Viacom is betting that Paramount Pictures can help steer the media giant’s turnaround efforts. The movie studio’s box-office results this year could go a long way toward determining whether or not its parent company’s faith will be rewarded.
Viacom announced new rebranding efforts on Thursday morning that will see the struggling company focus its efforts on six flagship brands—which include Paramount, the studio acquired more than two decades ago by media mogul Sumner Redstone, whose family owns the controlling stake in Viacom and CBS. Viacom is looking to boost profits as the company’s media properties have suffered from declining advertising revenue. Meanwhile, 2016 was the fifth-straight year that Paramount failed to out-gross any of the other six major Hollywood studios at the domestic box office.
On Thursday, Viacom CEO Bob Bakish told The Hollywood Reporter that Paramount (and its head, CEO Brad Grey) is “totally on board” with the company’s turnaround efforts, but Bakish also admitted that the movie studio needs to show improved results.
“We hold all our business units accountable for performance, and in this transition, that’s what we are looking for,” Bakish told THR in that interview. “I’m optimistic about the direction of Paramount, but there is a lot of work to do.”
Viacom’s (VIA) film division saw its revenue dip 8% in the 2016 fiscal year (which ended Sep. 30) to roughly $2.7 billion. Paramount released a number of notable big-budget flops in 2016, including Ben Stiller’s comedy sequel Zoolander 2 ($28.8 million in domestic gross) and a Ben-Hur remake that Paramount co-financed with MGM, which only grossed $26.4 million domestically, according to Box Office Mojo.
The studio also had some surprise successes last year, with the cerebral sci-fi hit Arrival pulling in more than $190 million globally, joining the adaptation of August Wilson’s Fences as the two Paramount films to earn Best Picture Oscar nominations this year.
Meanwhile, Paramount is already off to a rough start this year after the studio said in the fall that it would need to take a whopping $115 million writedown on its earnings for an unnamed 2017 film. While the studio did not name the troubled film, Variety and other outlets reported that the culprit was believed to be the live-action, computer-animated hybrid Monster Trucks, which cost more than $100 million to make. Released last month, the film has so far grossed less than $60 million worldwide.
Paramount also recently pulled two films from its 2017 release schedule—a Friday the 13th horror reboot and Brad Pitt’s zombie-thriller sequel, World War Z 2—with the latter having issues securing a director.
Paramount’s other big January release—the third installment in Vin Diesel’s XXX action trilogy, Return of Xander Cage—has fared better with more than $155 million in global ticket sales after three weeks in theaters. The studio does have a pair of big spring releases in Ghost in the Shell, the controversial adaptation of the popular manga comic that stars Scarlett Johansson, as well as the action-comedy adaptation of the 1990s lifeguard TV show Baywatch.
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But, Paramount’s best bet for a blockbuster film in 2017 is likely the latest installment in the long-running and financially successful Transformers action franchise, which will hit theaters in June. Starring Mark Wahlberg, Transformers: The Last Knight is the first film from the franchise since 2014’s Transformers: Age of Extinction made $1.1 billion worldwide (with nearly 78% of it coming overseas).
As part of Viacom’s rebranding, the company will try to bolster its brands’ performances through mutual support. Paramount and Nickelodeon will team up to produce four feature films, and the company’s Spike cable network will be rebranded as “The Paramount Network,” starting in 2018.
But for Paramount, the studio’s success will largely be defined by movie ticket sales as well as the number of big blockbuster and tentpole film franchises it can churn out.
Before Bakish took over as Viacom’s CEO at the end of 2016, his predecessor, Philippe Dauman, publicly stated his plans to sell off a stake in the struggling Paramount Pictures. Following Dauman’s exit in August, Viacom announced that it would hold on to Paramount, and Bakish has been adamant that the movie studio is an “integral” part of Viacom’s future success.
Now, Bakish is likely hoping for a decent year at the box office from Paramount to reward his faith.