Are Aliens a Good Investment?

Are Aliens a Good Investment?



People have been amazed by aliens since 1979 when three times Academy Award Nominee Ridley Scott directed the film Alien. If you have not yet seen this film then you have not been on the third rock from the Sun for long. Welcome to Earth.

This film was made with just $11,000,000 ($35,000,000 Adjusted for inflation) and won the Academy Award for Best Visual Effects. It was also nominated for Best Art Direction.

If you are in Switzerland then go to Gruyères and ask for directions for the Château St. Germain if you are a H.R. Geiger fan.

This film was a huge financial success and made over $100,000,000 for Twentieth Century Fox founded in 1915 by theatre chain pioneer William Fox.

In 1981 News Corporation (NYSE: NWS) bought half the studio. Three years later they bought the other half.

Aliens was made with a larger budget of $18,000,000 ($38,000,000 Adjusted for inflation) in 1986 and the film was a bigger hit with over $131,000,000 and more importantly the film was nominated for 7 Academy Awards and actually won two of them. This film was directed by three times Academy Award Nominee James Cameron and produced by Gale Anne Hurd which is very famous for buying 50% of the Terminator for just $1.

Do not mess with Austria Earth

Obviously, you cannot become the largest company in the world by releasing an alien film every five years. You need to sell tablets for that. A new kind of alien was required. Future President of the United States of America Arnold Schwarzenegger according to the plot of the 1993 film Demolition Men was chosen to save us from another nasty race of aliens and the Predators were created in 1987 with just $15,000,000

Over $98,000,000 were collected this time and $35,000,000 were wisely invested in a sequel three years later. Shooting a sequel with a cheaper lead role is a mistake Rupert Murdoch made again in 1997 when he decided to shoot Speed 2 without one of my role models Keanu Reeves and it appears that he is about to make the same mistake yet again replacing the biggest star in the galaxy in Independence Day 2. Check this theoretical financial article about a detailed solution to his budget problems. A billionaire with financial problems. That is hilarious.

Alien 3 was made once again with a larger budget of $50,000,000 ($81,000,000 Adjusted for inflation) in 1992 and as usual the film was a financial success with over $159,000,000 and was nominated for an Academy Award in the Visual Effects category. This film was directed by two times Academy Award Nominee David Fincher.

I am hoping that you can see a pattern here.

We all know now that Rupert Murdoch is the 91st wealthiest person in the world according to Forbes with a fortune of over $11 billion and still on its way to become the wealthiest person in the world 18 years from now assuming he gets out of the Broadcasting & Cable business and enters the Energy and Pharmaceutical business shortly and assuming he is still alive at that time.

We all know now that News Corporation is the third largest Broadcasting & Cable company in the world according to Forbes behind Comcast (NYSE: CMCSK, CMCSA) and The Walt Disney Company (NYSE: DIS)

How can you build a company that large? 

It’s very easy. All you have to do is hire the best man or woman for the job that you can afford. If the job is to build a skyscraper then you may not have enough cash to hire Adrian Smith but you need to hire somebody like him. If the job is to write a book then you may not have enough cash to hire E. L. James but you still need to hire somebody like him. If the job is to manage money then you may not have $161,000 to hire Todd Combs but you can still hire somebody that knows a lot about aliens.

What happened after Alien 3?

Alien: Resurrection was made with a huge budget of $75,000,000 ($106,000,000 Adjusted for inflation) in 1997 and the shareholders were extremely happy with sales of over $161,000,000. This film as usual was directed by Academy Award Nominee Jean-Pierre Jeunet.

If you are not familiar with his work then I strongly suggest you to see every film he has ever made. This guy is a genius and ICBC should lend him $100,000,000 right now to make a new film. I don’t want to wait until 2017 for the next one.

Even more incredibly, this film was written by Joss Whedon. I also believe the China Construction Bank should write him a check but for $1,000,000,000 right now to make whatever he wants. You cannot lose money with him. He may be smarter than Stephen Wolfram assuming that is even possible.

Alien vs. Predator was made in 2004 with a budget of $60,000,000 ($72,000,000 Adjusted for inflation) written and directed by the great Paul W. S. Anderson. We are entering a new corporate era where global corporations are more focused on reducing risk using complicated mathematical equations, advanced software and expert human beings. I know this well, I used to write software for the sixth most profitable company in the world.

Science Fiction and Horror films are now considered ancillary and they must be produced on smaller budgets to mitigate risk and increase profits. $172,000,000 was the end result. I believe an $80,000,000 budget would have attracted a more mainstream audience with bigger actors and actresses. Again, $40,000,000 ($44,000,000 Adjusted for inflation) were wisely reinvested three years later. With budgets that small you cannot really hire established directors like in the old days and the film was shot by two beginners who have never directed a film before. Negative reviews followed but the company still managed to produce a huge return on their investment of over $128,000,000

Predators was also made with $40,000,000 in 2010 and ticket sales were over $127,000,000

Prometheus was made with a $130,000,000 directed and produced by Ridley Scott and written by Damon Lindelof which used to write for Lost. In other words, we are going back to the old formula and we are forgetting about Business Intelligence. $403,000,000 at the Box Office which is of course, more than the last three films combined.

Film is art, you cannot really let computers assign the budgets. When in doubt, ask James Cameron. News Corporation should exit the film business altogether and only collect a modest distribution fee. Let a $7 billion company take the huge risks of production like The Weinstein Company, Miramax, MGM or Lionsgate (NYSE: LGF)

I can only hope that the next one will be made with a $237,000,000 budget and will be directed by James Cameron, written by Michael Arndt and starring Will Smith and Angelina Jolie.

This is the third article in the series. You may also enjoy Are hobbits a good investment? and Are vampires a good investment?