Analysis: Real Budgets For Films Are On Average 10% Higher Than What’s Reported Online
It’s a rite of passage every time a major movie gets released and there’s a question of just how well it’s doing. Someone brings up whatever estimated budget number for the film they can find online, and then the analysis begins…was that opening good enough for a movie that expensive? How long will it take to become what would be considered a success?
Yet the more fundamental question is just how accurate those budgets that people toss around so much are to begin with.
Luckily for us, as part of the 2014 Sony Pictures leak, a massive document listing the revenues, costs, and profitability for 433 films was released. Using the numbers found in that report, the differences between the reported budgets and the actual budgets can be easily seen. Looking at fifty of the most recent movies on that list, and comparing the numbers:
So how accurate are publicly reported budgets? Most of the time, surprisingly enough, they’re relatively close. On average, a film’s real budget is only about 10% higher than the reported one. Film budgets being underreported from what they actually are is the most common problem, with the actual being higher than the reported for 37 out of the 50 films analyzed.
How the publicly reported budget was found
For the source of this set of information, use the budget information available on Box Office Mojo on each film’s page. For example, for Cloudy with a Chance of Meatballs, their reported number is $100M. Mojo isn’t the only public source of film budgets out there, but it’s one of the most comprehensive ones, so seemed like the right source to compare to.
How the actual budget was found
To find the actual budget, look for that particular film’s page in the leaked document. Then, go down the “ULT” column (“ULT” stands for the ultimate, or final and complete numbers) and look for the row called “DIRECT PRODUCTION COSTS”. So for example, that data entry for the first Cloudy movie shows what rounds to $117M:
Note that for this analysis, only movies where Sony Pictures had full global distribution rights were included. For films where Sony was only managing the release in selected locations, they were not necessarily on the hook for the entire production cost. For example, the movie Pompeii was just a Sony release in the domestic (or North American) market. Other distributors handled the film internationally. Because of this, the Sony entry for Pompeii only shows $1M of direct production costs, and instead $24M in participations. This is because Sony did not finance the movie to start with, it only agreed to release it in exchange for giving the actual production companies a share of the revenue (known as a participation).