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Warner Bros Shuffle: Studio Needs a DC Superhero in Toby Emmerich, Say Insiders

With Greg Silverman’s ouster, CEO Kevin Tsujihara gets ahead of creative troubles

Warner Bros. CEO Kevin Tsujihara’s decision to replace motion picture president Greg Silverman with executive Toby Emmerich is an overdue response to an increasingly urgent creative crisis at the studio, multiple insiders told TheWrap.

In the shadow of a pending merger with his corporate owners and AT&T, Tsujihara named New Line President Emmerich — with whom he’ll share greenlight power — to the top job on Wednesday, three years after Silverman stepped into the role.

It began to look like Silverman’s days were numbered in May, when Tsujihara removed him as supervisor of the DC Comics film slate. The Warner Bros. property’s success is vital to the studio, said two individuals close to the lot in Burbank.

The decision came after March’s “Batman v. Superman” — Zach Snyder’s DC superhero mashup with Ben Affleck and Henry Cavill — grossed a below-expectation $330 million at the domestic box office on a reported $250 million budget.

Warner Bros said executives were not available to comment Wednesday.

Tsujihara created a standalone unit for the DC Films banner and appointed WB movie executive Jon Berg to run it alongside DC Comics Chief Creative Officer Geoff Johns, whom Tsujihara promoted to vice president under division president Diane Nelson.

“It’s no secret the studio wanted better critical reception on the DC properties,” another person close to Warner Bros. said.

The insider specifically referred to the August under-performer “Suicide Squad,” a David Ayer film that featured an all-villain cast. It rated 27 percent fresh on Rotten Tomatoes, was panned by many fans, and fetched $325 million in the U.S. on a $175 million budget. The studio heads and director had a knock-down, drag-out struggle over its content.

TheWrap wrote extensively about the fight over “Suicide Squad,” which saw stars like Will Smith, Margot Robbie and Viola Davis participate in reshoots. Tsujihara and Silverman effectively locked Ayer out of his own editing room in attempts to deliver a lighter, more commercial hit.

It wasn’t all bad news for Silverman — he’s credited with delivering a hit franchise based on the Lego toy, that started with “The Lego Movie” in 2014. Silverman brought that home for a $60 million budget to a nearly $260 million box office return, led by the voice of  a pre-“Jurassic World” Chris Pratt. Upcoming spinoffs include “The Lego Batman Movie” starring Will Arnett, and a film based on the Lego Ninjago toys.

The onus now falls on the well-liked Emmerich to stabilize DC projects like Jason Momoa’s upcoming “Aquaman” — whose release date was pushed bask this month from summer 2018 to later that fall — and a standalone Batman film to be directed by Affleck. DC Films are dated through 2020. Warner Bros. also has the just-launched Harry Potter-universe extension “Fantastic Beasts and Where to Find Them.”

After Silverman’s first year in control, Warner Bros. slid from first to third in studio market share, with 14.4 percent, sliding again the following year with 13.9 percent. The studio bounced back this year thanks to its superhero stable and currently sits in second place with 17.8 percent, though it’s well behind leader Disney’s 24.2 percent — despite having more than twice as many releases.

In financial decline for three consecutive years, Warner Bros.’ struggles have had an impact on parent Time Warner Inc.’s bottom line even as the conglomerate’s cable networks have thrived.

Warner Bros. has earned $9.2 billion in revenue and $1.2 billion in profit over the first nine months of this year, slightly better than the $1.1 billion in profit it earned on $9.7 billion revenue in the same period a year before. However, the studio’s profit margin remains low — and hasn’t topped 11 percent in the last three full years.

By way of comparison, Disney’s studio entertainment division had profit margins of 27 percent and 21 percent in fiscal 2015 and 2014, respectively.

The studio’s most profitable release of 2016 was the Maria Bello horror thriller “Lights Out,” which made $149 million worldwide on a $5 million budget. Emmerich shepherded the New Line release.

Throughout his New Line tenure, Emmerich has produced mid-range-budgeted monster hits like “Sex and the City” ($415 million worldwide), “Horrible Bosses” ($209 million worldwide) and “We’re the Millers” ($269 million).