The studio exectuives at Twenty-First Century Fox (NASDAQ: FOXA ) must be shaking their heads. The company's May 23 opener X-Men: Days of Future Past looked certain to do big numbers and reinvigorate the series. The return of director Bryan Singer, a stellar cast, and the red-hot iron for superhero movies provided the perfect combination of elements for a megahit. Now, allegations of sexual assault levied against Singer have been raised and the movie's box office future is in jeopardy.
News of a civil suit against director Bryan Singer alleging sexual coercion and mistreatment could not have come at a worse time. With the final trailer for Days of Future Past having just hit the web, the film should have enjoyed a hype-filled lead in to its release. Instead, the Singer story looks to explode over the next month and has the potential to damage the film's performance and the franchise at large.
The X-Men property is crucial for Fox
The "X-Men" series is of incredible importance to Fox. The company's attempts to reboot the "Fantastic Four" film series and prevent the rights to its characters from reverting to Disney's (NYSE: DIS ) Marvel Studios are reportedly producing less than desirable results. The weakness of the "Fantastic Four" property only makes the value of "X-Men" more apparent.
Disney's incredibly successful "Avengers" universe has reshaped the film industry, and the "X-Men" property represented Fox's best chance of keeping up in the superhero game. The controversy surrounding Singer could damage the studio's plans and necessitates a decision as to whether or not the director is kept on board for 2016's X-Men: Apocalypse.
Singer faces very serious claims
At a recent press conference in Los Angeles, Michael Egan III accused Singer of multiple incidences of rape. According to Egan, he was drugged and abused multiple times by the director and his associates over a two-year period. Even worse, the mistreatment is alleged to have begun when Egan was just 15 and supposedly involved the transportation of the boy across state lines, a potential felony.
For now, the case remains a civil and not a criminal matter. Egan and his mother apparently attempted to report the alleged misdeeds to the LAPD and the FBI in 1999, but received little in the way of assistance. Some have pointed to the timing of the accusations as an indication of suspect motives on the part of Egan and his legal team, though the alignment of the suit and Days of Future Past's impending release may be little more than coincidence. The statute of limitations in Hawaii, one of the states in which abuse was alleged to have taken place, was about to expire; this necessitated that action be taken quickly, if at all.
External events can have major impact on box office performance
Days of Future Past isn't the first superhero movie to be rocked by external events. The 2011 Connecticut movie theater shooting seriously shook up the Batman adventure The Dark Knight Rises' box office run and created serious headaches for Time Warner's (NYSE: TWX ) film unit. Leading up to the film's domestic release, debate centered around whether a "Batman" film could surpass the approximately $207 million opener that Marvel's The Avengers had delivered just months earlier.
The "Batman" series had grown tremendously in popularity since the release of 2008's The Dark Knight, and the 2012 sequel looked to have a legitimate shot at matching or even exceeding The Avengers' opening frame. The Batman pic set a record for opening night gross, but the horrific events of the cinema shooting scared audiences away from cinemas and slowed the film's opening totals. It still opened with an approximately $161 million grab, but surveys showed that 20%-25% of people were too scared to go to theaters that weekend.
X-Men could be damaged by media narrative
Comparing the effects of sexual abuse allegations against a principle production member to those of a horrific massacre in a theater does not create the tidiest of parallels when looking to project box office performance. It should, however, serve as a reminder that these entertainment products do not exist in a vacuum. Much of the media narrative surrounding The Dark Knight Rises unfortunately centered around the shooting connection, just as coverage of Days of Future Past now risks being dominated by the emerging Singer story.
Fox must focus on the future
At this point, there's not a whole lot that Fox can do to control the controversy that will be attached to its upcoming film. These aren't the first allegations that have surfaced against Singer, and it's possible that more people will come forward with similar claims to prolong the life of the story and drive the fervor. Fox must instead make a decision for the future of one of its biggest properties. The studio must perform due diligence and reach a decision as to whether Bryan Singer is the right man to lead future "X-Men" projects.
Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.