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Viacom strategy for Paramount Pictures: Limit financial risks

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Paramount Pictures’ movie strategy has long revolved around managing financial risk.

At a time when other Hollywood studios field an occasional risky bet, such as 20th Century Fox’s “Life of Pi”; Walt Disney’s “Lone Ranger” or “Pirates of the Caribbean”; and Universal Pictures’ “Les Miserables”; Paramount has taken a more cautious approach.

“We never want to wake up with a big loss on an individual movie,” Viacom Chief Executive Philippe Dauman told investors Monday at the UBS’ 41st Annual Global Media and Communications Conference. Viacom is the parent company of Paramount Pictures.

The studio imposes its cost containment policy by limiting its release schedule to about 15 films a year. Paramount intends to “build a slate around the franchise movies that we control,” Dauman said, adding that he was proud of a franchise film that Paramount released earlier this fall to kick off its current fiscal year: “Jackass Presents: Bad Grandpa.”

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ON LOCATION: Where the cameras roll

The room fell silent. Then, after a brief pause, a few investors chuckled.

Although the sensibilities of “Bad Grandpa” might not suit every investor, they can’t argue with the results. The extension of the MTV franchise raked in $100 million at the box office.

Dauman acknowledged that the Melrose Avenue movie studio brings in financial partners to share the financial risks of its film slate even though “we give up a lot of the upside in success. But that gives us more stability,” Dauman said.

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One investor asked about Paramount’s spotty track record retaining relationships with big-ticket producing partners, mentioning Paramount’s divorces with DreamWorks SKG and Marvel Entertainment. Dauman took the cue to tout Paramount’s new three-year film deal with mega-producer Jerry Bruckheimer, announced late last week.

On the set: movies and TV

Bruckheimer is expected to reach into Paramount’s 1980s closet and pull out two of the studio’s best-loved pictures -- “Beverly Hills Cop” and “Top Gun” -- to create sequels for today’s audiences, Dauman said.

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“We have a wealth of franchises,” Dauman said, noting the studio was preparing another installment of last summer’s blockbuster, “World War Z” with Brad Pitt. Later this month, Paramount rolls out the heavily hyped “Anchorman 2: The Legend Continues” and Martin Scorsese’s “The Wolf of Wall Street” with Leonardo DiCaprio.

Paramount’s financial discipline, Dauman boasted, allowed the studio to return some of the cash it generates to Viacom.

Dauman also saluted the company’s cash cow television network, Nickelodeon. The children’s network has just completed 10 straight months of ratings growth after a fallow period.

“SpongeBob SquarePants” is “a great franchise,” Dauman said, adding that Nickelodeon is producing another incarnation of “Dora the Explorer,” in which the empowered hero Dora is a little older than before -- allowing Viacom to roll out an updated line of Dora merchandise.

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Twitter: @MegJamesLAT

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