LOS ANGELES (TheWrap.com) ? Canceling its third major project in a row, Universal is acting less like a Hollywood media giant these days than a pensioner on a budget.
The latest of victim of the studio's newfound frugality: "Ouija," was axed when, as one studio insider put it, "the numbers didn't add up."
But the studio has been canceling massive projects for much of the past year. "Ouija," like at least one other, was canceled just a couple of months before scheduled production, a decision that costs the studio millions in lost pre-production cost, not to mention the $5 million cancellation penalty paid to Hasbro.
The trend at the studio may reflect 'the new normal' in town, with downward pressure on budgets meeting ongoing pressure from corporate suits to hit the bottom line.
But the cancellations create friction with the studio's relationships with some of the biggest names in Hollywood, and leave its slate lighter on tentpoles.
"Ouija," a co-production with Hasbro, was part of a seven-picture deal Universal signed with the toymaker in 2008. McG was set to direct, and Michael Bay was among the film's producers.
It is already the second Hasbro film to be cut from the Universal slate; "Clue" was dropped last year. And over the past few months the studio has killed projects from Ron Howard (Stephen King's "The Dark Tower") and Guillermo del Toro ("Mountains of Madness," based on a story by H.P. Lovecraft).
With a budget of $140 million, "Ouija" was too rich for Universal's blood -- even though not making the movie meant the studio had to shell out a $5 million penalty to Hasbro on top of millions spent on development cost.
An individual close to the Hasbro deal said that the studio's relationship with the toy company was still good, but that Hasbro was keeping its options open. (Under the deal, the toy company has the right to end the alliance if Universal does not make the movies.)
"This budget is right for the movie, but the film isn't right for us and we're moving forward," a Universal insider told TheWrap.
That said, it's not as if Universal is the only one euthanizing mega-productions these days. Two weeks ago, Disney put the future of the more than $200 million budgeted "Lone Ranger" in limbo, even though Johnny Depp was attached to star and Jerry Bruckheimer was on board to produce. With ancillary revenue sources such as DVD sales constricting, studios throughout town are being forced to dial down the amount of money they spend on theatrical releases.
The reasons behind Universal's cost-cutting appear to be two-fold. On the one hand, Universal seems to be adjusting to life under its new corporate parent, Comcast.
The Philadelphia-based cable giant, which acquired NBC-Universal last January, has shown less tolerance for big film bets than previous owner General Electric. Gone, it appears, are the days where Universal would gamble $100 million on adult dramas such as "The Green Zone" and "Public Enemies."
Though notoriously penny-pinching, Comcast has shown a greater willingness to spend on the television side, sinking big bucks into "The Voice" and bringing in Showtime programing guru Bob Greenblatt to prop up NBC. In some respects, Universal has been left seeming like an afterthought for its new parent.
Secondly, the studio has been in a costly rut in recent years, forced to shoulder costly failures such as last month's "Cowboys & Aliens," which has so far grossed just $108 million worldwide on a $150 million budget. "The Change-Up" was another disappointment, a movie the studio was convinced would be a sleeper comedy hit.
"They're in a state of shock after 'Cowboys and Aliens,'" said one former studio executive. "They had back-to-back misfires, which reinforced their most conservative instincts. But all of them are playing defensively."
Universal has some big projects on the horizon such as a sixth "Fast and Furious" film and a sequel to "Despicable Me."
"With the exception of 'Bridesmaids,' it's been rough and it seems like a lot of the movies they're making are huge bets and they're all over-$200 million bets. And that's a terrifying place to be," a producer who has worked with Universal in the past told TheWrap.
As part of a larger effort to get costs under control, the studio had already pruned the initial deal with Universal back from seven films to four, after canceling plans to make a movie based on the board game "Clue." "Battleship," a big-budget, alien mashup from "Hancock" director Peter Berg hits theaters next summer.
Films based on Hasbro's "Stretch Armstrong" and "Candyland" properties are still under consideration, but though Universal spent $7.5 million to sign up Taylor Lautner to star, it now seems possible that the studio will not move forward with "Stretch," originally set for release in 2012 but now only "under consideration," a Universal insider told TheWrap.
The one Hasbro property that will definitely see the light of day, next summer's "Battleship" does not appear to have been an entirely blissful experience. There have been rumors that the film is a runaway production with costs ballooning to north of $200 million, however, the studio claims it arrived on-time and on budget.
Hasbro projects are not the only big films to feel the pinch from Universal's new belt-tightening. Perhaps even more surprising than the "Ouija" move was the studio's decision last month to pull the plug on "Dark Tower," a hugely ambitious adaptation of the King series that the studio deemed too risky.
Conceived as a three-film franchise, the movies also boasted a lineup that included director Ron Howard, producer Brian Grazer, screenwriter Akiva Goldsman and star Javier Bardem.
The math it seems wasn't working out in all of these cases, and the prospect of more costly misses on its balance sheet left Universal performing triage to its film slate. It's risking serious blowback and a reputation as one of Hollywood's most fickle greenlighters.
"What's going on there? They're making bets, but then they're pulling out. But they're spending money to make those bets and that money is being thrown away," the producer told TheWrap.
"It's perplexing that they continually get so pregnant before they decide to abort. That's messy, bloody and unpleasant," a former executive told TheWrap.
Howard, del Toro, Hasbro and company are all big names with lots of clout. Universal's newfound economizing may make future collaborations more difficult and may also muddy its reputation with other talent shopping for a home for their new projects.
Goldsman, for one, is known as being seriously ticked off at the studio for killing "Dark Tower."
Beyond hurt feelings and bruised egos, there's the question of how Universal will replace all the products its tossing out of the shopping cart.
Despite the recent flurry of cancellations, the studio insists it hasn't gotten cheap.
"We're making 'Snow White' and 'Oblivion' and '47 Ronin' and all of these are big budgets," a Universal insider told TheWrap.
It is also bullish on the Mark Wahlberg action film "Contraband" and the Oliver Stone drug thriller "Savages," both of which bow next year.
But aside from the sequels to previous smash hits, like a possible fourth "Jurassic Park," Universal looks light on the kind of branded entertainment that rivals such as Warner Bros. and Disney churn out annually.
There may have a "Battleship," but there's nary a "Spider-Man" or "Batman" to be found in the batch, and that's got to hurt - whatever the budget.
Sharon Waxman contributed to this article
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