Can You Justify Hundreds of Millions?

[Jack Lynt]

Is it immoral to spend hundreds of millions of dollars on a movie?

It came up when rumors that Avatar's budget might be 400 million (?) were swirling around. And Steven Sodergergh asked it (or charged it) in his recent State of Cinema Address.

I remember Tavis Smiley asking James Cameron the question on his show. JC said, no, he didn't feel guilty about it. He had put a bunch of people to work making Avatar, generated profits for many people, helped to provide employment on down the food chain, down to theater workers, etc.

I don't know. I think you might as well question capitalism in general, then. They (big budget films) do generate work and profits, don't they? But do they benefit enough people, I suppose a question might be, to justify them?

Or is it immoral? Obscene?

My feeling, I think, short of throwing capitalism and the marketplace out the window, is that I don't think I'm going to worry too much about some folks spending two or more hundred million dollars on a single film when they do, in fact, or can, in fact, bring joy to so many people. Because so many people do love their movies, especially their tent pole spectacles. Avatar gave the joy of entertainment to a lot of people around the world, the relatively few haters, I'll bet, notwithstanding.

And after all, in the context of contemporary economics, what is two or three or four-hundred million dollars that some folks spend on a usually harmless product that is a movie compared to the obscene amounts that go to military spending, killing more people more effectively, billions and billions of secret dollars being spent on building a largely secret surveillance bureaucracy, business, and apparatus to surveil...us, bailing out Wallstreet fat cats that, so we're told, almost sent us crashing back to a barter economy, and whose fraudulent behavior has brought Europe to the brink, etc etc etc.

Okay, I suppose that's not necessarily a very strong argument to make. Two wrongs don't make a right. Or do they? But I think the perspective, the context do matter.

Is this debate, if there really is a debate, similar to the one over whether NASA, space exploration, or pure science ought or ought not be funded? Or is there such a gulf between art and entertainment on the one hand and science and space exploration on the other that it's pointless to consider them similar questions?

Anyway. What say you?

 

[jax_rox]

I may have a biased opinion as someone who works in the industry, but IMO - if a $100mil feature can, say, employ 50+ more people than an $80mil feature, then that sounds pretty good to me.

A lot of what goes into the budgets of these big movies is star salaries. Perhaps you could suggest that star's lower their pay rate, but then there's a reason these actors can demand the kind of pay they do - in general, they give consistent performances (ie: they may not necessarily be better than an unknown, but they have a proven track record that says they're much more likely to perform at a certain level for the 30th time than an unknown), and they put bums on seats.
To suggest such things is to get into a different economic argument, that I don't particularly want to get into (and aren't versed well enough in economics to do so anyway).

Realistically, if film budgets were brought down, it's the little guys who would lose - those who work for nothing or next to nothing (compared to their HODs or immediate superiors) who would lose out - lose their jobs, or take a significant dip in pay.

The Hobbit created so many jobs in New Zealand, and it was great for their economy. Realistically, if you brought the price of equipment and labour down, or alternately gave everyone access to multi millions of dollars, you'd still end up with Hollywood films, but you'd end up with a lot more people out-of-work (ie: if everyone can afford Roger Deakins, he's going to be booked up 365 days a year, and all those DPs who charge <1/10th of what Deakins does lose all of their income), and you'd just end up with some brilliantly shot pieces of crap.

 

[DDK]

I think the 1% who see the profits are the real problem. If that money was more fairly and evenly distributed, then it would be of far greater benefit to the world economy which would in turn help more people in general.

 

[8salacious9]

id happily spend hundreds of millions, with that i would employ as many young and old people out of work for a year or 2 and give them the opportunity that no one else does.

id also hire lots of indie actors no big names, or maybe just the one, also with that money id pay myself £10-20 million, split that between the family etc..

 

[jax_rox]

I think the 1% who see the profits are the real problem. If that money was more fairly and evenly distributed, then it would be of far greater benefit to the world economy which would in turn help more people in general.

IMO, I don't really mind who sees the profits. As long as I get paid my rate and make my living, that's fine by me. The rich get richer, sure, but they're employing me so the proverbial 'poor' aren't actually getting 'poorer'.

id happily spend hundreds of millions, with that i would employ as many young and old people out of work for a year or 2 and give them the opportunity that no one else does.

id also hire lots of indie actors no big names, or maybe just the one, also with that money id pay myself £10-20 million, split that between the family etc..

You're implying that an indie movie would cost that amount of money, or that you could get that amount of money for it. In an ideal world, it would be great if people just handed you hundreds of millions of dollars, but the reality is - that movie wouldn't cost that much if it didn't need to. So often, I hear people talk about movie budgets being so high and questioning why. Movie budgets aren't high because studios feel like throwing money at productions - the biggest single budget items are star packages. After that, everything's costed as it should be.

Productions don't go 'well we only really need a tripod for this scene, but hey seeing as we have the money, why don't we just throw in a helicopter shot while we're at it?'

 

[scottspears]

I remember reading an interview with John Sayles back in the 1980s and he was asked what he would do if somebody gave him $40 million to make a movie (this was back when $40 mil was a lot of money) and he said he would make the movie for $2-3 million and give the rest to people who could really use it.

Those kinds of budgets are risky ventures. Let's say The Great Gatsby tanks at a cost of $200 mil is it worth it? Yes, people made a wage for a 1-3 year span, but that's it. The money is gone. If a business was opened for that money and stayed open for 20 years I think the return would be better.

If that money was spent on a country like Haiti, it could save tens of thousands of lives. It could educate lots of under privileged kids. It might be used to find a cure for a rare cancer.

On the other hand, when you have a hit like Avatar, it returns millions to its investors how can re-invest in some big movies and maybe some indies.

No easy answers here.

Scott

 

[DDK]

IMO, I don't really mind who sees the profits. As long as I get paid my rate and make my living, that's fine by me. The rich get richer, sure, but they're employing me so the proverbial 'poor' aren't actually getting 'poorer'.

Who buys the content you work on?

The middle-class is what generates most of the world's economy and it's the middle class that is suffering as the "rich get richer". With all this 'belt tightening' going on around the world, if there isn't significant change to flatten wealth distribution, then there will be less and less jobs for you to work on as more and more people consider paying for a movie to be a luxury they can't afford rather than a part of their everyday entertainment consumption.

 

[Cracker Funk]

I don't understand why one should feel guilty about investing money in any venture that they think might turn a profit (so long as they're not employing child-labor, or raping the environment, or any other unethical business practices).

If a producer drops $400mil into a movie, they're not being frivolous, they're practicing business. It's a risky business, but it's not like they're draping themselves in Gucci and D&G, while sipping caviar smoothies. Maybe they actually DO sip caviar smoothies in their off-time, but that has nothing to do with their business investment, which is perfectly legit.

And for all we know, after they make a crap-ton of profits off their investment, they might go Bill Gates and transform themselves into the world's leading philanthropist.

 

[rayw]

Is it immoral to spend hundreds of millions of dollars on a movie?

They (big budget films) do generate work and profits, don't they? But do they benefit enough people, I suppose a question might be, to justify them?

Or is it immoral? Obscene?

And after all, in the context of contemporary economics, what is two or three or four-hundred million dollars that some folks spend on a usually harmless product that is a movie compared to the obscene amounts that go to military spending, killing more people more effectively, billions and billions of secret dollars being spent on building a largely secret surveillance bureaucracy, business, and apparatus to surveil...us, bailing out Wallstreet fat cats that, so we're told, almost sent us crashing back to a barter economy, and whose fraudulent behavior has brought Europe to the brink, etc etc etc.

What say you?

I say a more holistic understanding of economic principles would be beneficial.


http://www.investopedia.com/terms/o/opportunitycost.asp

Definition of 'Opportunity Cost'
1. The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.

2. The difference in return between a chosen investment and one that is necessarily passed up. Say you invest in a stock and it returns a paltry 2% over the year. In placing your money in the stock, you gave up the opportunity of another investment - say, a risk-free government bond yielding 6%. In this situation, your opportunity costs are 4% (6% - 2%).

Investopedia explains 'Opportunity Cost'
1. The opportunity cost of going to college is the money you would have earned if you worked instead. On the one hand, you lose four years of salary while getting your degree; on the other hand, you hope to earn more during your career, thanks to your education, to offset the lost wages.

Here's another example: if a gardener decides to grow carrots, his or her opportunity cost is the alternative crop that might have been grown instead (potatoes, tomatoes, pumpkins, etc.).

In both cases, a choice between two options must be made. It would be an easy decision if you knew the end outcome; however, the risk that you could achieve greater "benefits" (be they monetary or otherwise) with another option is the opportunity cost.​

http://www.investopedia.com/terms/v/velocity.asp

Definition of 'Velocity Of Money'
The rate at which money is exchanged from one transaction to another, and how much a unit of currency is used in a given period of time. Velocity of money is usually measured as a ratio of GNP to a country's total supply of money.

Investopedia explains 'Velocity Of Money'
Velocity is important for measuring the rate at which money in circulation is used for purchasing goods and services. This helps investors gauge how robust the economy is, and is a key input in the determination of an economy's inflation calculation. Economies that exhibit a higher velocity of money relative to others tend to be further along in the business cycle and should have a higher rate of inflation, all things held constant.​

Lettuce say there is $400M laying around for want of something to be done with it.

The WORST thing to do is for banks, businesses, and investors to just hoard that cash, the crux of our current financial state of affairs.

Now... once someone decides to actually SPEND that money is when opportunity costs + money velocity can be used to quantify social benefit.

If one business buys another business very little of the cash value spent materially benefits a great number of people.

If one business employs a lot of people that will turn around and spend that money on consumables and depreciating assets then the greatest number of people benefit - until that cash just ends up back into the pockets of cash hoarders: banks and (non)investors/savers.

So, whether $400M is spent on film, firearms, flip-flops, flapjacks, furniture, or pharmaceuticals really doesn't matter.
What matters is what happens AFTER the money is spent?
Does it keep on getting spent over and over again or does it just get locked up somewhere where it benefits no one for decades?
THIS is why the rich keep getting richer and the poor keep getting poorer, the so called "economic divide."

 

[Aspiring Mogul]

If a $100 million feature can make more than $100 million, why not? This is a political discussion.

 

[directorik]

What is “better”? Saving lives or making movies?
What is “better”? A good plumber or a director?
What is “better”? A good teacher or a good script supervisor?

We could all go for the rest of our lives without another movie
being made - try living in your neighborhood for one month
without any plumbers or trash collectors.

I get paid more as a camera operator than most teachers. Clearly
it’s better for society to have a good teacher than another reality
show camera operator.

When I chose my profession I was not thinking of making a better
society, providing for the needy or helping the people of Haiti. I’m
glad there are those who do that. Is it immoral for me (or anyone)
to make a living at something that isn’t egalitarian?

Yes, a huge piece of a $200/$400 million budget is going to a small
group of people. I know many of you hate the 1% so that is a horrible,
perhaps immoral, thing. But most of the budget goes to people like
me and jax - people earning a living doing what they love, feeding their
families, donating to their own, personal charities.

I’m with jax. If there is a $40,000,000 budget and I don’t have a job
or a $200,000,000 budget and I have a job I can’t find that budget
immoral.

 

[TheArtist]

Food for thought :

In 1970, a Zambia-based nun named Sister Mary Jucunda wrote to Dr. Ernst Stuhlinger, then-associate director of science at NASA's Marshall Space Flight Center, in response to his ongoing research into a piloted mission to Mars. Specifically, she asked how he could suggest spending billions of dollars on such a project at a time when so many children were starving on Earth.

Stuhlinger soon sent the following letter of explanation to Sister Jucunda, along with a copy of "Earthrise," the iconic photograph of Earth taken in 1968 by astronaut William Anders, from the Moon (also embedded in the transcript). His thoughtful reply was later published by NASA, and titled, "Why Explore Space?"

Extract of the answer :

About 400 years ago, there lived a count in a small town in Germany. He was one of the benign counts, and he gave a large part of his income to the poor in his town. This was much appreciated, because poverty was abundant during medieval times, and there were epidemics of the plague which ravaged the country frequently. One day, the count met a strange man. He had a workbench and little laboratory in his house, and he labored hard during the daytime so that he could afford a few hours every evening to work in his laboratory. He ground small lenses from pieces of glass; he mounted the lenses in tubes, and he used these gadgets to look at very small objects. The count was particularly fascinated by the tiny creatures that could be observed with the strong magnification, and which he had never seen before. He invited the man to move with his laboratory to the castle, to become a member of the count's household, and to devote henceforth all his time to the development and perfection of his optical gadgets as a special employee of the count.

The townspeople, however, became angry when they realized that the count was wasting his money, as they thought, on a stunt without purpose. "We are suffering from this plague," they said, "while he is paying that man for a useless hobby!" But the count remained firm. "I give you as much as I can afford," he said, "but I will also support this man and his work, because I know that someday something will come out of it!"

Indeed, something very good came out of this work, and also out of similar work done by others at other places: the microscope. It is well known that the microscope has contributed more than any other invention to the progress of medicine, and that the elimination of the plague and many other contagious diseases from most parts of the world is largely a result of studies which the microscope made possible.

The answer, here :
http://www.lettersofnote.com/2012/08/why-explore-space.html

 

[Aspiring Mogul]

I'm happy to see you here, Rik - can you give your thoughts on my thread on Goldman?

Anyway, you're right on. This has been known since the time of Adam Smith, who wrote, "The Wealth of Nations". He said the butcher does not sell meat to give people a better diet; he does it so they can give him money and he can be better off. The same would be true for the filmmaker. That has held true, and the events of the last century show that capitalism works, or at least it works less badly than the alternative.

 

[DDK]

Food for thought...

Whilst interesting I don't really think it applies here since I highly doubt any diseases are going to be cured by funding the next Transformers movie.

I think the greater benefit is to the amount of people who earn money through the profession. They pay taxes, they have families who work in other areas, they are a part of communities, etc. I bet a lot of them also donate to charities and in numerous other ways contribute to society.

Hence why I feel the greater evil is the distribution of that money. If it was distributed to more people rather than filtering up to the 1%, then it would be of much greater benefit to the world at large. Instead of buying one person a new, gold plated luxury yacht to cheat on their wives in, it could employ several hundred more people.

 

[rayw]

Instead of buying one person a new, gold plated luxury yacht to cheat on their wives in, it could employ several hundred more people.

But building and maintaining a gold plated luxury yacht to cheat on their wives in DOES employ at least a hundred people!
And those hundred employees are going to turn around with those paychecks and buy consumables (food, utilities, entertainment) and depreciating assets (clothes, furniture, appliances, electronics, autos).
Once those corporations get a hold of that EPS... well... there's where your cash hoarding has already begun.

 

[DeJager]

This forum has no room for politics. It only serves to divide us and it's not needed. I can have a heavy dose of politics every time I log onto Facebook or any media news outlet.

 

[DDK]

But building and maintaining a gold plated luxury yacht to cheat on their wives in DOES employ at least a hundred people!

Pfft, ten people at best.

 

[Jack Lynt]

Wow, I love you guys (gender neutral). What a smart bunch of people posting smart thoughts and sharing their knowledge, both of which have already educated and enlightened me.

If a $100 million feature can make more than $100 million, why not? This is a political discussion.

This forum has no room for politics. It only serves to divide us and it's not needed. I can have a heavy dose of politics every time I log onto Facebook or any media news outlet.

This is not a retort or me being argumentative, but a sincere address. I know the concern, I share it, and I do not want to bring politics to I.T...usually. And I know the rule.

We are a group of filmmakers. Politics only serve to divide us. We do not allow political discussions unless they are related to film. If they turn into political bickering, they will be closed.

Emphasis mine, of course.

I tried to use my best judgment. But of course it's not up to me to decide. I hope that management agrees. I realize that the thread's question is at least partly political in nature. However, I also believed, and believe, that it is related to film. It's a real question that people have asked and are asking about the movie biz in the popular press and media. I didn't invent it or make it up. I had no intention for it to divide I.T.ers, and I'm glad to be able to say, the proof is there to read, that it has divided no one here...look, it seems to me that all posters have proven that we're above turning it into something nasty or unpleasant. It's a question that might be worth intelligent people asking. And I would defer to a more intelligent person than I am who also happens to be a well regarded and successful filmmaker, Steven Soderbergh. I was somewhat interested by this question before. But it was his bringing it up in his State of Cinema Address that inspired me to actually pose it to the forum.

 

[rayw]

Pfft, ten people at best.

BUILD THE GOLD PLATED YACHT:
Financing
Design
Research
Purchasing
Engineering
Marketing
Storage
Construction site
Tools
Utilities
Office overhead
Shop overhead
Metalworkers
Fiberglass workers
Electricians
Plumbers
HVAC
Interior installation
Painting/weatherproofing
Woodwork
Engines
Hardware
Fuel/Oils/Fluids
Licences/Permits/Inspections

MAINTENANCE OF THE GOLD PLATED YACHT:
Pilot
Engineer
Service staff
Harbor Master/docking fees
Licences/Permits/Inspections
Food & Drinks
Entertainment
Fuel/Oils/Fluids
Replacement parts
Cleaning, interior/exterior
Maintenance mechanic(s)


That last batch of ongoing expenses over a ten to twenty year lifespan of a gold plated yacht can really cost more than the ship itself.

That's a lot of money going out the door in paychecks, most of it in turn going towards employee purchases of consumables and depreciating assets.
Very few of these people are saving and investing in appreciating assets any major amounts of their paychecks.

 

[wheatgrinder]

Build the gold plated yacht is a great example. Id like to add supply\creation chain.

Take ONE SINGLE SCREW on the gold plated yacht. Lets consider how many people are involved with every aspect of the creation of that one screw..

Where do you start? With the guy who mined the iron ore that went into the metal of that screw....

wait.. maybe you start with the guy who made the machine that the miner used to get the ore, but wait, that machine is made up of thousands of parts, each part having its own creation chain...

Buying any manufactured product impacts MILLIONS of peoples live.


Here.. read this
http://en.wikisource.org/wiki/I,_Pencil