Luxury: A Little Number-Crunching Never Hurts

A little number-crunching never hurts, especially in lean economic times. Forbes recently published its ranking of the 100 biggest stars in Hollywood in terms of the money they actually generated for the movies in which they starred (as opposed to mere box office results). The exercise yielded some rather surprising results confirming that big name celebrities (Tom Cruise and Leonardo di Caprio among them) do not necessarily ensure the financial success of a studio's movie.

The magazine examined the movies they starred in within the past five years and weighed the production budgets of those films (excluding marketing costs) against how much each film made including box-office performance, DVD sales and other distribution deals. The tabulation was then compared to what movie stars earned for each film. The aforementioned Mr. Cruise only earned the studios an average $7.18 USD for every $1 USD he was paid. By contrast, Shia LaBeouf (a relatively unknown actor compared to Cruise) earned an average $160 USD for every dollar he was paid.

The exercise may have some merit beyond Hollywood. Fashion and luxury houses who routinely pay celebrities to front advertising campaigns, attend sponsored events or to just sit in their front rows during fashion week (in addition to first class accommodations, free clothing, etc.) might consider performing a similar assessment. I for one would be very curious to know the actual bottom-line value to fashion and luxury brands of having a celebrity (rather than a model) front their advertising campaigns for instance. Times are tough and budgets are tight. Perhaps this would be an opportune moment to re-examine commonly accepted business practices.

Sincerely,

The Luxe Chronicles

Comments

[Dahlia]

I totally agree. I also want to know exactly which celebrity actually gave a boost in sales from all the fashion and luxury campaigns they get paid millions for. I tried to interview Ralph Lauren's marketing director last year to see how their move to the iPhone and mobile sites affected overall sales. Unfortunately, they were rude to never answer me on the matter.

Do you think these figures are available on public records? I know in the US you could find pretty much anything on any company because most financial records are public (though requires some digging). It would be especially significant for the brands who have gone public to let their investors know about those kinds of spendings.