Line is famous as the studio who gambled everything on making all three of Peter Jackson’s Lord of the Rings films at once; it’s almost hard to remember a time when that wasn’t just a risk, it was a huge and possibly crazy risk. It’s not a risk they’re taking on a second time – the company only put down money for the first story in Bill Pullman’s His Dark Materials saga, and they ended up making the most expensive film in their history, The Golden Compass.

Today I sat down with Golden Compass director Chris Weitz and actor Sam Elliott, and they both disproved the rumors I had heard about the film’s budget hitting 220 million dollars. They said it was 250 million. That’s 70 million more than the 180 million New Line has been claiming, which was apparently the original budget; the cost soared in post-production. Weitz said that the biggest factor was how expensive visual effects have become. "I don’t have my own effects house like Peter Jackson does!" he joked. The film is rich in CGI; every human character has a computer generated animal companion. And then there are the computer generated armored polar bears, who are also major characters. On top of that, Elliott said that there had been additional shooting as recently as a month ago (I imagine this was to fix the ending of the film. Weitz originally remained faithful to the book, which has an exceptionally dark ending. Finding that people weren’t that happy with the ending – he said they were confused – he decided to clip the story short and end on a high note of victory. The ending has been shot, and he is adamant that the footage will open the second film, should one happen), and that sort of last minute work will definitely throw a wrench into your budget calculations.

250 million dollars is a lot of money. The truth behind movie budgets is hard to glean, but it seems likely that The Golden Compass has earned a (temporary, at the rate things in the business are going) spot among the most expensive films of all time. At this moment it seems to be the third most expensive film ever – Spider-Man 3 had an announced budget of 250 million, and rumors put the final budget at well over 300 million, while the official budget for the third Pirates of the Caribbean actually is 300 million, so who knows where that really ended up. That, by the way, is just the production budget – I don’t have numbers, but I would be stunned to learn that the prints and advertising cost for The Golden Compass is a dime under 100 million dollars. It’s probably closer to 120 or 150 million.

The cold truth about these kinds of budgets is that it’s next to impossible to make the money back theatrically with them. There’s a lot of math that goes into this, but the general concept to remember is that the studio has to make about double the budget plus the prints and advertising to break even because movie theaters get their cut. That’s beside stars or creators who get back end deals and the like. This means it’s quite likely that The Golden Compass will need to make 700 million dollars or so worldwide just to break even. That’s a steep hill to climb before you even look at what happened the last time Nicole Kidman and Daniel Craig were in a movie together.

But does this mean that The Golden Compass needs to earn 800 million dollars worldwide for the next two books in Pullman’s trilogy to ever see the light of day? Not necessarily, as profit in the movie business is in the eye of the accountant. A film like Superman Returns was in no way profitable for Warner Bros with a 200 million dollar return on a 209 million dollar production budget, but that’s only if you look at it as just a movie. DVD sales, TV sales and merchandising money all pad out the accounts for these blockbuster movies (and meanwhile smaller films never become profitable due to shady accounting practices meant to keep people from profit participation). It’s possible that the post-theatrical life of The Golden Compass could warrant production of the sequels.

New Line’s feeling at least moderately bullish on the film – they’re sneaking it in about 800 theaters this weekend. They hope that word of mouth from advance audiences will be positive; I saw a screening last night that was mostly filled with civilians (they often pad out press screenings with schlubs off the street), but I couldn’t quite gauge what the reaction was. People did applaud at the end of the big polar bear fight, though. Good buzz from preview audiences will help a lot, especially because Pullman’s world is very complicated and can be difficult to explain to newcomers. On top of that, the movie doesn’t have blockbuster star power – as famous as Daniel Craig or Nicole Kidman are, the record shows that they aren’t the kinds of stars who open movies. I’ll be watching the web to see what kind of buzz comes out of the Saturday sneaks.

New Line obviously wants the franchise to go on. But if this film, which might be the smallest of the trilogy in scope and action, cost 250 million, what could the next two run? The third book has a massive battle between the armies of many worlds and angels, and there are alien worlds with completely bizarre inhabitants. And then there’s the fact that the next two stories get more into the realm of gnostic thought, specifically that the creator of the universe may not be the kind of guy we thought he was all this time. That’s wacky material for a massively expensive series (to Weitz’s credit he manages to get the basic theological themes of The Golden Compass into the movie without being so in your face about it that it would piss off America’s insane religious base). Of course if The Golden Compass is a huge hit – say, a Narnia sized hit that means an immediate greenlight for the sequel on the Monday after opening – Weitz will get to do whatever he wants, and today he told me that he intends to make the next two films very faithful to Pullman’s philosophy and theology. But if The Golden Compass limps to a decent looking but still underperforming number (say 400-500 million worldwide) and then makes its money back in the ancillary, it’s quite possible that sequels will happen, but with significantly reduced budgets (the good news here, according to Weitz at any rate, is that many of the CGI issues were solved in this film, meaning that costs could be lower and closer to the actual budget next time. Of course, CGI keeps on moving, and the FX work in Lord of the Rings is already starting to look creaky. Will The Subtle Knife, the second story, have to be expensive just to stay state of the art when it’s released in two or three years?) and with the headier stuff mostly excised.

Beyond that, a lot is riding on this film. Post-Lord of the Rings, New Line has had a hard time finding another blockbuster hit. Hell, they’ve had a hard time finding any hits at all. This film could be the final nail in a coffin that many industry observers have seen slowly closing for the last two years. We’ll know on Monday December 10th.