Wednesday, January 27, 2010

Avatar math, planes and taxes....

The stories have been flooding the airwaves for the last week -"AVATAR overtakes Titantic as biggest film of all-time!!".

So, I wasn't around for the golden age of cinema, but I do remember when Star Wars was out in the theater. It was a cultural phenomena and EVERYONE went to see it in the theater. I don't know anyone that has seen Avatar yet. Now maybe this says that I'm a hermit with loser friends, but maybe this movie isn't quite as big as we're being told.

This IMAX 3d movie has ticket prices that are in the $15 range. Roughly twice what they were when Titantic came out. With a higher ticket price it takes fewer tickets to become the revenue leader. If the Yankees sell 15% fewer tickets in 2011 b/c of the economy but have doubled their prices from 2009 would you classify that as "the best box office in Yankee history"? No, you'd measure the actual bodies going through the gate.

With that in mind consider that according to the Hollywood Reporter, Avatar is about the 26th biggest movie of all-time....

1 "Gone With the Wind" (1939) 202,044,600
2 "Star Wars" (1977) 178,119,600
3 "The Sound of Music" (1965) 142,415,400
4 "E.T.: The Extra-Terrestrial" (1982) 141,854,300
5 "The Ten Commandments" (1956) 131,000,000
6 "Titanic" (1997) 128,345,900
7 "Jaws" (1975) 128,078,800
8 "Doctor Zhivago" (1965) 124,135,500
9 "The Exorcist" (1973) 110,568,700
10 "Snow White and the Seven Dwarfs" (1937) 109,000,000
11 "101 Dalmatians" (1961) 99,917,300
12 "The Empire Strikes Back" (1980) 98,180,600
13 "Ben-Hur" (1959) 98,000,000
14 "Return of the Jedi" (1983) 94,059,400
15 "The Sting" (1973) 89,142,900
16 "Raiders of the Lost Ark" (1981) 88,141,900
17 "Jurassic Park" (1993) 86,205,800
18 "The Graduate" (1967) 85,571,400
19 "Star Wars: Episode I" (1999) 84,825,800
20 "Fantasia" (1941) 83,043,500

On the other hand, I can't figure out how the film has earned $1.86 billion on 76.4 million ticket sales (that would be over $24/ticket). There must be per screen licensing fees built into that box office data.

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This might not strike anyone else as funny, but knowing first hand the insane amount of time and money that is spent navigating the pitfalls of corporate tax law as it pertains to corporate aircraft I chuckled when I read this.....

"Accompanying travel on corporate aircraft by family members or guests of the AIG Chief Executive Officer (CEO) and other executives is permitted if a documented business reason exists for the family member or guests to travel with the executive.The Chairman of the Board or the Chairman of the Nominating and Corporate Governance Committee must approve in advance any accompanying travel on the corporate aircraft by family members or guests of the AIG CEO. The AIG CEO must approve in advance any accompanying travel by family members or guests of the AIG CAO. The AIG CAO must approve in advance any accompanying travel by family members or guests of any executive other than the AIG CEO. Personal use of the corporate aircraft by the AIG CEO is permitted if the personal use is incidental to a business trip and the incremental cost is paid by the AIG CEO. All other personal use of the corporate aircraft is strictly prohibited."

If I were a board member of a major US corporation I'd argue that there are 2 options for executive air travel - fly commercial or use your own cash to buy a share of a Netjet. The aggravation of dealing with allocating a % of each flight to each passenger is not worth the value derived from avoiding the masses at JFK.

Cheers!

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