US Box Office Hits 16-Year Lows As Weak Film Slate, Heavy Storms, Mayweather Fight Create Lack Of Interest

The film industry is looking more and more like a Coen brothers' flick: bleak with no catharsis.

Producers are entering an annual slow point, and even by August standards, this weekend was bad.

By Box Office Mojo’s preliminary estimates, the top 12 domestic films brought in $48.9 million in U.S. screenings, representing a 50.5-percent annual decline and a 4.7-percent estimate miss. Lions Gate Entertainment Corp. (USA) LGF’s “The Hitman’s Bodyguard” brought in just $10.1 million and Time Warner Inc TWX’s "Annabelle: Creation" made just $7.4 billion, coming in short of FBR Capital Markets estimates by 10.6 percent and 14.9 percent, respectively.

Hollywood studios can blame Hurricane Harvey and the pay-per-view fight between Floyd "Money" Mayweather and Conon McGregor for this weekend’s 16-year low, but FBR blames content.

“The main problem was a dearth of interesting releases this weekend,” analysts Barton Crockett and Zack Silver wrote in a Monday note. “Next weekend, we go from thin to vacuous, with no new wide releases.”

They anticipate a 30-year low for the four-day Labor Day weekend representing a 59-percent annual box office decline. Last year’s $19.7 million for “Don’t Breathe” and $12.7 million for “Suicide Squad” are beyond compare with this year’s expected first. In its third weekend, “The Hitman’s Bodyguard” is slated to bring in about $7.1 million.

The poor turnout will contribute to an estimated 25-percent year-over-year decline in quarter-to-date sales.

However, FBR sees potential catalysts in the Sept. 8 release of Warner Bros’ “It” and Sept. 22 release of “Kingsman: The Golden Circle.” With positive reports, these films might just propel the industry to meet quarterly estimates: an underwhelming annual drop of 20.5 percent.

FBR maintains a Buy on Time Warner and Lions Gate with Neutral ratings on Walt Disney Co DIS, Viacom, Inc. VIAB and Twenty-First Century Fox Inc FOXA, primarily justified by non-film-related analyses.