‘Pan’ Looks for China Life Raft as it Faces $100 Million Writedown

Pan,” the pricey fantasy adventure about a boy who refuses to grow up, crashed on the shoals of audience indifference last weekend when it debuted in the United States and across more than 50 foreign markets.

The film has racked up a meager $40.5 million globally, which is a far cry from the $150 million that Warner Bros. spent to make the picture and the additional $100 million it shelled out to market it. Analysts and rival studio executives predict that the film will result in losses of at least $100 million, given that it needs to do at least $400 million in order to recoup its costs. Estimates for the film’s ultimate global gross ranged from $150 million to just over $200 million, either of which would keep the Neverland epic submerged in red ink.

The studio’s best chance of stanching the bleeding is China, where “Pan” is set to debut on Oct. 22. That country could comprise as much as 30% of the film’s overall ticket sales and might add as much as $60 million to its gross. “Pan” will be the only U.S. film in the week of its release, which could provide it with some breathing room. Recently, a number of films that have faltered domestically, such as “Pacific Rim” and “Terminator: Genisys,” have found China to be a reliable bulwark against financial catastrophe.

“Pan” could also do well in Japan, the world’s third-largest film market after the U.S. and China. The picture debuts in the country on Oct. 31 and some efforts have been made to bolster its appeal with local crowds. For instance, a Japanese pop song called “Beyond Eternity” by Seiko Matsuda has been included at the end credits.

But some box office watchers are unconvinced. They note that local language Chinese films such as “Goodbye Mr. Loser” and “Lost in Hong Kong” have dominated ticket sales and that there are a number of highly anticipated American movies due to hit theaters in coming months, such as “Ant-Man” and “Everest,” which could stifle business.

“I don’t think [China] will be the saving grace,” said Phil Contrino, vice president and chief analyst at BoxOffice.com. “There are a lot of strong local films that will overshadow it.”

Moreover, analysts and rival executives note that Peter Pan is a story that is virtually unknown to the Chinese public. Without a resonant brand behind it, the film will soar or sink on it visual effects, and that may not be enough to lure crowds.

“Pan” had the air of a troubled production ever since it was moved from a prime summer release date into the fall. However, its U.S. opening was even lower than pessimistic projections. The film managed to pull in a paltry $15.3 million, lower than its anticipated $20 million debut. Its failure compounds a disappointing year for Warner Bros. The studio scored with the disaster movie “San Andreas” and the Oscar contender “American Sniper,” but it lost tens of millions of dollars on the likes of “Jupiter Ascending,” “Entourage,” “We Are Your Friends,” and “The Man From U.N.C.L.E.” Other pictures like “Mad Max: Fury Road” put up respectable global numbers, but cost too much to turn much of a profit. Next year looks stronger with “Batman v. Superman: Dawn of Justice” and the Harry Potter spin-off “Fantastic Beasts and Where to Find Them” both on tap.

There are factors that do limit Warner Bros.’ financial exposure. The studio has a partner in “Pan” in RatPac Dune, which put up roughly a quarter of the budget, so it’s not alone in shouldering the losses. And as a division of Time Warner, which claims HBO and Turner in its portfolio of media holdings, one Warner Bros. film release is unlikely to put a dint in the company’s earnings.

“It will have no real bearing on the third quarter numbers,” said Eric Handler, an analyst with MKM Partners. “My guess is the writedowns already got baked in when they moved the picture.”

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