Viacom's "Transformers" Sequels Causing Trouble For Time Warner

Over the past few years, Viacom, Inc. VIAB's Paramount has relied very heavily on franchises to succeed at the box office. From "Mission Impossible" to "SpongeBob SquarePants," the Viacom-owned studio has had a ton of recognizable IP at its disposal.

On Friday, Paramount unveiled it had selected release dates for its next three "Transformers" films. The new trilogy comes following the successful reboot that hit theaters in 2014 with Mark Wahlberg installed as the new lead. Yet, it is not the dates that should be of interest to investors, but what movies Viacom's rivals have already slotted for that frame.

The Scheduling Conundrum

"Transformers 5" (which is just a placeholder title) is slated to hit theaters on June 23, 2017. The problem is, Time Warner Inc TWX's Warner Bros. has long had that date confirmed for its "Wonder Woman" reboot. The same issues exists in 2018, where "Transformers 6" is slated go up against the WB's "Godzilla" sequel on June 8.

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Currently, "Transformers 7" is the only inhabitant of its June 29, 2019 release date, although that would sandwich it between Walt Disney Co DIS SNE's "Bad Boys 4."

For a film series like "Transformers," which usually opens without major competition, these are not ideal options. In fact, the calendar around that timeframe reads like a map to sequel city. "Cars," "Jurassic World," "Despicable Me," "Kingsman" and "Toy Story" all have dates in that area over 2017 and 2018, as do new "franchises" to-be like "The Mummy" and "Uncharted." It's a mess of a schedule.

"Transformers" is very used to having that last week of June to itself, but that seems unlikely here. While earlier this week Warner Bros. did slip "Ready Player One" to 2018 to avoid "Star Wars 8," it is not likely to make a similar move to avoid another big brand…yet.

Paramount and Warner Bros. are looking at a game of chicken, and one studio is going to have to blink. Both studios keeping their current dates is akin to mutually assured destruction. While Paramount's "Transformers" may have an advantage, it is undeniable that if all things remain the same, both studios will see depressed totals. This is a big reason why the major theater chains are pushing for a year-round release model.

No studio likes to back off, but usually if a better option presents itself, the studio can save face. For example, "Ready Player One" is arguably in a better position following its move, since it now can get an IMAX run and street during a less crowded window.

Paramount saw the same thing with "Mission Impossible: Rogue Nation" when the film wrapped ahead of schedule. The early end allowed it to open in the summer, away from "Star Wars" (and also snare a IMAX run).

So What's The Issue?

The problem here is that "Wonder Woman" is part of a carefully orchestrated release schedule. Its placement was designed to mirror the way Marvel rolls out its Cinematic Universe with multiple connected films a year. Warner's going to be harder pressed to shift.

The big issue is that Paramount isn't taking a year off between "Transformers" films, which is creating the bottleneck. Usually, the films comer every other year (or two) and these will come back-to-back-to-back. It's a situation many studios are going to start encountering and investors would be wise to see what steps they take to clear the logjam.