Production costs climb

Price of studio films on the rise despite cutbacks

By IAN MOHR

Good news! Annual statistics from the Motion Picture Association of America revealed this week that box officeand admissions were up in 2006. Bad news! MPAA members spent an average of $65.8 million on pics last year, up from $63.6 million in 2005. For the first time since 2004, the average price of a studio movie increased, by 3.4%.

Who's to blame? Sure, Disney spent $225 million on "Pirates of the Caribbean; Dead Man's Chest," but remember all the chopping of star salaries and production pacts? And who can forget Viacom's Sumner Redstone bragging about kicking Tom Cruise to the curb: "I hoped I was saying goodbye to a type of business." As it turns out, numbers are deceptive.

The MPAA only counts what member studios puts into picture budgets. Legendary Pictures ("Superman Returns") and Relativity Media ("All The King's Men") are co-financiers that don't exist in their statistics, so their money doesn't, either.

So here's the real bad news: The average negative cost for movies -- and their increase -- are likely much higher than anything you can find in the MPAA's stats.

And the real good news: Hits happen. "Pirates of the Caribbean: Dead Man's Chest" raked in more than $1 billion at the global B.O -- and with that haul came the MPAA's bragging rights to the 2006 B.O. bump.