Studio Dilemma: Risk a Box Office Flop, or Sell to Netflix?

After developing its He-Man franchise for years, Sony may take its 'Masters of the Universe' film direct to the streamer.

Call it Tom's Choice. Like all the major studios, Sony Pictures is questing for new franchises — and after years of development, it might have one with the He-Man movie Masters of the Universe.

But while the picture is on the calendar for release in March 2021, sources tell The Hollywood Reporter that studio chairman Tom Rothman is exploring the prospect of getting risk-free cash for the pricey project by making it for Netflix instead. A studio source says talks are preliminary, but such a deal would make Sony the next studio after Paramount to start making movies belonging exclusively or almost exclusively to the streamer.

So there's the dilemma: seek a studio or financier to partner on the project, holding on to various rights and territories, or make the safe deal with Netflix (which would not seem quite so safe if the film were a huge hit and it already was sold). Studios selling to streamers is an accelerating trend: Paramount is looking into dedicating a division to that purpose, while a source with knowledge of the situation says Sony's TriStar label is devoting resources to stream­ing deals. And indie studio A24 inked a multi-year agreement in 2018 to produce a slate of films for Apple.

Even Warners may sell to outsiders despite its parent, WarnerMedia, allocating massive resources to its own streaming service, HBO Max. Disney and Universal are likely to sit this out for now, making movies for their own services, Disney+ (launching Nov. 12) and Peacock (debuting in April 2020).

As for the others, says a rep involved in a number of deals, "They have this backlog of films that isn’t going to get made and released theatrically." After long seeing Netflix as the enemy, this person says, studios "are turning around and saying, 'Let’s join ‘em. We can’t beat ‘em.'" Meanwhile, Netflix is said to be looking to make a quality tentpole a quarter with international appeal, creating a healthy demand.

Sony has been developing Masters of the Universe since 2007, perhaps making it that much less appealing to sell given that the studio finally has a version that it wants to make. But Netflix has the series She-Ra and The Princesses of Power plus an upcoming Kevin Smith He-Man anime series. The Netflix negotiation is being handled for now by newly upped Sony Pictures Motion Picture Group co-president Sanford Panitch.

According to sources, Sony wants to bolster its bottom line, in part following a significant loss on reboot Men in Black: International. At an internal meeting in early October, sources say Josh Greenstein, co-president of the group, raised concerns that the studio has spent too much on marketing, especially on titles that appeared to face headwinds leading up to release.

The Sony talks come just a month after it sold off Harbinger, an adaptation of a Valiant Entertainment comic starring superpowered teens. While the terms of the deal aren’t known, Harbinger was meant to go into production this summer or fall.

This year, Sony has had a major theatrical hit with Spider-Man: Far from Home (co-produced with Disney’s Marvel studios), which grossed $1.3 billion worldwide. And, after a public parting over a deal gone south, Disney and Sony are back in business for a third Spider-Man film, slated for 2021. Meanwhile, Quentin Tarantino’s Once Upon a Time in Hollywood is the year's top-grossing original film at $360 million.

Borys Kit and Pamela McClintock contributed to this report.

This story appears in the Oct. 9 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.