Is Avatar’s Budget Half a Billion, or Half That?

Published by Jeff Leins on: November 9th, 2009

An article in the New York Times has caused quite a stir today in the movie community after it claimed a $500 million budget for James Cameron’s 3-D film, Avatar.

Michael Cieply’s report wonders if Fox can turn a profit from a production that costs half a billion, a total that includes everything from paying the special effects wizards to TV spots on Nickelodeon.  The studio claims the costs of making the actual movie are around $230 million, possibly a low-ball number (like most studio budget estimates) but still under the roughly $267 million spent on 1997’s Titanic after an adjustment for inflation.

Cieply writes Fox will likely spend somewhere around $150 million to market Avatar globally, but how does that suddenly add up to 500?  It continues to say $250M in domestic ticket sales would mean Fox was in the black, a seemingly arbitrary number even when you figure in outside investors.  The fuzzy math has David Poland questioning every detail of the NYT article, and admittedly left me scratching my head.

Cameron and his production company Lightstorm Entertainment reportedly pitched in millions — nearing $100M some say — of their own money to research and develop brand new three-dimensional techniques and motion capture technology, which might explain why a parade of major directors were stopping by the set to see what all the fuss was about.  Iron Man director Jon Favreau coined the phrase “game changer” in connection with the film after seeing early footage.

Sources for CHUD’s Devin Faraci say that brings the budget closer to $400 million (before marketing), muddying the waters even further.  He supports the figures at the Times and say they might even be a bit under the true amount when the movie finally hits theaters in December.

More importantly, Faraci wonders if this sort of top dollar spending and monstrous risk is good for cinema in general.  Will Avatar’s potential failure (or even the illusion of a disaster) mean more safe, boring blockbusters like fourth and fifth sequels to established franchises?  I think we’re already seeing that with four Pirates and Spider-Man movies and ideas based on board games.

In Hollywood, where public perception is key, a decent-sized theatrical opening may still be met with sneering faces from its detractors.  Reports citing this $500M figure will wonder where the money went or how anything but the biggest movie of 2009 can be considered a financial success.

We may never know what the true number is, but this latest development fits with the premature beatings the Cameron epic has been taking in the public forum, and it will only become fuel for people who have already made up their minds.  The trailers were met with some awed responses, but they were drowned out by a vocal crowd of nitpickers comparing the creature design to the Smurfs or box office flop Delgo.  Perhaps they’re responding negatively to the hype the movie is receiving, or maybe this is geek payback for Cameron betraying action/science fiction fans with a Titanic departure?