Are they right? At summer's halfway point, the definitive answer is: Yes and no.

For 17 straight weekends, say the gloom-and-doomers, box office has measured lower than last year. But if you take "Passion of the Christ" out of the equation, the numbers this year would be slightly higher than in 2004. And "Passion" was, after all, a "onetime" event, independent in its financing, release and ideology.

The G & D set says this year's downturn reflects the fact that Hollywood is giving us mediocre product. OK, but consider the following: The two biggest disappointments of 2005 are "Cinderella Man" and "Kingdom of Heaven." Both are excellent films, considerably more ambitious than "Van Helsing," "Troy" or the "Day After Tomorrow," which took in far more money last summer. Arguably, this year's problems stem from questionable release dates and marketing strategies, not issues of quality.

The G & Ders point to studies indicating that filmgoers in theory would prefer to watch movies at home rather than in theaters. This is about as relevant as asking couples whether they'd prefer to have sex atop the Eiffel Tower or at a Motel 6. In point of fact, filmgoers still pay to go to theaters and, if anything, seem to be drifting away from collecting DVDs. Indeed, the pattern of DVD sales looks more and more like film: There's a two- or three-week rush for a new release, followed by apathy.

Listen to the G & D crowd, and they'll tell you the downturn has spread to the overseas market. Again, yes and no. Last year saw a cluster of $300 million-plus releases like "The Last Samurai," and "Troy" and even some $500 million-plus phenomenon such as "Harry Potter and the Prisoner of Azkaban," which soared past $540 million, and "Lord of the Rings: The Return of the King" which hit $742 million outside the U.S. And, yes, there was Mel Gibson's "Passion" again hitting $240 million overseas.

Those were remarkable numbers, and 2005 won't match them, though the third "Star Wars," "Meet the Fockers" and "Ocean's Twelve" are giving it a try. Even "Kingdom of Heaven," which will barely scratch its way to $50 million in the U.S., has passed $150 million abroad.

So, long-term, are the habits of filmgoers changing? Absolutely. Will consumers spend more time online, or on gaming or watching porn on demand? Without doubt. Will the windows separating DVD release and theatrical release continue to diminish? They sure will.

But here's a suggestion to the gloom-and-doomers: If you want to get depressed, turn your attention to Iraq. Give Hollywood a breather.

It's all very corporate and businesslike, but it also points up an eerie question: What happens when "brand value" is dissipated?

Two of the biggest stars, Mel Gibson and Tom Cruise, have gone out of their way over the past year to point up their religious and ideological positions. Has this position-taking potentially eroded their brand value?

Study the public behavior of top stars and you can detect a keen attentiveness to brand value. Russell Crowe goes on the talkshow circuit and, explaining away his telephone-tossing propensities, repeats his mantra: "I was just trying to fulfill my basic obligations to my wife."

Brad Pitt and Angelina Jolie play love kittens in a lavish photo spread in W even as Pitt talks to starving children in Ethiopia (conveniently with Diane Sawyer by his side) and as Us Weekly shows him playing on a beach with Angelina in a different part of Africa.

It's hard to equate all this with short-term box office results. The Pitt-Jolie movie took off like a rocket; the Russell Crowe movie ("Cinderella Man," which was much better crafted) is a disappointment.

But "brand value" cannot be evaluated picture by picture. It's affected long-term by the types of roles top stars are offered, and that raises some interesting questions. Given Tom Cruise's widely advertised positions, would he be believable playing a doctor or a psychiatrist? Given the rigorous teachings of Scientology, would he be credible in any role in which he would have to counsel someone who is troubled?

The notion that Mel Gibson would be blackballed in the industry turned out to be preposterous, but could his "brand" now be believable in another "Lethal Weapon"-type dumb cop movie? Has he, to a degree, typecast himself in a very restrictive way? And has all the silliness involving Brad and Angelina compromised their ability to assume serious roles as serious people?

These questions are being raised in part because of the unorthodox behavior of the stars themselves, which is in turn exacerbated by the crazed overcoverage of celebrities in gossip magazines and blogs. Most movie-goers are overdosing on star coverage; it's the ultimate example of too much information.

And that brings us back to brands. Summer tentpole pictures today are built on the principle of shared equity as embodied by first-dollar gross deals. The studio equity takes the form of production and marketing expenditures -- easy to quantify. The equity contributions of superstars is not that easy: Their brand names ensure wide openings, solid advances from territorial distributors, strong output deals and, of course, incremental box office.

And therein lies the risk. If brand value is diminished, equity is reduced and the magic equations that make tentpole pictures possible begin to melt away. Which is a complicated way of saying: Careful, Tom, watch yourself, Russell, lighten up, Brad and Angelina. The brand you harm may be your own.

Overseas, too, the duo clicked as "Mr. and Mrs. Smith" brought in $32 million to make their worldwide cume $83.1 million.

But U's "Cinderella Man," whose star Russell Crowe had his own media maelstrom last week, slumped 48% in its second stanza to $9.5 million -- a much steeper decline than Universal had anticipated when it slated the pic for a summer premiere. (Crowe was arrested and charged with assault Monday in New York).

After months of Pitt and Jolie as the tabloid media's most sought after (alleged) couple -- Us Weekly is reported to have paid as much as $500,000 for photos of the pair on an African beach together -- Fox launched the Doug Liman-helmed pic in 3,424 theaters to biz significantly higher than expected.

Boosting "Smith" were older femme adults, who don't usually turn out for actioners but do read the celeb weeklies and watch tabloid TV chronicling the are-they-or-aren't-they star pairing.

"It certainly didn't hurt," Fox distrib chief Bruce Snyder said of the media obsession with Pitt and Jolie.

Pic, which sparked the rumors that the stars became romantically linked, is also the biggest opener on helmer Liman's resume.

Elsewhere, however, the marketplace remained sluggish, with the frame's other frosh titles debuting softly. Dimension's Robert Rodriguez kidpic "The Adventures of Sharkboy and Lavagirl in 3-D" opened at No. 5 with $12.5 million from 2,655 locations. In seventh place, Paramount's "The Honeymooners" saw results somewhat lower than expected, with $5.8 million from 1,912. And finishing in the 11th spot, Lions Gate's French horror pic "High Tension" opened to $1.75 million at 1,323.

'Man' down

There's plenty of disappointment over the lackluster second-week results for U's "Cinderella Man," which now has cumed $34.5 million and, barring some unforeseen uptick, will have trouble matching the $77 million domestic gross of last summer's "The Terminal."

Successful summer dramas tend to hold onto a much bigger portion of their opening, racking up steady biz in successive weeks. For instance, "Seabiscuit" dropped just 15% in its soph sesh, while "The Road to Perdition" was down just 30%.

"I'm heartbroken over the 48% drop," said U distrib prexy Nikki Rocco. "We know the word of mouth is great and the playability this film could have. And we will still support the picture."

She couldn't pinpoint why "Cinderella Man" has failed to catch traction. "As a group we'll look at all the factors and then figure out our next steps," she said.

"Smith," with its wide appeal in all four quadrants, may have hurt "Cinderella's" chances.

"We basically got everybody, from soup to nuts," Fox's Snyder said. Studio exit polls showed the aud was 56% female and 57% over age 25. "I am a little surprised (at those numbers) for a high-octane action movie."

In second place for the frame was DreamWorks' "Madagascar," which in its third week grossed $17.1 million, raising cume on the talking animal toon to $128.4 million.

Immediately behind it, Fox's "Star Wars: Episode III -- Revenge of the Sith" continued its stellar run, pulling in $14.9 million in its fourth weekend to lift cume on George Lucas' sci-fi finale to $332.1 million.

Adam Sandler football pic "The Longest Yard" from Paramount was at No. 4 with $13.5 million in its third week. Cume on the remake is a more-than-respectable $118.1 million.

Among the other sophomores, Warner Bros.' "The Sisterhood of the Traveling Pants" held fairly steady, dropping 42% to $5.7 million and pushing cume to $23.7 million.

But Sony's skateboarding pic "Lords of Dogtown" wiped out, nosediving 68% and out of the top 10 in its second frame with $1.8 million.

That was right behind No. 10's "Crash," which Lions Gate said earned $1.9 million in its sixth frame.

Summer doldrums

Despite "Sith" and "Smith," summer continues to be sluggish. Nielsen EDI estimates the weekend's total biz at $140 million, which is 12% behind last year, when five different pictures managed to gross more than $20 million, including the frame's three openers: "Chronicles of Riddick," "The Stepford Wives" and "Garfield."

The season numbers are more dismal, with this year's $1.121 billion in grosses 10.3% behind last summer's results through this point. For the year, 2005 is falling further behind with its $3.621 billion, now 7.2% behind last year's grosses.

Much of the season's hopes will ride on the next few weeks' releases, including Warners' "Batman Begins," set for Wednesday; Sony's "Bewitched" and Disney's "Herbie: Fully Loaded" for the June 24 frame; and Paramount and DreamWorks' "War of the Worlds" over the July 4th weekend.

In the limited arena, Japanese animated hit "Howl's Moving Castle" got off to a strong Stateside start with $401,000 from 36 screens. Distribbed domestically by Disney, pic averaged a stout $11,139 per location. Mouse House is studying results -- for instance, the feature grossed $54,000 at the El Capitan in Hollywood -- and considering a wider rollout. Last year, Hayao Miyazaki's previous pic, "Spirited Away," took in $10 million in the U.S., playing 151 screens at its widest point of release.

Thinkfilm saw good results for French helmer Francois Ozon's relationship drama "5x2." Starting on two screens in Gotham, pic grossed $17,055 for an average of $8,528 per engagement.

In its second week, Paramount Classics' "Apres Vous" grossed $60,000 from 12 screens after expanding to San Francisco. Averaging $5,000 per screen, pic has cumed $95,000. Label's "Mad Hot Ballroom," in its fifth week, brought in $389,469 off of 126 screens for an average of $3,091. Doc's cume is $1.7 million.

Sony Pictures Classics' "Saving Face," in its third week, collected $96,433 from 26 screens, averaging $3,709 per run. Cume is $333,335.

Roadside Attractions' "Ladies in Lavender" chugged along in its seventh week with $291,060 from 96 runs, averaging $3,032 and pushing cume to $2.5 million.

Miramax's "Deep Blue," in its second week, grossed $5,540 off of two screens, upping cume to $18,393.

Both sides were anxious to make sure the production got a greenlight; everyone involved expressed happiness at the outcome.

The deal is significant for Paramount, since it marks the new regime's first tentpole. But more interesting was the town's reaction to reports that the actor-producer had agreed to shave his points on the pic.

As it turns out, insiders deny this, insisting that the key cuts involved production budget and locations. But the details of "M:I-3" became almost incidental as studios and creative types became frenzied at the mere mention of a first-dollar gross deal. These days, studios and stars are increasingly trying to kick each other in the backend.

Studios are committed to tentpoles. But, in their ongoing war over profit participation, execs say they're tired of seeing stars and directors take home tens of millions through first-dollar gross deals before the studio has even recouped production and marketing expenses.

Stars and directors say they deserve big paydays because they're putting their equity -- i.e., their reputations -- on the line with each film. In addition, they're digging in their heels over backend due to a perennial suspicion that studios are doctoring the books.

One of the central sticking points is, not surprisingly, the DVD.

Studios pay participants out of a pool limited to 20% of DVD revenues. The majors and the guilds agreed on that formula more than 20 years ago, when homevideo was in its infancy and Hollywood said it needed the 80% to break even. Now with DVD coin outweighing box office, talent says they are being shortchanged on DVDs, so are forced to ask for a bigger part of the gross.

Studios counter that this attitude only reinforces the need to retain the 80%, since a distrib often remains in the red -- even with hefty box office grossers -- until the final DVD tallies are in.

Talent working for a percentage of a film's grosses is a decades-old practice. In the early 1950s, then-agent Lew Wasserman invented an arrangement whereby client James Stewart would get points in films made for Universal, which couldn't afford the star's salary.

The backend deal for the pic "Winchester '73" gave the actor net points in lieu of a salary, with the money coming from the studio's rental, or cut of the gross (after exhibitors get their share).

Now, most stars get salary plus backend, and studios are fed up as the percentage points creep up -- especially in an era of ballooning film budgets.

No more grin and share it

One film exec says studios are waking up to a slippery problem that had been ignored for a long time.

"It made sense when budgets and marketing costs were lower," says the exec.

Lawyers and agents who negotiate say the majors are standing fast. Says one dealmaker, "The studios are making a concerted effort to hold the line at 25%."

Hollywood has vowed such caution before, in the wake of blockbusters with backend components that exceeded 30%, like Universal's "How the Grinch Stole Christmas" and Sony's "Men in Black 2."

Even back then, studios insisted they wouldn't go past 25%. But when a tentpole has a star actor, star director and star producer, it can be tough to fit in everyone under that cap.

Hollywood is generally sanguine about films with one profit participant, such as last summer's Fox release, "The Day After Tomorrow" (director Roland Emmerich).

And there are examples of summer tentpoles in which no actors or helmers received first dollar gross, such as Fox's upcoming "Fantastic Four," directed by Tim Story ("Barbershop") and starring Michael Chiklis and Jessica Alba. The studio enjoyed similar terms on the first two "X-Men" movies.

The situation gets tricky with films in which several people have points.

"Cinderella Man," with its powerhouse trio of Russell Crowe, Ron Howard and Brian Grazer, is one backend-heavy title.

Some rivals estimate that DreamWorks-Par's "War of the Worlds" may fork out a record amount of the gross to Cruise and director Steven Spielberg, possibly topping the 35% gross points that were said to have been paid out on "Catch Me If You Can" -- split among Spielberg, Tom Hanks and Leonardo DiCaprio.

Studio execs know something that some box office trackers haven't realized: There's a big difference between "profits" and profitability. Some of the biggest box office grossers proved profitable for backend sharers long before they actually generated profits for the studio.

Though "Meet the Fockers" passed $500 million at the global box office, the most ever for a live action comedy, it's likely U had just about broken even on the film before it hit DVD, because 27.5% of the gross went to players including director Jay Roach and stars Ben Stiller and Robert De Niro.

Warner Bros. and Stephen Bing, which footed the production and marketing costs on "The Polar Express," saw the film's global box office hit $283 million.

The film will be released on DVD this holiday season, but Hanks and director Robert Zemeckis have already seen a payout close to $50 million, thanks to combined first-dollar deals of between 30% and 35% (which includes the points for their companies, Playtone and Image Movers).

After some hefty gross deals on pics like "Men in Black 2" and "Anger Management," senior management at Sony is said to have vowed never to give up more that 25% of its backend gross again. However, when Sony has powerhouse lineups for films like "Spider-Man 3" and "The Da Vinci Code," exceptions are made.

Par's get-tough policy on "Mission 3" sends a message to the town that the Grey regime is in the tentpole business, but not in a profligate manner.

The fact that a studio questioned a star -- particularly a star on that level -- was quietly applauded by execs at rival studios.

Many execs and agents were impressed that Par stood firm. "They needed to have the movie, particularly since they've already sunk $30 million into it," one producer notes.

The pic's budget will be trimmed by some 10%. And, as it turns out, Cruise could end up pocketing more money from "M:I3" than "M:I2." On the previous pic, Cruise/Wagner got 30% of the gross and allocated 7.5% to director John Woo; the latest venture's helmer, J.J. Abrams, isn't a gross player.

Gross points are a hot-button topic in the film biz -- even hotter in the last few years, thanks to the explosion of ancillary revenue, most notably sales of DVDs.

"The numbers started to go through the roof when people realized there was huge money in the ancillaries," says one entertainment lawyer.

When studios held the line on homevid percentages at 20%, gross points went up. Now with studios maintaining pressure on keeping gross points at 25%, it's the video-to-gross ratio that is climbing.

Says the dealmaker, "One of the ways to skin that cat is to take smaller upfront fees and smaller points, but then make the pot bigger."

The biggest stars have the most leverage in any negotiation and names like Cruise, Spielberg and Hanks have pioneered a change in DVD tallies, getting 50% or more of homevid revenue counted toward the gross.

When Peter Jackson made his landmark deal for "King Kong," which called for $20 million against 20% of the gross, for his helming, writing and producing duties, he was able to obtain a greater cut of "King Kong" DVD grosses. (He subsequently sued New Line over accounting for "Lord of the Rings" DVD revenues.)

Studios are employing other strategies to clamp down on points. One is to work with fewer gross players per picture. Stars may be indispensable, but studios are more willing to trust tentpoles to tyro helmers, who tend not to get points.

"It's no secret that studios would rather not pay first-dollar gross to actors," says one dealmaker. "But they can't stand to pay it for directors."

With its long roster of A-list actors, CAA has gotten more into the young directors game, in part because it needs point-free helmers to pair with its high-priced stars.

Last fall, for instance, the agency brought in agent Bart Walker, who brought with him a long list of helmers, including Sofia Coppola, Mira Nair, Julian Schnabel, Steve Shainberg, among others.

Studios and talent are also constantly seeking new models to finance films.

One oft-mentioned picture is 2001's "Pearl Harbor." Star Ben Affleck, producer Jerry Bruckheimer and helmer Michael Bay were all in line for a hearty cut of the gross. Disney couldn't fit them all under a 25% cap, so to make the deal work, they structured their deals so that the movie recouped before they started collecting their gross payouts.

The model was something akin to the 50-50 financing model more commonly seen in the indie world. After investors recover their money, a film's profits are split evenly among key talent.

But to accept such a deal, talent has to trust that they are getting an honest accounting from the studios -- a level of harmony that many doubt is achievable after decades of mutual hostility over balance sheets.