Warner Bros.' 'Pan' Could Lead to $150 Million Loss

Pan Still - H 2015
Courtesy of Warner Bros. Pictures

Pan Still - H 2015

The studio gambled big on the Peter Pan origin story in hopes of launching a new family franchise.

Don't count on Warner Bros. returning to Neverland anytime soon.

Unless Joe Wright's big-budget Pan suddenly discovers a treasure trove of pixie dust, the movie could see losses in the $130 million to $150 million range after opening to a disastrous $15.3 million in North America over the Oct. 9-11 weekend, according to analysts and box-office experts contacted by The Hollywood Reporter. No one would yet speak on the record.

Pan also is struggling internationally, grossing $20.4 million over the weekend from 54 markets for an early foreign total of $25.2 million (it opened two weeks ago in Australia) and a meek worldwide cume of $40.5 million. One wild card is China, where the film rolls out Oct. 22. If Pan does better than expected in the world's second-largest movie market, the losses could be lower.

The new leadership at Warner Bros. had grand ambitions for Pan when agreeing to a $150 million budget and hefty marketing spend in early 2014. Kevin Tsujihara, who took over as chairman-CEO of Warner Bros. Entertainment in March 2013, and his team were keen on building new family friendly franchises to make up for the loss of Harry Potter.

But audiences out-and-out rejected Wright's take on J. M. Barrie's book about the boy who never grows up. The movie, starring Hugh Jackman, Rooney Mara, Garrett Hedlund and newcomer Levi Miller, was ravaged by critics and earned a lukewarm B+ from audiences. Warner Bros. knew it had a troubled picture. Its release date was bumped from July to October to avoid the summer competition.

"It's been a rough year for Warner Bros., but look at what they have next year between Batman v Superman: Dawn of Justice, Suicide Squad and Harry Potter spinoff Fantastic Beasts," said MKM Partners analyst Eric Handler, who believes the studio can weather the current storm, thanks to a vibrant video game division and television syndication. He declined to estimate how much Pan could lose.

If the film's theatrical gross tops out at $150 million worldwide, it will see returns of about $135 million between film box-office returns (or film rentals) and ancillary revenues, including home entertainment and television deals, according to rough calculations by insiders. However, when factoring in a global marketing spend of $125 million, that means the movie cost $275 million to produce and sell. Hence, the loss would be about $140 million. The range of $130 million to $150 million accounts for the fact that analysts don't know exactly how much Warners spent on marketing, or exactly where Pan will end up at the box office. The studio declined to comment.

Pan joins a string of films that have lost money for the studio this year, including pricey titles Jupiter Ascending — which lost well north of $100 million — and The Man from U.N.C.L.E.

So far, Warners hasn't publicly commented on Pan's debut, refusing even to discuss the film on the record during traditional Sunday box-office calls with the media. "It came in so much lighter than anything we could have predicted. The movie failed to bring in an audience of any size," said one executive, who declined to be identified.

RatPac-Dune Entertainment, Warners' co-financing partner, put up a quarter of the budget for Pan, somewhat reducing the studio's exposure. And it's likely the studio already took a write-down on Pan when pushing back the film's release from July to Oct. 8.

Pan was produced by Greg Berlanti's Berlanti Productions. Sarah Schechter shepherded the project at the studio before leaving to become president of Berlanti's teleivsion and film company, based at Warner Bros.