How Much is the Oscar for Best Picture Worth?
Updated: Sep 10, 2019
Is it really an honor just to be nominated?
So, how much is it worth?
Wow, that was a short article.
Well, ok, let me be a little more precise: winning the Oscar™ for Best Picture is worth around $30 million in additional profit compared to the other Best Picture nominees.
So, how did you come up with that number?!
I'm so glad you asked.
These days, it seems like there's an awards ceremony every other week. And studios will shell out big bucks to get their movie nominated (and hopefully win). So that got me thinking.. Does it matter if you actually win, or is it enough just to get nominated? I mean, all the nominees get a ton of publicity.
Since we're talking about movies, I decided to analyze the single most coveted prize for movies: the Oscar™ for Best Picture. (hold for applause) I looked at every nominee and winner since 2000 and created estimated cashflow waterfalls to come up with estimated profit and ROI. (To learn more about what these terms mean, download my free ebook.) In short, I calculated how much money each movie made (after fees and expenses) and then compared it to their budget.
From this data, I was able to find the average* profit for the winners compared to the nominees. Best Picture winners had an average profit of $72 million**. Best picture nominees had an average profit of $35 million***. Less than half as much, or a difference of $37 million
That makes sense, So, why did you say it's worth $30 million?
Well, I also calculated the value using ROI. See, big budget movies can have an undue influence on the data. It makes it look like the average profit is higher than it really is. Without getting too technical, ROI helps eliminate that bias.
Using the data, I was able to find the difference in average ROI for the winners and nominees. The winners had an average ROI of 271%. The nominees had an average ROI of 169%. A difference of 102%.
What does that mean in dollar terms?
To figure that out, we have to look at budgets. The data tells us that the average budget for best picture nominees and winners is $25 million. That means the ROI difference of 102% is worth about $26 million.
Since the ROI analysis cancels out the effect of blockbusters better than the profit analysis, I put the final number closer to that answer. Plus, $30 million is such a nice, round number. #OCD
Maybe the winners made more money because they were just better movies.
I thought that might be a factor, and rather than trying to judge the quality of the movies myself, ;) I looked at the Metacritic™ scores for each movie. (Metacritic™ is a review aggregator: basically Rotten Tomatoes, but better.) There was almost no correlation between the quality of the movie and how much money it made. And often, the Best Picture winner did not have the highest Metacritic™ score.
What about movies that aren't even nominated? How much do they make?
Good question. Stay tuned to find out how much getting nominated is worth in my next blog article!
If you have any questions about this article or other aspects of film finance, you can leave a comment or email me from the website. If there are any topics you want to know more about in the form of a future article, I'd love to hear it.
The data set included 133 movies: 19 Best Picture winners and 114 nominees.
* average - median was used to mitigate the effect of outliers
Disclaimer - I was not an accountant for any of these films. Profit estimates are based on publicly available information and industry trends.