The biggest menace to Hollywood this summer may be a phantom after all.

In the weeks leading up to last Wednesday's opening of

The Phantom Menace

, the big six studios hastily rearranged their schedules so that George Lucas' hotly awaited act of self-love wouldn't overwhelm their own summer releases. Aside from

Phantom

, only one big-budget movie,

The Mummy

, has been released this month, and only a couple more are coming before the end of June.

Even so, with

Phantom

booked into eight- and 12-week runs in many big theaters, studios worried before it opened that it might dominate even into July, draining attention and ticket sales for most of the summer, Hollywood's biggest season. Hyped everywhere from

Time

to

Vanity Fair

,

Phantom

looked ready to challenge

Titanic

for the all-time U.S. box office record of $600 million.

Considering that the U.S. box office is only $7 billion annually, that potential made

Phantom

a significant threat to the studios, especially with two more

Star Wars

prequels coming in the next four years. With the box office already down slightly this year, studio profits slipping and spending on film development down sharply at industry leader

Disney

(DIS) - Get Report

, the studios hardly needed to lose the summer to

Phantom

.

Now

Phantom

is out -- and it looks like Hollywood can relax a bit.

Titanic

director James Cameron will be king of the world at least a little bit longer. After setting the all-time record for a single day's box office gross with a $28 million opening on Wednesday,

Phantom

failed to take the top all-time spot for an opening weekend. The movie so far has grossed just over $105 million, but that's well short of expectations, which ranged from $120 million to $140 million. In addition, reviewers have hacked

Phantom

, and the film didn't build strongly over the weekend, indicating weak word of mouth.

Paul Dergarabedian, president of

Exhibitor Relations

, a Los Angeles company that monitors box office grosses, says the expectations for

Phantom

were almost impossible to meet. "People were anticipating the box office returns almost as much as they were anticipating the movie itself," he says. But he cautions against labeling the movie a disappointment, noting that it has already turned in three of the eight biggest box office days of all time.

Fox

(FOX) - Get Report

, which is distributing

Phantom

for Lucas in return for a small fee, says it's "extremely pleased" with the movie's performance.

The question is not whether

Phantom

will be profitable. The movie more than recovered its $115 million budget before it opened, thanks to the huge licensing deals Lucas cut with

Hasbro

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,

Pepsi

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and other companies that specialize in consumer goods of dubious necessity. The

Los Angeles Times

estimated last week that after home video sales and licensing royalties, Lucas could

net

more than $2 billion in profit from the film. Even if the film is a total disaster at the box office, that figure is practically guaranteed to be more than $1 billion, thanks to royalties.

In fact, Lucas' profits from this film will probably exceed those produced by the 150-odd films that will be released in 1999 from the big six studios, owned by Disney,

Time Warner

(TWX)

,

Sony

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,

Viacom

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,

Seagram

(VO) - Get Report

and Fox. (According to estimates from

Schroeder

analyst David Londoner, the majors will turn in less than $2 billion in cash flow this year on revenue of about $20 billion. And that doesn't include the studios' financing and depreciation costs, which are substantial.)

But Hollywood's fear that

Phantom

will worsen the recession the studios have quietly entered appears to be waning. "Does this make it a little easier? Sure," one studio exec says. "If nothing else,

Phantom

won't be competing for marketing time" in July, when the floodgates open. This person figures that Disney has the most to gain if

Phantom

weakens early. Its summer animated feature,

Tarzan

, which opens June 18, is pitched at the same young audience Lucas is targeting. Time Warner, whose

New Line

subsidiary will release its highly anticipated sequel to

Austin Powers

on June 11, could also benefit.

Still,

Merrill Lynch

analyst Jessica Reif warns against reading too much into

Phantom's

first five days. Without another weekend, "It's hard to know exactly what the impact is going to be," Reif says. She is especially cross with Fox shareholders, who bid down shares in Rupert Murdoch's studio/television network by as much 8% Monday. While the stock eventually recovered and closed even on the day, it's down 10% from its recent high of 29 1/2, set May 13, as

Phantom

hype peaked. Tuesday the stock slipped 1 1/16, or 4%, to 25 13/16. (Merrill has performed underwriting for Fox.)

What investors don't understand is that

Phantom

represents a very small part of Fox's revenue, Reif says. The company will get somewhere between 5% and 10% of the movie's box office revenue as a fee for distributing the movie, compared with the $8 billion in revenue the company expects this year.

At the same time, Reif notes, the most recent television pilot season has cemented Fox's place as the leading supplier of television shows. The company has placed almost 30 new and returning shows on the six networks, almost guaranteeing that it will reap syndication revenues in coming years. It's "a guaranteed profit stream ... they've got great time periods, and they do have shows that are working," Reif sighs. But "everyone's so focused on

Star Wars

."