It's been about 11 weeks since Watchmen debuted and I don't see a need to wait any longer to do a very small postmortem on it. Critics hated it, bloggers (who mostly consisted of fans of the graphic novel) loved it. No where near enough people went to see it to justify its budget.
I think that most people seemed to have settled on $150 million for production and an unknown number for marketing, which I guess could have ranged from $20 million to $50 million or more.
The bottom line here is that for what it cost to make, especially with the foreign distribution deals that diluted WB's profit potential, this film needed to make over $300 million domestically just to break even at the box office, and obviously that didn't happen. The domestic take of $107 million (May 21) would mean just $59 million for the studio which is barely a third of what they needed. Honestly, even if this hadn't been the case and Watchmen had been a wild success here at home, they still would have been in a hole due to not getting foreign receipts. And even if they got some of those receipts, it wouldn't have been nearly enough to help.
Fanboys can hush up now because DVD revenue isn't going to save this film either, it may not have been a disaster, but it's about as close to being a flop as you can get without getting fired. (This is the part where you're missing the sarcasm in my non-existent voice, since people fail upwards in Hollywood.)
When people said that Watchmen was "unfilmable" I said they were full of it. This isn't the first graphic novel ever adapted to film and certainly not the longest piece of literature adapted. It may have played better as a television mini-series or even a rehashed trilogy but that hardly means it was impossible to shoot as a feature film. If it didn't work then it was because the people who made it (the studio is just as responsible for that as the creative talent for many reasons) had failed to do their jobs. That doesn't mean it's their fault personally, but it also doesn't mean that if they couldn't do it, that it couldn't be done at all.
And it's not like they won't try to do it again. It was only five years between remakes of The Hulk (both failed in my opinion and nobody has said that The Hulk was unfilmable) and the reboots are coming so fast and furious that it may not even take that long before somebody tries again.
Given the legal dispute between studios over who owned the feature rights, maybe Fox will decide that it can succeed where Warner Brothers didn't.
Update (2009-05-26): A reader left a comment challenging my numbers. Legendary Pictures apparently co-financed Watchmen (I didn't know so here's the correction), but I was unable to verify how big of a percentage they contributed towards production and marketing costs. The commenter says WB was only on the hook for 25%, which, given the relative size of the two studios and the various interactions involved (WB owns the rights which is why they got sued by Fox, not Legendary), sounds somewhat backwards.
Regardless, my conclusion isn't refuted by this new fact because all you're doing is reducing costs and revenue along similar lines. If WB only paid 25% into the budget, their cut is going to be a lot smaller as a result. If you add WB and Legendary's stakes together then you still end up in the same bad place: the pic lost money for the companies that paid for it. Whoever paid for it has to share the domestic distribution only becuase Paramount owns the foreign receipts. The budget was $150 million (cited in the comments) and domestic was only $107 million, and theaters take almost half of that (44% -- $47 million).
The result is still the same, WB lost huge money on Watchmen.