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What's An Oscar Really Worth?

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Photo: Alan Light

I'm writing from the red carpet, where despite the recession Hollywood's busy getting ready for the big glamorous night; in other words, business as usual. This Sunday all the nominees are hoping to bring home a life-changing gold statuette. There's no question winning can jumpstart a young actor or writer's career.

But the question of what an Oscar is worth to the studios that so carefully tally their wins Monday morning, is more obscure.

For sure, an Oscar gives studios key intangible benefits- and not just bragging rights. When it comes to attracting hot talent- a big star or director- awards can be key in assuring future critical acclaim. Studios are often competing for the same projects and an Oscar-studded track record can help lure key players when everything else is equal.

But there are some tangible, quantifiable benefits. A nomination for Best Picture boosts domestic box office by an average of $13 million. Sounds good, right? It would be if the major studios didn't spend between $15 million and $20 million on Academy Awards-related advertising ("for your consideration" type ads). The studios are shelling out the big bucks because they're going for the gold- a best picture win can have much larger impact.

Winning best picture can boost not just the box office, but also DVD sales and revenues brought in from International TV revenues. David Davis, a Hollywood banker for boutique firm Arpeggio Partners tells me that a busy picture win can generate as much as $100 million in International revenues. He explains that TV deals in European countries are often determined more on critical acclaim than they are on box office as they are here in the US. Many foreign rights sales are made before a film is released, long before an Oscar win. But for those studios that leave the terms of their foreign deals open, the potential is huge.

The films that benefit most from an Oscar win are those that are released close to the ceremony like this year's "Slumdog Millionaire", or re-released like "Crash" from a few years ago. To get a bump the films have to be on enough screens for it to matter- unlike "The Reader", which is a limited enough release that not enough viewers of the telecast will be able to see it. And for it really to matter to a company's bottom line, the film can't cost a fortune, nor can the studio have shelled out too much on ads.

"Slumdog Millionaire" is the favorite for this year, and with a $15 million budget and a slow rollout, gaining momentum up through this weekend's ceremony, it could get an even bigger bump from a win.

Questions? Comments? MediaMoney@cnbc.com