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MPAA stops disclosing average costs of making and marketing movies

Dan Glickman, head of the Hollywood studios' lobbying arm, says film financing is getting too complicated to obtain reliable data.

April 01, 2009|Richard Verrier

Reversing a long-standing practice, the trade and lobbying arm of the Hollywood studios won't disclose the average costs of making and marketing movies.

For years, the Motion Picture Assn. of America has annually released a statistical analysis showing average movie costs of its six members, made up of the major studios and their specialty film labels.

But the data, closely watched in Hollywood and on Wall Street as a valuable tool to measure the cost trends of the industry, was conspicuously absent from the group's Theatrical Market Statistics report for 2008, which was released Tuesday.

Grilled about the matter during a news conference at the annual ShoWest trade show in Las Vegas, MPAA chief Dan Glickman said the increasingly complex nature of film financing and distribution made it difficult to obtain reliable data.

"Year-to-year average costs comparisons are really useless and misleading," he said. "I'm not sure what these numbers mean anymore."

Nonetheless, Glickman's comments fueled speculation that the reversal came about as a result of pressure from his studio bosses, who have never been eager to cast a spotlight on how much they spend, particularly during a time of recession and layoffs. Actors also have been working without a contract from the studios since June, and detailing the cost of movies -- especially if they are shown to be increasing -- could undermine studio arguments that they are holding the lid on costs and that actors must follow suit.

The surprise decision -- several studio executives said they were unaware the MPAA was not planning to release the data -- comes at a time when Glickman's performance has come under greater scrutiny. Some observers said the studios do not think the MPAA has been effective, especially by failing to lobby successfully for tax breaks on behalf of Hollywood in the recent federal stimulus package.

The tax provision, which would have provided the same tax benefits to Hollywood won by other U.S. industries, faced opposition from some in Congress who portrayed it as a "bailout" of Hollywood.

Glickman said the speculation was wrong.

"This is not about us trying to protect ourselves on the lobbying side," he said. "There's nothing conspiratorial about this."

The MPAA did not try to compile the data this year but may do so in subsequent years if it comes up with a better method of tabulating average film costs, Glickman said. In 2007, the last year for which data was released, the average cost of producing and marketing a studio movie was $106.6 million, up 6.3% from the year before.

He and other film industry officials touted how well the industry has held up in the face of a historic recession. Global box office revenues reached an all-time high of $28.1 billion in 2008, up 5% from 2007, led by such hits as "The Dark Knight," "Iron Man" and "Indiana Jones and the Kingdom of the Crystal Skull." International markets continued to drive growth, accounting for 65% of box office receipts.

"All in all, the cinema industry is doing remarkably well during very difficult times," said John Fithian, president of the National Assn. of Theatre Owners.

Still, the industry experienced a slight decline in admissions last year, with attendance at North American theaters falling 2.6% to 1.36 billion in 2008, according to the MPAA report.

The higher box office revenue was the result of higher ticket prices, not more people attending movies.

In other 2008 statistics: the average national ticket price rose to $7.18, up from $6.88.

The overall number of films released in the U.S. rose nearly 38% to 606, up from 584 in 2007.

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richard.verrier@latimes.com

Times staff writer Clauda Eller contributed to this report.

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