The 2024 Oscars are coming up soon. In this article, we’ll look into detail everything related to the economic costs and benefits of the Oscars.
The Academy Awards, aka Oscars, are the biggest prize award of any entertainment industry, with billions of dollars flowing to make it possible every year. But how much does the Oscar ceremony cost exactly? And what benefits does it bring to the general economy? Let’s explore “Oscareconomics” in detail.
The Oscars are the oldest award created for the film industry, reaching its 96th edition in 2024. Over the decades, they cemented their position as a spectacular ending to the previous film season, awarding its best movies and cinematic artists. Then, a new film season begins in May at the Cannes Film Festival and the cycle starts all over again.
The Academy Award has therefore an established cultural role. The American film industry, the largest in the world, adds $180 billion to the US economy every year. Celebrating it through the Oscars is a tradition that enhances Hollywood’s ability to shape global culture.
But other than its important cultural role, the Oscars also add significant economic benefits. In this article, we’ll see all the details of “Oscareconomics”.
How much do the Oscars cost?
Arranging the Oscars ceremony is no small feat. It involves thousands of workers, from rolling out the red carpet to adjusting the lights inside the theaters to live-streaming it across the entire world.
The Oscars venue has changed many times in its almost 100-year history. In 2001, however, the Academy commissioned the construction of a huge theatre in downtown Los Angeles to accommodate the ceremony.
Hosting its first Oscar ceremony in 2002, the Dolby Theatre is now the official venue of the Oscars. It cost $94 million to build and has a capacity of 3,400 people.
Besides the venue, the estimated cost of the 2024 Oscars is $56.9 million per WalletHub. Just rolling out the massive 50,000-sq. ft. red carpet will cost $24,700.
And that’s without taking into account the huge figures spent by actors on their outfits. It may seem trivial, but Oscar-nominated actors use the ceremony to build their images, therefore the choice of outfit is crucial.
On average, actors spend $1.5 million on their outfits for the Oscars, but the actual expense can go much higher than that. At the 2019 Oscar ceremony, for example, Lady Gaga showed up with a $30 million Tiffany necklace.
All of this, however, comes with immense economic benefits for the city of LA. It is estimated that the Oscar ceremony alone brings $170 million to the city’s economy every year.
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How much does it cost to win an Oscar?
Winning an Oscar, or even just being nominated, can be extremely expensive for producers. The exact figures are not known, especially because it’s something Hollywood prefers to hide, but estimates are massive.
According to producer Stephen Follows, Hollywood companies spend between $100 and $500 million every year to campaign for the Oscars. The budget of a large studio tentpole.
There are also strict rules imposed by the Academy on Oscar campaigning, though they are often ignored by producers. Private parties to promote a film, for example, are technically not allowed, but the industry has a silent agreement to keep doing it anyway.
In 2023, however, rules became even more restricting following the controversy of Andrea Riseborough’s nomination for Best Actress. She was nominated for the film “To Leslie”, widely considered too small for an Oscar nomination, which prompted questions by industry members on the promoting practices of the production company. Allegedly, the production company heavily invested in promoting the film to strategic Academy members, whose word of mouth did the rest.
While ultimately not against the rules, To Leslie sparked an industry-wide controversy that forced the Academy to adjust its promotion rules.
Other than private events, whose cost is unknown, films are allowed to publicly advertise “for the consideration” of Academy members. During Oscar season, a front page advert on Hollywood Reporter costs up to $72,000.
Production companies can also hire specially-trained consultants whose work will be campaigning the film for the Oscars. According to a 2016 BBC article, their fees can range between $10,000 and $20,000 per movie.
The economic benefits of the Oscars
However, the question remains: is it worth it for production companies to spend so much on the Oscars? The answer is: it depends.
A 2012 research paper by Braithwaite et al. found that films receive a significant box office boost following a Best Picture nomination/win.
According to the paper, Best Picture nominees gross on average $4 million more every week following the nomination. In 2024 there have been 6 full weeks between the nomination announcement and the ceremony, for a total of $24 million box office boost. Best Picture winners add $2 million more on average every week following the ceremony.
Moreover, winning a Best Actor or Best Actress Oscar ensures a massive salary boost for subsequent films. Oscar-winning actors enjoy a 20% pay raise for the following projects according to WalletHub.
It should be noted that winning an Oscar comes with no prize money.
Campaigning for an Oscar can therefore be a profitable investment, especially in the long term. However, a nomination does not ensure a victory, and not all Oscars are worth the same. Producers should therefore carefully evaluate their marketing investments for the ceremony, as it may not eventually return the expenses.
