Film budgeting

Last updated October 01, 2024

Film budgeting refers to the process by which a line producer, unit production manager, or production accountant prepares a budget for a film production. This document, which could be over 130 pages long, is used to secure financing for and lead to pre-production and production of the film. Multiple drafts of the budget may be required to whittle down costs. A budget is typically divided into four sections: above the line (creative talent), below the line (direct production costs), post-production (editing, visual effects, etc.), and other (insurance, completion bond, etc.). For productions distributed by a third party the budget excludes film promotion and marketing, which is the responsibility of the film distributor. Film financing can be acquired from a private investor, sponsor, product placement, film studio, entertainment company, and/or out-of-pocket funds.

When it comes to reporting the budget of a film, the amount of the budget represents the gross budget, which is the grand total of actual spending to produce the project and not to be confused with net budget, which represents the final out of pocket for the producer after government incentives or rebates ("If you pay $50 for something but have a mail-in coupon for a $10 rebate, your gross spending still amounts to $50.").^[1] One of the consequences of the Sony hack was the release of budget information of many films or TV shows, including the 2015 Adam Sandler film Pixels . The actual cost to produce Pixels, or the "grand total", was $129.6 million and the net budget for Sony came to $111 million after they received a government rebate in Canada that covered a portion of their gross spend (cost) in the amount of just over $18 million.^{[ citation needed ]} Even though Sony's out of pocket for the film was reduced because of the incentive, it does not negate the fact that the actual cost (amount spent during production to make the film) was still $129.6 million.

Elements

Story rights: The right to produce a film based on a play, novel, musical or video game, or as a remake or sequel can cost anything from a couple of thousand (e.g., Leaving Las Vegas ) to over $10 million (e.g., the video game Halo ).
Screenplay : An A-list screenwriter may be paid between $100,000 to $2 million to write a script, including $400,000 a week for each rewrite of a film in trouble;^[2] script doctors may be called upon to revise the final draft at $100,000 to $200,000 a week. Recently, Columbia Pictures has been offering the best screenwriters 2 percent of the gross profits (after the production and marketing budget has been deducted). An original screenplay by a Writers Guild of America member can cost from its minimum, $69,499^[3] and upwards of $5 million (e.g., M. Night Shyamalan's Unbreakable ).
Producers: Film producers and executive producers are often well-paid, with a top producer earning a seven-figure salary upfront as well as bonuses and a share of the profits. For Spider-Man (2002), producer Laura Ziskin is estimated to have been paid over $30 million.^[4]
Director: The DGA minimum is about $19,143 per week, for a minimum of ten weeks' work.^[5] An A-list film director can command $5 to $10 million per film.
Cast: While the bulk of the cast usually gets paid by the Actors Guild standard rate of about $2,300 per week,^[6] famous and bankable film stars can demand fees up to $30 million per film, plus perks (trailer, entourage, etc.) and possible gross participation.^[7] Sometimes an actor will accept a minimal fee in exchange for a more lucrative share of the profits. Union extras are paid around $130 per day (plus extra for overtime or if they provide their own wardrobe), but on a low-budget film non-union extras are paid less, sometimes nothing at all.
Production costs: The cost of producing the film includes crew wages, production design, live set and studio costs, costumes, catering (food and drinks etc.), accommodation, transportation, travel, hotel stay, etc. The director of photography is usually the highest paid member of the crew.
Visual effects: The cost of computer-generated imagery effects and other visual effect work in post-production depends largely on the amount of work, the desired quality, and the effects company involved (Industrial Light and Magic is the most prestigious and expensive); extensive effect work, as in Avatar or The Lord of the Rings , can easily cost up to $100,000,000.^{[ citation needed ]}
Music: Typically, the music budget of a major motion picture is about 2 percent of the final total. Some, such as Spider-Man 's music budget, have been as high as $4.5 million.^{[ citation needed ]} The top film composers can ask for a seven-figure salary to compose about an hour of original film score. For well-known artists, like Christina Aguilera ( Shark Tale ) or Kanye West ( Mission: Impossible III ), the cost may be around $1 million for an original song;^{[ citation needed ]} for existing works it may be around $300,000.^{[ citation needed ]} Sometimes a less-known artist will license the rights to their song for a small fee in exchange for the publicity.

Tactics for cutting costs

Eliminate night scenes. Shooting at night requires powerful/expensive lighting and the payment of nighttime rates to the crew. Broken Arrow (1996) cut costs by millions of dollars by eliminating the night scenes from the script. Many directors choose to use the "day for night" technique.^{[ citation needed ]}
Avoid location filming in famous or commercial areas. Shooting a scene on, say, the Golden Gate Bridge requires stopping traffic with a resultant drop in revenue to the city of San Francisco. Filming such a scene for Interview with the Vampire cost Warner Bros. $500,000. Shifting the location to the San Francisco-Oakland Bay Bridge for close-ups could potentially save hundreds of thousands of dollars in location fees. Moreover, some locations (such as commercial enterprises like hotels and nightclubs) are more willing to allow filming than others. Some producers of low-budget features avoid paying location fees and seek to capture shots by subterfuge.^{[ citation needed ]}
Film action scenes early on Sunday morning. Stopping traffic for a car chase scene is easier in the early hours of Sunday morning, when traffic is at its lightest.^{[ citation needed ]}
Use unknown, non-famous actors instead of well-established movie stars.
Ask above-the-line talent to defer their salaries. In exchange for dropping their large upfront salaries, actors, directors, and producers can receive a large share of the film's gross profits. This has the disadvantage of cutting the financier's eventual takings. It has the further disadvantage of ambiguity. In the case of net profit participation instead of gross profit participation, disagreements due to Hollywood accounting methods can lead to audits and litigation, as happened between Peter Jackson and New Line Cinema, after New Line claimed The Lord of the Rings film trilogy, which grossed over 2 billion USD, failed to make any profit and thus denied payments to actors, the Tolkien Estate, and Jackson.^{[ citation needed ]}
Use a non-union crew. This is not an option for studios that have signed contracts with the unions—the Directors Guild of America (DGA), Writers Guild of America (WGA), and Screen Actors Guild (SAG). Director Robert Rodriguez has been known to use the skills of experienced non-union crews for his films.^{[ citation needed ]}
Film in another region. For example, many Hollywood movies set in U.S. cities are shot in Canada to take advantage of lower labour costs, subject to fluctuating exchange rates. As well, they take advantage of federal and provincial subsidies designed to grow and sustain the film and television production industries in the area. Many U.S. states have responded with tax incentives of their own (see Movie production incentives in the United States). Australia, Hungary, the Czech Republic, Germany, Malta, and New Zealand are other countries in which Hollywood movies are often filmed.^{[ citation needed ]}

Going over budget

In the US film production system, producers are typically not allowed to exceed the initial budget. Exceptions have of course been made, one of the most notable examples being Titanic (1997). Director James Cameron ran over budget and offered his fee back to the studio. In other countries, producers who exceed their budget tend to eat the cost by receiving less of their producer's fees. While the US system is profitable and can afford to go over budget, some other countries' film industries tend to be financed through government subsidies.^{[ citation needed ]}

Examples

Though movie studios are reluctant to release the precise details of their movies' budgets, it has occasionally been possible to obtain (clandestinely) details of the cost of films' breakdowns. For an example of a budget for a $2 million independent feature, see Planning the Low-Budget Film by Robert Latham Brown.

Unbreakable (2000 film)

Story rights and screenplay: $5,000,000
Producers: $1,878,260
Director (M. Night Shyamalan & Assistant): $5,081,749
Cast: $35,068,388
- Bruce Willis : $20,000,000
- Samuel L. Jackson : $7,000,000
- Robin Wright Penn : $2,500,000
- Rest of Cast, Casting, Stunts, & Travel: $5,568,388
Production costs: $26,214,709
- Visual effects: $1,000,000
- Music: $2,253,456

Total: $74,243,106 ^[8]

Lara Croft: Tomb Raider – The Cradle of Life (2003 film)

Story rights and screenplay: $4 million
Producers: $4 million
Director (Jan de Bont): $5 million
Cast: $17.25 million
- Angelina Jolie: $12 million
- Extras: $250,000
- Other (inc. Jolie's perks): $5 million
Production costs: $67 million
- Set design and construction: $17.8 million
Visual Effects: $13 million
Music: $3.3 million
Editing: $3 million
Post Production costs: $1.6 million

Total: $118 million^[9]

Terminator 3: Rise of the Machines (2003 film)

Story rights (Carolco and Gale Anne Hurd): $19.5 million
Screenplay: $5.2 million
- John D. Brancato & Michael Ferris: $1 million
Director (Jonathan Mostow): $5 million
Producers: $10 million
Cast: $35 million
- Arnold Schwarzenegger : $29.25 million + 20% gross profits
- Schwarzenegger's perks: $1.5 million
- Rest of principal cast: $3.85 million
- Extras: $450,000
Production costs: $58 million
Post-production costs: $4 million
Visual effects: $20 million
Music: $2 million
Other costs: $33.6 million

Total: $187.3 million^[10]

Spider-Man 2 (2004 film)

Story rights: $20 million
Screenplay: $10 million
Producers: $15 million
Director (Sam Raimi): $10 million
Cast: $30 million
- Tobey Maguire : $17 million
- Kirsten Dunst : $7 million
- Alfred Molina : $3 million
- Rest of cast: $3 million
Production costs: $45 million
Visual effects: $65 million
Music: $5 million
- Composer (Danny Elfman): $2 million.

Total: $202 million^[11]

Sahara

The Los Angeles Times presented an extensive special report, dissecting the budget of the 2005 film Sahara . The documents had become public domain after a lawsuit involving the film.^[12]

Related Research Articles

A film crew is a group of people, hired by a production company, for the purpose of producing a film or motion picture. The crew is distinguished from the cast, as the cast are understood to be the actors who appear in front of the camera or provide voices for characters in the film. The crew is also separate from the producers, as the producers are the ones who own a portion of either the film studio or the film's intellectual property rights. A film crew is divided into different departments, each of which specializes in a specific aspect of the production. Film crew positions have evolved over the years, spurred by technological change, but many traditional jobs date from the early 20th century and are common across jurisdictions and filmmaking cultures.

The Screen Actors Guild (SAG) was an American labor union which represented over 100,000 film and television principal and background performers worldwide. On March 30, 2012, the union leadership announced that the SAG membership voted to merge with the American Federation of Television and Radio Artists (AFTRA) to create SAG-AFTRA.

A film producer is a person who oversees film production. Either employed by a production company or working independently, producers plan and coordinate various aspects of film production, such as selecting the script, coordinating writing, directing, editing, and arranging financing.

The Directors Guild of America (DGA) is an entertainment guild that represents the interests of film and television directors in the United States motion picture industry and abroad. Founded as the Screen Directors Guild in 1936, the group merged with the Radio and Television Directors Guild in 1960 to become the modern Directors Guild of America.

"Below-the-line" is a term derived from the top sheet of a film budget for motion pictures, television programs, industrial films, independent films, student films and documentaries as well as commercials. The "line" in "below-the-line" refers to the separation of production costs between script and story writers, producers, directors, actors, and casting and the rest of the crew, or production team.

In a motion picture, television program or video game, the opening credits or opening titles are shown at the very beginning and list the most important members of the production. They are now usually shown as text superimposed on a blank screen or static pictures, or sometimes on top of action in the show. There may or may not be accompanying music. When opening credits are built into a separate sequence of their own, the correct term is a title sequence.

Pre-production is the process of planning some of the elements involved in a film, television show, play, or other performance, as distinct from production and post-production. Pre-production ends when the planning ends and the content starts being produced.

Filmmaking or film production is the process by which a motion picture is produced. Filmmaking involves a number of complex and discrete stages, beginning with an initial story, idea, or commission. Production then continues through screenwriting, casting, pre-production, shooting, sound recording, post-production, and screening the finished product before an audience, which may result in a film release and exhibition. The process is nonlinear, as the director typically shoots the script out of sequence, repeats shots as needed, and puts them together through editing later. Filmmaking occurs in a variety of economic, social, and political contexts around the world, and uses a variety of technologies and cinematic techniques to make theatrical films, episodic films for television and streaming platforms, music videos, and promotional and educational films.

<span class="mw-page-title-main">Principal photography</span> Phase of producing a film or television show in which the bulk of shooting takes place

Principal photography is the phase of producing a film or television show in which the bulk of shooting takes place, as distinct from the phases of pre-production and post-production.

Residuals are financial compensations that are paid to the actors, film or television directors, and others involved in making TV shows and movies in cases of the cable reruns, syndication, DVD release, or licensing to streaming media. Residuals are calculated and administered by industry trade unions like SAG-AFTRA, the Directors Guild of America, and the Writers Guild of America. The word is typically used in the plural form.

A production company, production house, production studio, or a production team is a studio that creates works in the fields of performing arts, new media art, film, television, radio, comics, interactive arts, video games, websites, music, and video. These groups consist of technical staff and members to produce the media, and are often incorporated as a commercial publisher.

Television crew positions are derived from those of film crew, but with several differences.

<span class="mw-page-title-main">Hollywood accounting</span> Opaque or creative accounting methods

Hollywood accounting is the opaque or creative set of accounting methods used by the film, video, television and music industry to budget and record profits for creative projects. Expenditures can be inflated to reduce or eliminate the reported profit of the project, thereby reducing the amount which the corporation must pay in taxes and royalties or other profit-sharing agreements, as these are based on net profit.

A background actor or extra is a performer in a film, television show, stage, musical, opera, or ballet production who appears in a nonspeaking or nonsinging (silent) capacity, usually in the background. War films and epic films often employ background actors in large numbers: some films have featured hundreds or even thousands of paid background actors as cast members. Likewise, grand opera can involve many background actors appearing in spectacular productions.

A low-budget film or low-budget movie is a motion picture shot with little to no funding from a major film studio or private investor.

<span class="mw-page-title-main">Location manager</span>

The location manager is a member of the film crew responsible for finding and securing locations to be used, obtaining all fire, police and other governmental permits, and coordinating the logistics for the production to complete its work. They are also the public face of the production, and responsible for addressing issues that arise due to the production's impact on the community.

Film finance is an aspect of film production that occurs during the development stage prior to pre-production, and is concerned with determining the potential value of a proposed film.

In the cinema of the United States, a unit production manager (UPM) is the Directors Guild of America–approved title for the top below-the-line staff position, responsible for the administration of a feature film or television production. Non-DGA productions might call it the production manager or production supervisor. They work closely with the line producer. Sometimes the line producer is the UPM. A senior producer may assign a UPM more than one production at a time.

Runaway production is a term used by the American Hollywood industry to describe filmmaking and television productions that are intended for initial release/exhibition or television broadcast in the U.S., but are actually filmed outside of the immediate Los Angeles area, whether in another country, another U.S. state, or in another part of California.

A film director is a person who controls a film's artistic and dramatic aspects and visualizes the screenplay while guiding the film crew and actors in the fulfillment of that vision. The director has a key role in choosing the cast members, production design and all the creative aspects of filmmaking in cooperation with producer.

References

↑ "How to Set a Household Budget". thenest.com. Retrieved 21 April 2018.
↑ Imber, Peter (2007-11-06). "Inside the WGA: Even at $400K a Week, a Million Insecurities". ABC.news. Retrieved 2012-07-15.
↑ "Schedule of Minimums" (PDF). Writers Guild of America. Archived from the original (PDF) on 31 March 2015. Retrieved 29 April 2015.
↑ Brodesser, Claude; Harris, Dana (2003-04-13). "Tobey's tangled rep web". Variety. Retrieved 2023-08-30. …Maguire felt his sequel compensation didn't reflect the more than $30 million that producer Laura Ziskin earned from the first 'Spider-Man'…
↑ "DGA Rate Cards 2012 - 2013; Minimum Salary Schedule". Directors Guild of America . Retrieved 16 August 2012.
↑ "Pay Rates for Actors". Actorpoint.com. Archived from the original on 2014-02-13. Retrieved 2014-02-10.
↑ Weinraub, Jake (2011-08-02). "Forbes: DiCaprio Beats Depp for Title of Hollywood's Highest Paid Actor". Reuters. Retrieved 2012-01-29.
↑ "The Smoking Gun: Archive: The Sixth Sense". The Smoking Gun . p. 10. Archived from the original on 2006-09-05.
↑ Edward Jay Epstein. "Budget for Tomb Raider-2 With Angelina Jolie". (Requires Flash)
↑ "budget". Edwardjayepstein.com. Retrieved 2014-02-10.
↑ Thomas, Archie (11 June 2004). "Anatomy of a blockbuster". the Guardian.
↑ Glenn F. Bunting (April 15, 2007). "$78 million of red ink?". Los Angeles Times.

External links

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[1] "How to Set a Household Budget". thenest.com. Retrieved 21 April 2018.

[2] Imber, Peter (2007-11-06). "Inside the WGA: Even at $400K a Week, a Million Insecurities". ABC.news. Retrieved 2012-07-15.

[3] "Schedule of Minimums" (PDF). Writers Guild of America. Archived from the original (PDF) on 31 March 2015. Retrieved 29 April 2015.

[4] Brodesser, Claude; Harris, Dana (2003-04-13). "Tobey's tangled rep web". Variety. Retrieved 2023-08-30. …Maguire felt his sequel compensation didn't reflect the more than $30 million that producer Laura Ziskin earned from the first 'Spider-Man'…

[5] "DGA Rate Cards 2012 - 2013; Minimum Salary Schedule". Directors Guild of America . Retrieved 16 August 2012.

[6] "Pay Rates for Actors". Actorpoint.com. Archived from the original on 2014-02-13. Retrieved 2014-02-10.

[7] Weinraub, Jake (2011-08-02). "Forbes: DiCaprio Beats Depp for Title of Hollywood's Highest Paid Actor". Reuters. Retrieved 2012-01-29.

[8] "The Smoking Gun: Archive: The Sixth Sense". The Smoking Gun . p. 10. Archived from the original on 2006-09-05.

[9] Edward Jay Epstein. "Budget for Tomb Raider-2 With Angelina Jolie". (Requires Flash)

[10] "budget". Edwardjayepstein.com. Retrieved 2014-02-10.

[11] Thomas, Archie (11 June 2004). "Anatomy of a blockbuster". the Guardian.

[12] Glenn F. Bunting (April 15, 2007). "$78 million of red ink?". Los Angeles Times.

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