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November 08, 2009
Cieply Math
The lead is head spinning - "Can a movie studio make money on a film based on an original and unfamiliar story, with no Hollywood superstars, a vanishing DVD market and a price tag approaching $500 million?"
$500 million.
Okay, Mr, Cieply. How do you get to $500 million?
"the estimated half-billion dollars spent on its production and marketing"
Yes, we get it. Please explain. I am wiling to go there with you, but I need some numbers that fit together, please.
"Published reports have put the production budget at more than $230 million."
Okay... hardly shocking these days. Less, in fact, than many of the rumors. It's less than 10% more than Star Trek, Transformers 2, or Harry Potter 6.
But the price tag would be higher if the financial contribution of Mr. Cameron and others were included.
Well, that's true of the aforementioned trio as well, all of which have some heavy backend players. On The Hangover, which is probably the #2 most profitable movie of the year-to-date, the director took 10% of the worldwide gross... which is a lot more comfortable when the movie is so (relatively) inexpensive.
"When global marketing expenses are added, “Avatar” may cost its various backers $500 million."
Whoa!!! $270 million on... what... marketing?
"Fox’s biggest investment in “Avatar” may be on the marketing side, where the company is planning to spend about $150 million around the world"
What? $230 million plus $150 million = $380 million. Where is the other $120 million?
There is no indication.
But there is this nugget - "If domestic ticket sales reach $250 million — a level broken in the last year by five films, including “Star Trek” and “The Hangover” — Fox and its allies would appear to be headed into the black."
Okay... maybe I missed a math class... If domestic box office is $250 million, Avatar will be in the black? There is no mention of international box office, but let's tag it at 60% of the total box office... $375 million. That would be $625 million worldwide.
That would be about $345 million in rentals going back to the studio. And that would cover $150 million in marketing and $195 million in production costs. Let's say there is about $175 million in post-theatrical net. We're up to $540 million. According to Cieply's math, the film would then be $160 million into profit, excluding Cameron's cut. Let's tag that at 20% of gross theatrical revenues over $500 million and 10% of post-theatrical net. That's $42.5 million into Cameron's pocket... and the funding entities are still in profit to the tune of over $100 million.
But Cieply is, it seems throwing that $100 million in profit into the production costs... though he never suggests how he is doing that, aside from repeating the $500 million figure multiple times.
Even if you want to push the production estimate up to $300 million - in which case, he should write the truth, "though Fox denies it, rumors that the film cost $300 million or more to produce are shouted by every other studio and the Paper of Record chooses to believe it." - he still isn't to $500 million... just $450 million, with marketing.
And that still wouldn't be the most expensive production/marketing budget ever. Which he seems to know when he calls it, "among the most expensive movies ever."
$500 million in production and marketing would definitively be the most expensive film ever made. So what the hell are you trying to say here?
The thing about this piece is that 90% of what he is reporting is completely reasonable as news on this film and Fox. But this $500 million thing is like a tabloid shock headline and the NYT use of it will hang on this movie - because other editors and writers will repeat it like gospel, not matter how poorly reported - and it is terrible journalism. Moreover, the piece is a shocking mess, flitting from one idea to another without coherence.
Does Cieply think that it is unusual for tens of millions in commitments for everything from marketing to technology to go into movies from interested companies looking for branding and/or a foot in the technological door? Is the use of TV networks by companies that own them and film studios to promote films on the network supposed to be a new thing? (Hasn't he see the endless Glee push in every corner of the News Corp universe by the homophobic Fox News? Or Evan Almighty and other films using bottom-of-the-screen roadblocks across NBC broadcasts and GE's cable holdings?)
I think it's great that after years of paying no attention, that the Paper of Record is now paying attention to one of the tools that studios use to reduce cash costs in production and marketing. But this $500 million thing is right out of Nikki Finke. If it's true, tell us how it adds up. And if you are throwing a number at the wall because some studio exec at another studio exclaimed, "The damn thing is going to cost Fox half a billion to put into theaters!" and your editor gave you to go ahead on the piece based on that, you are doing a disservice to everyone, from the studio to the filmmakers to the public.
Posted by dpoland at November 8, 2009 10:37 PM
Comments
I'm glad I'm not the only one who couldn't make those numbers make sense. The whole article was a bizarre mess on the money front.
Posted by: CloudsWithoutWater
at November 9, 2009 12:40 AM
Maybe Cieply just implys that the production budget of "Avatar' would be MORE than $300 million. And the film is still not finished.
(I know Fox keeps saying that the rumors are wrong and "Avatar" budget would only be in mid-200-million figure, though.)
Posted by: marychan
at November 9, 2009 04:37 AM
I'm still rooting for Cameron to hit this one out of the park. If anyone can, it's him.
Posted by: EOTW
at November 9, 2009 05:52 AM
I'm still rooting for Cameron to hit this one out of the park. If anyone can, it's him.
Posted by: EOTW
at November 9, 2009 05:52 AM
No matter what this picture makes, it will be a disappointment to someone. Even Cameron's "losers" like The Abyss are still very good pictures.
Posted by: doug r
at November 9, 2009 06:38 AM
I'm still rooting for Cameron to hit this one out of the park. If anyone can, it's him.
Posted by: SJRubinstein
at November 9, 2009 07:12 AM
I've said this elsewhere, but I'm kinda surprised that the film only cost $230 million. I mean, Cameron has broken budget levels for his last three or four pictures (The Abyss is debatable... how much DID that one actually cost?). He finally fulfills his 15-years in the making project, theoretically revolutionizing the way we watch movies, becoming the Jazz Singer of our age, etc etc, and it still cost nearly $100 million less than Pirates of the Caribbean 3?
I'm not saying I don't believe the numbers, but I'm just baffled at the apparent tight budgeting from someone who usually breaks the bank. To be fair, Cameron's unintentional budget-busters (Titanic and The Abyss) had issues with water. And even if the budget is higher than reported, there's no one I'd trust more with Fox's money than Cameron. Maybe he's getting frugal with age, but I'm almost disappointed that the movie didn't cost half a billion dollars.
Random thoughts...
Posted by: Scott Mendelson
at November 9, 2009 08:34 AM
THE ABYSS cost anywhere from $60-80 million, which was a record at the time. As far as AVATAR's budget goes, I remember reading an interview with Cameron where he pointed out that the performance capture part of the shooting schedule didn't need a huge crew. After all, there's no costumes, set decoration, production design, makeup, etc (although there is a tech team to wrangle all the data, work with the bodysuits the actors were wearing, and so forth).
Posted by: Telemachos
at November 9, 2009 10:00 AM
Not even sure this would help budget-wise, but since Cameron has been working on this for awhile, couldn't the lead up time to filming have helped lessen the costs? Didn't the other movies listed have a condensed production time (compared to Avatar)?
Posted by: jasonbruen
at November 9, 2009 10:40 AM
500 million sounds right, and that's even before marketing.
I've talked to a NUMBER of people who are saying the negative cost on this picture is almost 400 million. Zemeckis has said that his mocap films cost a million dollars a minute; I don't doubt that Cameron has found a way to double that. 350-400 seems utterly believable when you look at the cost of SPIDER-MAN 3, which is probably closer to 300 mil than the official 258.
But on top of that there's the R&D that's been going on for the tech on this film, which I've been told is about 100 million or so. Right here, before marketing, you're looking at a movie that's edging up on 500.
Posted by: Devin Faraci
at November 9, 2009 12:25 PM
Again, this movie is guarenteed to do huge biz overseas. If it doesn't get to $650 million worldwide, i'll eat my hat.
Secondly, it was the primary film that pushed exhibitors into embracing digital 3D, as Cameron has spent years campgaining for that. Third...big advancement in technology overall.
Posted by: EthanG
at November 9, 2009 01:57 PM
what a laugh, cieply should lay off the 'shrooms (or not be such a gullible puppet)
and devin faraci, i read your thing, very little of what you wrote is accurate ('avatar' is not a zemeckis mo-cap flick, about a third or so is live action/composit for a start). anyone who's told you the production has cost $400mil is utterly full o' shit -- but that's hardly surprising
just the simple fact that in all this absurd 'guessing-stated-as-fact' i've yet to see a SINGLE person mention the fact that 'avatar' is basically a NZ-based production (even reports that mo-cap was done in the US are wrong; most of the film - including a great deal of the mo-cap - was shot here where it will soon be finished), where the US production dollar stretches SIGNIFICANTLY further, shows that people are just blowing smoke out their ass because they are a world away from post production and they have no clue what's actually going on.
there is a reason 'avatar' was made here and it's not just world-beating facilities, innovation and skill. but realising that would involve looking and thinking beyond what you're spoon-fed and then repeat in that 'hollywood bubble' in which some of you so happily smirk
Posted by: leahnz
at November 9, 2009 05:50 PM
Leah, good for your nation. Now is there any other reasoning behind that rant?
Posted by: IOIOIOI
at November 9, 2009 07:15 PM
what part in didn't you understand, io?
quick recap:
the flapping lips decrying a budget blowout on 'avatar' are throwing around ridiculous figures supposedly based on some analysis of the 'avatar' production, and yet somehow everyone fails to mention the movie was largely made here where lower production costs + the higher value of the US dollar + nz govt tax breaks = far more bang for your production buck, which clearly indicates that the people talking about 'avatar' know very little about the actual production and are just engaged in rumour-mongering and wild speculation at best
Posted by: leahnz
at November 9, 2009 09:19 PM
Scott - 'Pirates 3' spent a lot of money on basically round-the-clock overtime because they had a previously agreed upon release date to meet. I haven't seen anything to indicate that Cameron had an unrealistic release date thrust upon him by the distributor (the standard trade-off for which is essentially a blank check), so it's not really that surprising.
Posted by: Gordon27
at November 9, 2009 09:58 PM
Leah - do you work in post-production there in NZ?
And how long do people think it's going to take for one of these $250m-$500m behemoths to completely crash and burn? Or is the business model such these days that the studios know they can buy their way to a $100m opening weekend and inertia will bring them to near-profitability?
Posted by: jeffmcm
at November 9, 2009 10:30 PM
That's the irony Gordon. Cameron, famous over-spender, finally gets his dream project off the ground and actually ends up carefully planning and budgeting so that the picture comes in at a (relatively) reasonable price. So for the price of X-Men: The Last Stand or Spider-Man 2, you get the theoretical next leap forwarding in whatever it is Cameron has up his sleeve. The man has become Spielberg! And no one seems to care that 2012 apparently cost a near-record $260 million. Remember when Devlin and Emmerich had a reputation for being cheap? Independence Day still looks like a $150 million flick for just $65 million.
Posted by: Scott Mendelson
at November 9, 2009 10:43 PM
Leah, I really did need that explanation. Thank you.
Jeff: the inertia bit seems the most apt, but may I point you to the direction of Duncan Jones? Moon looks incredible. If people like Jones and the folks who made District 9 continue to crank out films that look like they do at a smaller cost. Things have to change in terms of budgets.
I could be mistaken of course, but I still live under the assertion that all of that money is being spent because of a lack of imagination and ingenuity. Which explains the existence of 2012, but I am sure someone will have a fun time watching humanity being wiped out this weekend.
Posted by: IOIOIOI
at November 9, 2009 10:51 PM
Yes, that will be me.
I still don't understand how something like District 9 could cost so little and something like A Christmas Carol or Spider-Man 3 cost so much, to such diminishing returns.
Posted by: jeffmcm
at November 9, 2009 11:03 PM
A friend who used to work at Fox told me that the actual negative cost of TITANIC was $315 million, and that the figure was hushed up to avoid the wrath of the stockholders (especially Rupe). And that was 12 years ago, with far fewer VFX. If anyone genuinely believes the true negative cost of AVATAR is $230 million, I have some land in Arkansas I'd like to talk to you about.
Posted by: Cadavra
at November 9, 2009 11:31 PM
Secret budgets are the film world's version of Area 51, Roswell, and faked Moon landings. Everyone loves a good conspiracy, and they're fun to whisper about, but it's always "a friend of a friend" and of course the rumors are impossible to prove.
In the end, who really cares? If we're rooting for the filmmaker, we want them to be able to realize their vision. If we're rooting for ourselves, we just want a good fun movie. Does it matter that (for example) APOCALYPSE NOW or BLADE RUNNER went seriously over-budget? Or that T2 was the most expensive film ever?
Posted by: Telemachos
at November 9, 2009 11:59 PM
Yes, but we also want the good times to be sustainable. It seems pretty likely that nobody at any of the studios thinks that a repeat of the 1960s and the likes of Cleopatra/Dr. Dolittle/Star! could ever happen again.
Posted by: jeffmcm
at November 10, 2009 12:20 AM
"Leah, I really did need that explanation. Thank you."
fair enough, io, i babble
(jeff: art direction, but post p where a lot of my peeps work is within spitting distance, everyone pretty much knows the score. and i completely agree that budgets have gotten ludicrously, unnecessarily ott and need to come back down to a sensible level so that not every film has to make a few hundred mil just to break even. it's absurd)
"If anyone genuinely believes the true negative cost of AVATAR is $230 million, I have some land in Arkansas I'd like to talk to you about"
cadavra, what is considered "the true negative cost"? does that include the r & d & production cost of new tech like the pace fusion camera, etc, or just the production itself? if you're talking just the cost of the shoot and post p -- much of the pre-vis having been done over the years in advance by cameron -- a $US 200mil dollar production budget stretches much further here, probably up to as much as a third. 'avatar' is a top-end, extremely expensive production which likely will end up over its original budget when all is said and done, but nowhere near the level people are speculating/claiming, it's all just silly hype by people who pretty much have no idea what they're talking about
and just to say i think comparing 'avatar', which at the end of the day is a very complex and sophisticated but relatively straight-forward visual effects flick, to titanic, a production in which an almost full-sized replica of the ship had to be built with meticulous detail and then physically sunk in real time in giant reservoirs during a very long and logistically complicated shoot...i'm not sure that comparison is fair.
Posted by: leahnz
at November 10, 2009 02:48 AM
Leah I have a hard time believing that Avatar cost only 30 million more than A Christmas Carol. But unless you happened to be working on the budget of Avatar in some sort of producing capacity, I hardly think your opinions on this are any more accurate than the speculative 200-500 mill numbers around the web. Living in the same country as a production does not make you some insider or producer of it.
Posted by: martin
at November 10, 2009 09:34 AM
Pretty amusing. Leah lays out a fairly logical argument for why cost projections are overblown, and is met with a wall of "I don't believe it.... because...uh.... I don't believe it."
Posted by: storymark
at November 10, 2009 10:58 AM
you have a hard time believing? in what capacity, martin, head dingleberry? i don't really give a shit what you think.
i work in the live-action side of production but 'avatar' is in post within a stone's throw, where i happen to know many people involved in most aspects of the production, and whether or not the film is way over budget is no great mystery to the people making it, which you would know if you actually knew anything about film-making
Posted by: leahnz
at November 10, 2009 11:07 AM
Well, that's just like your opinion, man.
Posted by: martin
at November 10, 2009 11:19 AM
Interesting conversation.
I think one of the key components here is skill. Star Wars, District 9, even Cameron's Terminator were either advancing film technologies or elicitated the "I can't believe the look of this on that budget" responses. Any of the afore mentioned movies we could see being made with price tags many fold what they originally cost. Is it really that hard to believe that someone, who is widely acclaimed for his skill, made a movie, that though admittedly was not on the cheap still looks like it cost more than the amount it cost to put a person on the moon? Furthermore, with no "pull out all stops, this movie is getting completed by X, don't stop printing money" mandate, why is it hard to believe that this may not be the most expensive movie of all time?
I have no pony in this race. I love to see innovative movies that look like they cost 10 times than they really did. Conversely, it can be very compelling to give talent a blank-check and see what the results are. Irregardless of Avatar's cost, we will (probably) be the winner's here. Though unseen (and it could be a complete missfire), what has been shown looks like nothing that has been out there.
Posted by: jasonbruen
at November 10, 2009 12:08 PM
And so the spreading of the number has begun....
Posted by: Luke K
at November 10, 2009 12:19 PM
Yeah, Luke... that's what f-ing kills me.
You CANNOT do the math in that story and come up with $500 million unless you are somehow - and in an unexplained way - adding the soft costs that are standard for all productions. But there it is. The NYT said it and so it must be true.
I believe that Devin has been told $500 million... and I believe that it is complete bullshit.
As for Titanic, everyone seems to have forgotten the $75 million tank stages in Mexico that were built, stood alone as an ongoing business, and were sold off a few years ago, which everyone included in the budget price.
I covered that movie closely, back in the day, and I believe that with the tank facility, the number may have been up near $315 million... with actual negative delivery at $240m. Completely possible. Paramount got their bite for just $75 million, which Bill Mechanic still gets upset about.
What's the real number on Avatar? None of us know. Jon Landau knows. We're all just jerking off here. Would anyone believe that Stuart Little cost over $200 million? Is it possible that Stuart Little and this year's Star Trek cost the same? Well, they were pretty close.
Like J-Mc suggested (and yes, I am sometimes very pleased with what he adds), we live in a world where District 9 can be made for $30 million and a similar film made by a major from scratch would have cost $120 million... or at least $90m.
How much would the Star Wars movies have cost if George Lucas didn't own the company?
My objection was not that Cieply screamed $500 million in a crowded media room. It's that he didn't back it up at all in his reporting. So the NYT is now running a rumor, basically, without explaining why it chooses to believe that rumor in a clear way. Even if the rumor is right, the method of reporting it is scandalous.
Posted by: David Poland
at November 10, 2009 12:49 PM
Based on the official number, "Star Trek" was cost about $140 million to make, not over $200 million.
If Newspapers can't run rumors without giving clear explaination, Blogs also can't.
Posted by: marychan
at November 10, 2009 07:04 PM
sorry DP but i'm not just 'jerking off', speak for yourself. if you think landau (who is looking jolly in his loud aloha shirts even in our unseasonably cold weather here) is the only person in the 'avatar' production who knows what the budgets and over-runs are, then you're mistaken. cieply's figures are bogus and nonsensical conjecture, nothing more
Posted by: leahnz
at November 10, 2009 08:58 PM
Too bad slate.com can't get their hands on the line-item budget and stick it online, the way the did with T3. (I'm joking, but that's the only way we'll ever get anything close to actual numbers).
Posted by: Telemachos
at November 10, 2009 09:37 PM
With all the vague #'s being thrown around, until someone can confirm from a real crew member an actual (claimed) number, I'm going to stick with $220-240 mill. as an estimate, $350-400 once WW marketing is included. So with those numbers, I'd guess that $500 mill WW box office is the line where above it's considered a money making hit, and below it's a financial disappoint. Realistically, if it can pull in 250 domestic and 300 foreign, I think it's fair to call it a really solid hit. I think it's unrealistic to expect more than that.
Posted by: martin
at November 10, 2009 10:04 PM
"until someone can confirm from a real crew member an actual (claimed) number"
good grief.
"an actual (claimed) number"? apart from the fact that 'actual (claimed) number' is a contradiction in terms, any member of the production team who supplied budgets/overruns for publication would be in shit so deep for breaking contractual obligations they'd likely never get out.
"I'm going to stick with $220-240 mill. as an estimate"
based on what? really, please enlighten us as to what you've based your estimate on. because you've seen $230 all over the internet and $220-240 is 10 mil either side? ingenious
Posted by: leahnz
at November 11, 2009 12:40 AM
"If Newspapers can't run rumors without giving clear explaination, Blogs also can't."
A hell of a good point, which will be utterly ignored.
Posted by: storymark
at November 11, 2009 11:02 AM
I wouldn't say Moon looked "incredible". It looked convincing but it had basically one fairly large set, with presumably miniature work for the exterior scenes. And the repeated use of cliched Apollo whatever shot of the earth was a little annoying to me for some reason. They could have spend a grand on a different earth I think.
It's a good point that Avatar was, physically at least, probably a much simpler production than Titanic. The new yorker article made it seem pretty easy actually. I'm interested to see the results because I think Cameron's real genius is classic special effects (car chases, helicopters, explosions, etc.), not necessarily the digital stuff.
Posted by: torpid bunny
at November 12, 2009 07:51 PM
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