Oscar's windfall
Awards telecast is pure gold for Acad
ABC is paying the Academy $37 million for broadcast rights to the Sunday-night event, under a new pact that runs through 2008. Last year, after expenses, the Academy came home with an Oscar-night profit well above $15 million.
Shortly before this Sunday's big event, AMPAS prexy Robert Rehme made it quite clear that the Oscar telecast is the jewel in the Academy's crown, and he intends to keep it polished. Though many orgs hire companies to produce their kudocasts, Rehme said the Academy produces its own telecast as a way of ensuring quality.
Controlling the future
"This way, we can control our fortunes,'' Rehme said. "We control everything down to the number of commercials on the show, and we look at every commercial and pass on the content. We want to protect the Oscar and the Academy Awards and our brand."
As a byproduct of producing its own show, the Academy stayed out of last year's labor dispute between ABC and NABET, the union that reps technical production workers. Though the same crews work the show for the Academy, they work under an IATSE contract.
When Rehme sat down in a seventh-floor conference room in AMPAS' Beverly Hills offices to discuss finances, he imparted the news in a confident, professorial way. It was like going over a medical report from an especially empathetic neurosurgeon. But then, with good news like this, why wouldn't he be empathetic?
Over the years, the Academy has accumulated savings of $22,035,500 and has built a $21 million endowment for its Margaret Herrick library and film archives.
Restoration efforts
As to how that nest egg may eventually be spent, Rehme touched on one possible project, which he called "the largest film archive and restoration facility in the world," and described as being potentially "of a global scale."
Though Rehme, a former president of Universal Pictures and now an indie producer, was coy about details, he said that a study has been undertaken and that the facility will be built in conjunction with another "big organization." UCLA has been mentioned as a partner and he confirmed "there have been discussions." Rehme also noted that the undertaking would be "a larger project than building the Academy library."
The possible project would include a film processing laboratory with digital capability, a large storage facility, restoration work areas and a screening room. No final price tag has been set and "multi-million" is as close as Rehme got to an estimate.
Profit center
The Oscarcast revenue is crucial to the Acad's financial health because outside of the $1,180,942 in membership dues the Acad collects from its 5,000-plus members, the kudocast proceeds are pretty much the org's sole money maker.
Operations which almost break even include the Academy Players Directory, which brought in $1,381,934 in 1997, and the rental of the Samuel Goldwyn Theater at the org's BevHills headquarters, which raised $458,917.
The Acad's biggest expense is the Oscarcast. Last year, the org got $26,497,940 for worldwide broadcast rights to the show. But it cost AMPAS $10,345,185 to produce it, and the org picked up the $787,463 tab for the Governor's Ball. Still, this left the Academy with an Oscar-night profit well above $15 million.
To give an idea of how lucrative the show is, the Acad makes 10 times as much profit as the Hollywood Foreign Press Assn. does from the Golden Globes.
Next to Oscarcast production, the Acad's largest annual expense is the Margaret Herrick library and film archives, which costs an annual $4.5 million to run. The site contains roughly 26,000 tomes, which is nearly every book written in English on the motion picture business; 70,000 scripts; 7 million still photos; and 19,000 movie posters.
The library also houses a massive collection of private papers, ranging from Samuel Goldwyn's and Sam Peckinpah's to Production Code files and costume designers' sketches.
"You have a great history of incredible talent who have contributed to the art form and we need a repository of their work," Rehme said. "I'd hate to see that material be put in a university archive in Massachusetts or New York or Dallas. It belongs here, where the art form is based."
He plans to continue building the endowment by roughly $2 million a year until it can generate enough revenue to make the library financially secure.
Price above rubies
Rehme makes clear that there are no plans to sell any of the library's assets -- the posters alone could finance a "Godzilla" sequel -- to pay for the Herrick's operating costs.
He says, "We don't put a value on the collections because we're never going to sell them. They were given to us to preserve and hold and to make available to the industry and future filmmakers."
Other AMPAS expenses are the student film awards, the Nicholl writing fellowships, tributes, retrospectives, seminars and exhibits that cost in the ballpark of $2 million per year. After all of its expenses, the Academy saves about $7.5 annually. With the higher revenues from the new ABC contract, this yearly savings should roughly double.
Whatever happens with the unnamed restoration-center project, it's clear that film preservation is an area in which the Academy is taking an active interest. This year, AMPAS made an initial $250,000 grant for a program to save so-called "orphan films" -- documentaries, esoteric works and movies unclaimed by studios.
One other potential project is a museum. Rehme says, "We'll probably look at that once we're beyond these other things."
Whatever comes next, Rehme says it will be decided "cautiously and carefully" with an eye to what future generations will need.
"We're financially secure,'' says Rehme. "We intend to keep it that way."
