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We all knew Avatar was expensive, but maybe what we didn’t know was just how expensive. There have been rumors swirling around the film’s excessive budget number and now the New York Times says they know the movie’s bottom line. They estimate Avatar cost $500 million to make. Take that Waterworld.
The really strange thing here is that it doesn’t sound like Avatar will actually have to make $500 million at the box office before 20th Century Fox turns a profit. It’s kind of like when your local sports team builds a new stadium, sticks the tax payers with the bill, and then reaps all the profits from owning it… without really sharing. Sure they promise the presence of the stadium will create new businesses, clean up neighborhoods, and raise the coolness factor of the town in general. But in the end, you’re still stuck in Arlington shopping at Everything’s A Dollar stores while Jerry Jones does a Scrooge McDuck dive into his money bin.
That sounds like the kind of deal Fox worked out to get Avatar. The Times story says Rupert Murdoch’s conglomerate juggernaut (Which is now three times bigger than it was just ten years ago! There’s a scary thought.) is only on the hook for 40% of the cost of the film. They roped private equity partners into paying for 60 percent of the movies $230 million production budget. The rest of the $500 million seems to have come from Cameron’s wallet, and other shadowy, worldwide investors spending money on marketing and trying to convince people that this isn’t Delgo 2.
The millions Cameron himself invested, they may not even have to pay back. The deal is set up in such a way that if his production costs exceed a certain amount, he’ll defer his repayment until everyone else is kept in the lifestyle to which they’re accustomed. In Hollywood, that generally means you’ll never see a dime.
The bottom line here is that Fox is almost sure to get richer and bigger no matter how many tickets you buy for Avatar. But seriously, isn’t $500 million way too much to spend for a bunch of CGI? Go check out the full New York Times article if you're interested in the nitty gritty of how getting rich off Avatar is or isn't getting done.