Cancelling 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 cancelling massive projects for much of the past year. "Ouija," like at least one other, was cancelled just a couple of months before scheduled production, a decision that costs the studio millions in lost pre-production costs, 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.
Movies like "Ouija" have to make almost three times their production budget before they hit profitability, which with the ongoing decline in DVD sales is harder than ever to achieve, according to knowledgeable studio executives.
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.
Also read: Universal Ditches Another Big Movie: Hasbro's 'Ouija'
"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 pre-production costs. (Hasbro covers development costs under the deal.)
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. And Disney cancelled plans to make "Oblivion," a project with Tom Cruise that was picked up by Universal.
