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Doctor Strange director Scott Derrickson has left the sequel over "creative differences" with Marvel.
Derrickson made the original 2016 film starring Benedict Cumberbatch and had been due to deliver Doctor Strange in the Multiverse of Madness in 2021.
There's speculation that Derrickson and Marvel boss Kevin Feige disagreed about how scary the follow-up should be.
The director, whose credits include The Exorcism of Emily Rose and Sinister, had pledged "the first scary MCU film".
He made the comments at San Diego Comic Con in July, where Feige swiftly clarified that it would still be suitable for teenage viewers. "It's gonna be PG-13 and you're going to like it!" he added.
Feige has since said it would not be a horror film, and that any scary sequences would be like those made by Steven Spielberg in films like Indiana Jones and Gremlins.
Every Marvel film has been rated PG-13 in the US, meaning some material may be unsuitable for pre-teenagers.
Derrickson wrote on Thursday: "Marvel and I have mutually agreed to part ways on Doctor Strange: In the Multiverse of Madness due to creative differences. I am thankful for our collaboration and will remain on as EP [executive producer]."
In a statement to Variety, the studio said: "Marvel Studios and Scott Derrickson have amicably parted ways on Doctor Strange in the Multiverse of Madness due to creative differences. We remain grateful to Scott for his contributions to the MCU."
The first Doctor Strange film, which co-starred Tilda Swinton and Rachel McAdams, made $678m (£519m) at box offices worldwide.
Other directors who have dropped out
While a film's directors were once all powerful, replacing film-makers has become more common in recent years as the figures who control a franchise seek to ensure they have a director who shares their vision.
Directors have been fired and hired for Star Wars and James Bond movies as well as comic book adaptations.
- Patty Jenkins dropped out of directing Thor 2 because she couldn't fully get behind Marvel's script. As the first woman slated to direct a studio-backed big-budget superhero franchise film, she also knew that a flop could have big ramifications. "If I do it, and it's what I think it's gonna be, I can't help the fact that it will represent women directors everywhere, and then that's going to be bad for everybody," she told IndieWire. She went on to have a smash with DC's Wonder Woman.
- Shaun of the Dead's Edgar Wright left Marvel's Ant-Man after a dispute over the script, after he and collaborator Joe Cornish had worked on it - on and off - for eight years. "I wanted to make a Marvel movie but I don't think they really wanted to make an Edgar Wright movie," the director later explained to Variety.
- Directing duo Phil Lord and Christopher Miller left Star Wars spin-off Solo mid-production in 2017, with the franchise's head honcho Kathleen Kennedy saying they had "different creative visions". Ron Howard stepped in and steered it to a lukewarm reception that led Lucasfilm to shelve other spin-offs.
- Also in 2017, Jurassic World's Colin Trevorrow dropped out of Star Wars: Episode IX because he was "heading in a direction that many of us didn't feel was really quite where we wanted it to go", as Kennedy later put it. JJ Abrams returned to take the tiller and The Rise of Skywalker was released in December.
- In 2018, Slumdog Millionaire and Trainspotting mastermind Danny Boyle dropped out of the next Bond film in a dispute over the script, with rumours suggesting he wanted to kill off Daniel Craig's 007. His place was filled by Cary Joji Fukunaga and the film got delayed by six months. Fans will get to see the results when No Time To Die is released in April.
- Dexter Fletcher left Freddie Mercury biopic Bohemian Rhapsody over "creative differences" in 2014, only to be called back to retake the reins three years later when replacement Bryan Singer was fired in the middle of filming for "unreliable behaviour". It went on to be nominated for the Oscar for best picture, and win four more including best actor for Rami Malek.
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