http://www.policymic.com/articles/79143/the-economics-of-the-oscars-in-two-quick-and-easy-charts

The Oscars have a storied history of incest and kickbacks, though most of it is covered by the luxury of the red carpet and the inconceivable fantasy of the after party.  The “Oscar Bump” as it is called in this article has long been the end game of many a production companies efforts, so much so that it has turned the Oscar season into a campaign.  Most notoriously known for this pursuit is the movie Shakespeare in Love and its producers the Weinstein Brothers.  The 1998 Oscars, celebrating the movies of 1997, Steven Spielberg’s Saving Private Ryan is nominated and everyone thinks that surely it will take home the prize.  Saving Private Ryan however, did not have Bob and Harvey Weinstein behind its Oscar campaign, and, quite significantly it was competing with another war movie, The Thin Red Line (but that is another story).

The Weinstein Brothers were at the time working for Miramax Films at the time, a Disney-owned company; in 2005 they would eventually defect to form their own company.  They saw the possibility for a split vote.   The people in the academy that liked war movies would have a difficult time deciding, so much so that a large percentage that would’ve voted for Saving Private Ryan in any other year voted for Terrence Mallick’s more cerebral take on war.  It is said that the reason why Shakespeare in Love won the prize is because of a split vote and because of the fact that everyone in the Academy saw it.  It was impossible to be a member and not see it.  Miramax sent free copies out to everyone that would take it, realizing that this was an investment to help secure a nomination.  They had a wide release date of January 8th, 1998, meaning that it was among the movies still in theaters at the time of actual voting.  Saving Private Ryan on the other hand was a summer release and already in the back of voters’ minds.  And so, come time the reveal, everyone was shocked; everyone but the Weinstein Brothers.  Oscar campaigning has become essential to anyone movie with Best Picture aspirations.  This last year there wasn’t a single best picture nominee that came out before October.  Most production companies send baskets to the members of the Academy.  12 Years a Slave took home the big prize and it was released in November.

A few years ago the Academy increased the amount of possible Best Picture nominations from 5 to 10 to a hushed uproar.  The general question was why?  The real question however should be why not.  If the Academy is considered to ‘produce’ nominations (nominations are certainly worth quite a bit of money) then their marginal cost of production for those 5 more nominations is almost 0, while their marginal revenue is certainly not.  But they do not make money off of the movies, yes?  In thinking that one would fail to remember that the Academy (and it’s board) is comprised of Hollywood’s biggest and most powerful figures.  Last year the indie box office smash Philomena rode its Oscar nomination to a 100,000,000 dollar worldwide gross on a 12,000,000 dollar budget.  Though it premiered at film festivals in the early spring of 2013 its wide release came in November.  Distribution was handled by none other than the inimitable Weinstein Company.  To put hat kind of success into perspective The Avengers made upwards of 1 billion dollars worldwide, but they did it on a 200 million dollar budget.

The history of the Academy Awards is full of indie success stories like Philomena, but there are also movies that market themselves as Oscar bait but go unbitten.  Most famous of these is the Daniel Day Lewis starrer Nine.  A musical from the Director of 2002’s Oscar-sweeping Chicago that failed to make back it’s 80 million dollar budget despite 4 nominations (none of those 4 were in the big categories).  The Weinstein’s don’t get it every time.  Really it is a miracle they managed to secure 4 nominations after releasing a movie that got critically panned from all sides.

Its shark-infested waters out there on the red carpet, akin almost to the sort of speculation that happens on Wall Street.  This is the surface, of course, but I am out of time.