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Looking into how Marvel and DC have been trying to set up 'Shared Universes' longer than most people realise, I found out that an earlier attempt at a Batman vs. Superman film was mooted because the actor being considered (Christian Bale) had already been approached to play the role of Superman by another director (Darren Aronofsky), in another version of Batman.

The original production (to be directed by Wolfgang Petersen) was greenlit by the studio, but couldn't attract Bale, who was attached to another (ultimately unrealised) Aronofsky's Year One adaptation... but how can this make sense?

Warner Bros own the rights to the Batman character, so there is no way to make a film without entering into negotiations with them. If Petersen's film was greenlit, then he must have obtained permission from DC. If Bale wouldn't walk away from Aronofsky's version, it must also have had a shot of being made, or even green-lit: if DC didn't want the movie made, all they would need to do is withhold the rights.

It stands to reason that DC was in negotiation with both directors simultaneously, but if they greenlit Petersen's film it would no longer be in their interests to support, or even entertain, Aronofsky's. Development should have been cancelled immediately, freeing Bale up to move onto Petersen's, should he wish to.

Why would DC entertain two competing productions?

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"In development" doesn't mean much WRT a movie, so it was perfectly normal for Warners to be involved in multiple projects at once. Especially when there are multiple "bosses" involved:

And then, all of a sudden, Warner Bros. seemed to change its mind about Batman vs. Superman. Studio President Alan Horn was apparently convinced it was better to relaunch both heroes separately, with J.J. Abrams’ Superman script and some version of Aronofsky’s Batman origin story. Horn distributed copies of the Batman vs. Superman script and Abrams’ Superman: Flyby script to 10 Warner Bros. execs, and they all preferred the Superman script.

Warner Bros. VP Lorenzo di Bonaventura was still a staunch supporter of Batman vs. Superman, and argued that they could do the team-up movie first and then release Superman: Flyby. But J.J. Abrams, in one meeting, reportedly told di Bonaventura that “You can’t do that,” because it would be akin to releasing When Harry Divorced Sally followed by When Harry Met Sally.

In the end, according to Hughes’ book, the fate of Batman vs. Superman apparently came down to Alan Horn versus Lorenzo di Bonaventura — and after BvS was killed, di Bonaventura left the studio a few days later.

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