'Monster Trucks' isn't Paramount's only problem

A scene from the movie "Monster Trucks."
Source: Paramount Pictures

Paramount is already bracing for a huge loss ahead of its release of "Monster Trucks" next year.

Viacom, the studio's parent company, revised its earnings expectations last week, citing an "impairment charge of $115 million in its filmed entertainment segment in its fiscal fourth quarter related to the expected performance of an unreleased film."

"Paramount has already lost a lot of money this year, so why not write down a film for next year to have better numbers next year?" Doug Creutz, a Cowen & Co. analyst, told CNBC. "Companies write down films ahead of time often. You just don't hear about it usually."

"Monster Trucks" is the prime suspect. The film has an estimated production budget of between $100 million and $125 million, and has had its release date pushed back three times since it was first announced in 2013, according to comScore.

"[Paramount] has spent a lot of time and a lot of money on this thing and it looks like something that is a trailer on 'Funny or Die.' It seems totally fake," Jeff Bock, senior box-office analyst at Exhibitor Relations, said. "...It's just one of those things that is long gestating and sometimes the film doesn't turn out how you want it and, even after all the changes, it comes out even worse, but you are still obligated to put it out."

Still, there are some social media users who might give the film a chance in January.

Of course, "Monster Trucks" isn't Paramount's only problem. The studio has pushed back the release dates for several of its movies, been marred by struggling franchises and has projects in the pipeline for 2017 that have yet to be filmed.

"Rings," the third film in the "Ring" franchise, was originally slated for release in Nov. 2015. After being moved three times, it's anticipated to release in Feb. 2017. Similarly, the next iteration of "Friday the 13th" had four different release dates before settling, for now, in Oct. 2017.

In addition, Paramount's sequel to "World War Z," which is slated for release in June 2017, has yet to enter pre-production. Variety reported in early August that the film is expected to begin shooting in early 2017, however, with all of the post-production work that will need to be completed, it is unlikely the film will be ready for its expected release date.

So far in 2016, Paramount has released nine films. "Star Trek Beyond" garnered the studio about $336 million globally, but fell short of the previous two "Star Trek" films, which earned $386 million and $467 million.

Even worse, the third "Star Trek" film was the only Paramount film this year to garner more than $100 million domestically and $250 million globally. "Teenage Mutant Ninja Turtles: Out of the Shadows," which brought in $245 million globally, was helped heavily by foreign box office receipts, having only garnered $82 million in the United States.

The remake of "Ben Hur" grossed around $26.2 million domestically and $60 million at foreign box offices, tracking well below its production budget of $100 million, according to Box Office Mojo.

However, MGM Studios will take the brunt of the loss, as it put up more than 80 percent of the film's production budget, according to The Hollywood Reporter.

Similarly, "Zoolander 2," which had an estimated budget of $50 million, was able to bring in $55 million globally amid harsh criticism from critics and fans. According to Rotten Tomatoes, the film received a rating of 23 percent fresh from critics, while only 22 percent of audience members liked the film.

Six more films are slated for release heading into the final months of the year including "Fences" staring Denzel Washington and Viola Davis and Martin Scorsese's film "Silence".

The studio's licensing deal with Hasbro has borne some fruit for the company, mainly in the form of its "Transformers" franchise, which has fizzled slightly in the U.S., but continues to see success aboard.

Its "G.I. Joe" and "Teenage Mutant Ninja Turtles" franchises, however, have been widely panned by critics and audiences, each receiving a score of 38 percent or lower, as per Rotten Tomatoes' critics' consensus, and 51 percent or lower from fans. While all four films in the two franchises were able to make back their cost of production, it's possible the films were still considered a loss for Paramount depending on how much was spent for marketing and merchandising.

"They could use some better franchises, but they could also use some better movies," Creutz said of Paramount's lackluster franchise films.

Exhibitor Relations' Bock noted that Paramount could benefit from branching out to new creative properties, and diving back into the animation game.

"Paramount can only do 'Transformers' for so long," Bock said.

Paramount is the only major movie studio that isn't developing its own animation arm, said Bock. "That should tell you something."

Animated films have dominated the box office in recent years, with "Frozen," "Minions" and "Toy Story 3" holding positions in the top 20 highest grossing films worldwide.

Paramount made a multi-picture deal in 2014 with Locksmith Animation, a studio in the United Kingdom. However, the first film in that deal isn't slated for theatrical release until 2020.

Paramount's next animated feature release is "Sherlock Gnomes" in 2018 followed by "SpongeBob SquarePants 3" and "Amusement Park" in 2019.

While Bock suggested that Paramount could expand its business, Creutz said the studio's parent company Viacom may be better off simply selling Paramount.

"I think the movie business is in terrible shape right now and it probably needs some consolidation in terms of the number of studios," Creutz said.

Representatives from Paramount declined to comment.

(UPDATE: This story was updated to reflect Paramount's decision to decline comment, and to provide further details of upcoming films.)