Hollywood Horror Blockbuster: Two Leading Producers Will Soon Join Forces

Hollywood’s leading horror movie producers, Jason Blum and James Wan, are in advanced talks to merge their companies, a move that would create a sprawling horror film factory and greatly bolster their studio partner, Universal Pictures.

“James is probably 70 to 80 percent artist and 30 to 20 percent business person, and I am the reverse,” Mr. Blum said in an interview at Universal headquarters. Mr. Wan, the force behind “The Conjuring” and “Saw” franchises, added from Mr. Blum’s side, “We really do complement each other, yin and yang, which is part of what makes this so exciting.”

For the last 15 years, no producer of horror movies has been more successful than Mr. Blum. His company, Blumhouse Productions, which has a first-look deal with Universal, has generated about $5 billion in ticket sales, most recently with “The Black Phone” and “Halloween Ends.” Blumhouse, which has about 80 employees, is working on a new “Exorcist” trilogy. Its next film, “M3GAN,” about a singing, dancing, diabolical doll with artificial intelligence, arrives in theaters on Jan. 6.

Mr. Blum, however, wants Blumhouse to grow — a lot. He is pushing for Blumhouse to make at least eight horror movies for release in theaters each year, up from the three or four it has historically delivered. And he wants to make another slate of horror flicks for Peacock, NBCUniversal’s streaming service. Blumhouse also makes television series.

Horror has become one of only two genres that Hollywood views as fail-safe at the box office. (The other is the superhero film.) As patrons become choosier about what movies are worth a trip to the multiplex, dramas and comedies are almost uniformly struggling to sell tickets. Streaming services like Disney+ have dented demand for family-oriented films in theaters.

No film is a guaranteed ticket-seller, of course. Blumhouse’s recent “Firestarter” remake crashed and burned at the box office. But horror movies benefit from a loyal, increasingly broad fan base and a communal setting: Scares are more fun in a theater with strangers. Horror movies are also relatively cheap to make, often with budgets of $20 million or less, resulting in colossal profits when they strike a chord.

Mr. Blum’s primary challenge?

“I don’t have one idea to turn into a horror movie,” he said. “Not one. I built a business by recognizing great ideas from other people.”

Enter Mr. Wan, whose first-look deal with Warner Bros. expired in June after seven years. His production company, Atomic Monster, which has nine employees, has been involved with horror films (“Lights Out,” “The Nun,” “Annabelle: Creation”) that have taken in at least $3.5 billion at the box office over the years.

“I have so many ideas — so many ideas — more than I can handle by myself,” Mr. Wan said, adding that he would like to expand into horror-related video games, podcasts, live events and perhaps merchandise.

Mr. Blum, 53, and Mr. Wan, 45, declined to discuss the contours of the proposed deal, except to say that Atomic Monster would become a creatively autonomous label inside of Blumhouse and have a first-look deal with Universal. They hope to close the deal during the first quarter of next year.

“It really allows me a bigger canvas to paint on, if you will,” said Mr. Wan, who has something of a parallel career directing spectacles like “Aquaman” and “Furious 7.” He added, “Universal is very supportive of filmmakers and brilliant at marketing. To have partners that trust you, that believe in you, that goes a long way.” (Mr. Wan will continue to be involved with his Warner Bros. franchises. He is currently in postproduction on “Aquaman and the Lost Kingdom.”)

Mr. Wan and Mr. Blum have known each other since 2007, when they teamed up to make “Insidious,” about a haunted family. It was a blockbuster, leading to four sequels, the latest of which is set for theatrical release by Sony Pictures Entertainment on July 7.

It was actually Mr. Wan who got the ball rolling on “M3GAN.” Atomic Monster first pitched the idea to Warner Bros. executives, who passed, in part because Warner already has the “Annabelle” evil doll series. Mr. Wan then brought the project to Mr. Blum, who pounced. Universal is so pleased with how “M3GAN” turned out that it is already talking about a “M3GAN” sequel. TikTok posts tagged #M3GAN have been viewed 300 million times since the trailer was released a month ago.

In recent months, Mr. Blum and Mr. Wan started talking about merging their companies, eventually bringing in Creative Artists Agency and the Universal executives Donna Langley and Jimmy Horowitz.

A person with knowledge of the proposed deal, who spoke on the condition of anonymity because the conversations are private, said Mr. Wan would hold a substantial ownership stake in Blumhouse. Mr. Blum would still own the majority of the company, with NBCUniversal continuing as a third stakeholder.

Blumhouse’s current distribution deal with Universal runs until summer 2024, at which point Mr. Blum will have various courses of action to consider: renew, pursue a sale, shop for a new distribution partner.

The addition of Mr. Wan to the Universal stable would expand a string of coups by Ms. Langley, the chairwoman of the Universal Filmed Entertainment Group. In recent years, she has lured a murderers’ row of filmmakers to her studio, including Christopher Nolan, Phil Lord, Chris Miller, Jordan Peele and Daniels, the duo behind “Everything Everywhere All at Once.”

Ms. Langley called a combined Blumhouse and Atomic Monster “powerful and exponential.”

“James Wan and Jason Blum know how to create franchises and attract talent,” Ms. Langley said by phone. “There is a great deal they could do across the NBCUniversal portfolio, including Peacock and theme parks.”