Kabali and the economics of superstars

Yup. There’s an entire genre of economics studies centred around big-banner studio offerings, star billing (and sky-high compensation) for superstars, and box office returns. Many of these may relate to markets that are more transparent than ours, but their big-picture findings apply across geographies and cultures.

Yes, I’ve heard the meme: it’s Economics that obeys the Laws of Rajinikanth, not the other way around. And, of course, everything about Kabali , which opens tomorrow, appears to validate that joke about the topsy-turvy world of the Superstar.

Well, in an industry where you’re only as good as your last flop — in Rajinikanth’s case, an eminently forgettable Lingaa (and before that, the barely tolerable Kochadaiiyaan ) — the fact that producers and corporate sponsors have gone all-in with Kabali is beyond audacious. But from all accounts, even in a market where transparency in financial matters runs low, Kabali appears to be rewriting the rules of the game, raking in over ₹200 crore even before a single screening.

Market reports, which are hard to verify independently, have it that everything from theatre screening rights across languages, satellite rights, overseas markets rights, and music rights have been sold for that sum. That’s not even counting the revenue from marketing tie-ups with corporate brands and the merchandising rights. It seems to validate one aspect of what University of Chicago economist Sherwin Rosen noted in his seminal 1981 paper on ‘The Economics of Superstars’.

Haha, no. Rosen’s life was untouched by the ‘Rajini style’. His study, which built on the work of British economist Alfred Marshall, was an exploration of the larger phenomenon of superstardom, wherein “relatively small numbers of people earn enormous amounts of money and dominate the activities in which they engage.” And although it was conducted at a time when the technology-driven marketing potential of the performing arts, sports and literature was a fraction of what it is today, and although it was framed in another cultural context, it applies as much to Rajinikanth as to, say, cricketing superstar Virat Kohli or to JK Rowling, the world’s first billionaire author.

No, empirical evidence from Rajinikanth’s own recent filmography suggests it does not. That, too, conforms to theoretical understanding of ‘superstar economics’. For instance, a 1999 study titled ‘Information, Blockbusters, and Stars: A Study of the Film Industry’ by S Abraham Ravid of Rutgers University established that in the context of Hollywood, “stars play no role in the financial success of a film.” Similarly, it postulated, “big budgets do not contribute to profitability: if anything, they may contribute to losses.”

Economists persist in coming up with theoretical models to predict a film’s prospects for success. But as American novelist, playwright and screenwriter William Goldman once famously said: “Nobody knows anything… Not one person in the entire motion picture field knows for a certainty what’s going to work.”

Even Rajinikanth can’t say for sure. But, heck, the movie promises to be enormously entertaining. So, I guess I’ll wait for the whistles to subside and pay an usurious price to hear him say “Kabali-da.” It’s the Superstar effect: you can’t put a price on that.

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