Warner Bros.' 'Pan' Said Headed for $100 Million-Plus Loss

Updated on
  • Film adds to disappointing 2015 for Time Warner's studio
  • Loss this big on one film is unusual, though not unheard of

“Pan,” the Warner Bros. release that flopped in theaters last weekend, may produce a loss of more than $100 million for Time Warner Inc.’s movie unit and its production partners, according to three people familiar with the situation.

The picture, a retelling of the Peter Pan fairy tale starring Hugh Jackman, cost $150 million to make and has a marketing budget of about $100 million, said the people, who asked not to be named because the figures aren’t public. “Pan” generated just $15 million in U.S. and Canadian ticket sales in its debut.

“‘Pan’ will be one of the biggest duds of the year,” said Phil Contrino, chief analyst at Boxoffice.com. “People will remember it for some time.”

The film is sure to be one of Warner Bros.’ biggest disappointments at the box office this year. The studio, which often leads Hollywood in domestic ticket sales, is in third place this year and has had missteps with “Jupiter Ascending,” “Man From U.N.C.L.E” and “Entourage.” A DC Comics feature with Batman and Superman is set for 2016.

Studios and exhibitors split ticket sales, so generally a film has to produce double its production and marketing costs to break even in theaters. Movies have another chance to generate revenue later in the home-video market.

While Warner Bros. is the principal investor in “Pan,” its partner is RatPac-Dune, the entertainment company run by Steven Mnuchin, Brett Ratner and James Packer. Typically, RatPac’s participation is about one-quarter of the costs, said one of the people.

The filmmakers have some ability to limit their losses. Studios can cut back on the marketing if a film is a disappointment. The release of “Pan” in China starting Oct. 22 can also make up for some of the U.S. shortfall. U.S. studios get a smaller share of ticket sales there than at home.

A Warner Bros. spokesman declined to comment. RatPac didn’t respond to requests for comment.

Losses of such magnitude on a single picture are unusual, though not unheard of. Studios generally don’t release such information.

Warner Bros. probably lost $133 million on “Jupiter Ascending” this year, according to Wade Holden, an analyst at SNL Kagan. He estimated Walt Disney Co.’s “Tomorrowland,” another 2015 release, would produce a loss of $131 million.

In 2012, Disney reported a loss of about $200 million for “John Carter,” considered the worst for a single picture, and said in 2013 that it would lose as much as $190 million on “The Lone Ranger.”