Big Oscar Parties Mean Big Money

Hundreds of events happening around Los Angeles in the days surrounding the Academy Awards come with a combined price tag of about $150 million.

February 24, 2006, 12:00 AM EST

The luxurious Governors Ball was set up for a press preview more than two weeks in advance of the awards.

When the Academy Awards blow into Los Angeles, almost no one is outside the reach of the related special events. A mass mobilization of event producers, marketers, and vendors yields hundreds of events, from small scale to massive—and they go all week. There's the Academy of Motion Picture Arts and Sciences' official Governors Ball, Vanity Fair's exclusive party, and the Elton John AIDS Foundation benefit. Studios host parties for their top-level executives and nominees, and agents host more intimate fetes for their clients and friends. And swag suites and viewing parties fill nearly every room and penthouse in the area's stylish hotels.

“It's like the whole town goes to prom,” says Dina Wise, who currently produces events through her own New York-based company, and formerly worked in-house at Miramax. “The whole town goes into mode. Everyone is on call, like they're going to war.”

The 100 biggest events in the days surrounding the Oscars generate at least $150 million in revenue for the city's event and hospitality industries, according to estimates from event producers and vendors who have worked on these and other similar events. After all, in addition to a fee for the venue and a food and beverage tab—which can be considerable—the bill for the large-scale parties includes scores of such additional vendors as security personnel, PR flacks, linen providers, valet parking services, and custom tent makers, plus additional fees for the setup and planning of the events.

Those costs add up so much that some more inclusive estimates of the total amount spent on entertaining and event marketing—which figure in social as well as corporate and nonprofit events, and other peripheral spending—double that number. “You're an idiot if you [are a vendor who] can't tap into the market and make money out there,” says one New York-based event and PR vet.

The big five events on Oscar day alone—the Governors Ball, Vanity Fair's party, AIDS Project L.A.'s and Elton John's AIDS fund-raisers, and the Night of 100 Stars viewing dinner—may cost a total of $10 million, based on estimates from producers and vendors who have worked on these events and others on a similar scale. (The actual expense to the companies hosting the events may be dramatically lower, after sponsors significantly underwrite costs, but that number comes close to the events' full market price.)

A Week of Events
The Oscar night affairs get the most press coverage, but they're only a small part of the event marketing and business entertaining that happens around the awards. The studios use the full week to toast their own, with Warner Brothers planning a night-before-the-Oscars party at the Hotel Bel-Air for about 250 of its top-level executives and nominees. A jazz trio booked through the hotel will play for the assembled crowd, milling about the hotel's lounge as well as in a clear tent set up on the premises. The hotel's minimum charge for such a party is $125,000.

More informal business entertaining happens throughout the week, with agents and industry folk mixing business and social engagements with parties—which cost at least a few thousand dollars, and often more—at their homes and in venues around town.

Scores of businesses set up camp at area hotels to associate their name with the Oscars, while distributing their products through gift suites. Marketers from the fine jewelry, fashion, and cosmetics industries see payoffs, from the media exposure their gifts garner, to the immeasurable cachet that comes from celebrity affiliation. Marketers believe it works, and their generosity is boundless. Suites at the iconic Chateau Marmont in West Hollywood typically go for as much as $3,000, but during Oscar week that number rises to $3,500—and some marketers book suites for several days to a week or longer.

Some skip the suites, putting their products in gift bags and packages. Among the offerings this year are lingerie sets embellished with diamond brooches worth $15,000 from designer Chantal Thomass for Victoria's Secret (for the best actress nominees). And Madison & Mulholland is putting together $80,000 gift packages for nominees that include diamonds,
cars, and luxury travel.

Following the awards, this year's Governors Ball at the Kodak Theatre will feature a luxe environment with a water wall, fountains as tabletop centerpieces, Ultrasuede linens, and a performance by jazz vocalist Patti Austin. “To bring Patti Austin might cost $30,000 to $50,000—just for the musician's fee; that number could double for equipment and other needs,” says an event producer who recently contracted Austin to perform. Steve Einzig, founder of booking company, puts that number a little lower $25,000, or around $50,000 including travel and expenses.

While the ball's custom-made Ultrasuede tablecloths are coming from Classic Party Rentals (who declined our request for a price quote), comparable linens from specialty linen vendor Wildflower Linen would cost about $85 apiece—that would be $17,000 for 200 tables.

Wolfgang Puck caters the ball; past offerings have included caviar, filet mignon, and Maine lobster, a menu that could cost between $450 and $750 a head, according to local event producers. For 1,560 guests, that could be more than $1 million just for the catering bill and related costs of dining service. (A Puck spokesperson wouldn't give an actual price, but said our estimate was appropriate.)

Retail Price Versus Real Cost
Some vendors get considerable publicity and bragging rights from working on these high-profile events. (Puck's kitchen, for example, turns up year after year on shows like Access Hollywood, offering viewers a backstage glimpse of the party's elaborate production.) So a few will cut their prices in order to take advantage of such perks. Having in their portfolios some of the most publicized events of the year may help them win work from new clients later on, and undercharging for work on a big Academy Awards party, the thinking goes, may allow vendors to charge more with clients who are impressed by their Oscar work later.

But not everyone sees the value of such an arrangement. “From a profitability standpoint, the publicity a sub-vendor gets for working on these types of events does not offset the [large amount of work necessary] for the budget given,” says Angel City Designs president Mark Yumkas, whose company works on huge-scale events like the Grammy awards official bash. “We evaluate and will not hesitate to pass if we cannot be within our normal profit margin range.”

Of course, not every vendor has the opportunity to decline the prestigious work. “Vendors might work at a reduced rate, but for the most part, if Vanity Fair is approaching them, it's not for the price break,” says an event producer who works on parties with massive guest lists, and budgets to match.

All the Pricey Details
The Vanity Fair party at Morton's, with its well-documented reputation as the evening's most exclusive, star-studded party—comes with a price tag estimated at $2 million (the magazine's PR team didn't respond to our requests for comment). In past years, the party has featured a 30-foot-long, 10-foot-tall myrtle topiary in the shape of the magazine's title, lighting by lighting-designer-to-Buckingham-Palace Patrick Woodroffe, and tables set with Asprey accessories and custom-made engraved enamel lighters.

But the price of the party also includes dollars spent long before the doors to Morton's swing open. Condé Nast, the mag's New York publisher, flies as many as 30 staffers to Los Angeles to prepare for as long as three weeks; they stay at the Beverly Hills Hotel and drive rented cars. (While low-end car rentals start around $50 a day, you can bet these folks aren't driving the cheapest models, and the hotel's guest rooms start at $410 per night—and go way up from there—and it doesn't offer a group rate.)

Elton John's AIDS fund-raiser at the Pacific Design Center and AIDS Project L.A.'s benefit with Esquire magazine at the Abbey both require tents to accommodate the crowds they draw, and that expense alone is significant: A tent for 400 people runs around $30,000 to $40,000—and the cost nears $250,000 when you add the flooring, lighting, and furniture under it. AIDS Project was able to add the tent into this year's plans thanks to funding from a sponsor. And, under pressure from the new director of Elton John's foundation, the party is cutting some corners: This year, a New York vendor donated the invitation and journal printing, which has been done in the past by high-end invitation designer Kira Evans Design. (Evans's work is limited this year mainly to the press wall and place cards.)

Fund-raisers like John's—which brought the Scissor Sisters for a performance last year—might get a discount from entertainers who appear as a personal favor to John, but staging a show still has technical costs. And talent-packed guest lists mean extensive security staff. Other costs include limousine and car companies, which are booked solid during this period, and PR firms may charge from $5,000 to $25,000 to publicize a single event.

Sponsors' Effects on the Bottom Line
Some of the parties on Oscar night are fund-raisers, with guests' ticket and table prices—to the tune of $10,000 per table for AIDS Project's event—going toward the cause of the host organization. And of course, sponsors underwrite much of the costs of producing those parties. Half to 80 percent of foundations'
party costs are underwritten, ideally keeping the fund-raisers' take for their respective charities at least two-thirds versus the third of the budget that was spent on the event. “The [higher-visibility] parties' bottom lines can often run less expensive because so many companies want to be affiliated with them,” says one event producer, accustomed to working with big-name liquor sponsors, among others. ”Dom [Pérignon] or Veuve [Clicquot] might donate what could cost 60 to 70 percent of the budget for an event [that gets less media coverage].”

For the non-fund-raisers, sponsors' involvement is much less significant. “Only our beverages are sponsored,” says Cheryl Ceccetto, whose company, Sequoia Productions, has produced the Governors Ball for 17 years. “Sponsors need to be showcased, and the academy is not into branding—it's about the Academy Awards and [the ball] is not the place for [marketing].” (The Oscars are there to market movies, that is, not flavored vodkas.)

Yumkas, whose company produced NBC Universal's party for the Golden Globes, says he's seen sponsorship requests for parties with no fund-raising component ranging from $25,000 plus a donation of products, to as much as $100,000 and more. At the Globes party, he says, “There was actually a limit for how many times we could put [one of the sponsors'] logos on the step and repeat wall—that formula was based on sponsorship level, and the sponsors were only to get what they paid for.”

Sure, these parties are expensive. But the companies who fund them continue to do it year after year because they feel certain it pays off—in ways that may not be measurable in terms of dollars, but are nonetheless essential for the success of their businesses. In addition to impressing its biggest advertisers
and garnering the most press of the night, Vanity Fair's lavish party ensures it maintains its status as Hollywood's most important glossy. “The guests are editorial contacts they need for securing coverage—the agents, PR people, and others from whom they need favors to get big stars on the covers,” says a planner who has worked on events for the magazine. “The payoffs are guaranteed.”

Alesandra Dubin

Posted 02.24.06

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