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How Delaying ‘Fast and Furious 7’ Could Hurt Universal’s Bottom Line

With production on “Fast and Furious 7” now halted indefinitely, it seems increasingly unlikely that Universal will be able to make its July 11, 2014, release date — a potential blow for the Comcast-owned studio, which was relying on the franchise tentpole to boost next year’s bottom line.

The question now becomes how much does the departure of “Fast 7” from the summer 2014 slate affect the studio overall and whether the film would be able to reach the mammoth box office heights of its predecessors during a different play period.

“I don’t think it means anything at this point,” said Hal Vogel, an analyst at Vogel Capital Management. “It’s too early to know.” Vogel pointed out that normal cast insurance would cover the filming costs incurred by delaying the production, though only for a limited time.

“The longer term outlook is less clear because the theme of all of this is fast-car racing,” Vogel said. “People go for the theme.”

If the circumstances of Walker’s death in a fiery car accident dissuade audiences from buying tickets to an action film known for its violent car explosions, the studio’s profits suffer.

On the other hand, the franchise’s loyal fans could purchase tickets in record numbers as a way of memorializing Walker. “The Dark Knight,” which was released after Heath Ledger’s death in 2008, is still the most successful “Batman” film of all time. (That film had a summer berth, however.)

More than affecting just theatrical grosses, however, the delay of “Fast and Furious 7” could have implications for downstream revenues, including homevideo, merchandising and promotional partnerships.

For instance, “Fast and Furious 6,” which launched theatrically in May and saw nearly $800 million in worldwide ticket sales, hits DVD and Blu-ray shelves in time for the holidays on Dec. 10. It’s likely that Universal would have planned for a similarly timed homevid release for the seventh installment given that the “Fast” franchise has been extremely lucrative in ancillaries.

Numerous issues would cause trouble for U whether the release of “Fast 7” is moved to winter 2014 or summer 2015.  First, the studio would have to scramble to fill the summer 2014 slot with another tentpole as “Fast 7” is the only big release currently dated for that time. Moreover, Universal already has a full summer 2015 lineup, with four major franchise installments set to bow, including “Jurassic World” on June 12, “Ted 2” on June 26, “Minions” on July 10 and the next “Bourne” film on Aug. 14.

If Universal does pull “Fast 7” from summer 2014, the studio may choose to release the film during Christmastime, hoping to exploit the holiday box office or create an event around the pic during February or March 2015.

“This is a challenge for Universal, but not a disaster because the movie will get made,” said Fred Bernstein, an attorney with Katten Muchin Rosenman, who ran Columbia Pictures from 1994 to 1997.

“A good version of the movie will be successful whenever they release it,” Bernstein added. “The big challenge that it creates is their financial planning because it will delay when the studio gets to realize the revenues that the film ultimately will generate.”

Bernstein added that a delay in revenue presents problems for Universal, especially since the studio recently underwent a major exec overhaul that placed Comcast exec Jeff Shell in charge of the movie studio with Donna Langley as Universal Pictures chair.

As for merchandising, U was already limited with what it could do around the “Fast and Furious” franchise when it comes to producing toys given that the films’ target audience skews older than the more kid-friendly “Transformers” or “G.I. Joe” franchises at Paramount.

The same would be true for the seventh film, although the studio expanded the number of licensed products it offered around the sixth film to include apparel, remote-control cars and mobile games. But at least a delay wouldn’t leave a major toymaker like Mattel or Hasbro with truckloads of action figures in a warehouse waiting for the film to be released.

The franchise does not have a presence at the company’s theme parks outside of cars parked onsite for photo ops.

And when it comes to promotional partnerships, Dodge is the franchise’s largest partner, with the automaker’s Charger and other muscle cars prominently featured in the last film. Dodge also backed the more recent films with a marketing campaign that included online, TV and print ads.

“Obviously, (a release date change) will have an implication,” Bernstein noted. “Any time a studio moves a tentpole movie out of a key summer slot, for whatever reason … those are big issues.”

(Marc Graser contributed to this report.)

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