How much gold does it take to win an Oscar?

With awards season upon us, and the 2013 Oscars� nominee announcements recently, gold investment firm The Real Asset Company decided to look into how much it would cost, in gold ounces, to make an Oscar winning film.

Since 1990, the average cost of making an Oscar winning film costs on average over 118,000 ounces, but this is not reflective of our results. It can range between 9,544 ounces to over 604,000 ounces. Last year�s winner, The Artist, was the cheapest by far when priced in gold, but not when priced in dollars.

When we began the research, we had expected two things; the first that all Oscar winning films were getting increasingly expensive, and the second, as a result of the first, that the cost in gold would remain the same or at least decrease.

We were wrong on both counts. When it comes to the dollar cost of making a film which will get you Best Picture at the Academy Awards, there is no maximum or minimum amount you should spend � the cheapest film since 1990 to win was Crash (2006 winner) which cost a mere $6.5m whilst the most expensive was the 1998 winner Titanic ($200m).

We didn�t find the second point until the last four years or so when Best Picture films have all, by coincidence, cost a similar amount to make.

Gold and USD cost follow a similar pattern

�until 2001

Looking at the graph below you can see that the gold/USD relationship holds its own until 2001, when Gladiator won the award for Best Picture. From this point on we see a significant downward trend in the gold ounces cost amount of making a winning film.

This makes sense given this was around the beginning of the continuing bull-run we are currently experiencing in gold investment.

We also find that just because your film is profitable doesn�t mean it�s worth much in gold. The King�s Speech for example was the 6^th highest grossing film since 1990. However, in terms of gold ounce revenue it wasn�t particularly impressive, bringing in one of the lowest amounts of gold in the sample. This shows the ever-growing divide between the value of dollar and the value of gold.

Invest in gold to make cheaper films

The most interesting thing to note from the research carried out by The Real Asset Company is the decreasing cost in gold ounces of making similar priced films in the last 4 years or so. Each of the last four winners cost approximately $15m to make, relatively cheap when you look over the last 20 years of winners. Will we one day see a time when the big Hollywood producers and directors finance the silver screen from a gold vault?

The last four winners, between 2009 and 2012, each cost similar amounts of approximately $15million to make. Thanks to the devaluation of the dollar however, this does not mean that they all cost the same in gold ounces, clearly they decrease in gold ounces over the years. In fact the difference between the 2009 winner (Slumdog Millionaire) and the 2012 winner (The Artist) is a whopping 7,657 gold ounces.

To continue our demonstration of the dollar�s decreasing value, Crash, the lowest budget film in our sample cost under $6.5 million to make � half of those in recent years. But when priced in gold ounces it cost 14,615 oz to make, over 50% more than last year�s winner, the Artist which cost $15 million dollars to make but only 9,544 oz.

It�s interesting when we price important costs real life into gold, but the result is consistently the same. As when we did it with your Christmas dinner (link) we find once again over the last decade the world�s reserve currency is being continuously devalued alongside the world�s historically favoured money � gold.

Film bods out there should sit up and pay attention; if you�re planning on making an Oscar contender invest in gold, no matter your budget. Even if it�s a �cheap� one, as seems to be the trend in recent years, you could end up making a profit out of it before you send it to the cinemas.

 
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Please Note: Information published here is provided to aid your thinking and investment decisions, not lead them. You should independently decide the best place for your money, and any investment decision you make is done so at your own risk. Data included here within may already be out of date.