Which Studio Has Most to Gain Sunday? Not One You’d Expect

Fox Home Entertainment And Fox Searchlight's Birdman Special Screening And Performance

Most actors will say it’s an honor just to be nominated for an Oscar. But when it comes to the movies themselves — and to the benefits for the studios that make them — there’s a big difference between winners and nominees.

2013 film nominees added just under $168 million in U.S. grosses from the date their privileged status became known through the end of their theater runs, according to historical data supplied by Box Office Mojo. Winner “12 Years a Slave” accounted for $17.6 million of that total — a better than 45 percent boost to its domestic earnings. (That year’s nominees averaged a 26 percent gain.)

The True Value of an Oscar

For studios, the Oscar effect is like a bonus. Release a film that does well critically, and theaters keep it around longer, adding earnings that would otherwise be lost to new films taking their turn in the cineplex. This Sunday, one studio has more to gain than its peers.

We’ll get to who I’m talking about in a minute. First, let’s review the financial benefits of an Oscar win, drawn from my analysis of four years’ worth of results:

  • On average, Best Picture nominees see a 36.9 percent boost in U.S. theater grosses after receiving the honor. Winners enjoy an average 46.8 percent gain.
  • The average nominee grosses $30.2 million domestically. The average winner grosses $237.4 million.
  • Timing heavily influences post-nomination returns. For example, “The Help” exited theaters before being named a 2011 Best Picture nominee. A handful of theaters re-released the film in response, leading to a meager 0.06 percent gain in grosses.
  • By contrast, the military epic “Zero Dark Thirty” enjoyed plenty of Oscar buzz at the time of its Dec. 19, 2012, release, resulting in a 1,739.84 percent post-nomination boost.
  • Over the past three Academy Award competitions, October (two winners) and November (one winner) have been the best months for releasing Best Picture contenders. Among the eight Best Picture nominees for this go-round, half made their debut during those two months.
  • From 2011 to 2013, Sony (SNE) was the only studio to distribute at least two Best Picture nominees. None of its pictures won.

What to Look For Sunday

Which studio has the most to gain this year? Not Sony, it turns out. The studio’s only entry in this year’s Best Picture showdown is the small-budget phenom “Whiplash.”

By contrast, 21st Century Fox (FOXA) is distributing two contenders: “Birdman” and “The Grand Budapest Hotel.” The latter is a particularly strong earner, having collected an estimated $48 million in gross profit from theatrical and home video sales.

“Birdman,” at $9.1 million and a more meager 12.6 percent estimated profit margin, would benefit from the buzz that follows an Oscar win. Star Michael Keaton already took home the honor for Best Actor in a Comedy or Musical at this year’s Golden Globe awards.

Time Warner (TWX) could nab Oscar gold for its role in producing and distributing “American Sniper,” but that film already has all the buzz it needs to help the studio win financially. “Sniper” entered the week having already earned over $100 million in estimated box office gross profit.

Among the remaining candidates, Focus Features distributes “The Theory of Everything,” The Weinstein Co. backs “The Imitation Game,” and Paramount helped release “Selma,” which, according to my estimates, remains about $16 million in the red as of this writing. Fortunately, the Viacom (VIAB) business unit didn’t spend to produce the civil rights biopic, so its losses — if there are any — should be minimal.

Small Bets With Big Results

Which brings us back to Fox and its Fox Searchlight imprint, which produces and distributes small-budget films that aren’t only acclaimed but also profitable.

Last year offers a great example. Fox Searchlight distributed “12 Years a Slave” worldwide, helping the film gross $187.7 million globally in exchange for a share of the proceeds. (A mere $20 million production budget made sure there was plenty to go around.) In 2011, the studio helped produce and distribute the George Clooney drama “The Descendants,” a five-time nominee that won the Oscar for Best Adapted Screenplay and earned $177.2 million globally — also on a $20 million budget.

Small-budget movies like these may not earn Fox the fistfuls of cash that cable TV does, but it’s still a good business capable of producing impressive margins. A few wins Sunday for “Birdman” and “The Grand Budapest Hotel” would only add to the windfall.

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