572This just in: Anchorman 2 is not dead at Paramount Pictures. Not yet, anyway. But there is a budget gap of about $30 million to overcome.

Adam McKay’s Twitter late last week practically pronounced the project dead. And then Ben Stiller indicated that his Zoolander sequel wasn’t on the firmest ground at Paramount either when he Twittered: “Ron Burgundy and Derek Zoolander looking to appear in sequels. Both men destitute, without means or intellect to fund their own comebacks.”

What’s really going on? Paramount insiders said that the studio is eager to make both sequels, but only if each costs around $40 million. I’m not sure what the gross outlay will be, but it seems sure that it’s north of 20% on each film. Zoolander 2, which will also star Owen Wilson, has started development, with Tropic Thunder‘s Justin Theroux writing the script and directing. But the filmmakers behind Anchorman 2 won’t even start on a script unless Paramount moves the budget up to a range that is probably closer to $70 million.

All of the participants are bigger stars than when the originals came out, and they are always asked the same question during film junkets for other films: when is that sequel coming? And, from Anchorman‘s gang battle of rival news teams to the Zoolander gas station scene with horseplay between male models that culminates in a mass funeral, there is a plethora of memorable scenes and punchlines that stamp these as cult favorite comedies with established fan bases who want more.

So why is Paramount playing budget hardball when it just made a staggering deal on a Sacha Baron Cohen pitch that will pay him what amounts to $20 million against 20% of first dollar gross, with a gross outlay that rises to 30% after the studio recoups and earns its distribution fee? Paramount also paid writers Alec Berg, Jeff Schaffer and David Mandel between $3 million and $4 million, and gross as producers.

The studio was comfortable with the gross deal and a $65 million budget that includes the screenwriting fees, because Baron Cohen has proven himself a reliable overseas draw, studio insiders say. Borat grossed $128 million domestic, and $133 million overseas. While Bruno wasn’t viewed as a big success, the film’s domestic gross of $60 million was surpassed by its $78 million overseas take.

Contrast that to Anchorman. Made on a $25 million budget, the comedy about the local San Diego TV news team grossed $85 million domestic, but only $5 million foreign. Zoolander grossed $45 million domestic, and did $15 million foreign. Now, insiders on both films claim that is not necessarily indicative of sequel potential. Zoolander came out September 28, 2001, a time when the world was not in a laughing mood after the 9/11 terror attacks. Stiller’s movies generally perform strongly overseas: Meet the Fockers, for instance, grossed $279 million domestic and $237 million overseas. Anchorman‘s overseas distributor UIP doesn’t seem to have pushed the film overseas. There would be more for Paramount to sell  this time around, since McKay, Will Ferrell, Judd Apatow, Steve Carell and Paul Rudd are more prominent than they were in 2004. All are prepared to return–but they aren’t cheap. zoolander

Comedies with inherently American story-lines usually do most of their business domestically—Talladega Nights, a domestic blockbuster at $148 million, turned in $15 million in overseas ticket sales. The Hangover was the big anomaly, grossing $190 million foreign to go with its $277 million domestic gross.

It sounds to me like both films will be a struggle but could still happen, once the Twitter posturing is over. McKay’s subsequent Twitter message–doubting Paramount would allow the film to move elsewhere–is certainly true. Paramount is turnaround-shy after dropping Twilight and John Carter of Mars, the latter of which is being turned into a big Disney film. If Paramount let go of either, the studio would likely insist on a gross participation comparable to the 7.5% of first dollar gross New Line got when it let go of Dear John to be made by Relativity and distributed by Sony. That would certainly limit the suitor pool for both films.

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