By MICHAEL CIEPLY

LOS ANGELES - Can a movie studio make money on a film based on an original and unfamiliar story, with no Hollywood superstars, a vanishing DVD market and a price tag approaching $500 million?

That question looms large for 20th Century Fox and its 3-D science-fiction film “Avatar,” among the most expensive movies ever. Despite many skeptics, the studio thinks it can turn a profit, in part because the film’s creator, James Cameron, was the driving force behind the studio’s immense hit “Titanic,” which took in more than $1.8 billion at the worldwide box office after its release in 1997.

But just in case box-office receipts for “Avatar” fall short, Fox has worked hard to hedge its large bet on the movie.

Despite the estimated half-billion dollars spent on its production and marketing, “Avatar” may carry surprisingly little financial risk for Fox’s parent company, the News Corporation, even if it disappoints. That is because of shifting industry economics, reliance on outside investors and help from a network of allied companies and in-house business units.

Fox’s efforts underscore how studios generally have been able to minimize their exposure at a time of blockbuster budgets ? albeit at the cost of limiting their profit potential as well.

The final cost of the film has not been tallied, as Mr. Cameron, who has worked on the film for 15 years, and his collaborators, as far-flung as Weta Digital in New Zealand, continue to complete their work. Published reports have put the production budget at more than $230 million.

But the price tag would be higher if the financial contribution of Mr. Cameron and others were included. When global marketing expenses are added, “Avatar” may cost its various backers $500 million.

At what point the various partners in “Avatar” would see profit from the film depends on what share of revenue each receives as the movie reaches theaters in December and January, then home video and other media around the world. If domestic ticket sales reach $250 million - a level broken in the last year by five films, including “Star Trek” and “The Hangover” - Fox and its allies would appear to be headed into the black.



To pay for ‘‘Avatar,’’ a 3-D science fiction epic, 20th Century Fox is relying on many partners. / MARK FELLMAN/20TH CENTURY FOX

In 1980, the failure of “Heaven’s Gate” was enough to chase the Transamerica Corporation, which then owned United Artists, out of the movie business. But such companywreckers belong more to history than to the contemporary film business. With “Titanic,” the News Corporation was at risk for at least half of a production budget that would approach $300 million in today’s dollars, and was borne partly by Paramount Pictures.

The News Corporation is carrying a much smaller share of “Avatar’s” production cost, as a pair of private equity partners - Dune Entertainment and Ingenious Media - pick up 60 percent of the budget, according to people who were briefed on the economics of the film but spoke on the condition of anonymity to avoid conflict with the studio or filmmakers.

In a further hedge, Mr. Cameron would give up part of his own participation in the film’s returns if production costs exceed a specified level, according to those who were briefed on the film. If final production costs exceeded $300 million, for instance, Mr. Cameron would effectively defer much of his payout until the studio and others were compensated, despite his years of labor on the movie.

Fox’s biggest investment in “Avatar” may be on the marketing side, where the company is planning to spend about $150 million around the world .

But here, too, the studio has looked for partners to share some of the costs. One ally, Imax, worked with theater owners to set up a special 15-minute preview last summer without significant charges for the studio. “A lot of people are lending this sort of in-kind support,” said Greg Foster, chairman and president of Imax Filmed Entertainment.

Still, the studio has experienced some problems. Initial reaction to a conventional trailer was flat, and response to the 3-D Imax preview provoked doubts about whether Mr.


A movie deal
built to protect
against a flop.


Cameron’s movie - which uses new technology to tell the story of a planet being assailed by humans - was really the cinematic game-changer that had been promised.

Taking no chances, Fox is backing up Mr. Cameron’s movie with what an executive recently called the studio’s “secret weapon.”

That would be “Alvin and the Chipmunks: The Squeakuel,” set to open just a week after “Avatar.”

It is the relatively safe sequel to a chipper family comedy that cost about $60 million and took in $217 million at the domestic box office when it was released two years ago.



An audience in New York watched a preview of “Avatar.” / JENNIFER S. ALTMAN FOR THE NEW YORK TIMES