The Wolf of Wall Street is a Red Granite Pictures production, and Red Granite Pictures has a distribution deal with Paramount Pictures, which is a subsidiary of Viacom (NASDAQ:VIAB).
Based on early results, this is a positive for Viacom. However, there's a lot more going on than meets the average eye. Red Granite Pictures' next release is likely to benefit Universal Pictures -- a subsidiary of Comcast (NASDAQ:CMCSA) -- as well as New Line Cinema, a subsidiary of Warner Bros., which is owned by Time Warner (NYSE:TWX.DL). Confused yet? Don't worry, it gets a lot simpler.
Unleash the Wolf
Red Granite Pictures was formed by Joey McFarland and Riza Aziz in 2009. The company's strategy is brilliant and original. It looks for movies with strong brand potential that were never green-lighted and were left for dead. Red Granite then works like mad to get those movies made. Red Granite Films produced Out of the Furnace and Friends with Kids.
For instance, despite several challenges, including Hurricane Sandy setting back production, Red Granite persevered and got The Wolf of Wall Street made -- with Leonardo DiCaprio, Jonah Hill, Matthew McConaughey, and Rob Reiner included. That's a strong cast, not to mention that it's a Martin Scorsese film, which always attracts large audiences.
Red Granite finances its films on an individual basis, relying primarily on Middle Eastern and Asian investors. Those who invested in The Wolf of Wall Street are likely to be pleased. The film's budget of $100 million was somewhat steep for a small West Hollywood company like Red Granite, but the movie grossed $34.3 million in its first five days, ahead of Paramount Pictures' expectations.
The movie also sports an IMDb rating of 8.8 out of 10, which is extremely high. For some reason, the movie hasn't fared quite as well on Rotten Tomatoes, sporting an audience score of 79%. However, that's still very respectable. Furthermore, this is the type of movie that should build momentum based on word of mouth. Who doesn't like a movie about a Wall Street con man?
The Wolf of Wall Street is likely to be profitable for all those involved, and it indicates that Viacom's Paramount Pictures is wise when it comes to risk-taking opportunities with strong upside potential.
Better yet, Red Granite's next movie might have even more potential. If that potential is met, it will benefit Time Warner the most, as the company has a significant financial interest in the film. That movie is...
It's a dumber movie
Red Granite's next film is the upcoming release of the sequel to Dumb and Dumber, which will be called Dumb and Dumber To. Yes, the last word of the title is spelled incorrectly on purpose.
The best part about Dumb and Dumber To is that, unlike the prequel, Dumb and Dumberer, it will again star Jim Carrey and Jeff Daniels. This movie should have significant potential. Many Generation Xers will see it. I'm one of them, and as dumb as it sounds, many in my generation see Dumb and Dumber as one of the best comedies ever made (Hey, the same is said about Airplane! from the previous generation, so please don't judge).
From an investing standpoint
Though this is just one small iron in the fire for Viacom's Paramount Pictures, The Wolf of Wall Street is an example of the company's successful strategy of investing in profitable ventures. While we don't know how Dumb and Dumber To will perform, the brand alone indicates potential for Time Warner, which owns Warner Bros. Also keep in mind that Universal Pictures -- a subsidiary of Comcast -- will be releasing and marketing the film. Finally, don't be surprised if this little West Hollywood company is acquired by a larger player at some point over the next several years.
Fool contributor Dan Moskowitz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.