The Rise Of Skywalker’ Approaches $600 Million

Disney has today revealed that the total cost of 2019’s Star Wars: The Rise of Skywalker came to $593.7 million (£450.2 million) making it the third most expensive movie in history.

The costs of the production company behind the third instalment in the sci-fi saga rose by $10.1 million (£8 million) last year putting its total within a hair’s breadth of the £452 million spent on Disney’s first Star Wars movie, 2015’s The Force Awakens. It too only just trails Jurassic World: Dominion which cost a monster £453.6 million as this reporter revealed in The Guardian earlier this year.

Remarkably, despite its staggering cost, The Rise of Skywalker came in under budget and there’s no doubt about that. Like the last three Jurassic World films, Disney’s Star Wars trilogy was made in the United Kingdom which shines a spotlight on its costs.

The budgets of movies made in the United States are usually a closely-guarded secret as studios combine the cost of them in their overall expenses and don’t itemize how much was spent on each one. It’s a different story in the U.K.

Studios filming in the U.K. get a reimbursement of up to 25.5% of the money they spend in the country provided that at least 10% of the movie’s core costs are incurred there. In order to demonstrate this to the authorities, studios set up separate companies to produce each film in the U.K. and they are obliged to file legally-binding financial statements.

As with all U.K. companies, these filings are released in stages long after the period they relate to. The process starts during pre-production and continues long after the premiere. There is good reason reason for this.

It is revealed in the 2018 financial statements for the production company behind Star Wars spinoff Rogue One which state that “the company was involved in paying the ongoing production costs in relation to the film” even though it was released two years earlier. In short, the financial statements are compiled in stages over a long period of time in order to give the production team time to ensure that all the bills are paid.

The filings are a goldmine of financial information as they reveal everything from the production’s overall cost and level of reimbursement right down to the headcount, salaries and even the social security payments to staff. They also reveal whether the movie cost more or less than the studio originally budgeted for it.

The filings for the production company behind The Rise of Skywalker state that by March 2019, one month after filming wrapped, the movie was “in line with the budget”. However, post-production cost less than expected and by the end of the year, less than two weeks after the movie debuted, it was “below the production budget”.

Although the reason for this isn’t certain, it coincided with the editing of the movie which took less time than usual. This came to light in an interview on The Rough Cut podcast with The Rise of Skywalker’s editor Maryann Brandon who admitted that the latter stages of the production schedule were accelerated which “affected everything.”

She estimated that the crew had three months less to work on The Rise of Skywalker than The Force Awakens. Brandon explained that the reason for the tight timing was that Disney insisted on sticking to the movie’s December 2019 release date rather than delaying it which would have increased the post-production time and therefore the cost.

Reshoots are often planned into budgets but J.J. Abrams, director of The Rise of Skywalker, told Entertainment Weekly that the movie ended up needing fewer than The Force Awakens. He explained that because The Force Awakens was the first movie in Disney’s Star Wars series “we didn’t know if these characters would work, if the actors would be able to carry a Star Wars movie. There were a lot of things we didn’t know. On [The Rise of Skywalker], we knew who and what worked.”

The cast of The Rise of Skywalker reads like a roll call for the Oscars. It reunited Mark Hamill and the late Carrie Fisher (through previously unreleased footage) with Ian McDiarmid who played their adversary, the evil Emperor, in the original Star Wars movies nearly 40 years earlier. In The Rise of Skywalker he teams up with Adam Driver’s Kylo Ren to take on the remnants of the Resistance, with Daisy Ridley, John Boyega and Oscar Isaac in the leading roles.

For Disney, the reduced reshoots and the accelerated post-production process was a force for good. If the movie had cost more to make, it would have reduced the studio’s profit. Calculating that requires knowledge of the amount Disney spent on the movie and the amount it generated from it.

Disney banked a $103.8 million (£78.4 million) reimbursement for The Rise of Skywalker reducing its net spending on the picture to $489.9 million. Its returns largely come from its share of the movie’s $1.077 billion box office takings.

The amount theaters pay to studios is known in the trade as a rental fee and an indication of the typical level comes from film industry consultant Stephen Follows who interviewed 1,235 film professionals in 2014 and concluded that, according to studios, theaters keep 49% of the takings on average.

This research lends weight to the widely-established 50-50 split which would give Disney $538.5 million from The Rise of Skywalker and a $48.6 million profit at the box office.

The share of the box office isn’t a studio’s only return from a movie so offsetting it from the costs in the financial statements does not show whether it made an overall profit or a loss. As a Disney spokesperson told this reporter last year, “there will be other income generated by the production (such as DVD/Blu Ray sales, merchandising, etc.). It’s not reflecting a true account of whether the film was overall profitable.”

However, just as the production generates other income, it also incurs other costs, chief of which are the marketing expenses which are not shown in the financial statements of the production companies. Accordingly, if the home entertainment and merchandise sales should be added to the theater takings, the marketing cost should be deducted from them.

Disney doesn’t disclose how much it spends on marketing each picture while the merchandise and streaming sales are tough to attribute to specific productions. A great deal of the former carries the overall Star Wars brand, rather than the names of specific movies and streaming viewers don’t pay to watch each one of them.

This casts a cloud of uncertainty over the movie’s overall bottom line even though it made a profit at the box office. One thing that’s for sure is that this wasn’t enough to make The Rise of Skywalker a force to be reckoned with as Star Wars has stayed off the silver screen since its debut. Instead, the series has been relegated to streaming shows with one of the most popular being The Mandalorian.

Next year Star Wars will make its long-awaited return to theaters with the release of The Mandalorian & Grogu which follows up the streaming series. Time will tell whether it can bring back the magic or whether it is still far, far away.