How Paramount fell from its peak
Paramount has mismanaged its franchises for over a decade. Can it climb back?
Welcome to The Traverse. I’ve gotten a lot of new subscribers recently, so wanted to kick off this edition with a big thank you for signing up. I’ve been trying to publish more regularly, but was away last week. To make up for it, I went long on Paramount amid the messy merger news— looking back at its last year of glory, what went wrong, and what’s next. If you like reading about the business of franchises and fandom, and know others who might, spread the word!
In 2011, Paramount Pictures was at the top of the box-office mountain. It had beat all other studios in global market share with over $5 billion in worldwide ticket sales, including over $3 billion outside of North America, the first studio to hit that number at the time. Hits like “Transformers: Dark of the Moon,” DreamWorks’ “Kung-Fu Panda 2,” “Mission: Impossible — Ghost Protocol,” and two Marvel movies (!!) powered Paramount to break a three-year Warner Bros. streak.
As The Hollywood Reporter noted at the time, market share doesn’t account for how much Paramount actually earned from those movies, and the Marvel and DreamWorks releases only got the studio distribution fees.
But it did earn bragging rights and headlines, which are still important currencies in Hollywood — ones that Paramount would probably kill for these days. Paramount hasn’t topped the box office since then; far from it, actually. To be fair, Disney dominated the 2010s after that. But the Paramount studio’s fortunes have been about as great as the larger company, which is to say, not very.
This week, the studio’s corporate parent Paramount Global and Skydance — the production company behind some of the studio’s biggest recent hits like “Top Gun: Maverick” — finally agreed to the terms of a long-gestating merger. Yet, controlling shareholder Shari Redstone is reportedly taking her sweet time accepting the deal, and a shareholder meeting scheduled for Wednesday was pushed to later this month. Not to mention, the three top execs of the company right now — Brian Robbins, George Cheeks, and Chris McCarthy — apparently took time during the annual company meeting on Tuesday to present their own “shared vision” for its future. It all fuels speculation that a sale could laughably fall apart.
But regardless of the outcome of this saga — whether Paramount Global stays the course, or Skydance takes over — one thing is perfectly clear: the movie studio is in desperate need of a reset.
Following its success in 2011, Paramount plummeted behind its rivals in box-office market share. Every year since, domestically, it has ranked last among the major studios except for the “Maverick”-powered 2022, in which it was still third behind Universal and Disney despite that being the highest-grossing movie in the US that year, according to data from The Numbers.
It hasn’t been for lack of trying. In 2021, Robbins — who was leading Nickelodeon — was named CEO of Paramount Pictures, replacing Jim Gianopulos in a major shakeup that signified Redstone was unsatisfied with the studio’s direction.
But the studio is still flailing and new entries in its most dependable franchises have faltered. Last year, “Transformers: Rise of the Beasts” became the franchise’s lowest-grossing live-action movie worldwide with $437 million, less than even 2018’s spinoff “Bumblebee.” “Mission: Impossible — Dead Reckoning” earned a fine $567 million globally, but it’s a disappointing figure considering A) the previous installment, “M:I — Fallout,” made nearly $800 million globally in 2018 and B) the movie cost nearly $300 million to make before marketing costs.
Even Paramount’s expensive Oscar plays have crashed and burned. 2022’s “Babylon,” from Damian Chazelle and starring (pre-Barbie) Margot Robbie and Brad Pitt, earned $63 million globally, including just $15 million in the US. It cost at least $80 million to make and received just three Oscar nominations in below-the-line categories. And Martin Scorsese’s “Killers of the Flower Moon,” which cost $200 million to make (!!!), earned $157 million globally and went home empty handed from the Oscars despite 10 nominations (to be fair, Apple financed the movie while Paramount distributed it theatrically, so it was lower risk for Paramount).
The near future isn’t looking much better. Awareness for “A Quiet Place: Day One,” which opens in theaters in a few weeks, is surprisingly low despite the previous movies being hits, according to The Quorum. The next “M:I,” scheduled for release next year, has been delayed so heavily by the pandemic and last year’s Hollywood strikes that the budget will surely rival “Dead Reckoning’s”.
How did we get here?
I’d put it largely on franchise mismanagement. I started this newsletter thinking about the relationship between fandom and the business of Hollywood, and Paramount has a lot of attractive IP at its disposal with loyal fanbases. But it has spent years either running them into the ground (Transformers) or ignoring them completely, to the point where they’ve lost any relevancy to the average moviegoer (Star Trek).
“Dark of the Moon” was peak Transformers at the box office. After a critically derided follow-up in 2014 with “Age of Extinction,” the franchise seemed to lose the faith of moviegoers, with each entry after that earning less at the global box office than its predecessor. It’s clear that director Michael Bay should have handed the keys to another filmmaker after “Dark of the Moon,” who could have taken the franchise in an exciting new direction far sooner than Paramount tried to with “Bumblebee.”
Now, Paramount is planning a Transformers and G.I. Joe crossover spinning out of “Rise of the Beasts,” despite that movie underperforming and the Joe franchise never particularly connecting with audiences on the big screen. The latest, the “Snake Eyes” spinoff, earned only $40 million worldwide. Sure, that was in the pandemic-plagued year of 2021, but that still raised my eyebrows when I double checked. Were the previous movies popular enough to warrant a spinoff origin story? Not really.
For Star Trek, there hasn’t been a movie in eight years and the last one, “Star Trek Beyond,” wasn’t exactly a huge success. In that time, the franchise has seen plenty of action on the small screen thanks to streaming, with several shows having launched on Paramount+. Star Trek isn’t Star Wars; it never will be and doesn’t necessarily have to be. Its roots are in TV, where it has found success again in recent years. But Paramount at least shot some life into the franchise on the big screen with the 2009 movie reboot, and then failed to capitalize on the momentum. Its two sequels just weren’t good enough, and Paramount has appeared to not know what to do with the movie franchise until recently, when it was reported that Simon Kinberg (known for the X-Men movies) would produce a prequel. If the recent box office has taught me anything, it’s that the masses want a prequel to an already kind-of-niche franchise with a history of inconsistent releases...
Then there’s the franchises that got away. Remember how 2011 was the last year Paramount dominated the box office? It’s probably not a coincidence that it was also the last year it released Marvel and DreamWorks movies. After Disney bought Marvel, the Mouse House bought Paramount out of its deal to distribute the final two films in its six-movie deal, “The Avengers” and “Iron Man 3,” which both made over $1 billion. And Paramount bungled its deal with DreamWorks, with reports at the time of a rocky relationship. “Kung-Fu Panda 3” was released by Fox in 2016, and Universal — which now distributes DreamWorks Animation movies — released the fourth installment this year. It made $542 million globally, more than its predecessor and is one of 2024’s biggest hits in a year that’s been lacking them.
I’m not trying to kick a horse while it’s down, but this is important context to understand just where everything went wrong. But recent Paramount releases have offered some key lessons for the studio in the future. I’m just not confident that the current regime would turn things around if the Skydance deal fails.
Where do we go from here?
Paramount hasn’t been devoid of hits in the last dozen years. Of course there was “Maverick,” which worked because it wasn’t the 12th Top Gun movie, and it got a lot of people to go to the movies who usually don’t go to the movies.
But there has also been the more modest but still successful “Paw Patrol” and “Sonic” movies. The two “Paw Patrol” movies grossed nearly $350 million worldwide combined. The two “Sonic” movies earned $725 million combined. These are cheap movies to make, and likely turned a healthy profit. What else do they have in common? They’re kids movies! Another example is last year’s animated “Teenage Mutant Ninja Turtles: Mutant Mayhem,” which made a reserved $180 million globally but was still one of Deadline’s most profitable movies of 2023 thanks to a mid budget and alternate revenue it generated.
Imagine a world where Paramount was still partnered with DreamWorks Animation, home of “Kung-Fu Panda” and “How to Train Your Dragon”? Now Universal, as I concluded recently, is the animation champion. But Paramount could still try to leverage kid-friendly and animated content in more ways (it will release an animated Transformers movie later this year).
Speaking of Universal, that studio has seemed to land on the right recipe for success that others, including Paramount, have undoubtedly taken note of: a balance of franchise tentpoles (Jurassic World, Fast and Furious), animated blockbusters (“Super Mario” last year, and look for “Despicable Me 4” this summer), and positive relationships with talented filmmakers (it stole Christopher Nolan and “Oppenheimer” from Warner Bros., and has horror covered with deals with Blumhouse and Jordan Peele). Universal was last year’s biggest studio in market share, while also building a successful video-on-demand business (yes, you’re probably overreacting to “The Fall Guy” PVOD drop, something the studio has been doing for the last four years). It releases a lot of movies of various kinds at various budgets, and if some are flops, the hits make up for them.
Easier said than done, I know, and like I said, it hasn’t been for lack of trying. But the blueprint is there.
One thing Paramount is smartly doing is zeroing in on horror. Despite the aforementioned “Day One” lacking interest right now, “Quiet Place” is still a young franchise that still has potential, especially when an eventual “Part Three” is made that continues the original story (people just don’t want prequels right now, I guess). Paramount’s low-budget original horror “Smile” was a hit in 2022 off the back of a great marketing campaign, and the sequel hits theaters later this year. And in 2022, Paramount struck a deal with former DC movies chief Walter Hamada, also known for ushering the “Conjuring” movies, to produce low-cost horror movies for the studio.
Yet, Hamada’s first project from that deal looks like it could be a Teenage Mutant Ninja Turtles movie. That’s another franchise Paramount had bungled with underwhelming live-action installments in 2014 and 2016, until last year’s “Mutant Mayhem.” This time, Paramount and Hamada plan to adapt the acclaimed TMNT comic “The Last Ronin,” a mature take on the Turtles in which the remaining survivor seeks revenge on his brothers’ killer. I’m not sure how the masses will feel about it, but it could find an audience craving something new and maybe be a hit if the budget is reined in.
In fact, if Paramount really wanted to turn Transformers and G.I. Joe around, recent comic books would be a good place to look. The new Transformers series that debuted last year from Image Comics has been a sensation, with the first issue becoming 2023’s highest-selling comic. It’s part of a larger connected franchise called the “Energon Universe” that is weaving together original stories and characters with the worlds of Transformers and G.I. Joe. I won’t bore you all with the specifics, but I’ve never read a Transformers or Joe comic before, and I’m loving them.
Of course, all this hinges on what a potential buyer plans to do with Paramount, if it sells. But if it wants to remain a major movie studio, it needs the same thing as its franchises: a major reboot.
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This was a really interesting read! Looking forward to reading more :) thank you!