Are Bat­man and Su­per­man strong enough to lift Warner Bros.?

To shake off its malaise, Warner Bros. tries a su­per­hero combo The stu­dio is in a “never-end­ing quest to make DC Comics more like Marvel”

Bloomberg Businessweek (Asia) - - CONTENTS - −Anousha Sak­oui

▶ Three days be­fore its March 25 open­ing, Bat­man v Su­per­man: Dawn of

Jus­tice was met with some harsh early re­views. The crit­ics weren’t kind to the Caped Cru­sader (Ben Af­fleck), the Man of Steel (Henry Cav­ill), or di­rec­tor Zack Sny­der. One saved his venom for an un­seen vil­lain, the stu­dio that made the film, Warner Bros. The movie is “a sleek, stylish com­mer­cial by a stu­dio des­per­ate to birth a new cash cow post- Harry Pot­ter,” wrote the Mi­ami

Her­ald’s film critic. For Warner, more is rid­ing on the movie than on any other sin­gle re­lease this year. It’s im­por­tant not only for the money it could pull in, but also be­cause it could be a step­ping­stone to cul­ti­vate a ded­i­cated au­di­ence for fu­ture films from its DC Comics fran­chise. “Suc­cess is giv­ing the fans an ex­pe­ri­ence that’s so en­joy­able and en­ter­tain­ing for them that we deepen their com­mit­ment to DC as a whole, and so the movies keep grow­ing,’’ says Greg Sil­ver­man, a co-head of Warner’s film stu­dio.

The stu­dio es­ti­mates the film’s open­ing-week­end box-of­fice re­ceipts will bring in $100 mil­lion to $140 mil­lion do­mes­ti­cally and an ad­di­tional $200 mil­lion from 61 other coun­tries. An­a­lysts at Box­Of­fice.com on March 23 raised their fore­cast for the week­end to $179 mil­lion, from $159 mil­lion five days be­fore, be­cause of strong pre­sales, de­spite the re­views. Those num­bers—some an­a­lysts pre­dict even big­ger re­turns—could help Warner shake off its 2015 movie losses. Among its no­table flops last year was

Pan, a retelling of the Peter Pan fairy tale, which an­a­lysts es­ti­mate gen­er­ated more than $100 mil­lion in red ink, ac­cord­ing to the Hol­ly­wood Reporter.

For Bat­man v Su­per­man to be as prof­itable as Walt Dis­ney’s Marvel movies or Warner’s own Dark Knight Bat­man movies, which had an av­er­age profit mar­gin of 44 per­cent, it would have to gross $1.15 bil­lion world­wide at the box of­fice, as­sum­ing pro­duc­tion and global mar­ket­ing costs of about $400 mil­lion, es­ti­mates Wade Holden, an an­a­lyst at SNL Ka­gan. That com­pares with a global gross of $1.5 bil­lion for Dis­ney’s first

Avengers movie and $668 mil­lion for the Su­per­man ori­gin story Man of Steel.

“This is a big roll of the dice,” says Jonathan Kuntz, a film his­to­rian who teaches at the Univer­sity of Cal­i­for­nia at Los An­ge­les. Suc­cess could lead to a whole world of spinoffs and se­quels;

fail­ure, he says, “spells real trou­ble.” Warner’s last su­per­hero-driven smash was Christo­pher Nolan’s The

Dark Knight Rises in 2012, which, ac­cord­ing to Box Of­fice Mojo, set an open­ing-week­end record for the fran­chise with $160.9 mil­lion in ticket sales. The stu­dio’s Harry Pot­ter box-of­fice for­tunes have dried up; so, too, have the riches from the Hob­bit films. As a re­sult, Warner has fallen far be­hind Dis­ney and Uni­ver­sal Stu­dios in box-of­fice rank­ings. In 2015 the two com­bined com­manded about 42 per­cent of the global box of­fice, com­pared with only 14 per­cent for Warner.

Af­ter a man­age­ment shake-up in 2013, Kevin Tsu­ji­hara, at the time the head of Warner Bros. Home En­ter­tain­ment, was named chief ex­ec­u­tive of­fi­cer and chair­man of Warner Bros. In 2014 he out­lined a six-year plan to re­lease at least 10 su­per­hero films from the DC Comics li­brary. The “DC Ex­tended Uni­verse,” along with Lego and at least three Harry Pot­ter pre­quels, based on works by au­thor J.K. Rowl­ing, are the cor­ner­stones of the stu­dio’s slate over the next four years.

It will have to con­tend with Dis­ney, which since 2012 has been beat­ing Warner at the su­per­hero fran­chise game. The Mickey Mouse stu­dio has churned out megahit af­ter megahit, draw­ing on a seem­ingly end­less sta­ble of Marvel char­ac­ters, from Iron Man to Cap­tain Amer­ica. The first of four

Avengers movies, re­leased in 2012, was the big­gest movie of that year glob­ally.

That’s in­ten­si­fied the pres­sure on Warner, says Bar­ton Crock­ett, an an­a­lyst at FBR Cap­i­tal Mar­kets. The stu­dio’s in a “never-end­ing quest to make DC Comics more like Marvel in terms of com­mer­cial suc­cess.” DC Comics has been part of the Warner fam­ily since the ’60s; Dis­ney bought Marvel in 2010.

Pit­ting what ar­guably are the world’s best-known su­per­heroes against each other, Warner is tak­ing some cues from Dis­ney. The new movie fea­tures cameos from Won­der Woman and Aqua­man, who are sched­uled for their own head­line fea­tures later in the decade. Two Jus­tice League movies will unite Su­per­man, Bat­man, and Won­der Woman with the Flash.

But su­per­heroes may have worn out their wel­come, as in­dus­try an­a­lysts warn of an over­sup­ply. Still,

Time Warner CEO Jeff Bewkes has said Warner’s prof­its in 2016 would be led by the stu­dio. “He’s go­ing to have a hard time see­ing that hap­pen if this movie doesn’t work,” Crock­ett says. “It has the po­ten­tial to be the big­gest movie for Warner Bros. all year. And if it doesn’t work, the cred­i­bil­ity of the team at Time Warner from Jeff Bewkes on down is go­ing to suf­fer.”

The bot­tom line Bat­man v Su­per­man will need to gross about $1.15 bil­lion world­wide to be as prof­itable as Dis­ney’s Marvel movies.

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