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Patrick Goldstein and James Rainey
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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.

Avatar-movie-poster 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 () | Archives (29)

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2 red flags

1) Cameron lifted the plot from the Star Trek pilot, when Cpt. Pike opted for a new 'body' on 'new' planet in exchange for his old 'wheelechaired' body. Ouch.

2) He also - intentionally or not - has repurposed Jar Jar Binks. Ouch.

3) Bonus. The dialogue and acting is so leaden as to make one's teeth hurt. Ouch.

Conclusion: Four year olds will be thrilled.

Remember, if you love Fox News and want to pat Mr. Murdoch right on the back, this is the movie to see...I just thought I 'd throw that in there.

I saw the previews and it looks awesome, and I work for a digital effects company!

Really never heard much about this movie... Shows how much that budget was put into advertising, eh?

In the end, it will come down to what it always comes down to: is there a good story behind all of those special effects?

If you don't have that, and you don't have a known entity (i.e. Harry Potter, etc.) you're out of luck.

WoW! I just now heard about this movie. I'm been playing Warcraft (wow) too much. Thanks for the article. I will now go look at youtube for the trailers.

I don't see what the big deal is. The trailer looks like some CGI men go to fight some CGI cats, with the hook being that one of the men gets turned into a cat -presumably becoming torn between the sides in the conflict. Sort of like the plot to Pocahuntas, except the talking animals are the main actors. The other hook is that it'll look pretty in IMAX, but every 3D film looks nice so that isn't anything special either. Why should I see this?

the movie is no titanic, there won't be teenage girls doing major repeat business for this film, its for guy geeks, if you went to the in theater extended 3d clips there was little buzz, my reaction was that the movie worked best in the real environment and not the all digital world, I'm not certain that I can stand 2 hours of 3d. the basic storyline is fairly evident so I don't expect any surprises, sure Fox laid off its investment but they did that on Titanic with Paramount which they regret to this day, will this film bring on a whole new 3d viewing world, I doubt it.

not sure if people know how to do simple math.. but ill do it myself, the article says the movie cost 230mil to make and that its other costs they plan to spend 150mil.. since when does 230+150= 500? where is that extra 120mil he seems to be adding to it? if you look at other past movies like pirates of the caribbean 3, spiderman 3, superman returns.. they all cost 400mil+ in addition to marketing which is what Avatar costs.. i never heard any news reports of that? the only numbers this "journalist" has come up with comes up to 380? how does that make sense and how to people not use simple math

What they neglected to mention was that budget included the game development, which should pull in big money.

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