Today's debut of Superman Returns may be faster than a speeding bullet and more powerful than a locomotive, but will it be able to leap its $260 million production budget in a single bound?
Time Warner (NYSE:TWX) is certainly hoping so. It approved the flick, by most accounts the most expensive production ever, in hopes that the Man of Steel can save the studio after live-action flops earlier this year in V for Vendetta, Firewall, and Poseidon.
More is at stake here than just those cinematic disappointments. Tapping into its own DC Comics subsidiary, the company is hoping to catch the same lightning in a bottle that Marvel Entertainment (NYSE:MVL) has achieved over the past few years with some of its franchises, including X-Men, Spider-Man, and Blade.
Time Warner had let its potent Batman and Superman franchises collect cobwebs over the past few years before the release of Batman Begins last year. The Batman flick did gross just a little more than $200 million at the domestic box office, but that placed it only eighth out of all of the movies released that year.
That's still better than Time Warner's position this year, though. It doesn't have a single entry among the 10 highest-grossing flicks so far in 2006, whereas it commanded three on that list last year. Superman Returns will change that. Count on it. The question is whether the flick will be able to make enough in its global theatrical run and DVD and merchandising sales, to justify the lofty budget.
I argue that it doesn't really have to. As long as the film is a hit on the big screen, it can turn the spigot for more cost-effective sequels in the coming years. This is about more than just one film or one Halloween season with a few more trick-or-treating Superman kiddies than in years past. It's about making a statement. And even if Superman Returns becomes a loss leader -- and it may very well be, since a good chunk of the ticket sales this summer will go to the multiplex operators -- it can still be a major coup for Time Warner.
In any event, Time Warner is pulling out all of the stops. It even paid for the bulk of additional work needed on the prints to create 20 minutes of 3-D sequences for fans paying a premium to see the superhero film on an IMAX (NASDAQ:IMAX) screen.
With IMAX hungry for a hit after V for Vendetta and Poseidon got the IMAX treatment, the Time Warner and IMAX relationship can use a little Clark Kent muscle, too. As a Rule Breakers recommendation, IMAX is seeking a potential suitor, and a strong showing here would help vindicate the big-screen-format pioneer as a viable buyout candidate.
It's a good thing that Superman is so strong. He's certainly carrying a lot of corporate weight on his shoulders.
Marvel and Time Warner are both Motley Fool Stock Advisor newsletter service recommendations.
Longtime Fool contributor Rick Munarriz has never worn a red cape, even during Halloween. He does not own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
