‘Avatar’? ‘Blair Witch Project’? ‘Star Wars’? The Hollywood Reporter crunches the numbers to see which film has earned the most hard cash.

What’s Hollywood’s most profitable movie ever? The answer depends on how you define “profitable.”

If you think of profit purely as a ratio of production cost to box office gross, 1999’s The Blair Witch Project and 2007’s Paranormal Activity run neck and neck.

Blair Witch involved an initial outlay of $35,000 — but that was just for the shoot; once postproduction was completed, the real budget was over $200,000 (and may have been as much as $500,000), including a sound remix and a transfer to 35mm. Artisan Entertainment’s Bill Block bought the picture for just over $1 million and (after a hefty marketing spend of $6 million to $8 million domestically alone) it earned $249 million globally.

Paranormal only cost $15,000 to make. Later, however, its sound was redone for an additional $150,000; and producers Oren Peli and Jason Blum spent an extra $50,000 to reshoot the ending at Steven Spielberg’s request, bringing the total budget to $215,000. As a return on investment (ROI), looking at the initial outlay alone, that beats Blair Witch — unless you also factor in the marketing costs, in which case Blair is in pole position.

DreamWorks paid $350,000 for Paranormal, which was released by Paramount, with around $18 million going to domestic marketing. The movie earned $193 million at the global box office.

Figuring out Paranormal’s profit is complicated because Paramount didn’t distribute the movie internationally. Instead, foreign rights were sold to individual distributors for a total of $5 million, with the producers earning an extra $5 million or more in bonuses.

Following a ballpark rule-of-thumb that the studio keeps around half of the box office take (the money the studio makes is called “rentals”), Paramount and DreamWorks made a theatrical profit of around $78 million from the domestic gross (not counting the distribution fee), with at least as much going to distributors abroad.

Dollar for dollar, Blair Witch and Paranormal have to be considered two of the best movie investments in history. But does that also make them the most profitable films in hard cash? Not quite.

Both horror flicks were dwarfed by a host of big earners. Three stand out: 1939’s Gone With the Wind, 1997’s Titanic and 2009’s Avatar.

Gone With the Wind cost $4.25 million (or $78.6 million in today’s dollars) but what it earned is harder to calculate.

The picture has taken in roughly $200 million domestically — but that doesn’t reckon with inflation, something that’s extraordinarily difficult to compute given the film’s multiple releases over 80 years. It also doesn’t include international revenues, most likely in line with the domestic total.

In 2014, the Guinness Book of World Records concluded that the movie had made an inflation-adjusted $3.44 billion; today that would be $3.75 billion and it’s probably a conservative figure.

Since “P&A” (prints and advertising) costs in the 1930s were a fraction of what they are today — there was no need to buy ultra-expensive TV commercials, for instance, and far fewer prints were struck — and since MGM kept most of the income from theaters (because it owned so many of them), analysts estimate the movie’s theatrical profit at anywhere from $2 billion up. That number is also an extremely conservative estimate.

Titanic, the most expensive film ever made at the time of its release, cost $210 million ($337 million today) and earned $2.2 billion around the world. That box office gross should be broken into two — $1.8 billion of it came in when the picture was first released; and another $400 million came in when it was re-released in 2012. The total is roughly $3.33 billion, adjusted for inflation.

But how profitable was it?

Here’s where the math becomes tricky. The picture’s backers — Paramount and 20th Century Fox, which split the rights — spent around $150 million (in today’s dollars) on marketing. Add marketing to the inflation-adjusted “negative” cost and you have a total expenditure of around $487 million, per sources.

But Titanic received a much bigger slice of the box office pie than most movies.

Usually, studios get back about half of the box office gross in rentals; but Titanic played in theaters for a long time, and the longer a film remains in theaters, the higher the percentage of the box office goes to the distributor.

In reality, Paramount and Fox received around 58 percent of the box office revenue or around $1.9 billion in today’s dollars. That leaves a theatrical profit of around $1.4 billion — still less than Gone With the Wind.

Avatar cost $387 million to make and market, per a studio spokesman at the time (though insiders believe its real price tag was as much as $50 million more). Include inflation and the cost in today’s dollars was $464 million-plus. The James Cameron movie made $2.8 billion at the box office — or $3.36 billion in today’s dollars.

Fox got back approximately half of that, or $1.68 billion adjusted for inflation. Take away the cost of production and marketing and you’re left with a profit of around $1.2 billion from theaters alone — in other words, less than both Titanic and Gone With the Wind.

(None of these numbers includes the studio’s distribution fee, ranging from 10 percent to 20 percent of the money they get back from theaters.)

So does this leave Gone With the Wind as the most profitable movie of all time?

Not so fast — because none of the above calculations counts revenue from “ancillary” sources, such as cable and home video. Titanic’s total take from those revenue streams was about the same as its rentals — almost $2 billion in today’s dollars. When you include ancillary revenue, its profit is in the $3.5 billion to $4 billion zone.

It’s unclear how much ancillary revenue Avatar made, but studio sources say it earned considerably more than Titanic. And both Cameron movies fared better than Gone With the Wind, which was made in an era when most ancillary markets didn’t exist. (Back then, “ancillary” was the term for international grosses.)

Does this mean Avatar is in fact No. 1, after all?

Nope. Because we still haven’t included a bunch of extra money from sequels, merchandise and licensing, and streaming.

The most successful picture by that accounting has to be — drumroll, please — 1977’s Star Wars, which spawned an empire that has so far earned $10.2 billion at the box office, not adjusted for inflation (from 12 released films, costing an average of $141 million each) and another $42 billion in merchandise ($6.6 billion just from video games and home entertainment, according to Forbes — and that was in a report published five years ago, before a host of recent releases, not to mention extra money for Star Wars’ contribution to Disney’s theme parks and its current value to Disney+.)

The original release (now called Star Wars: Episode IV — A New Hope) cost $11 million ($47 million in today’s dollars), with an additional $16.5 million for marketing ($70 million today).

All this makes it massively more profitable than Gone With the Wind, Titanic and Avatar — and certainly more so than Blair Witch and Paranormal Activity. (The movie’s stars didn’t do too badly from it, either: Alec Guinness received 2.5 percent of the gross profits or $3.3 million; Carrie Fisher and Mark Hamill received 0.25 percent each or $368,750; and Harrison Ford received .67 percent or $1 million.)

But what about purely at the box office?

Star Wars’ theatrical take was $510 million at the time of its release ($2.16 billion today). It made another $265.5 million later (approximately $453 million today) for a total of $2.613 billion in today’s dollars.

Fox got back half of that, meaning that in adjusted dollars the movie made a profit from theaters of more than $1.3 billion. Sorry, George Lucas, but that’s less than Gone With the Wind.

So Star Wars is the most profitable movie in history. But Gone With the Wind holds the crown in terms of absolute profit from its theatrical run alone.

Via HollywoodReporter.com