Return on investment – and ‘overpaid’ Hollywood stars

You might ask if Hollywood stars are ‘overpaid’, like footballers. However, most footballers aren’t overpaid in the sense that there is a perception that they bring huge revenues to their clubs and are therefore ‘worth it’.

The same is true of Hollywood stars, who are worth paying a fortune if that’s reflected in their box office draw. This isn’t just showbiz gossip, it’s Business Studies (and there’s no business like business studies, as they say).

Hollywood studios have to think like a business and ask if it’s worth ‘investing’ in a big name (and big bucks) star. The answer for Drew Barrymore is apparently ‘no’. Check out the list.

According to the BBC Drew Barrymore and Eddie Murphy top Forbes ‘overpaid’ actors list.

The 40 highest paid actors had their pay measured against the budget and earnings of their last three movies. The Forbes list says that Barrymore’s films earned 40 cents for every dollar she was paid, while Murphy’s returned about $2.70. Everybody’s Fine, a 2009 film starring Drew Barrymore and Robert De Niro, earned only £10m globally. And while Eddie Murphy may be well known for box office hits like The Nutty Professor, his recent films have not done well.

Here’s the Top 10 overpaid list (and there’s more detail in the article)

1. Drew Barrymore
2. Eddie Murphy
3. Will Ferrell
4. Reese Witherspoon
5. Denzel Washington
6. Nicolas Cage
7. Adam Sandler
8. Vince Vaughn
9. Tom Cruise
10. Nicole Kidman

This is all pretty simplistic, but a clear introduction to a crucial business concept.