Top of the flops

Ever wondered why movie stars get paid so much? Well, so apparently did S. Abraham Ravid, a professor of finance at Rutgers University. And he's discovered through years of research that the appearance of a "big name" in a film makes no difference to its performance at the box office. Forbes magazine quotes him as saying: "Star participation has no statistical correlation with the success of a movie, no matter how you define 'a star' or how you define 'success'." The article, which notes that stars including Will Ferrell, George Clooney and Nicolas Cage all had big flops in 2008, continues:

While top-shelf stars like Ferrell and Cage often sell more tickets, he says their movies are often that much more expensive to produce and, as a result, rarely turn a sizable profit for their studios. Put another way, stars do well for themselves and their agent and management teams, but they fail to deliver for the studios that employ them.

And that, of course, begs the question: Why not make more little films with no names (like ths year's Twilight), and make lots of money, than blow a wad on star vehicles? While the business concept of a "loss leader" may come to mind, my guess is that many studio bosses are too caught up in the Hollywood mystique for their own (and their shareholders') good.