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Sony Pictures Is Hoping '22 Jump Street' Marks the Studio's Turnaround

Stocks in this article: SNEFBTWTR

NEW YORK (TheStreet) -- Jonah Hill and Channing Tatum may make for an underwhelming pair of undercover cops but the duo has potential to be a breakthrough hit for Sony Pictures Entertainment, Sony's  (SNE) trimmed-down film studio. 22 Jump Street is projected to be a win for Sony Pictures, a much needed hit a studio that endured a after major restructuring over the winter.

CEO Kazou Hirai pledged in November to cut $250 million in costs from the Tokyo-based Sony's entertainment units over two years as he attempts to overhaul and boost profits at the company's movie, TV and music businesses. After hiring Bain & Co. last year to identify more than $100 million in entertainment unit reductions, Sony's Columbia Pictures announced it would only release 18 films annually, down from 23 in past years. 

Of the 18 films planned by Columbia Pictures for 2014, much emphasis is being placed on action comedies such as 22 Jump Street. The film starring Hill and Tatum is expected to gross $45 to $50 million at it's opening weekend, which begins on Friday. The Columbia Pictures' and Metro-Goldwyn-Mayer Pictures' film will be released in 3,300 locations in North America on June 13.

"It's gonna be big," Phil Contrino, chief analyst for BoxOffice.com, said in a phone interview.

According to Jean Guerin, Senior Vice President, Media Relations Sony Pictures Entertainment, the film tested higher than any other R-rated comedy in Sony Pictures' history.

"As we head into the weekend, anticipation for the sequel is extraordinary. Spurred by a coordinated effort in social and digital media, the fan base for the franchise has grown exponentially since the first film opened to $36.3 million in 2012 and set a record at the time for a non-summer, non-sequel R-rated comedy," writes Guerin in a note.

Contrino confirms the rising anticipation for 22 Jump Street on social media. "We've been tracking it on Twitter and Facebook and we have seen plenty of enthusiasm for the film," he said.

The film, directed by Phil Lord and Christopher Miller, follows the characters Schmidt (Jonah Hill) and Jenko (Channing Tatum) from 21 Jump Street as they continue their undercover tomfoolery by investigating a local college. The partnership meets turmoil as Jenko befriends a kindred spirit on the football team, and Schmidt infiltrates the bohemian art major scene. The dysfunctional undercover cops have to solve the case and figure out how to fix their friendship as they mature. 

Combining the success of 21 Jump Street with the Facebook (FB) and Twitter (TWTR) activity surrounding the film, Contrino forecasts that Sony Pictures is likely to enjoy a successful opening night. "There has been a lot of good will surrounding the first movie which is always good," Contrino said. "All signs pointing it's going to be a big hit."

Despite the hype surrounding the two overgrown teenagers of 22 Jump Street, the film has to compete with top earners like Disney's Maleficent and 21st Century Fox's (FOXA) A Fault in Our Stars. The Disney film starring Angelina Jolie grossed $70 million in the U.S. its opening weekend, while the John Green based novel earned $48 million.

Hirai, who took over for longtime chief Howard Stringer, told WSJ.com in an interview that the studio's process for greenlighting movies is changing, suggesting that Lynton and Pascal will focus on more profitability going forward.

On the eve of 22 Jump Street's release, Sony shares were rising 0.3% to $16.14. Disney was falling 0.7% to $82.23 while Fox was dropping 0.7% to $35.16.

-Written by Kathryn Mykleseth in New York.


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