Would You Pay $400 Million for This Movie?

On Paramount’s storied lot in 2018, studio brass and partner Skydance gave the go-ahead for Tom Cruise to make two more Mission: Impossible movies following the massive success of Fallout. No one taking part in that decision some seven years ago could have known what was in store for Hollywood, much less the world, or the minefield they would have to cross.

Between COVID-19 delays, the strikes, reshoots and rising costs due to inflation, the blockbuster hopefuls of the 2025 box office season — from Mission: Impossible — The Final Reckoning, one of the most expensive movies ever made, to DC Studios/Warner Bros.’ Superman and Universal/Amblin’s Jurassic World: Rebirth — are saddled with price tags requiring sky-high box office returns. (Rebirth did rein in its budget substantially compared to the prior film.)

Another title getting buzz for its budget is Apple Original Films’ highly anticipated F1, which Warner Bros. is releasing theatrically. One source says the budget is $300 million, a figure disputed by the filmmakers. If that figure is the total before tax rebates and production incentives, the net budget could indeed be substantially lower. If it isn’t, the ultimate spend could approach $400 million when including marketing costs.

No one will divulge what the original greenlight number was for the two final Mission films starring Cruise, but the combined cost was a net $700 million before marketing. Now in theaters, Final Reckoning’s budget is $400 million after subtracting tens of millions of dollars in tax incentives and rebates from the various countries included on its globe-trotting shooting schedule. (As a way of comparison, Fallout’s net budget was anywhere from $200 million to $250 million.)

“These costs are not sustainable. Obviously, there were unique items that didn’t help the budgets, such as strikes and COVID. Costs will come down as the business normalizes,” says Wall Street analyst Eric Handler of Roth Capitol. “There is a reason studios shoot outside of L.A. so as to rely on incentives and rebates from states or countries overseas.”

Turning to the list of the most expensive films, Final Reckoning would come in behind 2015’s Star Wars: The Force Awakens ($447 million) and 2018’s Jurassic World: Fallen Kingdom ($432 million). And, like Final Reckoning, a slew of megabudget tentpoles saw their budgets dramatically impacted by the pandemic and strikes, including 2022’s Avatar: The Way of Water, which cost well north of $400 million, and 2022’s Jurassic World: Dominion, at roughly $432 million. Again, these are net budgets before marketing spends.

Last year, documents filed by the Superman production team with the Ohio government seeking incentives listed the gross budget of the highly anticipated July film as $363.8 million. When that number was reported, director James Gunn — who also runs DC Studios — lambasted the article. “How in the world do they think they know what our budget is?” he wrote on social media. In recent days, DC suggested the budget is a net $225 million after incentives and tax breaks.

Yet one longtime financier says the $363 million figure isn’t incorrect. And sources say DC and its parent could spend as much as $200 million on the global marketing campaign, compared with the usual $150 million for an all-audience summer tentpole. It wouldn’t be a surprise, since Superman kicks off the Gunn era and needs to work at the box office. Either way, between the production budget and marketing, it’s certain to land in the $400 million club.

According to a veteran studio source, Superman, which opens July 11 in North America, is exploding on social media, with the first full trailer raking in 250 million-plus views, the most in Warners/DC history. Based on such metrics, a domestic debt of $175 million or thereabouts is within the realm of possibility; it even has a shot at finishing with $1 billion-plus globally. “There’s no way to defend these budgets, because when you get into the $700 million to $900 million break-even point in regards to box office and ancillary revenue, it doesn’t make any sense,” says a veteran financier.

Jurassic World: Rebirth opens nine days earlier, during the Fourth of July corridor. That film features an entirely new cast, led by Scarlett Johansson. It’s hardly a surprise that Universal and Steven Spielberg’s Amblin, which the studio now owns, took efforts to substantially reduce the budget, which sources confirm to be a net $180 million. Either way, that’s still a sizable chunk when factoring in marketing. Others dispute the net price tag of $180 million and say total costs could still come in between $330 million and $400 million when including marketing. 

Final Reckoning, opening less than two weeks ago over over Memorial Day, should clear the $400 million mark in the coming days at the global box office and is hoping to do significantly more business than the last installment, Mission: Impossible — Dead Reckoning Part One, which was stymied by Barbie and Oppenheimer.

Box office isn’t the only factor in judging a movie’s performance. The value of a franchise library can increase exponentially with each installment and can drive tens of millions of dollars in TV licensing rights, merchandising, special-edition DVD sales and streaming licensing revenue. Both Mission: Impossible and Jurassic World are the kind of coveted properties that can play a major role when suitors are interested in buying an entire studio.

“When looking at the performance of a film that is one segment of a franchise property, you have to look holistically at the franchise as a whole and remember that each installment augments the overall performance of the prior films and the general IP itself,” says one studio veteran familiar with both. “Franchise films drive multiple revenue streams across the entire library including streaming, home entertainment, and global content distribution.”

As one example, in the lead-up to Final Reckoning, sources say the launch of a Mission: Impossible rewatch campaign on domestic digital was a resounding success. Sales of a bundle of the first six movies was up 160 percent year-over-year, and movies one through six were up 97 percent individually. That helps justify those sky-high budgets, as well as celebrating Cruise’s final turn after a three-decade run. 

“We’ll never again see a movie where an actor does his own stunts and so little CGI,” predicts one person close the the M:I pic. “A.I. will take over.”