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Only the title appears at the beginning of the film; all other credits are at the end. The credits include the following dedication: "In loving memory of Rebecca Annitto, a true beauty inside and out." Annitto, the niece of co-producer Peter Saraf, was a 14-year-old competitive rower who was killed in a car accident in Princeton, NJ.
Various articles in Los Angeles Times and an August 11, 2006 Entertainment Weekly provide the following information about the film's five-year development process: First-time screenwriter Michael Arndt, a former personal assistant, sold the screenplay for $150,000 to producers David T. Friendly and Marc Turtletaub in 2001. In a November 17, 2006 Hollywood Reporter interview, Arndt stated that his twin brother is "a depressed academic who teaches Proust" and that his family had a VW bus when he was growing up. "Everything that happened with the car [in the film] happened to my family."
Both Dean Parisot and Goldie Hawn expressed interest in directing the film before the assignment went to Jonathan Dayton and Valerie Faris. Dayton and Faris, who are married, were known for their work on commercials and music videos, but had never directed a feature film. The project was sold to Focus Features, which argued that the film needed a major star and commissioned a rewrite from screenwriter Steve Conrad. Conrad is not credited onscreen and his contribution, if any, to the final film has not been determined. Jim Carrey, Alec Baldwin, Tom Hanks, Ben Stiller, Kevin Kline and Robin Williams were considered for one or both of the male roles; Bill Murray was sought for the role of "Frank"; and Laura Linney, Jennifer Aniston and Diane Lane were considered for the role of "Sheryl." A November 1, 2006 Los Angeles Times article adds that David Duchovny was considered for role of "Richard" and Donald Sutherland was considered for the role of "Grandpa."
Dayton and Faris objected when Focus proposed shooting the film in Canada to save money, in part because Canada lacks America's fascination with beauty pageants for young girls, which would have made it difficult to cast the roles of the other Little Miss Sunshine contestants. After two years of development, Focus dropped the project, and Turtletaub decided to buy the script back and finance the production himself. Big Beach, which is jointly owned by Arndt and Turtletraub, eventually co-financed the picture with Bona Fide Productions, a company co-owned by Albert Berger and Ron Yerxa. Little Miss Sunshine was shot in less than a month, for an $8 million budget.
According to a June 25, 2006 Los Angeles Times news item, the beauty pageant was shot at the Radisson Hotel in Culver City, and many of the scenes in the VW bus were filmed near Palmdale, CA. Entertainment Weekly adds that portions of the film were shot in the Arizona desert. In their DVD commentary, the directors noted that the extras in the scenes at the hotel were actual contestants and parents from the beauty pageant circuit.
The DVD included, as added content, footage shot but not used for the film's ending. In one version, the family stops for picnic after leaving the contest and reminisces about Grandpa. In their DVD commentary, the directors noted that the scene was "too sappy" and did not fit the tone of the rest of the movie. In another version, the adult members of the family are handcuffed together while "Ms. Jenkins" confers with the policeman after the contest. Additional footage shows the family stealing a giant trophy from the hotel before leaving.
Little Miss Sunshine had its premiere at the 2006 Sundance Film Festival, where it was optioned for a record $10.5 million, the biggest deal for a single film in the festival's history, surpassing the previous high of $10.25 million for Happy, Texas in 1999. Little Miss Sunshine was screened at the inaugural Sundance Institute at the Brooklyn Academy of Music film series in mid-May 2006 and was shown as part of Film Independent's Los Angeles Film Festival on 2 July 2006.
Little Miss Sunshine was a critical and popular success. The Los Angeles Times review praised the film's performances and stated, "Little Miss Sunshine hilariously punctures the grotesque bubble of the competitive American spirit in which `winners' are recognized by their rigorous ability to conform to the standards imposed by the market, and `losers' include anyone who won't bow to its mighty will." Variety reported on September 11, 2006 that the film had earned $36.7 million, which put it in the top tier of independent films. According to Internet financial database Box Office Mojo, the film's worldwide grosses exceeded $86 million as of January 2007.
In addition to being selected as one of AFI's Movies of the Year for 2006, Little Miss Sunshine received the Darryl F. Zanuck Producer of the Year Award (Marc Turtletaub, David T. Friendly, Peter Saraf, Albert Berger & Ron Yerxa) from the Producers Guild of America. Alan Arkin received an Academy Award for Best Supporting Actor and Michael Arndt received the Academy Award for Best Original Screenplay. The film was also nominated by the Academy in the categories of Best Picture and Best Supporting Actress (Breslin). The picture earned two Golden Globe nominations, one for Best Motion Picture-Musical or Comedy, and another for Best Actress in a Motion Picture-Musical or Comedy (Toni Collette). The film received the Screen Actors Guild ensemble award for Outstanding Acting by a Cast, and received SAG nominations for Arkin for Outstanding Performance by a Male Actor in a Supporting Role and Breslin for Outstanding Performance by a Female Actor. The film also received the following Independent Spirit Awards: Best Feature, Best Director, Best First Screenplay and Best Supporting Male (Arkin). Paul Dano was also nominated in the Best Supporting Male category. Dayton and Faris were nominated for Directorial Achievement in Film by the Directors Guild of America, and Arndt received the Writers Guild of America award for Best Original Screenplay.