The Oscar Economy: The $30,000 Red Carpet…and More
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By Lindsay Miller,
The Fiscal Times
February 26, 2011

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Director Frank Capra may have called the Oscar “the most valuable but least expensive item of worldwide public relations ever invented by any industry."  But producing Hollywood’s biggest night of the year hardly comes cheap. From the lavish food and drink to the gold-plated statuettes themselves, little expense is spared to make this night an entertainment extravaganza, not to mention the economic boost it gives to the city of Los Angeles – over $130 million. Here are a dozen surprising ways money is spent on the Academy Awards.

1. Best Picture Campaign: $15 million and up

From full-page ads in Variety and The Hollywood Reporter to swanky parties and screenings, studios spare little when it comes to championing their films for a best picture win. “The money spent is directly proportional to the ambition,” says a publicist who has worked on several campaigns. “A tiny indie could run a million, while a film like The Social Network could go as high as 15 million or more.”

2.  Scalped Ticket: $85,000 and up

Oscar invitees sign a release promising not to resell or give away their coveted seats to the show—but that hasn’t always stopped scalpers. In a 2008 lawsuit, the Academy accused two companies of trying to hawk tickets for as much as $85,000 a pop. In 2009, the Academy brought another suit against an Arizona-based firm that advertised a seven-day trip to Hollywood that included an Oscar ticket, accommodations at the Bel Air hotel, a strut down the red carpet, and other cushy perks for $175,000.

3. Gift Bag: $75,000

Several invite-only gifting suites where stars are lavished with vacations, jewelry, skincare treatments, and other pricey perks are held the week of the awards. So even the losers end up winning: This year, Distinctive Assets, a Los Angeles-based marketing company, will send each Oscar nominee $75,000 worth of swag the morning after the show. Standouts include a getaway to the Maldives worth $16,000 and a six-month gym membership.

4. Champagne: $42,000

Moët & Chandon is providing the bubbly at this year’s official “after” party, the Academy Awards Governors Ball. Organizers expect more than 1,200 bottles of the brand’s Imperial selection to be served, and at $34.99 each, that’s nearly $42,000 of sparkling wine swilled and savored.

5. Red Carpet: $25,000-$30,000

The Oscars’ red carpet is an impressive 500 feet long and 33 feet wide—or 16,500 square feet. A spokesperson for Beverly Hills-based Red Carpet Systems says they would charge $7,500 to rent a red carpet that length at their standard width of just ten feet wide. In fact, most L.A.-area companies that provide the service charge an average of $1 and $1.50 per square foot of carpet. At that rate, the Academy’s walkway could cost as much as $24,750 before taking into account set-up fees, which can also be hefty. Red Carpet Systems says a project the size of Oscar’s could require a crew of about 16 men for four days, and at California’s minimum wage, the labor alone would cost another $3,768.