The Academy of Motion Picture Arts and Sciences, sitting on a $134-million nest egg, is ready to use some of that wealth to undertake its boldest step in decades: development of a "world-class" motion-picture museum in the Los Angeles area.
The price tag, site and timetable aren't yet known. But sources say academy governors are aiming for a project that would cost about $200 million and take about seven years to develop.
Although previous efforts have been made here to start film museums, the academy plan would be by far the most ambitious in scope and carry with it the stamp of the world's most prestigious film organization.
Indeed, academy executives said they wanted the museum to be a "major statement" comparable to such recently built Los Angeles cultural landmarks as the $274-million Walt Disney Concert Hall or even the $1.3-billion J. Paul Getty Museum.
"We're not going to think small," Academy President Frank Pierson said.
He added that the academy's governors envisioned creating not only a major Southern California tourist attraction but a film education center as well.
Funds from the nonprofit organization would be used as seed money to design an enterprise that is expected, in turn, to attract donations and possibly assistance from local government.
The project would mark the biggest expansion of the industry group's franchise since the 1930s, when it retreated from its early role as an arbiter of artist-studio disputes to focus on the Academy Awards. In those days, the academy relied on dues and donations and held its award shows in hotel ballrooms. One year, it had to go, hat in hand, to studios to come up with extra money for its golden statuettes.
The worldwide broadcast has become so big and rich that the academy at times has seemed an institution in the service of a single annual television show. During the last five years, the academy's treasure chest has increased tenfold thanks to TV rights and investments.
Those riches probably will continue to rise as TV audiences become more fragmented, making big-event shows such as the Oscars and Super Bowl even more desirable to advertisers.
The ceremony, which academy Executive Director Bruce Davis calls "this crazy thing we do one night a year," keeps the academy so flush it never has to beg for operating funds.
At most nonprofit organizations, Davis said, "you wake up every day of your life and ask: 'How are we going to go raise the money we need to get through the next month and the next month?' We don't have that."
In fact, the Oscar telecast has generated so much money in recent years, academy officials have come to face the question: What to do with it all?
Davis provided the answer, disclosing plans to proceed with the museum, during a discussion with The Times. He was joined by Pierson, as well as Controller Andrew Horn, who oversees the group's finances, and executive administrator Ric Robertson, who supervises a pair of related philanthropic foundations.
The academy's television deal with Walt Disney Co.'s ABC was renewed in 1998, just after the enormous popularity of "Titanic" pushed the Oscar broadcast to a ratings peak that hasn't been repeated. The academy's awards-related revenue immediately jumped 55% to $41 million in 1999. It easily will top $50 million this year thanks to an annual escalation in fees.
Based in Beverly Hills, the academy and its related foundations technically don't record a profit as would a business enterprise. But the group's consolidated financial reports and tax returns reflect an organization that would be the envy of most any money-making venture.
For the year ended June 30, 2003, net assets rose by about $14 million, 60% of which came from the awards-show profit. The rest flowed from a growing investment portfolio that has been spread among equity and bond funds -- which will help provide the financial underpinning for the museum project.
As recently as the early 1990s, assets were rising by only about $3 million a year, and the academy's bankroll was below $10 million, none of it in long-term investments.
Still, like managers of any business, academy executives have been fretting about costs.
Financial statements show that Academy Awards-related expenses climbed 27% to $21.9 million in 2002, as the show moved into the new Kodak Theatre from its recent homes at the Shrine Auditorium and the Dorothy Chandler Pavilion. At the Kodak, logistics involved in closing the busy area around Hollywood Boulevard and Highland Avenue increased security costs to nearly $2 million.
Academy officials have tried to curtail the show's burgeoning expenses by imposing new budgeting procedures on an event that celebrates grandiosity. "Our production is like the most complicated Broadway show that runs one night," Davis said.