Film budgeting

Financial plans for film production / From Wikipedia, the free encyclopedia

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Film budgeting refers to the process by which a line producer, unit production manager, or production accountant prepares a budget for a film production. This document, which could be over 130 pages long, is used to secure financing for and lead to pre-production and production of the film. Multiple drafts of the budget may be required to whittle down costs. A budget is typically divided into four sections: above the line (creative talent), below the line (direct production costs), post-production (editing, visual effects, etc.), and other (insurance, completion bond, etc.). The budget excludes film promotion and marketing, which is the responsibility of the film distributor. Film financing can be acquired from a private investor, sponsor, product placement, film studio, entertainment company, and/or out-of-pocket funds.

When it comes to reporting the budget of a film, the amount of the budget represents the gross budget, which is the grand total of actual spending to produce the project and not to be confused with net budget, which represents the final out of pocket for the producer after government incentives or rebates ("If you pay $50 for something but have a mail-in coupon for a $10 rebate, your gross spending still amounts to $50.").[1] One of the consequences of the Sony hack was the release of budget information of many films or TV shows, including the 2015 Adam Sandler film Pixels. The actual cost to produce Pixels, or the "grand total", was $129.6 million and the net budget for Sony came to $111 million after they received a government rebate in Canada that covered a portion of their gross spend (cost) in the amount of just over $18 million.[2] Even though Sony's out of pocket for the film was reduced because of the incentive, it does not negate the fact that the actual cost (amount spent during production to make the film) was still $129.6 million.