Cary Fukunaga‘s adaptation of Stephen King‘s It seemed to be making some real progress, what with Will Poulter entering talks earlier this month to play Pennywise. But now it may be deader than one of the killer clown’s victims. Fukunaga has dropped out as director, after clashing with the studio. Read up on the Cary Fukunaga It exit after the jump.

TheWrap broke news of Fukunaga’s departure. It was supposed to get going this summer in New York, so this is a last-minute shakeup. According to their sources, Fukunaga had been butting heads with the studio about his vision for the project, following budget cuts instituted by studio New Line. (It was originally set up at Warner Bros. before jumping over to New Line.)

Given the laundry list of issues, it’s kind of surprising Fukunaga didn’t jump ship earlier. Among other things, New Line took issue with Fukunaga’s insistence on shooting in New York, instead of a cheaper location. The studio was also made nervous by the disappointing opening weekend performance of Fox’s Poltergeist, reportedly in part because that marketing campaign also featured a clown.

And those are the smaller arguments. The studio and Fukunaga also disagreed about the basic direction of the project. Fukunaga wanted his It adaptation to consist of two films, with the first featuring the main characters as kids and the second following them into adulthood. Jeff Sneider adds that Fukunaga was going for something “classy and artful,” along the lines of Stanley Kubrick’s The Shining.

In contrast, New Line wanted a single, more commercial movie. It felt iffy about the prospect of marketing a kid-centric movie to adults, and preferred to put the younger and older versions of the characters in the same film. Poulter’s casting apparently didn’t help matters either. While he’s a promising up and coming actor, he’s not exactly the kind of proven, big-name draw that reassures anxious studio execs.

Fukunaga had written the scripts for both It movies with Chase Palmer. Roy Lee, Dan Lin, Doug Davison, Seth Grahame-Smith, and David Katzenberg are producing.

As of now, it’s not clear whether New Line will go back to square one with It, or try and stay on track with a new director. Either way, the current incarnation of the project is dead. And with him out, it seems likely New Line will try and make the less artsy single-film version happen.

Now that he’s off of It, Fukunaga will likely shift his attention to some of the other items on his to-do list, including a TV miniseries based on Caleb Carr’s The Alienist and an anti-bullying drama about Joe and Jadin Bell.