Why Paramount Really Bumped 'G.I. Joe'
When Paramount announced May 23 that it was moving G.I. Joe: Retaliation from June 29 to March 2013, nostrils started to quiver throughout the industry. The explanation the studio was selling -- that it needed time to turn the sequel into a 3D spectacle -- didn't seem to pass the smell test. Why bump a $125 million-budgeted tentpole starring Dwayne Johnson and Bruce Willis five weeks before its scheduled release after launching a multimillion-dollar marketing campaign that included a Super Bowl spot? "They eat all of that money," notes one prominent producer. "And when you yank a movie at the last minute, it does not send an encouraging signal."
Paramount sources say studio chair Brad Grey and vice chair Rob Moore felt the expense was preferable to a duel with Sony's Spider-Man reboot, out July 3. "They looked at the landscape and realized they couldn't compete," agrees the producer in an appraisal shared by executives and agents. Add to that the sinking of Universal's $200 million-plus Battleship -- another film based on a Hasbro property -- and the potential downside looked especially distressing. So Paramount is adding 3D in hope of bolstering overseas box office and taking the opportunity to expand the role of Channing Tatum, whose stardom has grown thanks to The Vow and 21 Jump Street. In fact, Tatum's character originally died in Retaliation, but it's now possible he will be resurrected.
More broadly, Paramount has decided to sit out the season after a brutal few months in which potential franchises -- Disney's John Carter, Universal's Battleship, Warner Bros.' Dark Shadows -- turned into losses. Many suspect Sony's pricey Men in Black 3 also will lose money. (Some think Paramount's top executives might also have an eye on their bonuses, deferring costs to polish up results for the current fiscal year. Paramount declined comment.)
Whatever the reason, Paramount's decision to move G.I. Joe signals a big shift for the studio: It also bumped the Brad Pitt zombie tentpole World War Z -- a film with a budget of $150 million or more that is said to be facing several weeks of costly reshoots -- from December to June 2013. The studio also moved the action-adventure Hansel and Gretel: Witch Hunters from March 2012 to January 2013, ostensibly to allow star Jeremy Renner to bolster his name value with The Avengers and The Bourne Legacy. At this point, the studio's summer slate has only a Katy Perry concert movie (July 5) and distribution fees from Madagascar 3 (June 8). And the latter might be one of the last films from DreamWorks Animation to be released by Paramount as the two have been at an impasse over distribution fees. (Of course, any troubles at Paramount might well strengthen the hand of DWA's Jeffrey Katzenberg in a negotiation. Insiders speculate that DWA will strike a deal with Sony Pictures or self-distribute domestically and make a deal with Fox for overseas distribution.)
Toward year's end, the picture appears to brighten for Paramount. The studio has the fourth Paranormal Activity in October and the November thriller Flight with Denzel Washington, from director Robert Zemeckis. At Christmas, it has a Tom Cruise thriller, Jack Reacher, and then The Guilt Trip, a comedy with Seth Rogen and Barbra Streisand.
But overall, the studio is looking at a sparse year. In March, it dumped Eddie Murphy's A Thousand Words in theaters, and in May it stumbled with The Dictator, which sources say cost about $100 million, though the studio pegs it at $65 million. The Sacha Baron Cohen film has grossed an underwhelming $93 million worldwide so far.
The idea that Paramount might be hitting turbulence after several years of flying high actually cheers some who feel the studio has relied on hits provided by outsiders -- notably Marvel and DWA -- while showing less interest in nurturing its own product. "They are impossible to do business with," says a prominent player. "They spend less money on movies than anybody; they develop fewer movies than anybody." The haters don't even credit the current regime for its hits: They point out that the Transformers franchise was hatched by live-action DreamWorks and Mission: Impossible predated the current bosses. Still, the Mission and Star Trek franchises have been re-ignited, and if Paramount's G.I. Joe strategy works, 3D could boost its overseas haul by as much as 30 percent.
But for now, Paramount's boasts about market share -- a dubious measure yet one studios like to brag about -- are over. So far, analysts are largely unfazed, with Stifel Nicolaus saying that moving G.I. Joe "adds to a much stronger slate in full-year 2013 for Viacom [with] limited impact on full-year 2012 results."
One industry veteran agrees the real impact of a weak 2012 won't be apparent in the current fiscal year's results. Paramount will receive a hefty 8 percent fee from Disney on The Avengers (part of the deal when Disney bought out Paramount's interest), and the studio is still benefiting from its 2011 hits. He predicts, "The bad news will come next year."