When you don't get participation, your front money naturally accelerates
.... The best participation is if you can get gross from every boxoffice
dollar The next best is gross after break-even, which means
when the picture has paid back its negative cost and its advertising.
After that, profits.... So if you're a Robert Redford, you may get $2
million [in front -money] for it, but what if suddenly the picture turns
out to be JAWS?
SUE MENGERS, ICM AGENT, MARCH 5, 1976
Adefining feature of 1970s Hollywood filmmaking was rapidly escalating production and marketing costs. Average negative costs inflated from $1.9 million in 1972 to $8.9 million in 1979, an increase of over 450 percent in less than seven years. (In the preceding decade, it was estimated that film costs had nearly tripled between 1960 and 1970.)1 Indeed, in 1980 Dennis Stanfill, chairman of 20th Century-Fox, predicted that the average cost of motion pictures would be $25 million by 1985-$14 million to produce and $ 11 million to market.2 (He was too sanguine: the actual figures for 1985 were $16.8 and $12 million.)3 There were several major reasons for this rise, including an annual monetary inflation rate in excess of 7 percent, resulting mainly from the cartelization of international oil prices in 1973, which impacted interest rates on production loans from banks.
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