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Fox Looks to ‘Predator’ In Hunt for the Next Billion-Dollar Franchise

By Tim Beyers - Jul 2, 2014 at 9:29AM

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The studio taps Shane Black to direct the next installment in the 27-year-old action franchise.

Fox hasn't had much luck rebuilding the Predator franchise. Credit: Twenty-First Century Fox.

Remaking any action classic can be tricky. Remaking one that most Arnold Schwarzenegger fans can quote liberally? That's just crazy.

Or at least you'd think so after looking at the data. According to figures from Boxoffice.com, Sony's (SONY -0.93%) 2012 remake of Total Recall earned just $198.5 million worldwide despite spending $175 million to produce and market the film. Twenty-First Century Fox (FOXA) intends to remake Predator anyway.

Why it will fail: History
A pure '80s adrenaline booster fueled by one-liners and astounding visual effects, Predator killed at the 1987 box office, earning $98.3 million worldwide off a $15 million production budget, Box Office Mojo reports. Three times Fox has tried to recapture that magic over the past decade. Success has proven elusive:

Installment
Release date
Worldwide gross
Budget / P&A

Alien vs. Predator

Aug. 13, 2004

$172.5 million

$100 million total

Aliens vs. Predator-Requiem

Dec. 25, 2007

$128.9 million

$88 million total

Predators

July 9, 2010

$127.2 million

$70 million total

Sources: Google, Boxoffice.com.

And yet I can't blame Fox for trying. For years Dark Horse Comics has published various titles featuring the iconic alien hunter. What's more the entire Alien vs. Predator concept dates back to a 1990 comic book series that spawned years of follow-up series. Why not take advantage of the built-in fan base?

Pride may also have something to do with the decision to give Predator another go. Only two movies in Fox's storied history have ever cleared more than $1 billion in worldwide box office grosses versus seven (!) for Walt Disney (NYSE: DIS) and five for Time Warner (NYSE: TWX). Fox may want to prove that there's more to its hit machine than Avatar and the Star Wars movies it no longer distributes.

Why it will succeed: Hawkins
But isn't a remake a huge risk? Maybe, but the new Predator will also have a connection to the first movie, something the Total Recall remake lacked. Fox has hired Shane Black, who played Hawkins in the 1987 version, to direct.

Investors should love that move. Black's connection to the first movie should help to recapture the sensibility that made the original so enjoyable. He's also one of a handful of directors to have made a billion-dollar movie: last year's Iron Man 3.

To be fair, working with an established franchise probably helped. Black is nevertheless aiming high with Predator, telling Collider that he wants to expand and explore "the existing Predator mythology, rather than hitting the restart button." We've seen that strategy work before, most recently with 2009's Star Trek.

What to watch for next
Fox is also sharply underrated when it comes to squeezing profit from its movies. The studio earned $1.3 billion in operating income from its Filmed Entertainment business in fiscal 2013, resulting in an impressive 15% margin vs. about 11% for Disney and Warner over similar periods. A new hit franchise would only serve to widen the gap.

Now it's your turn to weigh in. What do you expect from a new Predator movie? Leave your take in the box below. You can also follow the Fox story by adding the stock to your Foolish watchlist.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Time Warner and Walt Disney at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. 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.

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