Why China and Other Overseas Markets Couldn’t Save This Summer’s Dismal Box Office

“Transformers,” “Pirates of the Caribbean” and “Baywatch” underperformed at home and abroad

One stark lesson of this summer’s miserable box office: Studios may no longer be able to rely on overseas markets as a life raft for tentpoles that underperform in North America.

Paramount’s “Transformers: The Last Knight” grossed just $229 million in China, less than the $320 million 2014’s “Transformers: Age of Extinction” earned there when the country’s box office was significantly smaller. Worse, the total overseas revenue for “The Last Knight” was $471 million, nearly half the $859 million the previous installment earned.

As Hollywood’s domestic box office has cratered by more than 14 percent this summer, studios are discovering that other pricey studio projects — including Paramount’s “Baywatch” and Disney’s “Pirates of the Caribbean: Dead Men Tell No Tales” — are failing to score both at home and abroad.

“If [the box office] starts dwindling internationally, that’s a problem,” Paul Dergarabedian, the senior media analyst at ComScore, told TheWrap. “Studios have always counted on those international markets to make up the difference for any shortfall in the North American box office for specific films.”

But this year that strategy has proved to be less than meets the eye as established franchises are not proving to be as bankable as expected even as overseas box office has ticked up 3 percent so far this year (North American sales are down 6 percent for 2017 to date).

“Pirates of the Caribbean: Dead Men Tell No Tales” earned about $70 million less domestically than its 2011 predecessor, “On Stranger Tides,” and was by far the lowest-grossing movie out of all five of Johnny Depp’s “Pirates” films.

While the franchise continued to perform fairly well overseas, with “Dead Men” reeling in $618 million in international markets, that was the smallest foreign gross since the first “Pirates” film, “The Curse of the Black Pearl,” which came out 14 years ago and made just $3 million in the world’s second-largest movie market, China.

“Dead Men” hauled in $172 million in China but it still fell nearly $200 million short of the foreign gross for “On Stranger Tides.”

Even “Baywatch,” based on an internationally syndicated show that reached upwards of 1 billion people a week in nearly 150 countries, earned just $119 million internationally and a dismal $58 million in North America despite megawatt headliner Dwayne Johnson and plenty of hype. That simply wasn’t enough to make up for its belly flop at home. (The R-rated comedy didn’t get past China’s regulators.)

But with China’s appetite for this summer’s crop of Hollywood hits relatively light, and certain tentpoles like Sony’s “Spider-Man: Homecoming” not even hitting the market yet (the superhero flick premieres in China on September 8), the Middle Kingdom hasn’t come through for Hollywood this year.

While studios only get about one-fourth of the Chinese theatrical gross, compared with roughly half in the U.S., the sheer size of that market has frequently bailed out big-budget would-be blockbusters that flopped at home.

Paramount’s “xXx: Return of Xander Cage” grossed just $45 million at the domestic box office earlier this year, but took in $301 million internationally, led by China with $164 million. Headliners Vin Diesel and Donnie Yen — two of China’s biggest stars — undoubtedly helped push it up the Middle Kingdom’s charts.

And Legendary’s video-game adaptation “Warcraft” earned just $47 million at the domestic box office last year, but brought in a whopping $386 million in international markets, including $214 million in China.

Dergarabedian said sometimes it takes just one movie to turn things around. That happened in China this summer, pushing its box office up 6 percent year-over-year — but Hollywood had nothing to do with the country’s home-grown $800 million smash hit “Wolf Warriors 2.”

And while the European box office held strong during the dog days — helped by Warner Bros.’ “Dunkirk” — that also wasn’t enough to save the industry’s bacon.

Christopher Nolan’s World War II epic was extremely popular in the United Kingdom, where it grossed $63.2 million, making it the country’s second highest-grossing film of the year after Disney’s “Beauty and the Beast.” “Dunkirk” has grossed $397 million worldwide through August 23.

AMC Theatres, the world’s largest cinema chain, may be the best example of what’s happened this summer. The company has expanded in Europe (and is owned by a major Chinese entertainment company, Dalian Wanda Group) but its geographic diversity couldn’t compensate for a disastrous summer season at home.

The company’s stock tanked about 25 percent earlier this month after AMC previewed disastrous second-quarter earnings. Still, AMC CEO Adam Aron told investors, “Gains in Europe were more than counterbalanced by the weak American results.”

The movie business may be more international than ever, but Hollywood still shapes the box office. And there was no saving this dry, cold American summer.