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Why Paramount And Viacom Need 'Star Trek Beyond' To Blast Off

This article is more than 7 years old.

Paramount, Viacom's beleaguered movie studio, will release its major live action summer blockbuster Star Trek Beyond this Friday. The movie maker has suffered a string of flops this year--and as it attempts to sell off 49% to an outside buyer, the company needs a win.

They are banking on one with the crew of the Starship Enterprise. In its thirteenth installment and the third film in the rebooted series, Zachary Quinto and Chris Pine are back in the driving seat as Commander Spock and Captain Kirk, with Simon Pegg and Zoe Saldana also rejoining the cast. Directed by Fast and Furious' Justin Lin, its producers are hoping for some of that franchise's firepower as Star Trek Beyond heads into its opening weekend. 

For Viacom CEO Philippe Dauman, a hit with Star Trek Beyond shows an ability to help rebuild Paramount's ailing film slate--and perhaps eventually Viacom's shrunken stock. But his attempt to sell a minority stake in Paramount is in opposition to the media giant's controlling shareholder, 93-year-old Sumner Redstone, who is attempting to squeeze him out. A miss could make Dauman's path to the door even clearer.

“We have had a process which began with over 40 players who expressed their interest,” Dauman said of the Paramount divestiture, speaking at a June investor conference. “It is strategically important to look at what is the best way to enhance and accelerate the growth of Paramount into the future.”

Paramount has struggled in recent years. It placed last among the six major studios in 2015 box office returns, nabbing just 5.9% of ticket sales. Movies that held promise this year flopped: the much-awaited Ben Stiller sequel Zoolander 2 grossed just $55.9 million, while the Tina Fey-fronted war comedy Whiskey Tango Foxtrot managed a meager $23 million on a $35 million budget. Those contributed to a $136 million loss in Paramount's first quarter.

Recent films haven't fared much better. The company had high hopes for its Teenage Mutant Ninja Turtles: Out of the Shadows reboot, which made a modest $231.1 million globally on a $135 million budget. Had it scaled into the black, the reptilian adventure could have held lucrative possibilities for merchandising money and future films. Instead, Viacom's quarterly earnings are expected to fall short of expectations this quarter.

Now Paramount is looking to Star Trek Beyond--and its overseas box office potential--to turn around its summer fortunes. The franchise has grossed over $1.4 billion globally since its 1979 debut, with its most recent installment tallying $467.4 million worldwide in 2013But given the new movie's undoubtedly heft pricetag, it will likely have to tally over $370 million to break even. It has nabbed a China release date, which could help matters (China's Alibaba Pictures Group contributed financing to the film).

Its failure would not bode well for Paramount's ability to capitalize on existing intellectual property in a Hollywood landscape where franchises hold the key to big bucks. Paramount fumbled with Teenage Mutant Ninja Turtles. It still owns the intellectual to Mission: Impossible, which continues to perform well at the box office, as well as Transformers, a dormant franchise that grossed $3.8 billion worldwide. But to compete with Universal and Disney's Marvel, it needs a slate of films that can gross close to $1 billion apiece with never-ending potential for future installments.

In a show of confidence, Paramount this week announced a sequel to Star Trek Beyond before it even opened. Only time will tell whether the enterprise pays off.

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