Film Budget and Box Office Mathematics

Understanding what your film make at the box office will help shape how large or small your film budget should be. Of course, there was no way to predict how much "Napoleon Dynamite" or "Paranormal Activity" or how small "The Island" would gross at the box office. But, if you have a reasonable expectation for the average box office numbers on theatrical films or what certain actors and/or directors command in foreign sales, then you can back into how much to make your film for. The rule of thumb for box office gross is that every dollar the theater earns in gross revenue, half goes to the studio and half goes to the theater (the longer the film plays in theaters the more the split favors the studio). So if your movie makes $100 million dollars at the box office, then $50 million goes to the studio and $50 million goes to theater. P&A costs are usually either $20 million for a normal wide release and closer to $50 million and possibly higher for a tentpole film (ex: "Troy", "Avatar"). So if you expect your horror film to gross $100 million at the box office, with a $20 million P&A spend, then the breakeven cost of the film budget shout be $30 million. Now that you understand the mathematics, you can understand why most horror films are made on a movie budge of $20 - $40 million.

Look at www.quickfilmbudget.com for more information on how to make a film budget for $30 million.