Jim Cameron's 'Avatar' price tag: How about a cool $500 million?

You'd have to say that the New York Times' Michael Cieply is a pretty crafty reporter. He knew that the best way to get us to read a sober, intricately detailed financial analysis of 20th Century Fox's economic involvement in "Avatar" was to stick something in the lede that would grab our attention -- like the news that the movie's price tag was approaching $500 million.

How did he get that number, you may wonder. According to his story, the Jim Cameron-masterminded film (due out next month and still under lock and key) has a reported production budget of $230 million, but Cieply says that the price tag "would be higher if the financial contribution of Mr. Cameron and others were included." He says that when you toss in the cost of global marketing for the film -- he says Fox itself is planning to spend $150 million around the world -- the film would cost its various backers $500 million.

Cieply's story makes a compelling point about modern-day studio economics. When it comes to a mega-blockbuster like "Avatar," studios like Fox don't just hedge their bets. They involve a wide variety of partners who provide financial and marketing support for the studio's behemoth. According to the piece, a pair of private equity partners -- Dune Entertainment and Ingenious Media -- are picking up 60% of the film's budget. But Fox also has built-in protections from Cameron himself. If the film's final production costs topped $300 million, for example, Cameron would "effectively defer much of his payout until the studio and others were compensated."

Cieply says the film also qualified for tax rebates in New Zealand, since much of its digital work was done there. It also benefits from $25 million worth of technological and marketing aid from Panasonic, which pitched in to help the film in return for assistance from Cameron on Panasonic's upcoming 3-D home video systems.

It just goes to show that when you're in the blockbuster business these days, you can always count on a little help from your friends, who are all hoping to make a little money -- or enjoy some reflected benefits -- from a mega-event that casts a giant shadow over the entire Hollywood landscape.

Comments

[JAM]

After seeing the previews, I am not impress at all. Cameron is gambling that his resume will make people come and see his picture, but honestly it's hard for blockbusters like Harry Potter and Batman to recoup their investment and these are franchises with strong earning powers. Moviegoers would have to come time and time again, so that this movie can be profitable and not just break even.

[Jay]

There were a lot of skeptics out there for Titanic, too. What did that make? A billion? More?

This will be playing in probably every IMAX in the nation, and that brings in a premium, don't forget. And this definitely seems like the kind of movie I will see multiple times (I giant IMAX screen in full 3D is glorious!).

I'm 29 and I'm as excited to see this as I was Jurassic Park. More so. And I saw that 3 times.

[logan]

too bad you were 'not impress at all'. you're gonna be eating your words in a few months, that's for sure.

[tmonsta]

well, if you hate fox news, and you want to hit Mr. Murdoch square in the pants this is the film to boycott

newscorp would take a crazy beating if this one fails hard

[not inpressed]

The bigger story is yet to develop.
Stop the presses!
This movie will flop, flop, fizz, fizz.
From the get go this movie needs to pull in at least 300 mil? And that's just to break even?
I haven't seen anything on the previous that will bring me back to the theather and the "Titanic" secret formula seems to be missing as well. ( lead character stud teenagers in love )

[Frank]

His names is James. Cameron, James...

;)

[oldmanvargas]

That just sounds insane
but then again people were going bananas over titinatics price and how much arnold and T2 cost. Im sure in another 10 years things will cost even more and some how Mr. Never disappoints will think of an even bigger buget when he acturally flys to the milkyway to flim his next big idea that came to him in another dream. I am there opening weekend and i am there 10 years from now.
Oh and of course his rusume is going to sell this too , cam' on people
why wouldnt you go see this, 20 bucks for two and you get to see what 500 million dollers can really look like i mean we cant pretend like King Kong
was truelly the best one can do with cgi. (which was pretty good right?)
Matrix revolutions had better cgi i think and those are cash cows , so lets just let the ego genius do what he does best, blow our minds with great story telling

[Pete]

So, I read the NYTimes story yesterday and now...this? How about doing just a little reporting--like calling up someone, asking them for a comment, that kind of thing. Otherwise, try using Yahoo headlines like "Will Avatar Sink Fox--click to find out how much Titanic Director Spent.

[jim]

It’s a $500,000,000 cartoon with people in it. That’s says it all right there. Remember “Final Fantasy”? It bombed.

The only good thing that will be good to watch is “South Parks” take on it.

[arlette]

"The only good thing that will be good to watch is “South Parks” take on it."

-this made my day :P