Is everything an investment?
Forbes recently released the results of a study aimed at figuring out who are the most overpaid actors. Read the story here. In light of the America's terrible economy, this story caught my eye. Everyone, even Hollywood is looking for ways to maximize profit. They calculated this by a simple ratio: The amount the actor was paid for his or her last three films, and the amount his or her films returned. Drew Barrymore came in as the most overpaid actor, with her films returning only an average of 40 cents for every $1 Barrymore is paid. She was the only actor on the list whose films return less money than she is paid. Next up is Eddie Murphy. For every $1 he is paid his films return an average of $2.70. Here are the rest:
3. Will Ferrell: For every $1 Ferrell is paid, his films return an average $3.50.
4. Reese Witherspoon: For every $1 Witherspoon is paid, her films return an average $3.55.
5. Denzel Washington: For every $1 Washington is paid, his films return an average $4.25.
6. Nicolas Cage: For every $1 Cage is paid, his films return an average $4.40.
7. Adam Sandler: For every $1 Sandler is paid, his films return an average $5.20.
8. Vince Vaughn: For every $1 Vaughn is paid, his films return an average $5.20.
9. Tom Cruise: For every $1 Cruise is paid, his films return an average $6.35.
10. Nicole Kidman: For every $1 Kidman is paid, her films return an average $6.70.
I suppose it's important to keep in mind that for mega-stars who are paid huge amounts of money for each movie, it will obviously be relatively easy to make this list. As Forbes states, "Their films have to earn several times their production budgets in order for the star to offer a good return on investment". For some of these actors, using only their last three films might be too small a sample size. Notwithstanding this, the entertainment industry is very much a "what have you done for me lately" business...
For me, there aren't many surprises on this list. Perhaps Ferrell? Had someone asked me to dream up this list on my own, Murphy and Sandler would have definitely come out of my mouth. Not that they aren't talented, but with the amount of money that they're paid...
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My question: Do you think production studios look at studies like this get a better idea of how to maximize their returns on investment?
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