Viacom Is Depending on These 5 Paramount Movies to Deliver

Sumner Redstone's media behemoth is sure to be watching the box office performances of these five films from subsidiary Paramount, as they will be closely tied to investor confidence.

Author:
Buster Coen
Publish date:
Jun 17, 2016 4:43 PM EDT

Sumner Redstone's media behemoth is sure to be watching the box office performances of these five films from subsidiary Paramount, as they will be closely tied to investor confidence.

On Friday morning, Viacom (VIAB) - Get Viacom Inc. Class B Report lowered expectations for its third quarter ending June 30, 2016, forecasting adjusted earnings per share of $1 to $1.05. That is dramatically down from the $1.39 per share that had been the consensus forecast leading up to the out-of-the-blue announcement. It is also way down from the EPS of 2015's third quarter, which was $1.47.

But Viacom clearly does not want investors to despair, as it announced that its film division, Paramount, has a strong film slate in the months ahead that will help to keep the struggling company afloat. However, Paramount has had problems of its own recently at the box office. In the past five years, only four of its movies have cracked the annual box office top ten in worldwide numbers. By comparison, The Walt Disney Company (DIS) - Get Walt Disney Company Report has seen 14 of its movies counted among the year's top ten largest grossers since 2012.

A large part of Paramount's problem is its scarcity of reliable franchise movies in comparison to the other studios in the Big Six. The upcoming slate for Viacom's film division will attempt to strengthen its existing franchises, while also kickstarting a couple of new ones. However, Paramount may see box office results that are less rosy than Viacom is promising. Here are the next five movies on Paramount's schedule, complete with box office analysis.

This is the third movie in this iteration of the popular sci-fi franchise. The first two movies were hits at the domestic box office, with $258 million and $229 million, respectively. However, this franchise has always struggled overseas, which is increasingly where studios are looking to put big-budget films in the black. The second movie did show improvement over the first at the foreign box office, with $239 million compared to $128 million overseas. Still, an overseas number under $250 million is underwhelming for a large effects-driven movie, and Paramount had to work very hard to achieve that muted foreign total. The pressure is on for this sequel, as comScore analyst Paul Dergarabedian noted by email. "This [franchise] is one of the crown jewels for Paramount and thus needs to do well both domestically and abroad to inspire confidence that future installments will continue to regenerate revenue for years to come," he said.However, that may be too tall of an order for "Beyond" to fill. The last installment, "Star Trek Into Darkness," had a more mixed response than the widely lauded first movie, so it will be harder for "Beyond" to capitalize on franchise goodwill.Additionally, it's possible that J.J. Abrams's decision not to return as a director will hurt this sequel. Abrams is now a legitimate household name following the latest Star Wars movie, and as much as the trailers for "Beyond" have been touting his involvement as a producer, Abrams's new producing role is not going to generate as much excitement as a return to the directing chair would have.The sequel may also struggle to emulate the holding power of the first two movies, given that it will face tough competition from the Summer Olympics and the release of "Jason Bourne" shortly after its release. As Shawn Robbins, senior analyst for boxoffice.com, pointed out over email, 'Beyond' "practically goes head to head with 'Jason Bourne' in many major markets, making a global gross under the $467 million of 'Into Darkness' seem likely." All told, this movie may struggle to justify a fourth installment in the sci-fi franchise.Forecast: $155 domestic/$230 overseas/$385 million worldwide

This movie, aimed squarely at adult audiences, stars Meryl Streep as an aspiring opera singer who cannot sing and Hugh Grant as her husband. It is being released in the same August corridor as Streep vehicles "Julie and Julia" and "Hope Springs," which both saw reasonably successful box office runs. However, this movie may have a tougher time repeating the performances of those films for a bevy of reasons. First of all, the premise is fairly unappealing: biopics about renowned singers are extremely hit-and-miss at the box office, so it may be hard to drum up interest in this tale about someone who can't carry a tune.Realizing this, Paramount has emphasized both the comedic and inspirational angles in the trailer, which has resulted in advertising that is somewhat muddled. Streep and Grant certainly add to the film's appeal as recognizable stars, but neither is reliably bankable. The last movie Streep headlined, "Ricki and the Flash," made a paltry $27 million at the box office, and Grant hasn't had a strong performer at the box office since "Music & Lyrics" in 2007. Unfortunately, "Florence Foster Jenkins" does not seem like it will add a hit to either the stars' or the studio's résumé.Forecast: $15 domestic/$20 million overseas/$35 million worldwide

This remake of the Oscar-winning 1959 film looks to take the epic story in a different (and less self-important) direction. The trailer promises action more in-line with director Timur Bekmambatov's 2008 film "Wanted" than the original swords-and-sandals epic. Unfortunately, this modern-day take on "Ben-Hur" will likely struggle to reach the $341 worldwide gross of "Wanted." A Roman epic that includes modern action sequences and Jesus Christ as a supporting character is bound to be a tough sell to the more discerning faction of the general public, and the movie has no bankable stars outside of Morgan Freeman. The August 19 release date also doesn't inspire much confidence, as movies rarely open to more than $15 million in the last two weekends of August.The actioner is likely a stronger foreign play for Paramount. "'Ben-Hur' will likely generate the lion's share of its box office in the international arena and as we saw recently with 'Teenage Mutant Ninja Turtles,' and in the past with 'Transformers,' the international marketplace is vital for Paramount's global bottom line," analyst Dergarabedian noted.Period action movies generally do well at the foreign box office; in recent years, both "300: Rise of an Empire" and 2016's own "Gods of Egypt" considerably outgrossed their domestic totals overseas. If "Ben-Hur" can come close to the foreign totals of the "300" movies--which both made a hair below $250 million outside of North America--it may have a chance of being profitable for Paramount. If not, the studio may be looking at a late summer flop.Forecast: $50 million domestic/$160 million overseas/$210 million worldwide

This movie returns a Paramount favorite, Tom Cruise, to the role of Jack Reacher, which he first played over the Christmas corridor of 2012. The first "Jack Reacher" did decently at the domestic box office, making $80 million, and performed better overseas, with $138 million. That resulted in a worldwide total of $218 million, a good result for a $60 million movie. The first trailer for this sequel was just recently released, and it seems like the unsmiling action and muted cinematography of the first movie will be emulated in the second.The problem is, the first movie isn't very well-remembered. It only generated a Flixster Audience Score of 67%, and it fell off pretty quickly at the box office after the Christmas/New Year's holiday window. The fact that the sequel is releasing four years after the first movie will not help matters; studios usually work to ensure that a period of no more than two to three years separates franchise installments. The overseas box office should not see a severe drop-off, given Cruise's international appeal, but the domestic box office for the sequel may be disappointing for Paramount. Equity research firm Wedbush sees the sequel coming in at $67 million, for a drop-off of 16% from the first film, but "Never Go Back" may come in even lower than that. If it does, that will likely be one less franchise in the arsenal for Paramount.Forecast: $45 million domestic/$120 million overseas/$165 million worldwide

This horror film is a reboot of "The Ring" franchise from the mid-aughts, which produced two highly successful movies for Dreamworks. There are a couple points of concern for this movie. The first is the fact that it has been pushed back on the release calendar several times by Paramount. It was originally slated to release in November 2015, and was then rescheduled for April 2016, before finally landing on its current date of October 28, 2016. When a movie is pushed back, it often means the studio is having trouble with it in post-production, and that could mean the finished product will be less than appealing to general audiences.Additionally, "Rings" will have to contend with two other horror movies being released over the Halloween corridor. "Ouija: Origin of Evil" will release a week earlier than "Rings" and looks to be a strong performer based on the success of the original "Ouija." Lionsgate has an untitled horror film slated to open the same day as "Rings" that will add competition even if the film is a minor factor at the box office.However, despite these concerns, Paramount can likely bank on making a tidy sum off of "Rings." The movie's budget is a reasonable $33 million, and even if the movie opens big and then drops off significantly in the following weeks, it can rely on home video revenue to spike its profits. As Dergarabedian notes, "Rings" will likely follow the example of other modestly-budgeted horror films that "do well on home video and therefore become a cash cow." Add in international numbers -- which, if the original 'Ring' movies are any indication, should be very strong -- and this is one (perhaps the one) film of Paramount's imminent slate that the studio can feel good about.Forecast: $55 million domestic/$65 million worldwide/$120 million worldwide

"Star Trek Beyond" (July 22)

This is the third movie in this iteration of the popular sci-fi franchise. The first two movies were hits at the domestic box office, with $258 million and $229 million, respectively. However, this franchise has always struggled overseas, which is increasingly where studios are looking to put big-budget films in the black. The second movie did show improvement over the first at the foreign box office, with $239 million compared to $128 million overseas. Still, an overseas number under $250 million is underwhelming for a large effects-driven movie, and Paramount had to work very hard to achieve that muted foreign total.

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The pressure is on for this sequel, as comScore
analyst Paul Dergarabedian noted by email. "This [franchise] is one of the crown jewels for Paramount and thus needs to do well both domestically and abroad to inspire confidence that future installments will continue to regenerate revenue for years to come," he said.

However, that may be too tall of an order for "Beyond" to fill. The last installment, "Star Trek Into Darkness," had a more mixed response than the widely lauded first movie, so it will be harder for "Beyond" to capitalize on franchise goodwill.

Additionally, it's possible that J.J. Abrams's decision not to return as a director will hurt this sequel. Abrams is now a legitimate household name following the latest Star Wars movie, and as much as the trailers for "Beyond" have been touting his involvement as a producer, Abrams's new producing role is not going to generate as much excitement as a return to the directing chair would have.

The sequel may also struggle to emulate the holding power of the first two movies, given that it will face tough competition from the Summer Olympics and the release of "Jason Bourne" shortly after its release. As Shawn Robbins, senior analyst for boxoffice.com, pointed out over email, 'Beyond' "practically goes head to head with 'Jason Bourne' in many major markets, making a global gross under the $467 million of 'Into Darkness' seem likely." All told, this movie may struggle to justify a fourth installment in the sci-fi franchise.

Forecast: $155 domestic/$230 overseas/$385 million worldwide