We rarely know how much Hollywood studio movies actually cost to make. Film financing is incredibly complicated, and the official production budgets we see on sites like BoxOfficeMojo never include the additional costs devoted to prints & advertising. Plus, there’s usually more to the story. For example, Sony’s Annie remake officially cost $65 million, but that was only after the studio spent $77 million and was then granted over $11 million in tax incentives for shooting in New York. On the opposite end, WB’s Superman Returns officially cost $270 million, but $60 million of that was tied to the decade of accrued development costs from the various failed Superman movies predating Bryan Singer. Still, that was a budget figure so high it seemed as if the movie had been set up to fail.
Worrying about film profitability isn’t supposed to be our concern, though. We just know that when a movie costs a lot to make it will need to make that much more worldwide to be considered a success, and sometimes those movies with runaway budgets are screwed straight out of the gate.
Well, like Superman Returns before it, Batman v Superman might already be screwed before it’s even come out. According to LatinoReview:
Right now, “Batman V. Superman: Dawn of Justice”s budget has ballooned to $410 million dollars. That means it is in the running for being the most expensive movie ever shot. The current record holder is “Pirates of the Caribbean: On Stranger Tides,” according to financial statements obtained by Forbes.
First, On Stranger Tides‘ officially reported budget is $250 million, and the referenced Forbes article is more about the booming success of the UK’s tax rebate program than it is a line-by-line breakdown of Tides‘ financials. The author does repeatedly state that the true budget ended up being $410 million, but he also points out that Disney’s official profit statements do not indicate the company felt it overspent on Tides considering its $1.045 billion worldwide gross.
Second, this is LatinoReview we’re talking about. That’s a name which should inspire a healthy dose of skepticism followed by a nagging, “Yeah, but sometimes they’re right.” Maybe you can’t completely dismiss this or their follow-up about the Justice League‘s budget:
My sources are now telling me that the two-part “Justice League” movie–which is set to be released in 2017 and 2019, respectively–is going to be relatively reasonably budgeted at $500 million for the production of both films.
That’s what they’ve heard, but they have no explanation to go along with it, completely in the dark on why Batman V Superman might ultimately cost over $400 million but WB will somehow manage to keep each individual Justice League movie to $250 million. The ballooning cost on Batman V Superman might be related to those reports that after viewing the completed film WB was so blown away by Affleck’s Batman that they threw more money at Zack Snyder to go shoot more footage to up Affleck’s screentime. However, it might also mean that LR is being purposefully vague, and the $410 million figure they cite is actually Batman v Superman‘s production budget + anticipated prints & advertising costs, in which case $410 million would not seem that insane. Or maybe this is all total bullshit because screw LR.
If true, though, WB is probably setting Batman V Superman up to fail. Sure, Disney is publicly happy with spending that much to make the last Pirates of the Caribbean movie, but you can tell what they really thought about it based upon the fact that it’s 4 years later and there still hasn’t been another Pirates movie. The sequel has been delayed multiple times after Disney ended its longstanding exclusive relationship with producer Jerry Bruckheimer due to his continued inability to keep his budgets under control. They forced his team to rewrite the next Pirates script to make it something more cost-efficient, and what they have now is a sequel (Dead Men Tell No Tales) which won’t come until the summer of 2017, a full six years after On Strangers Tide.
What they possibly learned is that when you spend that much money on a movie you are setting the profitability bar way too high. The Hollywood blockbuster, by its definition, swings for the fences, but spending that much money on a Pirates movie or Batman V Superman is like demanding that you absolutely must hit a grand slam at the worldwide box office. If a measely home run or even maybe a 2-run home run won’t cut it for you anymore, you’ve probably dug yourself into too deep of a whole.
Good news: Batman V Superman filmed on a friendly tax-rebate program in Detroit. Some of that rumored $410 million budget could be nullified by tax incentives. Plus, remember when we worried about X-Men: Days of Future Past becoming the second most expensive movie in 20th Century Fox’s history? Well, there’s a sequel due out next year. Everything clearly worked out.
Isn’t this just what studios do now? They spend more money than ever before to make more money than ever before. As Harvard Business School professor Anita Elberse explained in her book about about the blockbuster mentality in Hollywood:
The sheer act of spending more on a film can sometimes lead to higher revenues. Production and marketing budgets are important signals to the marketplace. Audiences aren’t the only ones falling for this; everyone in the “value chain” for films takes it as a cue. Theaters, for instance, will often commit to dedicating more screens to big-budget films, and will also give them more favorable weekends. Their decisions can have a huge influence on potential revenues; we know from research that the number of screens given to a film is the single best predictor of its box office success.
Sure, but at a certain point the amount of money you spend on a movie enters into a financially irresponsible territory that only James Cameron can pull off. If LR is anywhere close with its budget figures, Batman V Superman could very well make a ton of money (more than Man of Steel‘s $668 million) and still be a giant failure. So, um, Batman V Superman, whatever you do – don’t suck. Even then, merely being a good movie might not be enough to deliver the grand slam WB needs.
In March 2016, it will be Batman vs. Superman vs. Profitability.
We Minored in Film 
That’s funny…I just today wondered the same about Infinity War, but then, well those are two movies shot back to back and you can pretty much expect everyone going crazy over it. You can’t say the same about the next PotC, because, well, a lot of fans were unhappy with the last movies in the franchise. with Dawn of Justice, I am not sure if the ongoing believe that EVERYONE has waited for Batman going up against Superman might be a little bit overblown. The comic community is comparable small and if I were a producer, I would expect more along the lines of what Man of Steel made. Which was a lot. But still.
I agree with this article, I definitely feel like Warner Brothers are putting all their eggs in one basket, and no doubt it will make a lot of money but the backlash to Man Of Steel doesn’t seem promising. I just feel like it should have been a great story that is well told (which it well could be) but with the increasing reports on WB’s script process and now budgets, it makes it consistently seem like money is the only goal. Fingers crossed it delivers, I genuinely feel like the DCEU could be a great counterpoint to Marvel, it just needs to tell a great story first.
Yeah. I agree with this article too. There are some really good points particular with how high the profitability bar has been set. Maybe it seems obvious to us looking on and those involved know something special that we don’t but still… the share holders have got to be a little nervous about the hard numbers.
As noted previously in this blog (when discussing Avengers 2), they need the non-geeks to make the majority of the audience. So I wonder how much of the Man of Steel backlash was from the non-geeks.
On a positive note, there are a lot of unused factories in Detroit they can actually destroy for the film.
Also, wow. Annie cost that much to remake?! I wonder if they should have just gotten actors cheaper and less famous than Jamie Foxx and Cameron Diaz.
Hey Kelly, this is a random kind of question but it is about money. If you go to the cinema and ignore the 3D and IMAX options, why does it cost the same to see different current release films at the same cinema? ie why does it cost the same to see a 1 star Adam Sandler film as seeing something better? If you compare things to the supermarket, there are cheaper loaves of bread and then there’s more expensive ones that taste better… Production costs for the cheaper loaf are probably a lot lower and if it is the supermarket’s own brand, there isn’t any advertising invested in it.
Something to keep in mind is that Man of Steel made $170 million before its premiere with over 100 corporate partners. Even if BvS doesn’t hit anywhere close to Avengers numbers, it can still be extremely profitable for the studio via product placement, merchandising, and marketing tie ins. Money is money after all.
True. You wouldn’t necessarily have guessed that Batman Begins was really that big of a hit based on budget vs. worldwide gross, but WB was desperate to get Christopher Nolan to make a sequel since the merchandise and home video sales were insane.
As of late last year, Batman was easily DC’s most licensed character, and sold more merchandise than Superman and The Avengers, though all three groups trail light years behind Spider-Man.
http://www.hollywoodreporter.com/news/superhero-earns-13-billion-a-748281
So, there are various other profit outlets for Batman v Superman. It’s just that, damn, if they truly are spending anywhere close to $400 million on the film’s budget that’s nearly uncharted territory. There’s letting your movie act as a bit of a loss leader, knowing you’ll make up for it in merch and down the road on home video/TV rights, and then there’s spending more money on a movie than just about anyone ever has before.
After the okay biz for Man of Steel and mixed word-of-mouth, I struggle to truly believe that WB would spend that much on Batman V Superman. What would make more sense is if the figure LR heard is budget + prints and advertising, in which case $410 million actually sounds about right.
Forbes’ Scott Mendelson thinks WB should use the budget rumors to its advantage:
http://www.forbes.com/sites/scottmendelson/2015/10/22/how-batman-v-superman-can-turn-its-allegedly-sky-high-budget-into-a-marketing-hook/
Part of me hopes the rumor is true because I would love to see all that money up on screen for a DC movie.
Neat article and solid research nice work Kelly