Big movie budgets

Spurred on by and article on Kevin Costner's return the the world of Westerns, James Russell get annoyed with the author of the article stating that Waterworld was the first film to cost more than $100 million, when this was clearly not so. He speculates that the author meant to say that it was the first film to cost more than $200m.

It's a bit hard to tell what films cost because studios and producers lie about it so much, but neither statement is right. When it was released in 1991, Terminator 2 was widely reported to have been the first film to cost over $100 million. However, the producers never admitted this, claiming that the budget was just under $100. A couple of years ago the Internet Movie Database was reporting the budget for the film at about $95 million, but they now report $100 million, and it is now widely acknowledged that it actually did cost $100m. James Cameron's next film, True Lies (1994) was the first film for which the producers actually admitted a $100m budget. Both these films were expensive, but also seriously profitable (especially Terminator 2) so in the end people weren't too bothered about the costs.

Waterworld was widely publicised as an out of control production at the time that True Lies was in the theatres, and it was eventually released in 1995. (Original director Kevin Reynolds was sacked towards the end of the production and Costner ended up directing a fair bit of the movie, but was not credited). At the time, rumours were that the budget was around the $160-170 million mark, which was massively in excess of the cost of any other movie up to that time, and way over budget. At the time, I didn't hear any claims that it cost over $200m, and the IMDB now reports it at $175m.

As for Universal's claims that the film made a profit, don't believe them. At the time, the rule of thumb was that if film's domestic (ie US and Canada) gross exceeded the budget, then it would make a profit when all the revenues came in from various sources. Waterworld grossed $88 million in the US, which was way short. Things were helped by its non-US grosses being much greater than that ($167m), but still the studio would have been hard pressed to get its outlay back. The best that can be said is that the film did find an audience, so Universal didn't take a bigger bath than it would have with most unsuccessful films. That said, given that the best thing that can be said is that Universal risked $175 million and although they may have got most of the money back they made no return, they would certainly have rather done without the whole thing. (And in my opinion it was a really bad film).

The first film with a $200m budget in actuality was likely Titanic (1997), which was also widely reported as an out of control production. (Like most out of control productions, it was filmed on water. The reason for this is that on land if you mess a shot up, you simply have another take. On water, your set and props have floated away, and setting everything up again takes a lot more time). That one grossed $600m domestically and $1.2bn in the rest of the world, which was so immensely profitable that nobody cared about the budget in the end. And that has been the pattern with James Cameron generally. He has broken the record for most expensive film three times, but has always managed to produce interesting films that have made money.

Just as a final point, the old rule of thumb that a film must gross its budget domestically to end up profitable is much less true than it used to be, because films gross a larger portion of their box-office revenues outside the US than they used to, and because DVDs are now responsible for a much greater proportion of revenues than VHS tapes ever were. All that said, Hollywood is having a terrible summer this year, because at least half a dozen movies have cost $150m, $200m or more to make and have then fizzled at the box office. I shall be writing a report on just why Hollywood's films this year have cost so much, why Hollywood didn't believe this mattered, and why in the end it did, but this shall not be seen from me for a couple of weeks.