Fox Faces Rough Seas at Box Office

Nearly every major film studio finds itself in gambling mode during the hotly contested summer box-office bonanza period, but these are particularly dicey times at 20th Century Fox.

Fresh from the out-of-this-world success of last summer’s “Independence Day” and the hit run earlier this year of the “Star Wars” trilogy, which brought the studio its most lucrative period in several years, Fox is now facing a string of severe disappointments.

The lackluster opening weekend for expected blockbuster “Speed 2,” the $150-million sequel starring Sandra Bullock and Jason Patric, coupled with the postponement of James Cameron’s mega-budgeted “Titanic” from July 2 to Dec. 19, has robbed the studio of its expected summer box-office bang.

“After the summer they had last year, this one seems to have gone in reverse,” said one top producer, who requested anonymity. “Everything seems to be falling apart. They’re drowning in disappointments. First ‘Speed 2,’ then losing ‘Titanic.’ Those were their big movies of the summer.”

“They will be hurt by this late release of ‘Titanic,’ ” said a top executive at Paramount Pictures, which is co-producing the film with Fox.

“Titanic” is a huge investment upon which a lot is riding, with a budget reportedly estimated at anywhere from $185 million to $300 million. Paramount’s investment in the film is just $65 million, while Fox put up the lion’s share of the costs. Paramount appears to be getting the better end of the deal: The U.S. box-office profits and 50% of the worldwide box-office take go to Paramount. Fox, meanwhile, will distribute overseas and will earn only half of worldwide box office.

“Right now they’re trying to put a good face on it,” said the Paramount executive. “But it probably won’t make any money. Fox will take it on the chin. Everyone knows it at both studios. We feel bad for them, but they really don’t have a choice. They should have held the reins tighter on Cameron.

“Jim will turn out something good, but how good it is, at this point and cost, does it really matter?” said the Paramount executive. “It’s a love story on water about a subject the public already knows too well. It’s going to be a rough ride for Fox this year and I wouldn’t wish it on anybody.”

Fox’s more immediate problem, “Speed 2,” is the sequel to the immensely successful 1994 Bullock-Keanu Reeves vehicle that made $365 million globally. The sequel, which received mixed to unfavorable reviews, only narrowly edged out “Con Air” (in its second week of release) for the top spot at the box office this past weekend, and its opening $16.5 million does not bode well for its continued success. This weekend it will face stiff competition in the form of “Batman & Robin,” and the following weekend it will tangle with “Hercules.”

“ ‘Speed 2’ looks like it’s going to be trouble for them,” said a prominent box-office watcher. “They didn’t plan on taking a bath. They planned ‘Speed 2’ would be a real good successor to the first one. They can’t have gone into it thinking, ‘We’ve got a real big pocketbook.’ ”

Indeed, Fox’s pocketbook was filled over the past year with $800 million made from the worldwide distribution of “Independence Day” and another $250 million from the three installments of “Star Wars.” The studio had also turned a significant profit on “William Shakespeare’s Romeo + Juliet.”

“We had our best fiscal year in six or seven years,” said Jeffrey Godsick, Fox’s senior vice president of publicity and promotion.

But they have had to dip heavily into that pocketbook for this year’s projects.

Besides the big expenditures of “Titanic” and “Speed 2,” the studio has spent substantial sums on “Anastasia,” its first venture into feature animation, and on “Alien Resurrection,” the fourth installment of the “Alien” franchise. Both of those films are scheduled to open in November and are said to have cost the studio about $100 million apiece, according to industry sources.

“I don’t think there’s any question that some of the films we have coming out do cost more,” said Tom Sherak, chairman of 20th Domestic Film Group. “I think everybody’s trying to keep costs in line. Sometimes you can and sometimes you can’t.

“ ‘Star Wars’ may wind up being Fox’s windfall for the year,” said the Paramount executive. “You had this huge bounty from this revived 20-year-old franchise. . . . And now they’ve got ‘Anastasia’ coming up that’s reportedly cost them in the neighborhood of $100 million and ‘Alien Resurrection’ that’s over $100 million, another expensive sequel. And both of those are coming out in November with ‘Titanic’ hitting in December, right on the heels of those two. If you take the costs of just those last three movies combined, those three films could wind up costing Fox nearly half a billion dollars. That’s killer. What would they have done without the ‘Star Wars’ windfall?”

Fox executives point to the worldwide marketplace and other ancillary revenue sources, like television sales, video and airline sales, which have grown substantially in recent years and whose impact is far more influential to a film’s overall profitability than in the past.

“You go into it not just looking at the domestic gross but the total revenue-producing package of the whole movie,” Godsick said.

Sherak acknowledged that the studio was disappointed with how “Speed 2” had fared on its first weekend, but also pointed to the overseas market as a potential source of the film’s success.

“It’s a very crowded marketplace so you just don’t know yet,” Sherak said. “I think the press wants to write things off before it’s fair to write things off. . . . When you look at the fact that the first [“Speed”] did over $235 million internationally, you know that the picture is not solely dependent on the U.S.”

Sherak predicted that “Volcano,” another Fox disappointment that opened earlier this year, would fare better on foreign soil than it did domestically.

“Volcano” cost about $90 million and earned about $47 million in the U.S., after being beat to release by Universal’s “Dante’s Peak.”

“We’re hoping [it’ll make] $125 [million] overseas,” Sherak said. “We think it’s going to do very big business, no different than the Stallone picture ‘Daylight,’ no different than ‘Waterworld’ or ‘Striptease’ [which all fared well overseas]. ‘Volcano’ was an expensive picture, but there’s revenue coming in. It’s not like everything is written off.”

In fact, films like “Volcano,” “Speed 2,” “Titanic” and “Alien Resurrection” will probably fare exceedingly well because they fit the pattern for successful films overseas, said Jim Gianopulos, president of 20th Century Fox International.

“If you look at the characteristics of films that work internationally, they are big event pictures, big special-effects pictures, pictures with a big cast and sequels,” he said. “If there are any rules, those are the four characteristics of predictable success internationally.”

Sequels, as a rule, fare considerably better overseas than on domestic turf. For example, each “Die Hard” film and each “Alien” movie did far better than its predecessor, usually doubling its box-office success.

“Volcano” has already opened in three foreign markets--Korea, Mexico and the Philippines--and in each case has had the second-highest opening ever, behind “Independence Day,” Gianopulos said.

“There’s an enormous anticipation for both ‘Volcano’ and ‘Speed 2,’ and ‘Titanic’ is phenomenal,” he said. “It’s going to be a really great year internationally.”

Claudia Puig is a Times staff writer; Judy Brennan is a freelance writer.