Entertainment Weekly has an interesting story anylizing why Terrence Howard might have not been cast in Iron Man 2. While insiders cite Howard’s “difficult behavior” on the set of Iron Man, it might also have a bit to do with money.
Apparently, Howard was the first actor signed on for Iron Man, which somehow made him the highest paid actor on the project, above Jeff Bridges, Gwyneth Paltrow and even… Robert Downey Jr. Pretty crazy, eh? But it was too late to renegotiate after the project fully came together, and EW sources claim that “Favreau and his producers were ultimately unhappy with Howard’s performance, and spent a lot of time cutting and reshooting his scenes.”
Now onto Iron Man 2… Favs and screenwriter Justin Theroux decided to minimize Jim Rhodes’ role in the sequel. This resulted in Marvel going out to Howard’s agents with a “drasticly reduced offer” estimated to be a 50 to 80 percent cut, but more in line with the supporting cast member’s salary of the first film. One can only guess what happened next, but I’m assuming that Marvel got a cold response and moved quickly on Don Cheadle, and in affect beefed up the Rhodes role in the sequel.