Can Pixar's 'Up' Save Paramount Pictures?

I ran the numbers and I'm pretty sure that Sumner Redstone, owner of Paramount Pictures, is hoping that Pixar's 'Up' will dominate the box office when it opens on May 29th. Why is Paramount's head cheerleader rooting for the other team? It's a long and twisted tale, and at the heart of it is a father's love for his daughter. Sumner wants Pixar to succeed at Paramount's expense because his daughter bet the farm on Disney Digital 3D.

If you've been following my blog, you know that I cannot stop watching the car-crash that is the Redstone family. Back in October, Sumner had to part with 12% of his family fortune after he violated covenants on $1.6 billion in debt his holding company, National Amusements, had amassed. When the news broke the Wall Street Journal repeatedly blamed Shari Redstone (Sumner's daughter) for the family's financial jeopardy. Shari runs a theater chain for the family and had invested heavily in Disney Digital 3D gear for the opening of 'Meet the Robinsons'.

'Meet the Robinsons' was a huge bomb, and it remains to be seen if the box office for 'Bolt' was aided by its limited 3D release. In the two years the gear has been sitting around Shari's theater chain there was only one use of it that really made sense, and that was the 'Hannah Montana & Miley Cyrus: Best of Both Worlds Concert'. While that one run was profitable, at no other time has the chain profited from the massive expense that Shari incurred.

And right now Sumner needs profit more than he needs his legs. Another $800 million of the family's debt is due this month and Sumner is scrambling for cash. Today he sold his $800 million stake in Midway Games to help pay down the debt, but unfortunately he sold his stake for $799.9 million less than he paid for it. That's how desperate Sumner has become: he gave up control of Midway Games for a paltry $100,000 (I think another buyer offered a handful of magic beans, but Sumner's mother made him turn that guy down). Sumner's hoping to eventually benefit from the tax loss, but anyone that's willing to walk away from $800 million needs to think twice about the usefulness of his legs.

The only meaningful assets that Sumner has left are the Viacom properties and Shari's theater chain. Sumner has said he will not sell any part of Viacom and that he would consider selling the theaters. It's reasonable to conclude, then, that Sumner's only consideration at present is getting the best price possible for those theaters. To get a decent price Sumner needs a hit movie to utilize all the Disney Digital 3D gear that Shari bought (if that gear turns out to be a money-maker it will greatly enhance the value of the theater chain).

Which brings us to Pixar's 'Up'. It turns out that 'Up' is the only movie in the pipeline that will have anything to do with Disney Digital 3D. If 'Up' plays all summer to packed houses it just might bring in enough revenue to keep the Viacom empire intact. Pete Docter and Bob Peterson, the directors of 'Up', may be Sumner's only hope.

I sure hope those guys know comedy.