'Monster Trucks' Leads Viacom to Take $115M Write-Down
The company is taking the write-down months before the big-budget film opens in cinemas.
With the November departure of interim CEO Tom Dooley drawing most of the Viacom headlines on Wednesday, some may have missed news of a major write-down in the company's film unit for a title that is months away from hitting theaters.
Lowering its earnings forecast for the current fiscal fourth quarter, Viacom cited "a programming impairment charge of $115 million" that is "related to the expected performance of an unreleased film," in addition to other factors.
Sources tell The Hollywood Reporter the movie in question is Monster Trucks, set for release on Jan. 13. The big-budget title has been delayed numerous times after originally being slotted to hit theaters more than a year ago.
First set for release on May 29, 2015, it was then pushed to Dec. 25 of that year, then March 18 of this year and eventually to next January.
Monster Trucks is a 3D live-action/computer-animated action comedy produced by Paramount Animation and Mary Parent's Disruption Entertainment and was directed by Chris Wedge. It stars Lucas Till, Jane Levy, Amy Ryan, Rob Lowe, Danny Glover, Barry Pepper and Holt McCallany.
With an estimated production budget of $100 million-plus, one source said the film was intended to be a broad-audience title, but turned out to be more of a kids movie.
Given Paramount's slew of box-office misses this year, Jefferies analyst John Janedis wrote in a Wednesday report that the studio's "issues" were "ongoing." He added: "Viacom indicated there would be a write-down of $115 million related to a future film that will not likely perform to expectations."
And Drexel Hamilton analyst Tony Wible said that the loss "implies that Paramount will have lost about $500 million this year despite a favorable box office, home entertainment and licensing environment."
He added: "The studio is gradually losing its major franchises, and it may be difficult to launch new ones in the increasingly competitive film slate. We are lowering our future margin assumptions for the studio."
Georg Szalai contributed to this report.