Film budgeting refers to managing the budget for a film during its production phase. During script development, a rough budget is produced by filmmakers in order to convince film producers and film studios to give them a greenlight for production. During pre-production,
a much more detailed film budget is produced. This document, which
could be over 150 pages long, is used to secure financing for the film.
Multiple drafts of the budget may be required to whittle down costs. A
budget is typically divided into four sections: above-the-line (creative talent), below-the-line (direct production costs), post-production (editing, visual effects, etc), and other (insurance, completion bond, etc).
- Story rights: The right to produce a film based on a play, novel, video game or as a remake or sequel can cost anything from a couple of thousand (Leaving Las Vegas) to over $10 million (the video game Halo). An original screenplay by a Writers Guild of America member costs from a minimum of around $50,000 (Quentin Tarantino's True Romance) to $5 million (M. Night Shyamalan's Unbreakable).
- Screenplay: An A-list screenwriter can be paid $1 million to
write the first three drafts of a script, with a further $1 to $2
million sole credit bonus. Once the story has been agreed upon and the
script locked, script doctors may be brought upon to revise the final draft at $100,000 to $200,000 a week. Recently, Columbia Pictures
have been offering the best screenwriters 2 percent of the gross
profits (after the production and marketing budget has been deducted).
Typically the development of a script consumes 5 percent of a film's
- Producers: Film producers and executive producers
are often well-paid, with a top producer earning a seven-figure salary
upfront as well as bonuses and a share of the profits. (Often a producer
will be given 40 percent of the net profits). For Spider-Man, producer Laura Ziskin is estimated to have been paid over $30 million.
- Director: The DGA
minimum is about $14,000 a week, for a minimum of ten weeks' work. An
A-list director can command $5 to $10 million a film. Traditionally, a
director's salary is about 7 percent of the final budget.
- Cast: An A-list actor can ask for anything from $10 million
to $30 million, plus $3 million in perks (trailer, entourage, etc.) and
10-20 percent of the gross profits. The rest of the cast, by comparison, can often come out much worse with many being paid the Screen Actors Guild
minimum (as low as $100/day on an Ultra-Low Budget film). Sometimes an
actor will accept a minimal fee in exchange for a more lucrative share
of the profits; Bruce Willis is estimated to have made $100 million from The Sixth Sense.
Union extras are paid around $130 per day (plus extra for overtime or
if they provide their own wardrobe) but on a low-budget film non-union
extras are paid less, sometimes nothing at all.
- Production costs: The cost of actually shooting the film
including sets, wardrobe, location filming, hotels and transportation.
The most prestigious productions will often employ the most successful,
and therefore most expensive, crew, with the director of photography usually the highest paid at about $500,000 to $1 million. Shooting costs could easily amount to $500,000 a day for 100 days.
- Visual effects: Employing a hundred employees of Industrial Light and Magic for over a year can turn a big-budget film into a mega-budget film. Computer-generated imagery (CGI) work in post-production can be expensive; such work on The Hulk is estimated to have cost $100 million.
- Music: The top film composers can ask for a seven-figure salary to compose an hour or so of original music. An original song by Christina Aguilera (Shark Tale) or Kanye West (Mission: Impossible III) could cost $1 million, and the right to use a song by David Bowie or The Beatles
could cost $300,000. (In addition, the artist may wish to see a
screening of the film to see if it meets their approval; Bowie did so
with the film Training Day, giving the film a good amount of pre-release publicity.). More recently, the rights to have Led Zeppelin's "Whole Lotta Love" on the film Lords of Dogtown
cost producers $3 million. Sometimes a film will turn to unknown or
little-known artists willing to sell the rights to their song for a
small fee in exchange for the publicity. Typically, the music budget of a
major motion picture is about 8 percent of the final total; Spider-Man's music budget was $4.5 million, including a brand-new song by Chad Kroeger.
Film Budget Terms Glossary
 Tactics for cutting costs
- Eliminate night scenes. Shooting at night requires powerful/expensive lighting and the payment of nighttime rates to the crew. Broken Arrow cut costs by millions of dollars by getting rid of the night scenes from the script. Many directors choose to use the 'day for night' technique.
- Avoid location filming in famous or commercial areas. Shooting a scene on, for example, the Golden Gate Bridge, requires stopping traffic with a resultant drop in revenue to the city of San Francisco. Filming such a scene for Interview with the Vampire cost Warner Bros. $500,000. Shifting the location to the San Francisco-Oakland Bay Bridge for close-ups
could save hundreds of thousands of dollars in location fees. Some
locations are more willing to allow filming than others - commercial
enterprises such as hotels and nightclubs. Some producers of low-budget
features avoid paying location fees and seek to capture shots by
- Film action scenes early on Sunday morning. Stopping traffic for a car chase scene is easier in the early hours of Sunday morning, when traffic is at its lightest.
- Use unknown cast members rather than stars.
- Ask above-the-line talent to defer their salaries. In
exchange for dropping their large upfront salaries, actors, directors
and producers can receive a large share of the film's gross profits.
This has the disadvantage of cutting the financier's eventual takings.
It has the further disadvantage of ambiguity. ''gross profits is
customarily defined as the profits remaining after production and
distribution expenses are subtracted from revenues. Disagreements over
accounting methods can lead to audits and even litigation, as recently happened between Peter Jackson and New Line Cinema over dividing up the profits from the hugely-successful Lord of the Rings film trilogy, which grossed over 2 billion USD.
- Use a non-union crew. Not an option for studios that have signed contracts with the unions—the Directors Guild of America (DGA), Writers Guild of America (WGA), and Screen Actors Guild (SAG). Using an inexperienced crew has its own disadvantages, though.
- Film in another region. For example, many Hollywood movies set in U.S. cities are shot in Canada. These "runaway productions" enjoy lower labour costs, subject to fluctuating exchange rates. As well, they take advantage of federal and provincial subsidies designed to grow and sustain the film and television industries in the area. Many U.S. states have responded with tax incentives of their own. The Czech Republic, Australia, and New Zealand are other countries in which Hollywood movies are often filmed.
 The budget as an advertising tool
For blockbuster movies, high budgets are advertised to imply that the film will be worth watching. On the other hand, El Mariachi was advertised
as having a shoestring budget of $7,000. El Mariachi's actual budget
including the distribution costs far exceeded $7,000. The festival print
of El Mariachi was in fact made for $7,000. The additional budget
expenditures came when the movie was picked up for distribution by a
 Going over budget
In the US film production system, producers are not allowed to exceed
the initial budget. Exceptions have of course been made, one of the
most notable examples being Titanic. Director James Cameron ran aground
with the budget and offered his fee back to the studio. In other
countries, producers who exceed their budget tend to eat the cost by
receiving less of their producer's fees. While the US system is
profitable and can afford to go over budget, other countries' film
industries tend to be financed through government subsidies.
Though movie studios are reluctant to release the precise details of
their movies' budgets, it has occasionally been possible to obtain
(clandestinely) details of the cost of films breaks down. For an example
of a budget for a $2 million independent feature, see Planning the Low-Budget Film by Robert Latham Brown (ISBN 0-9768178-0-2).
- Story rights and Screenplay: $.1 million
- Producers: Rs.2 crores
- Director (M. Night Shyamalan): Rs.2.6 crores
- Cast: Rs.10 crores
- Bruce Willis: Rs.25 crores
- Samuel L. Jackson: Rs.7 crores
- Robin Wright Penn: Rs.2.6 crores
- Rest of cast: Rs.1.5 crores
- Production costs: Rs.10.2 crores
- Visual effects: Rs.1 crores
- Music: Rs.2.5 crores
Total: Rs.73 crores
 Lara Croft Tomb Raider: The Cradle of Life
- Story rights and screenplay: $4 million
- Producers: $4 million
- Director (Jan de Bont): $5 million
- Cast: $17.25 million
- Angelina Jolie: $12 million
- Extras: $250,000
- Other (inc. Angelina's perks): $5 million
- Production costs: $67 million
- Set design and construction: $17.8 million
- Visual Effects: $13 million
- Music: $3.3 million
- Editing: $3 million
- Post Production costs: $1.5 million
Total: $118 million
 Terminator 3: Rise of the Machines
- Story rights (Carolco and Gale Anne Hurd): $14.5 million
- Screenplay: $5.2 million
- John D. Brancato & Michael Ferris: $1 million
- Director (Jonathan Mostow): $5 million
- Producers: $10 million
- Cast: $35 million
- Arnold Schwarzenegger: $29.25 million + 20% gross profits
- Arnold's perks: $1.5 million
- Rest of principal cast: $3.85 million
- Extras: $450,000
- Production costs: $58 million
- Post-production costs: $4 million
- Visual effects: $20 million
- Music: $2 million
- Other costs: $33.6 million
Total: $187.3 million
 Spider-Man 2
- Story rights: $20 million
- Screenplay: $10 million
- Producers: $15 million
- Director (Sam Raimi): $10 million
- Cast: $30 million
- Tobey Maguire: $17 million
- Kirsten Dunst: $7 million
- Alfred Molina: $3 million
- Rest of cast: $3 million
- Production costs: $45 million
- Visual effects: $65 million
- Music: $5 million
- Composer (Danny Elfman): $2 million.
Total: $200 million[4
source : wikipedia.org
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