Studio executives see red when the media report movie budgets

It's a game where nobody tells the truth, all sides say

August 13, 2004|By Patrick Goldstein | Patrick Goldstein,LOS ANGELES TIMES

HOLLYWOOD - Peter Chernin is the one of the consummate diplomats of the entertainment industry. But there's one issue that makes even Chernin's blood boil - the media's reporting on movie budgets. Discussing the film business at a media panel in April, the News Corp. president told his audience that it was hard "to read a single bit of truth" about movie budgets in the press.

Barbara Brogliatti, Warner Bros.' longtime chief corporate communications officer, is still seething over her pitched battles with reporters trying to pin down a budget number for Troy, the studio's summer historical epic. When a reporter from the Wall Street Journal told her the paper was planning to write that the movie cost close to $200 million, citing a New York Times story with that figure, Brogliatti says she told the reporter, "I have Jayson Blair's phone number if you need it."

Brogliatti, who insists the film cost "just north of $170 million," says she told the reporter, "If you write that the movie's budget is `just under $200 million,' you're not just calling me a liar, but [Warner Bros. Chairman] Alan Horn a liar too." (The Journal ended up saying the film cost $180 million.)

Studio chiefs believe that budgets are essentially none of the media's business. "I don't really want my competitors to know what Troy cost," says Horn. "We don't even disclose our budgets in our quarterly statements to stock analysts." Of course, the same studios that refuse to divulge budget figures are happy to call reporters on Sunday to trumpet their opening-weekend box office results. And it's impossible to provide any context for the box office numbers without telling readers how much a film costs.

`Heaven's Gate'

Movie budgets first made headlines in 1980 with the news that Michael Cimino spent a then-staggering $44 million making Heaven's Gate. It would be hard to argue that the film's budget wasn't key to the story: If Cimino had stuck to his original budget, the film would've been a dimly remembered flop, not an epic disaster that changed the course of the industry.

Today's budget reporting is truth-or-dare journalism, shaped by constant manipulation and gamesmanship. The issue has become a sore subject because it reinforces the most negative stereotypes about journalists and film execs - that reporters are inaccurate and that studio chiefs are liars.

As Horn put it: "When I read that Last Samurai, with a budget of $140 million, was a disappointment [after its opening weekend], I go, `Please! That's just not the whole story.'"

And journalists barely disguise their disdain for studio whoppers. When Universal said last year that The Hulk cost $137 million, Variety editor Peter Bart responded by writing, "I suppose you could call that an accurate number - give or take, say, $50 million."

The one thing both sides might agree on is that Hollywood deal-making has become so astoundingly complicated that most movie budgets are shrouded in a fog of sale lease-back deals, foreign tax incentives and complicated back-end profit participation arrangements. As Bruce Orwall, a veteran industry reporter for the Wall Street Journal, put it: "When reporters are on deadline, squaring off against the most voracious spin machine outside of the Washington Beltway, you're sometimes not going to get optimal results."

Sharon Waxman, who covers the industry for the New York Times, has her own calculus for how many executives tell the truth about budgets: "Zero! I don't know anyone who tells the truth on a regular basis. Just this week a studio head said to me, `Why should I tell you a real number when everyone else discounts by 30 percent?'"

Faced with so much artful obfuscation, reporters often end up fishing for budget numbers from agents with a client in the film or from another studio that might have been approached to bankroll half the movie. Of course, rival studio executives invariably supply a much higher budget figure than the studio producing the film.

Divide by two

"A lot of people like to bait you," Brogliatti says. "They'll say, `I hear Polar Express [set to open this holiday season] costs $250 million,' because most reporters assume that if I say a film costs $125 million, it must really cost $150 million. What the press often does is take what you say and what they've heard from the competition and divide by two."

Studios now even demand corrections - and sometimes get them - when papers run what they believe are inflated budget numbers. Last year, Variety said in a story that The League of Extraordinary Gentlemen cost $110 million. Two days later, it ran a retraction, saying the film cost only $78 million. The Los Angeles Times ran a correction in January after reporting that The Last Samurai cost $180 million. The correction listed the budget at "about $140 million."

In April, the Wall Street Journal had Shrek 2's budget at $70 million. Several weeks later, the paper reported the film's budget as $95 million.

Why the different numbers? Orwall says when the Journal learned more about the production costs, it passed the information along to its readers.

The fundamental flaw in budget reporting is that it essentially relies on someone telling reporters the truth, not exactly a foolproof method when dealing with a Hollywood culture that runs on hype and imagination.

The Los Angeles Times is a Tribune Publishing newspaper.

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