The Ghostbusters' Business Plan Always Sucked

At the start of the original Ghostbusters Peter Venkman declares that he and his busting compatriots will “go into business for ourselves!” But, considering the economic state of New York City in 1984, how did they do it? Could something this ridiculous be an actual business in ‘80s NYC?

As a thought experiment, we’re walking through the core elements of the Ghostbusters’ company: the properties the Ghostbusters inhabited, the tools they built and used, the capital they were working with before they even made this perilous decision. We’re excluding stuff like taxes, permits and other droll minutiae that’s less riveting than breaking down what a reasonable per-ghost catch fee could be.

How Much Money Did the Ghostbusters Have Before They Became the Ghostbusters?

In the original film, Egon, Ray and Peter all had PhDs in psychology and were given a grant by the Psychology Department of Columbia to study…well…it seems…parapsychology. Parapsychology is a splinter of “real” psychology that explores the scientific possibilities of unexplained events. In the film, Peter tells Walter Peck that he has degrees in “parapsychology and psychology.” While it’s doubtful Peter could really have a PhD in parapscyhology, there are some institutions that do award degrees in this “fringe” pseudo-scientific field.

So, just before the film begins, Ray, Egon and Peter are being paid by Columbia to study fringe science, and presumably teach classes and, possible, lecture about regular psychology. How much are they making? Today, the average adjunct professor makes about $20,000.00 a year. When we do a little reverse-inflation, that comes out to a little less than $8,000.00 a piece. Now, they’ve also got a grant which we have to assume is a research grant. When Inverse reached out to Columbia’s Research and Grants Department about the potential amounts for psychology research grants in 1984, a representative for the University said, “There is no way we have of giving you that information. We don’t reveal amounts of grants to the public.”

With research grants, it really depends. They don’t appear homeless or on the poverty line, but they definitely need Ray to put up his childhood home for sale in order to get the business going. For that reason, let’s say that each of the three original Ghostbusters has between 2,000 and 5,000 bucks in their bank account when Columbia pulls their funding and that money is exclusively from their meager adjunct salary.

Unfortunately, there is no “typical” amount for how much a research grant would be. A lot of grants of this kind could come from the The National Institute for Health but it’s also possible for a research grant to come from seed money from the university itself. Because the grant is terminated so quickly, we can probably assume it was seed money, otherwise it seems like it would be hard for them to take away so much money so quickly. Still, the Ghostbusters clearly have money left over, so how much was the original nest egg?

Ray’s House

After leaving a bank in Manhattan, it’s made clear that Ray has been strong-armed by Peter into taking a loan out against the potential sale of his family home. It’s not referenced where that home is, but Ray has the bearing of someone who comes from money (in fact, they all kind of do) so let’s assume this home is somewhere in Cape Cod or a similarly affluent New England area. How much was this loan? Well Egon says the interest rate for the first year is $95,000. We know the interest rate is “19%” meaning if it was a loan that needed to be paid off in one year, with a fixed interest rate that would make the loan $500,000, which actually feels like a lot! If the Ghosbusters were really, really broke before they started their business, it would seem they would now have a lot of money. But, Ray mentions the containment unit is going to take “a lot of bread to capitalize.” If they loan was for around $500,000 and the ‘Busters each have about three grand each, and we round-up, theyre sitting at like $510,000 to get going.

The Firehouse

The first thing we see the Ghostbusters spend money on is the iconic firehouse which will serve as their HQ. Peter tell the real estate agent that it seems “a little pricey for a unique fixer-upper.” In the new movie, the Ghostbusters are thinking of renting a headquarters, which is probably true of the original, too. (Buying a property in New York is super expensive.) Now, in real life, that particular firehouse is an active firehouse, meaning real firefighters live there and fight fires. (Hook and Ladder 8, the unit stationed there were among some of the first responders during 9/11.) When Inverse reached out to the New York Historical Society, they pointed out that historical landmarks (like the firehouse) are rarely available for commercial uses. Point is: renting that firehouse would be kind of impossible in our universe since it’s not available for rent. In the new film, the ‘Busters are quoted at roughly $20,000 a month to which Erin Gilbert replies “burn in hell!” If we use this as a baseline, and do our very rough reverse-inflation again, this would make the rent at the firehouse about $9000 a month. Assuming a one year lease, the ‘Busters would likely be required to put up a security deposit, and the rent for the first month of the lease and the last month of the lease. That’s roughly $27,000 up front, leaving them with $483,000.

Ecto 1

“Everybody can relax, I found the car!” When Ray brings the 1959 Cadillac to the Ghostbusters HQ, he spews a laundry list of the various repairs the car needs before they’ll be able to really start using it. Ray clearly bought the car used with cash, and says it was “only $4800.” Peter is freaked out by this figure, but just like with the firehouse, they have to go along with what Ray wants since they are surviving on the money he put up to start the business. Considering Ecto1 gets an awesome paint job, has a ton of mechanical work, and is outfitted with nifty lights and sirens, we can easily assume another $4000 was spent to get the car up-to-snuff. (Paint jobs are pricey, as are flashing lights.) Subtracting that from the initial ‘Buster funds leaves us with $474,200.

Equipment

This is where things get tricky. We’re dealing with science fictional equipment that does things which are borderline impossible. When the Ghostbusters enter the Sedgewick Hotel Ray mentions each one of them is wearing an “unlicensed nuclear accelerator.” How much do four nuclear accelerators cost? The new Ghostbusters solves this problem neatly by having Abby Yates (Melissa McCarthy) and Jillian Holtzman (Kate Mckinnon) steal a bunch of equipment from the community college where they both work. (In fact, the new Ghostbusters may have started off better than the old Busters when you also take into account that Patty Tolan (Leslie Jones) obtains the car for free, too.) Anyway, in either Ghostbusters universe, this equipment is bespoke. Ray and Peter had already created the PKE meter when they were still at Columbia, but the Proton Packs, Ghost Trap, and Containment Unit are the equipment that would cost the most.

When talking to Walter Peck, Peter mentions that what they have in their basement is a “laser containment unit.” It’s also fairly safe to infer the “proton packs” rely on some laser technology, too. Industrial lasers today can cost between $5000 and $250,000. Here’s where stuff starts to get tight. They’ve got to buy a bunch of equipment that all sits in the price-tag range of industrial lasers, which they need more than one of. Even if we do a little reverse-inflation again, we’re still dealing with an estimate that knocks out a huge chunk of the startup money. Let’s say all the laser equipment and weird black-market nuclear accelerators all cost in total, a modest $450,000. Now, the ‘Busters are sitting at $24,000, which is basically what they’re going to owe in rent for the next couple months.

Staff

Before business picks up, the Ghostbusters also hire a secretary, Janine Melnitz (Annie Potts.) Later in the film, Janine mentions she’s been working for “two weeks without a break,” implying she’s salaried, rather than hourly. What was Janine’s salary? In NYC today, a low-end administrative assistant makes between 35K and 45K a year, so let’s assume Janine was hired at $$$10K in 1984 money. Obviously, the Ghostbusters don’t have to pay her all of this up front, but they have already given her at least $1,000 before things get going. Later, when things are going well, the Ghostbusters hire Winston Zedemore (Ernie Hudson.) We later learn that Winston makes about $11,000 a year. Here is where the Ghostbusters are saving a lot of money: they’re barely paying Winston and Janine anything. Still we have to assume at this phase, the first three ‘Busters are also not paying themselves.

How Broke Were They Before They Started Bustin?

Just before the team gets their first big call and meets Slimer, Peter mentions “petty cash,” to which Ray says, “This magnificent feast represents the last of the petty cash.” When Inverse reached out to Con Edison (the energy company which services New York City) the company was unable to give us cost estimates for a Firehouse in 1984. However, anecdotally, the average power-bill for one-bedroom apartment in New York City, running it’s air conditioning all-day long during the summer is about $100 a month, which is a lot now. With all of their equipment, the Ghostbusters easily have a power bill ten times that. (In fact a representative from Con Edison comes to shut down the Containment Unit in the movie.) Rent and power are both about $10,000. After they’re first month, the Ghostbusters are already broke.

“Ghost Cops Bust Chinatown Spook”: Okay, so that’s one Ghost. $5000!

After the Ghostbusters trap Slimer business starts booming. We know from the dialogue (“Five thousand dollars? I had no idea it would be so much!”) that the Ghostbusters are charging $5000 per ghost. During the montage in which we see the Ghostbusters on a variety of cases, Peter Venkman says “No job is too big, no fee is too big!” leading us to believe they might be charging more per-ghost depending on the case. But, let’s stay at $5000 a ghost. And if we only use this montage as the proof for the number of cases the Ghostbusters actually had, here’s how it all breaks down:

• Rockefeller Center: The ‘Busters running holding one trap, but because theyre running, probably headed to catch another ghost? So, let’s say two. That’s $10,000.

• I got it!” Ego holding a trap on the street. $5000 more.
• “Stand Aside, Please!”: Ray Holding a Trap Up, Walking From a Brownstone. Another $5000!

• The Chinatown Ghost, as mentioned, $5000

• Ray holding another trap walking toward Ecto1. $5000 again

• The Ghostbusters running down a street. Let’s assume they catch one ghost here: $5000.

• Casey Kasem announcement: When Dana is listening to the radio, she hears a report of the ‘Busters taking down “a pretty pesky poltergeists.” $5000.

• “Is it a Mist or Does it Have Arms and Legs?”: Jenine is answers the phone haggardly. Let’s assume they caught the mist, so that’s another $5000. But, in this scene, Jenine’s phone has at least four lines lit up. Assuming she took all those calls, and they caught all those ghosts, that seems like $20,000 right there. If this goes on for two weeks (Jenine mentions a worksheet) that seems like a baseline of $125,000 a week.

• “Two more Three-Repeaters”: When Ray and Peter hire Winston, they’re carrying two traps, that’s obviously two more ghosts, plus, there’s a mention they have to go catch two more. To be a little liberal, let’s add that onto the stuff we don’t see (i.e the lines on the phone being lit up.) So, another $20,000.

Okay. So before Gozer appears as the Stay-Puft Marshmallow Man and terrorizes New York City, the Ghostbusters are collectively sitting at: $215,000! If we subtract their monthly operating costs (Winston, Jenine, power bill, rent, plus food and stuff) that’s still about $199,000. Meaning: the Ghostbusters were a very successful start-up, at least in those two weeks. If they’d continued doing that, they’d even be able to pay-off that big loan way quicker than they thought. But did they?

How Did it All Shake Out In the End?

The problem with all of this, of course, is the fact that once the Ghostbusters rid the world of Gozer, the supernatural activity in New York City decreases to basically zero. In saving the city, the Ghostbusters also destroy their revenue stream. Sure, a profit of $199,000 in about two weeks is great, but there’s zero indication that in the reality of the two original films that business stayed good. In fact, in Ghostbusters II all four of the original members are straight-up desperate for cash. Peter Venkman mentions that they were “stiffed on the bill, for saving the city. Presumably such a pay-out from the city would have saved them all in the money department.

How bad did things get?

Well, in Ghostbusters II, Ray and Winston are doing birthday parties, while also maintaining an occult bookshop, Egon has managed to crawl back to Columbia, and Peter is doing bad public access TV shows. It’s safe to say that the brief spurt of less-than-month of ghost-catching business in 1984 put the original Ghostbusters in crippling debt. Surely, they had to fire Janine and pay her unemployment benefits, to say nothing of how the four of them dealt with their own debts. By the time Vigo shows up in Ghostbusters II these four guys are probably thrilled to be making that sweet ghost-busting cash again.

Is this a good business model? It would seem that the answer is “no.” If you have to wait for a very rare outbreak of a certain kind of thing to catch and contain then you’re basically running a business where you catch leprechauns. If the film established a world in which ghosts were super-common, then being a Ghostbuster could bring you bank. But as it stand, their skills are only needed every once in awhile.

Smartly, at the end of the new Ghostbusters it’s established that Holtzman, Gilbert, Yates and Tolan are secretly being subsidized by New York City. The mayor’s office is quietly giving them “anything they need,” even though publicly, they’re not recognized. Clearly, this a business model that works: charge a nominal fee for your services, but when things get lean, continue to rely on secret funding from the government. Maybe the new Ghostbusters are more business savvy, or maybe they just got lucky. Either way, unlike their predecessors, they’re not going to be in a mountain of debt by the time they get to their sequel.