Lionsgate to Slash 'Ascendant' Budget as 'Divergent' Franchise Fizzles

"The core of the story is being hollowed out by splitting the final novel [into two parts] and spiraling out of control," says one box-office analyst as the Shailene Woodley series shrinks rather than grows in its third installment.

In the wake of the weak box office of Allegiant, the third picture in the Divergent franchise based on Veronica Roth's young adult novels, sources say Lionsgate will cut the budget of the fourth and final movie in the series, Ascendant, due to start shooting this summer.

"The budget for the next one will be reduced [compared to the previous film]," a well-placed production source tells The Hollywood Reporter. "They haven't said by how much," the source adds, but it is expected several millions of dollars will be trimmed at the very least.

Sources estimate Allegiant's budget at $110 million. The upcoming picture is still being written and no final budget has yet been determined.

The movies have been a disappointment for Lionsgate, which was hoping the Shailene Woodley vehicles would boost its fortunes, following the earlier successes of the Twilight and Hunger Games series. (Twilight was made by Summit Entertainment, which was bought by Lionsgate.) Both expanded Hollywood's awareness of the potential for young-female-driven franchises.

The Divergent Series: Allegiant (to use its full title) opened this weekend to an estimated $29.1 million in North America. That was 44 percent down from the previous outing, Insurgent, which opened in March 2015. The new movie also is struggling badly overseas, with a take of $54 million from international theaters and a global total of $83 million.

"There's never been quite a YA [young adult] drop-off like this," says box-office analyst Jeff Bock. "Wait. Yes, there has. Hunger Games suffered similar results from sequel to threequel, as the North American debut of Mockingjay — Part 1 was off nearly $35 million. That didn't hurt Lionsgate too much, however, as Hunger Games overperformed from the get-go — not the case for Divergent."

Lionsgate's strategy with its YA franchises — Suzanne Collins' Hunger Games trilogy and Stephenie Meyer's four Twilight novels — has been to split the final installment into two parts, as Warner Bros. did with its wildly popular Harry Potter films. The move worked with Twilight and, to a lesser extent, with Hunger Games, but the question now is whether Lionsgate film chiefs Rob Friedman and Patrick Wachsberger overplayed their hands in splitting Divergent's three books into four films. Allegiant scored a franchise-low 10 percent "fresh" rating on Rotten Tomatoes and received a mediocre B CinemaScore, compared to an A- and A for the first two. Fans already have indicated their displeasure that the last book in Roth's series has been split into two movies.

"It comes down to this: The core of the story is being hollowed out by splitting the final novel [into two parts] and spiraling out of control," adds Bock. "Not only is story momentum being truncated, but this type of corporate greed has caused something even more dire than declining grosses — it's completely destroying the brand name. Ding dong, dystopia is dead. At least in the YA genre."

The performance of the latest installment does not bode well for Ascendant, due out June 9, 2017. In addition to fan fatigue, the pic will face stiff competition from the sequel to Paramount's World War Z and the reboot of Universal's The Mummy, starring Tom Cruise. "This franchise simply isn't strong enough to compete with the big boys of summer," says Bock.

Some observers believe the series is too reminiscent of Hunger Games, while others say Woodley lacks the star wattage of Jennifer Lawrence. But one high-level insider blames the rapid turnaround imposed by Lionsgate, arguing that its executives were under so much pressure to raise their company's stock price with a hit in each calendar year that they did not leave enough time for quality.

"To make their date, they were just racing forward," this executive says. "The whole company is much more interested in delivering product than maintaining quality control. That's why there are so many bad movies being made there — because, unlike anywhere else I've ever worked, the whole thing is just, 'Move it forward, move it forward, move it forward.'"

The aggressive timetable, which would have required Allegiant director Robert Schwentke to begin work on Ascendant before finalizing Allegiant, is said to have hastened his exit from the final movie. Lee Toland Krieger (The Age of Adaline) was hired instead.

The Divergent series has been dogged by problems, not least the exit of director Schwentke and what sources say was discord during production on Allegiant. "Between visual effects — which were on an impossible schedule — and music, he was working seven days a week, then had to start work on the next one," says the production source of Schwentke. "He put on weight. He was really wiped. It was just exhaustion. In his deal, there was a trigger time where he had to decide if he was going forward. He was very torn, because he loves his team. But it wasn't possible."

A rep for Lionsgate denies rumblings that Woodley was dissatisfied with Schwentke. But the production source sticks to his position. "She was complaining about him, but she was equally complaining about the speed of the movies and not taking the time to get a script right," he maintains. Krieger was signed only after Woodley gave her approval. "The different contestants were discussed with her," the source says, "and we knew he was someone who was sensitive to actors."

Other recent Lionsgate releases have included three major let-downs: The Last Witch Hunter with Vin Diesel (which opened Oct. 23 and grossed $27 million domestic and $140 million worldwide); Mortdecai with Johnny Depp (which opened last January and has made $47 million worldwide); and Gods of Egypt (which cost a reported $140 million and has earned $128 million worldwide).

Lionsgate's stock has been drifting for a year as Wall Street has mulled a post-Hunger Games future, realizing the Divergent series wouldn't be able to fill the gaping hole. The stock skidded badly when the last installment of Hunger Games underperformed in November. When the company on Feb. 4 reported lackluster quarterly earnings — blaming Hunger Games — FBR analyst Barton Crockett chopped 26 percent off his price target. After Allegiant opened weak, the stock dropped another 2 percent on Monday, capping off a four-month slide of 45 percent. Starz, which is exploring a merger with Lionsgate, has seen its shares fall 11 percent in the same timeframe as it has grappled with entirely different issues: cord-cutting and skinny bundles.

Analysts were divided over how the series' problems would affect the company, though some stayed bullish.

"Given poor reviews and very unpredictable box office for YA films, we admit to actually being slightly relieved, with the film likely to achieve cumulative U.S. box office approaching $70 million," wrote Matthew Harrigan of Wunderlich Securities after the opening weekend. But analyst Ben Mogil of Stifel Nicolaus lowered his Lionsgate rating to a "hold."

Amid the series' wilting box office, speculation has been rife about whether heads will roll at Lionsgate. There has been considerable talk about executive movement at the top of its film division, not least about the future of co-chairman Friedman, who joined Lionsgate from Summit, which he headed with Wachsberger.

How quickly anything might happen is open to debate. One source notes "those rumors have been around for years." Friedman gave Summit a huge boost with the Twilight saga, which was produced by his former Paramount colleague Karen Rosenfelt and which paved the way for the Lionsgate purchase, completed in 2012 for $412 million.

Lionsgate declined to comment.

Paul Bond contributed to this report.