How Much Does It Really Cost to Make a Movie?
Have you ever wondered just how much that set on your favorite movie cost to make? Or just how much an actor gets paid for a few months of work?
You’re not alone. It’s notoriously difficult to get the line-by-line costs of a movie. Film budgets are some of Hollywood’s most closely guarded secrets since they really don’t want anyone to know how much anyone else is getting paid in Tinseltown.
But Hollywood can’t keep everything a secret. Using leaked budgets and information from Hollywood insiders, we’ve deconstructed how much the most important parts of a big Hollywood movie cost to make — sometimes by estimates, and sometimes by specifics to the dollar.
And, spoiler alert: Hollywood budgets are obscenely expensive.
Selling the Script
When it comes to Hollywood, everything is negotiable.
The story goes that Sylvester Stallone was offered $360,000 for the script of "Rocky" on the condition he wouldn’t play the lead. Stallone refused until the studio relented and gave him $1 million to make the entire movie. That's the story, anyway. It's probably not real, but it makes for good marketing.
James Cameron sold his script — and the rights — to "The Terminator" for $1 on the condition he would be the director.
Screenwriters Have Minimum Payments
For writers who are members of the Writers Guild of America, there are minimums.
The WGA states that for a film with a budget that is less than $5 million, a screenplay and treatment purchase must be at least $71,236.
For big-budget films of $5 million or more, the purchase must be at least $133,739.
Big Names Get Bigger Scripts
If a scriptwriter is well known, he or she will make more money. But some people start off great.
For example, Shane Black received $250,000 for writing "Lethal Weapon" in 1987. That film’s budget was $15 million, so the script made up 1.66 percent of the buddy cop movie’s cost.
Nine years later, he sold his script for "The Long Kiss Goodnight" for $4 million. The 1997 film had a $65 million budget, making the script 6.25 percent of the budget.
The rights to a screenplay are included in the script’s cost, when applicable. For instance, 2014’s "Annie" had an $8.34 million chunk of its $77.75 million budget devoted to the screenwriters and rights, which makes up about 10.7 percent of the film’s budget.
Screenwriters Get Residuals
The upfront pay for the script covers the film's theatrical release at home and overseas. But when the movie is released on DVD, premium channels or streaming services, screenwriters receive a residuals payment.
A typical screenwriter's residual fee is 1.2 percent of the gross. Additionally, there can also be a DVD script publication fee of $10,000.
This only applies to credited screenwriters. Uncredited ones are out of luck. And you have to be in the WGA.
Money on the Back End
Some cast and crew, particularly directors and staff, make money off the back end. A back-end deal is some way for people to get paid via profit participation. That often includes gross profit points, which take a percentage of the film's total gross. These only pay out if the movie makes money.
Back-end deals are typically given to people who take a pay cut upfront, which helps the movie get made. Gross profit points are particularly coveted, because they can make people insanely rich off of just one film.
Stars Who Got Rich off Back-End Deals
A number of stars have enriched themselves by negotiating back-end deals, like:
- Tom Hanks made $70 million from "Forrest Gump" from back-end deals and gross points; he took a salary pay cut for profit sharing.
- Keanu Reeves was paid $10 million for "The Matrix," but then ended up with another $25 million in back-end deals. He earned a total of $250 million for the entire "Matrix" franchise, thanks largely to the back end.
- Robert Downey Jr. made $75 million for "Infinity War," the majority of which came from profit participation.
How much a director gets paid — and how much of that budget they’ll take up — usually has to do with how well-known they are.
Patty Jenkins is said to have earned a middle-rate pay of $1 million for the smash-hit "Wonder Woman" upfront (not even 1 percent of its estimated budget of $120 million to $150 million).
However, back-end deals based on bonuses tied to the film’s success could have earned her closer to $3 million, according to Screen Rant.
For "Wonder Woman 1984," she received a $9 million paycheck.
"Annie" director Will Gluck earned $2 million, or 2.5 percent of its $77.75 million budget.
The Highest-Paid Directors
Big-time directors can make a lot more.
For "Lord of the Rings," Peter Jackson made $20 million, plus 20 percent of the gross on the back end. Jackson made the same for 2005’s "King Kong" (minus the back end) and Christopher Nolan is rumored to have been paid $20 million, plus 20 percent gross, for "Dunkirk" — the same deal he was paid for "Interstellar." He’s said to be one of the highest-paid directors in Hollywood.
According to THR, the average big-picture director made $750,000 to $1.5 million in 2016.
Directors just getting their big-picture break can earn a lot less, from $250,000 to $500,000.
Producers have general oversight of the entire movie, from finding the script and the director to macro-managing the marketing and the rights.
According to THR, the average studio producer makes around $750,000, while entry-level producers rake in about $250,000. Big-name producers can command much more, of course, especially when it comes to back-end deals.
"Deadpool" producer Simon Kinberg is said to have earned $2 million from the film’s $58 million budget (about 3.5 percent), but went on to make another $38 million after taking in a back-end deal.
The Cast — Setting the Stage
The cast usually makes up the lion’s share of a movie’s production budget, with big-name stars commanding absurdly high salaries.
While movie stars were always highly paid, the very first actor to earn $1 million was Marlon Brando in 1962 for "Mutiny on the Bounty." That's over $8.5 million today, which is still a lot less than Hollywood's highest-paid stars.
The first actress to break the $1 million mark was Elizabeth Taylor, who received the seven-figure paycheck for "Cleopatra."
Big Stars Can Cost Millions in Perks
Big-name stars can come with "perks" like travel, catering and very expensive special treatments.
For example, according to documents obtained by The Smoking Gun, Mel Gibson earned $25 million for his lead role in "Signs," which only had a $70.2 million budget — or more than one-third of the movie’s cost for just one actor.
But he cost even more than that. Gibson was allotted another $1 million for other expenses, like private jet travel and $57,000 worth of private chiropractic and massage work.
In comparison, co-star Joaquin Phoenix only made $1 million.
In another example, "The Sixth Sense" star Bruce Willis earned $14 million with an additional $780,000 in perks, while his 10-year-old "I see dead people" co-star Haley Joel Osment was given a low payday of $150,000.
"The Sixth Sense" had a budget of around $40 million. Willis alone made up about 37.5 percent of the budget. It’s not revealed just how much the entire cast made, but it’s reasonable to believe it’s above 40 percent of the budget.
Willis is also rumored to have made a total of $100 million by taking a pay cut of the $14 million in favor of gross percentage points (this is something that wouldn't have been listed in the budget itself).
For "The Interview," which cost $44 million, Seth Rogen earned $8.4 million and James Franco earned $6.5 million. Out of the $77.748 million budget for "Annie," $17.25 million was allocated to the entire cast, making up 22 percent of the budget.
Bribing the Locals
If a movie is filming in a foreign land, money sometimes talks when it comes to favors from the local government.
For example, the 2005 action-comedy "Sahara," which was filmed in Morocco, paid out $237,386 dollars in "'courtesy payments,' 'gratuities' and 'local bribes,'" according to documents obtained by the Los Angeles Times. These payments included $40,688 to halt a river improvement project and $23,250 for "political/mayoral support."
"Sahara" was a financial flop and had a bloated budget of $160 million, plus $81.1 million in distribution expenses.
Promotion and Advertising
While a movie’s production budget does not include promotional costs, it’s still worth noting how much promotion costs. Not only are promotional costs staggering, but they also can make or break a movie’s box-office gross, and are a huge part of deciding whether or not a movie is a flop or a hit when these costs are factored in.
According to Gizmodo, who spoke with a BoxOffice.com editor, marketing costs can equal half or more of a movie’s production budget. They say the children’s flick "Megamind" cost between $130 million and $145 million to make, but had a promotional cost of $65 million.
If It's a Hit, Open the Wallets
Movies that studios think will do well get the star treatment, with increased marketing, press junkets and the works.
Movies that a studio thinks are going to flop receive less advertising in an attempt to curb their losses. Plus a January or February release date, which is where movies go to die.
They're called "dump months."
Profits and Loss
As a general rule of thumb, if a movie makes twice its production budget, it will be profitable.
But there are exceptions to that rule. Take, for instance, the 1988 hit film "Rain Man" starring Tom Cruise and Dustin Hoffman. "Rain Man" made $172.8 million worldwide on a $25 million budget. By 1992, it had grossed $228 million. It was a huge success. Or was it?
According to the American Film Institute, the movie actually lost money. Apparently, distribution fees were $134 million, profit participation ate up $77.6 million, and production costs amounted to $45.87 million (we're going to assume that included the marketing).
The result? "Rain Man" lost $30 million. Those numbers are from 1992, so it's possible that "Rain Man" picked up another $30 million over the following three decades, but highly unlikely.
Whether it’s an original soundtrack or the booming beats of radio hits, a movie has got to have music. And that music will cost money.
According to the ninth edition of "All You Need to Know About the Music Business" by Donald Passman, license costs can range from $15,000 (for minor usage of an obscure song) to more than $100,000.
The Opening Credit Song Is the Most Expensive
Songs performed over the opening credits cost more, from $50,000 to $300,000. Likewise, ending credit songs cost around $35,000 to $200,000. This lines up for what "The Village" paid for the use of license of "one song" (the budget doesn’t specify which song) in its budget for $300,000.
James Newtown Howard composed the soundtrack for "The Village."
For the compilation of songs used in "The Interview," the studio paid $1.7 million.
And if you want an original composition, it can cost a pretty penny: For James Newton Howard’s original score for "The Village," he was paid $1.3 million — about 1.8 percent of the film’s $71.6 million budget.
The Special Effects and Stunts
Stunts are often necessary even when the movie isn’t action-packed. For example, "The Interview" allocated $218,823 for stunts. Special effects require the hiring of many different people — often entire teams or companies — all of which need compensation.
Additionally, brief scenes can require millions when special effects are involved — and they might not even make it into the movie. A 46-second scene in "Sahara," which involved a plane crash, cost $2 million but was ultimately left on the cutting-room floor.
Some stars, like Tom Cruise, perform their own stunts. And they're very adequately compensated for it.
Tanks and Choppers
With the leaked budget of "The Interview," we’re allowed a more in-depth look at some more minor special effect costs of a $44 million comedy with a few explosions.
The SFX cost of firing a tank is $100, while the SFX involved in making the round look like it lands cost $1,000. Blowing up a vehicle with a helicopter missile cost $3,000. Practical effects for a helicopter crash cost $500, while something called HELICOPTER PMP — probably overall helicopter management — cost $5,000.
If all of that seems a bit low, it does to us, too. But according to the budget, total special effects for "The Interview" cost about $2.5 million, about 5.7 percent of the film's cost.
Special Effects Can Be the Star, Too
For big-budget, action-packed flicks, special effects are a huge cost. Case in point: "Terminator 2: Judgement Day," which had a budget between $90 million and $100 million, devoted $15 million to $17 million just for the liquid metal CGI effects for the T-1000.
A CGI-heavy scene for the 2006 film "Superman Returns," where Superman returns to his home planet, cost about $10 million to produce (it was cut from the theatrical version, but included in the Blu-ray).
For big-budget pictures that aren’t action movies, special effects may not make up much of the budget. Looking through the leaked budget for "The Village," special effects cost several hundred thousand dollars in equipment, rentals and manpower, while "Annie" spent $850,000 on special effects — only 1 percent of the budget.
Designing the Sets
Not all movies need expensive set designs, but Hollywood flicks often spend millions on creating amazing landscapes. The NORAD set from the 1983 movie "War Games" is rumored to have cost $1 million out of its $12 million budget. "Titanic" had incredible custom-made sets built out of its $200 million budget — like an entire grand staircase made out of solid oak.
For "The Matrix Reloaded," the Wachowski brothers custom-built a mile-and-a-half freeway for its epic car chase scene. The cost: $2.5 million. A drop in the bucket for its $150 million budget, but that’s just one scene.
Sets constructed for "Annie," made up $2.47 million worth of its budget, about 3 percent. For "The Interview," set design and construction totaled about $2.261 million, or about 5 percent of the budget.
But Sometimes You Just Need a House. Or Some Woods.
While sets help, there are rare instances where moviemakers don't need to create anything. "The Blair Witch Project" and "Paranormal Activity" are the two biggest examples of this. Each movie was made with extremely low budgets, with the filmmakers using whatever they had around for the setting.
"The Blair Witch Project" is set in the woods while "Paranormal Activity" takes place in the director's house. "Paranormal Activity" cost $15,000 to make and conjured up $193.4 million at the box office, spawned several sequels and became the most profitable horror movie of all time.
"The Blair Witch Project" cost substantially more, with a budget of $200,000 to $500,000 and made $248.6 million at the box office.
Movies Can Take Advantage of Local Tax Breaks and Filming Incentives
Some states and countries offer subsidies as incentives to film there, hoping that big-budget productions and their crew will spend locally and help create jobs.
According to CNBC, "subsidies take multiple forms, but typically include tax credits, cash rebates on qualifying production expenses, or a combination of both." The same article also notes that the movie studios are the ones to make out better than the states, as it's still questionable whether or not filming incentives help the state whatsoever.
Other countries also provide incentives. Australia offers a 16.5 percent tax rebate for movies filmed there and a 30 percent tax rebate for post-production work, regardless of where the movie was originally filmed.
"Lord of the Rings" received about $200 million in tax breaks for filming the entire trilogy in New Zealand.
The Savings Can Be Significant
It's still a big business. California, for example, offers a maximum of $330 million in credits each year.
It's really good for movie studios, too, as it cuts off a chunk of the budget. "Run All Night," a box-office bomb starring Liam Neeson, had an original budget of $61.6 million, but after New York tax credits, the bill came to $50.5 million, according to Bomb Report.
That's $11 million off the budget, which is like half the cost of a Neeson.
While actors can take a pay cut for profit participation and help a movie get made, some movies run into so many problems that they go way over budget.
A classic example of a movie with production troubles that caused an inflated budget is "Cleopatra," which was budgeted for $5 million — of which $1 million went to Elizabeth Taylor. Sixteen weeks into filming, Taylor got ill, and production was halted and only 10 minutes of film were viable. The budget had increased to $7 million.
It took two-and-a-half years of stop-and-start production, with filming taking place over several countries and two directors. It ended up costing $44 million, and nearly bankrupted 20th Century Fox.
Other times, filmmakers have to fight to pry more money out of the studio to see their vision realized.
Sometimes Stars Fight for Bigger Budgets
When the studio pulls the purse strings tight, there can be some heated arguments between the suits and the stars.
That's what happened with Mel Gibson's "Braveheart." Gibson directed and starred in the film, passing on several other movies to do so. The movie was to be produced by 20th Century Fox and Paramount, with 20th Century Fox putting up two-thirds of the budget and Paramount picking up the rest of the bill.
But when Gibson met with the Paramount execs, they offered only $15 million and a 25 percent distribution fee. The $15 million wouldn't even cover the costs of the epic battle scenes.
Gibson, not known for having a cool head, picked up an ashtray and threw it through a wall.
"I was like, 'What the f--- do you people mean? I turned down three jobs — blah, blah, blah.' I was kind of upset, probably a little over the top. It was all posturing bulls---," Gibson recalled.
Paramount gave in to his demands within a week.
Movie Financing Can Attract Criminal Behavior
Movie financing is a complicated process. "Hollywood accounting" is a term often used to describe the weird ways that filmmakers use to justify not paying people.
Whenever you're dealing with millions and millions of dollars, there's a real risk of a film's finances being embezzled.
Look at John Travolta's "Battlefield Earth," one of the worst movies ever made. On paper, this stinker had a budget of around $73 million. Only it didn't. Finance Pictures, which had independently produced the movie, had inflated the budget and embezzled $30 million of "Battlefield Earth" money.
The film only had a production budget of $44 million. Travolta took a pay cut and worked on a $10 million salary, then fronted an additional $5 million when funds were running low. Franchise Pictures went bankrupt in 2007.
More recently (and somewhat ironically), Riza Aziz, producer for Martin Scorsese's "The Wolf of Wall Street," was accused of financing the movie with money stolen from the wide-reaching 1Malaysia Development Berhad (1MDB) scandal. Aziz's production company, Red Granite Pictures, paid $60 million in a civil lawsuit to the U.S. government but admitted no fault.
Product Placement Can Help
If you see a product in a movie, chances are that it's paid for.
The most notorious example of product placement is "Mac and Me," which is just one big ad for McDonald's combined with a movie that unashamedly rips off "E.T. the Extra-Terrestrial." McDonald's food distribution company financed the film. And E.T. promoted Hersey's candy in exchange for $1 million in advertising.
For the biggest films, just a few seconds of ad placement can run several million dollars for Marvel movies. Pampers paid $50,000 for its diapers to be shown in "Three Men in a Baby," and Exxon paid $300,000 to be featured in "Days of Thunder."
But that's not always the case (this is the world of movies, there are no rules). You'd think that FedEx paid out the nose for being a central plot point in "Cast Away," but instead, FedEx just worked with the producers and provided FedEx trucks, packages, etc. The company didn't pay a dime and got all that publicity for free.
Choosing to Use Film or Digital Cameras
There's a heated debate among filmmakers about whether film or digital cameras are best. Film is much more expensive and requires lots of labor, but some people (like Quentin Tarantino) swear it looks better and softer than digital, which can be extremely crisp.
Mainly, though, film cameras are almost always shot in 24 frames per second, which is how most of us are used to seeing things on TV and movies. Digital can shoot at fps much higher than that, and it can look weird. Tarantino calls digital "the death of cinema as I know it."
MovieMaker compared the cost of cameras on a low-budget film. The digital camera and capture drives amounted to $43,500, while the 35mm camera and film amounted to nearly $97,000 in rental equipment. Scale that up with much more expensive cameras and loads more film needed for a motion picture, and those costs rise much more.
So if you're looking to get into the movie-making business to get started, you'll need a good bit of scratch if you want a full-fledged film.