A new report claims that Marvel Studios’ Doctor Strange in the Multiverse of Madness cost nearly $100 million more than the original estimated production budget.
This new report from Forbes states that Doctor Strange in the Multiverse of Madness cost $94.5 million more than the film’s original estimated production budget of $200 million.
This nearly $100 million increase in the production budget comes after newly released financial statements in the United Kingdom revealed an additional $135.3 million was spent on the film’s production.
This additional $135.3 million was then added to previous reports that noted the film cost $213.7 million. That brought the total cost to $349 million. However, the United Kingdom reimbursed $54.5 million meaning the net cost for the film was $294.5 million.
According to The-Numbers, Doctor Strange in the Multiverse of Madness grossed $411.3 million at the domestic box office and another $540.8 million internationally for a global total of $952.2 million.
When the film came out, box office analyst OMB Reviews used the original $200 million production to predict that the film would bring in a considerable margin of over $200 million.
However, given the increased costs that number has also significantly declined albeit it still appears to have raked in enough to be profitable.
With a $294.5 million production budget, the break even point for the film clocks in at $736.25 million using a 2.5x calculation. Typically you multiply the production budget by 1.5x to find the total costs which includes the production budget along with marketing. For Doctor Strange in the Multiverse of Madness that comes to around $441.7 million.
The next thing you do is you have to factor in the theaters take of the box office. They typically take 40% while the studios bring back around 60%. This obviously can fluctuate depending on the deals the studios have with various theaters. However, the 60/40 split is standard albeit some analysts have switched to a 50/50 split.
With a 60/40 split, Doctor Strange in the Multiverse of Madness is $129.6 million to the good. A 50/50 split only returns $34.4 million.
Film costs have become a major thorn in The Walt Disney Company’s side in recent years as their films are no longer bringing in the massive box office hauls they once had.
Former Marvel executive Ike Perlmutter claimed in April he was let go from the company specifically because he was trying to keep the costs low.
Perlmutter told The Wall Street Journal, “I have no doubt that my termination was based on fundamental differences in business between my thinking and Disney leadership, because I care about return on investment.”
He elaborated, “All they talk about is box office, box office. I care about the bottom line. I don’t care how big the box office is. Only people in Hollywood talk about box office.”
As for The Walt Disney Company’s claim he was let go amid their downsizing efforts to cut costs, Perlmutter disputed it saying, “It was merely a convenient excuse to get rid of a longtime executive who dared to challenge the company’s way of doing business.”
While Perlmutter claims he was let go because he was trying to have the company focus on return on investment rather than box office grosses, the company’s CEO Bob Iger has admitted that the company’s film production costs have gotten out of hand.
During the company’s Q1 FY23 Earnings Result call, Iger answered a question from Michal Nathanson of MoffettNathanson saying, ““In additionally we are going to lean more into our franchises, our core franchises, and our brands. I talked about curation in general entertainment. We have to be better at curating the Disney, and the Pixar, and the Marvel, and the Star Wars of it all.”
“And, of course, reduce costs on everything that we make. While we are extremely proud of what’s on the screen, it’s gotten to a point where it’s extraordinarily expensive. We want all the quality. We want the quality on the screen, but we have to look at what they cost us,” he added.
To that end it looks like they will also be creating less of their big franchise films. As reported by The Hollywood Reporter, IGer said during an appearance at a Morgan Stanley conference, ”
What we have to look at at Marvel is not necessarily the volume of Marvel storytelling, but how many times we go back to the well on certain characters.”
He elaborated, “Sequels typically work well for us, but do you need a third or a fourth, for instance? Or is it time to turn to other characters? There’s nothing in any way inherently off in terms of the Marvel brand. I think we just have to look at what characters and stories we are mining.”
What do you make of this new report that Doctor Strange in the Multiverse of Madness cost nearly $100 million more than what was originally reported?