If There’s A “2” In Front Of Your Studio Budget, There Better Be A “2” After The Title
It is certainly possible to break even on a $200 million production budget when grossing $400m – $500m worldwide. That’s $220m – $275m income against a minimum of $325m in production and marketing. You can see how there can be black ink. But really, $500m is about where a studio starts to feel like a $200m investment in production was worth the time, effort, risk, and resources. (Many deals are distribution only or close to it these days… but that’s another variation of the same truth.)
In the five years prior to 2012 and 2012-to-date, there have been 53 movies that grossed at least $500m worldwide.
In the most extreme definition of “originals,” 19 of these films qualify (leaving 34 sequels or franchise movies). Nine of them are animated films. Transformers, Iron Man, Alice in Wonderland, Sherlock Holmes, and The Hunger Games aren’t exactly original. And the other five are Inception, Avatar, 2012, Hancock, and Mamma Mia!. (Based on a Broadway musical is such a poor foundation for a $500m grosser that MM! deserves an original spot, no?)
So if you are making a list of directors who have a good enough touch commercially to make a studio feel okay about a $200m investment—co-funded or not—you can look to Nolan, Cameron, and Emmerich as worthy, as all have done it more than once and all three show that they can go there (in most cases) when intended. Peter Berg has done it once, has talent, but is not close to being a sure bet at this level. Phyllida Lloyd is a talented women, but MM! is a freak and she knows it as well as anyone. She won’t be up for “Wonder Woman” directing duties.
So who else? Bay, obviously. I’d feel good about putting Spielberg in the list, though he hasn’t been chasing that so much lately. When he has, we got War of the Worlds and Indy 4. I can’t think of anyone that Tom Rothman would rather bet money on in the Robopocolypse.
After that… hmmm…
Raimi? Not so much without the spider-suit. Likewise, Marc Webb. Todd Phillips has become a strong comedy director, but investing $200m in a comedy is a fool’s errand, even with the Hangover numbers. Guy Ritchie, no. Favreau, no. Marc Forster… you have to be kidding me. None of the Twilight directors, obviously… and not Gary Ross (who doesn’t really think that way anyway)… and no one from PotterVille. Shawn Levy, no. JJ Abrams… not yet… not with two major franchises, neither of which rode to $500m ww under his direction.
Brad Bird could be The Next One to make the list, but on the strength of one movie, not yet. Francis Lawrence is an interesting candidate, but still unproven, really. The Hunger Games won’t prove anything in this regard.
Gore Verbinski and Barry Sonnenfeld might, in some movie moments, have their work mistaken for the other’s. Both have had some massive, massive success. But are they still good for a $200m bet? Well, Gore had Johnny and Barry has Will and when those combos happen, money seems to flow. Outside of that, not so much. I am a fan of both men, but particularly with histories of overruns, they are brilliant, itchy, choices.
Other greats who can make big dollars (and magic) in the right situation include Peter Jackson, the Wachowskis, and as he heads back to live action, Bob Zemeckis might have a big third act in him.
But I’m still at five as the list of really solid bets if you are making a very expensive, non-animated film. And Emmerich is really the only one of the five to knock out “big commercial product” every couple of years. Spielberg may make a movie a year, but he does what he wants… lots of quality doubles. Bay will have his first non-Trannies film since 2005 next year. Cameron made two major releases in the last 15 years. And Nolan dances to his own tune, his post-Bat career just now taking shape.
As I have been writing for years now, too many studios are too comfy making too many $200m+ movies. There are a lot of movies they can produce like programmers, doing development, putting together good casts and genres, and hoping for the best. Movies are a gamble. And all of the Big Five started somewhere… Bay being the only one to really start at the high end.
But getting to $500m worldwide, even if there were 12 such films last year, is no mean feat. The vast majority, as already noted, are sequels, franchises, or animated product from one of 3 companies. Of the five “original” titles tat got there in the last 6 years, as mentioned above, three were from The Big Five, one was Will Smith, and the last one was a cheap movie that had a remarkable moment.
So when we have to discuss John Carter or Battleship or World War Z or 47 Ronin in ugly terms, why would we be remotely surprised? Of the four, the only one with any excuse, as far as being greenlit at those prices, was John Carter, which was as much about Disney managing Pixar as it was about greenlighting a regular film. (Likewise, btw, The Lone Ranger, which is a mega-gamble, but keeps the Johnny Depp in Pirates door open.)
I agree—and have been writing for years—that movie studios need “middle class” movies and even indie divisions to keep balance in a rough business. But the issue of hugely expensive films, tentpoles, whatever you want to call them, is not as complicated as designing a slate. If you are thinking of greenlighting a movie that’s going to be close to $200m or over and it’s not already well-proven… stop. Breathe deep. Think about what the very likely possibility of losing over $50 million for your studio will do to your life. And if after that, you think that the film is really an $800m grosser, do what you want to do.
And if you just think it’s so cool and you’ll get to work with such great people and it might get to $500m if the wind picks it up and carries it just right, get the bottle of very expensive whiskey, pour yourself a couple fingers, and toast to what that really, really great idea might have been. Have a nice dinner with the producer and director when you explain why it’s in turnaround. And live to fight another day.
At the begiginning of the 13th paragraph, I think you mean $500m worldwide and not $50m worldwide.
I wonder if studios took more time to work on and develop these big movies if 1) it would cost less (as production is not rushed and therefore costs less $?) and 2) by taking more time, a better quality movie would emerge which could equal more money. I am just thinking out loud. If we consider John Carter, could a better movie have emerged that would have led to more earnings? I thought the movie was not terrible. The easy answer is get a bigger star with track record but that means a bigger budget. We’re probably at what you suggest – keep everything, just rain in the budget.
I wish the studios would really treat these big mega movies as once in a generation (or 2) and try to get the best quality and earnings (and sure, not in that order). But I think studios are now trying to get them out there quickly and hope for a franchise and if they strike out, then can redo them in a few years. I think this gives them a safety net. Spiderman is unique, so we have to see it done with something else. Bourne is an interesting case, though it is more a continuation than a reboot.
Interesting thoughts. And though everyone wants an Avatar or Avengers, the studios were freaking out about Titanic and Waterworld did not light the world on fire.
But Jason you have to remember that with Titanic and Waterworld the budgets were a results of the productions going horribly wrong. They weren’t greenlit at that size. But even at their original prices Cameron was a big name because of Terminator and True Lies and when Waterworld was greenlit Costner was the biggest star in the world.
Good article.
@hcat, but isn’t this article expanding on 47 Ronin? Was this movie really greenlit at $200m? I thought the budget went over (which the studio seemed to go along with until now)? There are 2 approaches to these shouldn’t-be budgets:
1) greenlit at the enormous cost
2) greenlit at a high cost (but not exorbitant), but then cost overruns pushed it to exorbitant cost.
Maybe I read it thins wrong, but I assumed John Carter fell into the first category and 47 Ronin fell in the latter.
Part of the problem, too, is the assumption that a successful film will automatically generate a sequel, or as Vulture put it, “a standard follow-up“. (In that case, so “standard” that they didn’t even bother to give the movie an actual ending.) So now everyone is trying to create a hit not because they want to make one really great movie but because they want to launch a franchise, even if the only standard follow-up they can think of is a remake of the original.
There’s no shame in that, Hangover–you’re just following in the footsteps of The Evil Dead.
P.S. From 47 Ronin’s wiki site: “Universal is providing Rinsch with a production budget of $170 million despite his lack of feature film experience, which The Hollywood Reporter considered to be a ‘large-scale, downright risky’ move.” So it looks like the correct answer is 2)…though $170M, handed to a guy who hasn’t even directed a commercial, (“‘visual and stylish’ blurbs for brands” doesn’t sound like commercials to me) does seem “exorbitant”.
You forgot Burton. I’m not a fan of anything he’s done in the last 10 years, but his movies have made some big money. Granted, the Sondheim musical wasn’t a smash hit, but it was challenging source material to say the least. I think most studios would still bet on him at this level.
Dark City cost 30 million dollars in 1998. Most blockbusters should not have a production budget higher than 100 million dollars
“Bay, obviously. I’d feel good about putting Spielberg in the list, though he hasn’t been chasing that so much lately.”
Your analysis reeks of primitive thinking. Do you honestly think if Spielberg was to helm any of the Transofrmers movies they would make less? And that’s not even going into Spielberg lending his name to the proeprty thus greatly expanding it’s global appeal. Bay is still very much a person who can deliver the Island and Spielberg never had a sci-fi film gross that small an amount (The Island was a Dreamwork movie but we are talking about directors) here.
So it’s Speilberg, obviously. With Bay behind… way behind.
And Emmerich? Anonynomous didn’t even make its theatrical gross back on a $30 million budget. His name isn’t worth much. The guy had only two really huge hits in the last 10 years. Even if you count 10,000 BC, Spielberg had more hits than him, to say nothing of the vast difference in quality.
I think what DP is saying is that with Emmerich, Speilberg, et al, it depends on the subject matter. Anonymous is not the right subject matter for that kind of boxoffice earning and no one in their right mind is expecting Lincoln to do $500m worldwide.
Jason, just trying to say that on paper Waterworld and Titanic were not as risky due to their pedigree. 47 Ronin went over budget but was still greenlit with a high budget with a faded star and unproven director. The equivelent in the Waterworld-Titanic era would have been Daybreak, which while not the most expensive property on the block was way more than they should have spent given the talent involved (Not suprisingly also by Universal who has been making these mistakes for years).
@hcat, I was trying to state that at these astronomical budgets, very few projects do not make the studios worried. I agree with you that those examples had a better pedigree than Ronin.
Proman… you are a piece of work.
1. There was no comparison of Bay and Spielberg. Period. They were the extension of a list of 3 that became 5 with their addition.
2. Emmerich… again, not comparing him to Spielberg in any way. But he did direct three of the forty-three live-action $500m worldwide grousers in movie history.
Spielberg has 5 and another couple that, given their release dates, were similarly successful. So no, Emmerich isn’t in his class. No one really is. And only an idiot would have an argument about it.
And please note… Waterworld, like Titanic, was profitable before it was all over.
Back then, $200m was what $300m is now. You’re actually talking about movies on either side of the DVD bubble.
I would say that the #1 reason why budgets exploded was the amount of cash coming from DVD sell-thru… about 50% of which is now not on the table.
7/8 years ago, a $200m movie wasn’t so much of a risk. You really had to dump for it not to work its way to black. Very, very roughly, the theatrical minimum to see a $200m production break even y years ago was about $325m worldwide… and is about $425m now.
David Poland, with all the theaters going with digital presentation, for a major blockbuster release, how much money are studios going to safe in distribution?
DP, interesting about Waterworld as I could have sworn I’d seen it on lists of the biggest flops (but as you’ve mentioned before, many other sites only account for box office and not other sources).
About DVD, are studios just ignoring the downward trend with the numbers? I’d be one thing if it was the last 2-3 years. But DVD has been trending down for years.
Antho… the studios projected about 2 billion a years in savings when we get to 100% digital.
Waterworld was one of the first films to do a LOT more overseas than here. According to people with the film, near $300m ww. And a strong VHS seller.
Studios have cut back in a big way. But they seem to lose their minds on these tentpole-type films sometimes. Like I wrote, if you have a franchise, you can budget a lot and usually get away with it. But in trying to launch new franchises, they go nuts.
“Waterworld was one of the first films to do a LOT more overseas than here. According to people with the film, near $300m ww. And a strong VHS seller.”
They post the worldwide take as $284 million dollars.
Gear shift.
So in 1989 they claimed Batman was the most expensive movie ever made at 55 million dollars. In 1994 Waterworld finished production at $175 million. In four years the most expensive movie ever made quadrupled. Titanic five years later would crack 200 million. Spiderman 3 in production 2007 would hit 258 million. John Carter supposedly cracked the 300 million marks in 2011.
And there’s so much made about the most expensive ones, but the average cost of a major studio film has ballooned to an almost unmanageable level. If the studios are making so many 150+ million dollar films, and the vast majority cannot recoup costs theatrically even with international factored in, there’s a problem. Especially considering the diminishing blu ray/dvd returns.
How many of these overpriced disasters can the studios absorb.
Minor corrections…
Batman & Robin was the first $200m movie, in the summer before Titanic.
Superman Returns, Matrix Revolution, the third Pirates, and Avatar topped $300m before John Carter.
Wasn’t Matrix Revolutions and Reloaded at a cost of $260m for both? I seem to recall that they saved a ton of money because both films were shot together, Back to the Future style. So with a combined gross of over $1.1B worldwide, it paid off big time.
Superman Returns cost 300 million?
Wow.
“Originally budgeted at $185 million,[39] Warner Bros. placed the production cost at $209 million, after factoring in tax rebates and incentives.[1] Taking into account the development costs since the early 1990s, total expenditure is estimated to be around $263 million, with up to a further $100 million spent on worldwide marketing.[16]”
…from the movie’s wiki page.
“Bryan Singer convinced Warner Bros. not to experiment with test screenings. In addition, Singer took out 15 minutes of footage after showing Superman Returns to some of his ‘trusted associates’.” And yet we were still left with all those scenes of people just staring, usually at Lois’ sickly wonder child, which she must’ve conceived when she was 15. Way to go, Supes, not just abandonment but statutory rape, too–just how many more issues can you give that child, besides that whole kryptonite thingy?
Don’t think Batman was the highest budget yet. Superman was said to be 55 million (though who knows how much of that was also the sequel) Ishtar reportedly hit 55 and I remember hearing that Rambo III was the most expensive ever at 80 (though the wiki page says it was 62). Even after T2 topped 100 it took awhile for the other studios to follow suit, Waterworld was the first production at Universal over 100 million.
But even go farther back than that, in the early eighties the tentpoles were 20 maybe 30 million and by the early nineties someone had crossed the 100 million mark.