Paramount's meager slate imperils its box office crown

LOS ANGELES/NEW YORK (TheWrap.com) - A year after Paramount trampled other Hollywood studios with box office hits like "Thor" and "Transformers: Dark of the Moon," the studio could fall to last place in market share this year after pushing two major projects off its 2012 slate.

"G.I. Joe: Retaliation" and "World War Z" were moved to 2013 because of reshoots and script concerns, leaving the studio with mostly welterweight titles.

"It looks very lean until the next ?Star Trek' comes out," Matthew Harrigan, an analyst at Wunderlich Securities, told TheWrap. "It's not too surprising with that ?Transformers' and Marvel product gone, but I can't remember a studio going from first to worst as quickly."

Indeed, Paramount has opened only four new movies this year with nothing outside of a Katy Perry documentary debuting until October's "Paranormal Activity 4." Its biggest success will probably end up being "Madagascar 3: Europe's Most Wanted," a DreamWorks Animation film distributed by Paramount.

Thinning out its upcoming slate even further, the studio last week postponed shooting franchise hopeful "Teenage Mutant Ninja Turtles" over script concerns.

Meanwhile, its distribution deal with Marvel Studios is over, a similar pact with DreamWorks Animation expires at the end of the year and its two biggest collaborators - J.J. Abrams and Michael Bay - can only make so many films.

No one from Paramount would comment on the record, but individuals close to the studio believe the scheduling shakeup will leave 2013 better stocked with franchise fare.

Over the next few months, however, the studio's slate is thin, and it is running low on hits developed within its walls.

"Paramount's lineup is really divided heavily between the projects that come from the outside and those that come from the inside," a producer told TheWrap. "The outside movies are fading away and the inside ones they have left are problematic. You have to question how well they will perform and if they will generate enough money to pay the enormous overhead it takes to run a studio."

It's a particularly ignominious fall from grace, given that the change in fortunes coincides with Paramount's 100th anniversary. That's probably not the centennial celebration that Paramount Chairman Brad Grey and crew had in mind, but sometimes the best laid plans go awry.

Now that "G.I. Joe" has been moved, Paramount's summer comprises "The Dictator," which has grossed a lackluster $134 million worldwide, and DreamWorks Animation's "Madagascar 3: Europe's Most Wanted," which racked up an impressive $280 million worldwide so far. The animated hit is welcome news, but Paramount only receives an 8 percent distribution fee for its efforts.

An individual close to the studio said it pushed "G.I. Joe" to refashion the film for 3D and beef up Channing Tatum's role. Screenings of the film met with a lukewarm response from audiences.

Moreover, in a crowded summer where many big budget films have bombed, the studio felt a new release date would be more hospitable.

"?Battleship' scared the crap out of them," the individual said, referencing the costly flop from Universal Pictures. In the case of "World War Z," the zombie apocalypse movie starring Brad Pitt, a problematic ending led the studio to move the Marc Forster-helmed film from December to June 2013 and hire Damon Lindelof ("Prometheus") to beef up the conclusion. That will necessitate weeks of costly reshoots on the special-effects-laden picture.

And pushing production back on "Ninja Turtles" will allow the studio to trim the budget to $125 million but nevertheless involves more schedule juggling.

Though not a wasteland, this winter does not overflow with tentpole fair or awards contenders for Paramount.

"Paranormal Activity 4" is expected to repeat the success of previous installments, and the studio is optimistic about Robert Zemeckis' "Flight," starring Denzel Washington. Come Christmas time it is betting on Tom Cruise as mystery novelist Lee Child's "Jack Reacher."

Fortunes will undoubtedly improve in May when the "Star Trek" sequel hits theater.

And the studio has prepared for the likely departure of DreamWorks Animation by launching its own animation division. "Rango," the first animated film released under the studio's banner, scored $245 million globally, although a follow-up is not expected until at least 2014.

Paramount has long emphasized profits over market share, and Wall Street likes that approach.

"A highlight at Paramount has been there haven't been a lot of big losses," Alan Gould, an analyst at Evercore Partners, told TheWrap. "They may not take as big a shot as Disney, but that means that while they don't have the upside of ?The Avengers,' they don't have the downside of ?John Carter.'"

But Paramount may be learning that filling its own slate is a big challenge.

"For so long they had other supplies like Marvel and DreamWorks that they could always count on for one or two hits. They could count on a pipeline. Now they are confronted with a place where they have to supply all their movies," one producer told TheWrap.

Some producers who work with the studio say it is more risk-averse than most.

"Everything there is a profit and loss statement," the producer told TheWrap.

In addition, other producers and financiers say it's difficult to get the attention of Paramount executives.

"It is not a system that is open to lots of outside producers and financiers and they're not interested in acquiring a lot of product," another producer told TheWrap. "They do not return your calls and they are impossible to meet with. When you turn back on everybody and turn inward, sometimes you find there's not a lot to fall back on."

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