What’s a film cost? Go figure

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.

20th Century Fox Co-chairman Tom Rothman was just as blunt. “The reporting is never accurate, and it probably can’t be accurate,” he says. “There are too few people who know the genuine truth as opposed to the rumored truth you hear from the nattering nabobs of the business.”

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 Warners’ 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 before dawn 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. Still, why do we regularly chronicle movie budgets while rarely, if ever, reporting how much a new TV show or hip-hop CD costs?

“The cost of a movie is an incredibly important barometer, not only of the movie’s performance but of the industry itself,” says Joel Sappell, the Los Angeles Times business section’s senior entertainment editor. “Look at Paramount Pictures right now. They’re rethinking their entire strategy about making films, in large part involving how much the films cost and how much risk they should take. Should we not write about that? Isn’t that an important issue to analyze and understand?”

Movie budgets first made headlines in 1980 with the news that Michael Cimino spent a staggering $44 million making “Heaven’s Gate.” The debacle ushered in a new era of industry reporting, some of it shoddy, some stellar. But 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 we’re inaccurate and that they’re liars. Studio chiefs say reporters rarely do their homework when chronicling movies’ financial progress. 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.’ ” On the other hand, we barely disguise our 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 tule fog of sale lease-back deals, foreign tax incentives and complicated back-end profit participation arrangements. It’s probably easier for President Bush to get accurate information about terrorist threats than it is for movie reporters to get credible numbers for most movie budgets. 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.” Not long ago, two top executives at the same studio, just days apart, gave me two completely different budgets for the same movie. Trying to gauge who was being more candid, I asked a fellow reporter for his opinion. He said, “What makes you think both of them aren’t lying?”

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%?’ ”

Waxman said when “Van Helsing” was released in May, “two different people at Universal said on the heads of their children that the movie didn’t cost a penny more than $140 million. But I knew they were lying because a more senior executive at the studio told me just days later that the film cost $155 million.”

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. Many reporters, myself included, have gone back to the original studio with a number even we suspect is suspiciously high in the hopes that it will stimulate -- perhaps shock -- the studio into offering a realistic budget figure.

“A lot of people like to bait you,” says Brogliatti. “They’ll say, ‘I hear ‘Polar Express’ 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 only cost $78 million. Our paper did the same thing in January after running a piece saying “The Last Samurai” cost $180 million. A week later we corrected the story, saying the film’s budget was “about $140 million.”

In the spirit of self-criticism, I would say we’re often guilty of fuzzy math. Even the nation’s top newspapers routinely offer different budget figures for high-profile movies. In the space of a month last December, the Los Angeles Times ran three stories about “The Last Samurai” with three different numbers, ranging from $100 million to $180 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. As for our paper: “The reality is there’s not enough communication -- the right hand doesn’t always know what the left hand is doing,” says Sappell. “We try to go with our best sourcing on each story, but we need to look more closely at what the best sourcing is and how to do it.”

The fundamental flaw in budget reporting is that we essentially rely on someone telling us the truth, not exactly a foolproof method when dealing with a Hollywood culture that runs on hype and imagination. We end up using a Cold War strategy: trust but verify. Unfortunately, no one voluntarily produces documents verifying a film’s budget. “They say they’ll show you the documents,” Waxman says. “But whenever I’ve asked, they’ve never shown me anything.”

Still, there’s no excuse for papers publishing different budget numbers for the same movie. One solution would be for a paper, perhaps my newspaper, to designate a respected reporter to maintain a database of budget figures compiled by the reporters covering the movie beat. We still might be wrong occasionally, but at least we’d be consistent.

Movie budgets get more complex each year. We’d do a better job reporting on budgets if we treated the job more like investigative journalism and less like deadline reporting. But getting at the truth in Hollywood is like gambling in Vegas: The odds are stacked in the house’s favor. Or as the Journal’s Orwall put it: “If the studios complain about inaccurate budget reporting, it’s important to note that most of the information we get about budgets comes from the studio themselves.”

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The Big Picture runs Tuesday in Calendar. If you have questions, ideas or criticism, e-mail them to patrick.goldstein@latimes.