Disney’s Strong Earnings Report and Outlook

 by Ray Keating

News/Analysis

DisneyBizJournal.com

February 7, 2024

 

Disney surprised the markets with a strong earnings report today, along with a boatload of announcements. Indeed, the first quarter 2024 earnings report was one to be appreciated by stockholders.

Let’s get to what I see as the key takeaways, and there are a good many.

 

First, diluted earnings per share (EPS) excluding certain items jumped by 23 percent versus the same period last year – from $0.99 to a $1.22. For good measure, Disney offered some rare earnings guidance, projecting that full year fiscal 2024 EPS excluding certain items would increase by at least 20 percent versus 2023, to approximately $4.60.

 

Second, the company announced a 50 percent increase in its semi-annual dividend to $0.45 per share, which will be distributed in July.

 

Third, Disney also announced a stock buyback of $3 billion during the current fiscal year, with further buybacks seemingly slated for the future.

 

Fourth, the company was bullish on its cost savings and efficiency undertakings, noting that it would hit or exceed the previously announced $7.5 billion cost savings for the year.

 

Fifth, the company confirmed, once more, that it was on track to arrive at streaming profitability by the end of the current fiscal year. CFO Hugh Johnston pointed out that the objective on the streaming front is to achieve double-digit margins. According to Johnston, the path to such levels of profitability lies with growing subscriptions via paid sharing (which got a good deal of attention), lower churn, and international growth, as well as pricing and assorted efficiencies. Iger noted that the company is “working toward” what Netflix has achieved. 

 

In terms of streaming subscriptions, Hulu saw subscribers increase by 1.2 million in the quarter. Meanwhile, as largely expected, Disney+ subscriptions decreased by 1.3 million, but Disney also projected Disney+ core subscribers to increase by 5.5 million to 6 million in the second quarter.

 

Sixth, Disney announced that it entered into a partnership with Epic Games, with a $1.5 billion equity investment in the gaming enterprise. This partnership will result in the creation of a Disney Universe existing alongside and interconnected with Epic’s Fortnite. Disney CEO Bob Iger noted the need for the company to tap into demographic trends regarding gaming, and the opportunity to leverage the company’s intellectual property (IP) accordingly. He also highlighted the opportunity in this Disney digital world to purchase digital goods and perhaps in the future physical goods.

 

Seventh, since Taylor Swift seems to be everywhere, Disney announced that her “Eras Tour” concert film will come exclusively to Disney+ on March 15, with additional content not in the original release.

 

Eighth, it was noted that 70 percent of the announced plan to invest $60 billion on parks over the coming decade will go to increased capacity, with every park location and the high seas being affected. Annual announcements are expected to come from the company each year starting in 2025.

 

Ninth, a full-slate ESPN standalone streaming option will be launched in August 2025 or the fall of that year. This ESPN streaming option will include all ESPN programming, and will integrate betting, e-commerce, stats and personalization. In addition, the previously announced streaming sports joint venture with Fox and Warner Bros. Discovery is scheduled to launch this fall.

 

Tenth, all parks were profitable in the quarter, with growth in international parks particularly strong. And it was repeated that the company is expecting to “turbocharge growth” in the parks. The cruise line got notable attention in terms of expanding opportunities. It was noted in the earnings report: “At Experiences, we generated all-time records in revenue, operating income, and operating margin in the first quarter…” As for key sources of profitability on the Experiences front for the quarter, four were highlighted: Shanghai Disneyland, Hong Kong Disneyland, the Disney cruise line, and the latest Spider-Man video game.

 

Eleventh, on the movies and franchise fronts, it was announced that the planned Moana television show was being transformed into a theatrically released movie, set for November of this year. Meanwhile, it’s hard to say if something should or should not be read into the fact that the only Star Wars movie specifically mentioned by Iger was the one featuring The Mandalorian and Grogu. For good measure, Iger noted the slowdown in production on the Marvel front, declaring that there would a “focus on stronger franchises” going forward. In addition, the forthcoming Kingdom of the Planet of the Apes movie received a fair amount of attention. It has a release date of May 10, 2024.

Iger’s assessment was summed up in a statement in the earnings report: “Just one year ago, we outlined an ambitious plan to return The Walt Disney Company to a period of sustained growth and shareholder value creation. Our strong performance this past quarter demonstrates we have turned the corner and entered a new era for our company, focused on fortifying ESPN for the future, building streaming into a profitable growth business, reinvigorating our film studios, and turbocharging growth in our parks and experiences… Looking at the renewed strength of all of our businesses this quarter – from Sports, to Entertainment, to Experiences – we believe the stage is now set for significant growth and success, including ample opportunity to increase shareholder returns as our earnings and free cash flow continue to grow.”

 

Finally, regarding the activist investor challenges facing the company with the upcoming April 3 shareholder meeting, when asked about it on CNBC, Iger declared that those individuals didn’t understand the Disney business, nor the Disney brand. He also spoke of the company “acting with a sense of urgency,” and that “all of us are optimistic.” When it came to streaming, Johnston also used the word “urgency,” that is, there is an “urgency to get to a good sustainable business.”

 

Why all the “urgency” talk? That’s what happens when activist investors lurk heading into a shareholder meeting, and people have been focusing on the under-performance of your stock.

 

In after-hours trading, at the time of this writing, Disney’s stock price was up by more than six percent.

 

__________

 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Support the Daily Dose of Disney with Ray Keating Podcast at https://www.buzzsprout.com/1724143. Subscribe at the $8 or $10 level, and get The Disney Planner: The TO DO List Solution by Ray Keating. Remain a supporter and you'll get a FREE BOOK by Ray Keating every six months going forward. Thanks!

 

The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.

 

Consider other books by Ray Keating, including…

 

• The Pastor Stephen Grant thrillers and mysteries. There are 18 books in the series now.

 

• Pre-order The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist. Signed books here and Kindle editions here.

 

• Order The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist. Signed books here.  And Kindle and paperback editions here.

 

• The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks at RayKeatingOnline.com or paperbacks, hardcovers and Kindle editions at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel is at Amazon. 

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

“The Marvels” Ranks as Worst MCU Movie Box Office

 by Ray Keating

Analysis/Commentary

DisneyBizJournal.com

December 4, 2023

 

The Marvels, which opened domestically on November 10, went from the worst opening for a Marvel Cinematic Universe movie to the worst box office overall among these films. Given the company’s poor box office performance of late, is Disney going to get serious about getting its movies back on track from both quality and costs perspectives?

DisneyBizJournal noted, “The Marvels had the worst opening weekend of any MCU movie. According to BoxOfficeMojo.com, the domestic take was $47 million and the international box office was $41.5 million.” It also was pointed out that the film had a production budget estimated at $274 million, with marketing/post-production costs usually running anywhere from 50 percent to 100 percent of the production costs.

 

Variety reported, “After four weeks on the big screen, the comic book tentpole is running out of steam with $80 million in North America and $197 million globally. There would typically be optimism that attendance could rebound over the busy holiday season, but Disney apparently doesn’t expect that to be the case. The studio wrote on Sunday in a note to press, ‘With “The Marvels” box office now winding down, we will stop weekend reporting of international/global grosses on this title.’”

 

Yikes. That’s astounding – especially failing to reach $100 million domestically.

 

Variety also reported, “Now, as the film nears the end of its theatrical run, box office revenues won’t top 2008’s ‘The Incredible Hulk’ ($264 million, not adjusted for inflation), which previously stood as the lowest-grossing entry.”

 

As DisneyBizJournal has noted previously, assorted industry reports indicate that studio take is about 55 percent of the domestic box office (a bit higher with the earliest box office take), and anywhere from 20 percent to 40 percent of foreign ticket sales. Our very generous assessment for Disney, therefore, pointed to The Marvels needing to earn more than $950 million to start making a box-office profit.

 

The Marvels estimated $197 million worldwide box office amounts to a breathtaking theatrical release loss for Disney.

 

Disney CEO Bob Iger has done a dance recently trying to explain the poor performance of this film, as well as others. For example, Variety quoted Iger declaring, “We got to the point where if a film didn’t do a billion dollars in global box office, we were disappointed. That’s an unbelievably high standard, and I think we have to get more realistic.”

 

Indeed, but there are two key problems in this equation that Disney seriously needs to address. The first is simply quality storytelling. It all has to improve, from story to characters to special effects. The second is the astronomical costs of Disney filmmaking, including MCU films. The idea that the breakeven point for a movie like The Marvels was beyond $900 million in box office revenues is outrageous. 

 

Just because you expect a movie to top $1 billion at the box office doesn’t mean that you should budget matters so that you only start making money on or around that revenue point. Hollywood long has had trouble keeping costs under control, but the problem seems to have gotten far worse recently, which is strange given the enormous advancements on the tech front that should bring costs down, as is the case in almost all other industries.

 

There certainly has been a lot talk about “fixing” things at Disney, but it remains hard to detect much of substance happening regarding movies in terms of quality (perhaps other than the promotion for Dave Filoni on the Star Wars front) or costs. Disney has its work cut out for it. And yes, it requires fresh thinking and new blood. After all, just because the company has recovered from periodic movie lulls in the past is no guarantee that this will just automatically happen once again. Iger talked a great deal about innovation being an ongoing process in his book The Ride of a Lifetime. He’s right, and Disney needs innovation to be reinvigorated on the movie front right now.

 

__________

 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Support the Daily Dose of Disney with Ray Keating Podcast at https://www.buzzsprout.com/1724143. Subscribe at the $8 or $10 level, and get The Disney Planner: The TO DO List Solution by Ray Keating. Remain a supporter and you'll get a FREE BOOK by Ray Keating every six months going forward. Thanks!

 

The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.

 

Consider other books by Ray Keating, including…

 

• The Pastor Stephen Grant thrillers and mysteries. There are 18 books in the series now.

 

• Order The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist. Kindle editions and paperbacks via Amazon here and signed books here. And don’t forget the first book in this growing series, i.e., The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel is at Amazon. 

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Signed editions of Ray’s books are at www.RayKeatingOnline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Disney’s Marvel Still Fixing Rather Than Building

 by Ray Keating

Analysis/Commentary

DisneyBizJournal.com

November 13, 2023

 

The news for Disney regarding the opening weekend of The Marvels wasn’t good, but then again, it’s hard to say that it was unexpected. This is the most recent signal that Disney CEO Bob Iger might have been a bit premature in declaring that the company was shifting from a “fixing” stage to a “building” stage during the company’s earnings call last week.

The Marvels had the worst opening weekend of any MCU movie. According to BoxOfficeMojo.com, the domestic take was $47 million and the international box office was $41.5 million. Reviews are generally poor. And reports put the production budget alone at approximately $274 million. Marketing/post-production costs are going to run anywhere from 50 percent to 100 percent of the production costs. 

 

And keep in mind that Disney doesn’t take all of those box office revenue dollars, with a major chunk going to movie theaters. As DisneyBizJournal.com has previously noted, “It needs to be pointed out that all of the box office gross doesn’t go to Disney. Various industry reports note that studios take in about 55 percent of the domestic box office, and anywhere from 20 percent to 40 percent of foreign ticket sales.” It also should be noted that the studio take domestically is a bit higher with the earliest box office numbers. 

 

Even if we use a very generous breakdown for Disney, The Marvels would have to take in more than $950 million to start making a box-office profit.

 

So, you’re looking at another case where Disney’s inability to control costs, combined with another Marvel under-performer in terms of quality, means a box-office bomb.

 

And consider the news that Captain America 4 – Captain America: Brave New World – has not just been pushed from July 2024 to February 2025 due to the writers’ strike, but also, reportedly, for major reshoots due to poor test scores. And those reshoots appear to be major, and lasting a few months. 

 

And then there are the major changes being undertaken for the return of Daredevil to Disney+. 

 

On Disney’s recent earnings call, Iger stated his belief that quantity can undermine quality, and admitted, “We lost some focus.” That might be an understatement in terms of both quality of storytelling and acting responsibly in terms of costs. And “fixing” Cap 4 and Daredevil will only drive costs higher.

 

And now, the only MCU film scheduled for 2024 is Deadpool 3. 

 

Are there bright spots? Disney+’s Loki has fully dropped season 2, and both seasons were excellent. And the trailer for Echo looked surprisingly interesting. But what else is there?

Disney captured lightning in a bottle with its run of MCU films through Avengers: Endgame. And there was plenty of quantity over that stretch, and but for a few misses, quality largely reigned. But since then, quality has been the exception. 

 

In terms of the MCU, Disney still has plenty of fixing to do, and perhaps the best term looking ahead is “rebuilding.”

 

__________

 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Support the Daily Dose of Disney with Ray Keating Podcast at https://www.buzzsprout.com/1724143. Subscribe at the $8 or $10 level, and get The Disney Planner: The TO DO List Solution by Ray Keating. Remain a supporter and you'll get a FREE BOOK by Ray Keating every six months going forward. Thanks!

 

Consider books by Ray Keating, including…

 

• The Pastor Stephen Grant thrillers and mysteries. There are 18 books in the series now.

 

• Order The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist. Kindle editions and paperbacks via Amazon here and signed books here. And don’t forget the first book in this growing series, i.e., The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel is at Amazon. 

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Signed editions of Ray’s books are at www.RayKeatingOnline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Daredevil, Source Material, Quality and Costs

 by Ray Keating

Analysis

DisneyBizJournal.com

October 17, 2023

 

Producing a quality product while keeping costs under control is good news in free enterprise, with owners/shareholders and customers both being quite pleased. At the opposite end, seemingly out-of-control costs combined with eroding quality spells trouble.

When it comes to movies and streaming shows in recent years, with a few welcome exceptions, the general trend for Disney has been poor-to-middling quality combined with sky-high costs, or at best, pretty good productions saddled with insurmountable costs. That’s part of the reason we heard recently that the company was going about slashing costs.

 

Of course, though, the point is to reduce costs while enhancing quality. We see this across industries, with assorted innovations and efficiencies creating products of greater value in the market, while at the same time costs are reduced and productivity is enhanced. Hollywood, however, is an industry that often seems to struggle with this. Or at least it does for a time, but eventually the market doles out punishments via the wrath of shareholders, consumers, or both.

 

Much of Hollywood, including Disney, seems to be at this juncture, and it’s going to be interesting to see what players survive, emerge and how the industry might be altered.

 

For Disney, an interesting test case is Daredevil.

 

The Marvel show, of course, first ran on Netflix for three seasons. And if it wasn’t the best superhero show ever made, well, it’s in the top two (and I really can’t think of what might come in ahead of it).

 

So, in the midst of this struggle over costs and quality, Disney is bringing Daredevil, starring Charlie Cox as Matt Murdock/Daredevil, back on Disney+ with an impressive 18-episode run. But with production under way, news came in late September that Marvel/Disney basically stepped in to more or less clean house, except for Cox, Vincent D'Onofrio as Kingpin and apparently John Bernthal’s Punisher. Writers? Gone. Directors? Gone.

 

Not knowing what was going on, the reasons for these actions amount to speculation. However, we can plug these decisions in with what else has gone on and is going on with Disney. Again, those challenges in terms of costs and quality.

 

Given the rather unimpressive run Marvel has had on Disney+ except for Loki, and keeping in mind the value of Daredevil, the hope – from a fan and a shareholder perspective – is that Disney/Marvel took a close look at what was being produced in this new Daredevil season, and was not pleased.

 

That seems to be backed up by a recent Hollywood Reporter story, which included the following:

 

• “Fewer than half of the series’ 18 episodes had been shot, but it was enough for Marvel executives, including chief Kevin Feige, to review the footage and come away with a clear-eyed assessment: The show wasn’t working.”

 

• The problem? “The show is Marvel’s first to feature a hero who already had a successful series on Netflix, running three seasons. But sources say that Corman and Ord crafted a legal procedural that did not resemble the Netflix version, known for its action and violence. Cox didn’t even show up in costume until the fourth episode. Marvel, after greenlighting the concept, found itself needing to rethink the original intention of the show.”

 

The Hollywood Reporter went on to note what a mess most Marvel streaming shows have been behind the scenes – in part due to a Marvel movie process that hasn’t served the company well in terms of its movies of late, whereby the movie or show is filmed, and then “fixes” are made post-primary filming. If that’s the new Marvel Way, it was destined to come crashing down. The new process? It’s reported, “Showrunners will write pilots and show bibles. The days of Marvel shooting an entire series, from She-Hulk to Secret Invasion, then looking at what’s working and what’s not, are done.” 

 

Also, Brad Winderbaum, Marvel’s head of streaming, television and animation, was quoted: “It comes down to, ‘How can we tell stories in television that honor what’s so great about the source material?’”

 

Now, there’s a crazy thought. But honoring the source material runs much deeper than what Marvel has been doing post-Avengers: Endgame. Will that truly be fixed? We’ll see. 

 

And as a fan and shareholder, they better not screw up Daredevil. Oh yeah, and bring back Foggy Nelson and Karen Page (I really shouldn’t have to remind you people of such things.)

 

__________

 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? (Keating is a Disney shareholder.)

 

Support the Daily Dose of Disney with Ray Keating Podcast at https://www.buzzsprout.com/1724143. Subscribe at the $8 or $10 levels , and get The Disney Planner: The TO DO List Solution by Ray Keating. Remain a supporter and you'll get a FREE BOOK by Ray Keating every six months going forward. Thanks!

 

Consider books by Ray Keating, including…

 

• The Pastor Stephen Grant thrillers and mysteries. There are 18 books in the series now.

 

• Order The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist. Kindle editions and paperbacks via Amazon here and signed books here. And don’t forget the first book in this growing series, i.e., The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel is at Amazon. 

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Signed editions of Ray’s books are at www.RayKeatingOnline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

6 Questions for Bob Iger

 by Ray Keating

Commentary

DisneyBizJournal.com

September 23, 2023

 

While visiting Walt Disney World on Friday afternoon, I overheard a conversation among Disney cast members either speculating or knowing that Disney CEO Bob Iger was at the Boardwalk Resort.

 

So, as noted in the accompanying video, this got me thinking about what I would ask Mr. Iger if I happened to bump into him. Here are the six questions that came to mind.

 

First, Disney has made a big deal in recent days about pledging to invest $60 billion in parks and cruise lines over the coming decade, could you provide more specifics? What are we looking at in terms of numbers and projects at Walt Disney World, for example? “Frozen” at Disneyland and “Black Panther” have been mentioned in reports, can you give us more?

 

Second, with news and rumors swirling about offers being made to Disney for ABC and other Disney television networks, including Byron Allen’s reported $10 billion offer for ABC, FX and National Geographic, what’s the company’s thinking on a price target for such assets?

 

Third, can you give us some clarity on the future of ESPN and its move to full streaming?

 

Fourth, in light of the Disney deal with Charter Communication, how do you now envision the future of streaming, such as Disney+, as it relates to cable television? (See the recent DisneyBizJournal analysis).

 

Fifth, the quality of Marvel films has fallen off notably since Avengers: Endgame, or at best these films have become far more uneven. What is the plan going forward, and is Kevin Feige in danger of losing his job?

 

Sixth, some recent Disney movies pulled in a decent amount of revenue at the box office – such as The Little Mermaid, Indiana Jones and the Dial of Destiny and Elemental – but runaway costs made these either box office losers or break-even propositions. What’s being done to get these costs under control?

 

And if I could slip one more question in, it would be: Given the controversy between Disney and Florida Governor Ron DeSantis, it has been reported that you’ve said that you want to “quiet the noise” on these types of issues. How do you accomplish that given the reality of politics?

 

__________

 

Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? (Keating is a Disney shareholder.)

Consider books by Ray Keating, including…

 

• The Pastor Stephen Grant thrillers and mysteries. There are 18 books in the series now.

 

• Order The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist. Kindle editions and paperbacks via Amazon here and signed books here. And don’t forget the first book in this growing series, i.e., The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel is at Amazon. 

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Signed editions of Ray’s books are at www.RayKeatingOnline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.

Disney’s Recent Big Budget Blockbusters and Bombs – and What Lies Ahead

 by Ray Keating

Commentary

DisneyBizJournal.com

May 3, 2023

 

What’s the right rate of success for Hollywood movies in terms of being profitable? Given the many mysteries of film industry accounting, general estimates are all over the place, with many pointing to a 50-50 chance overall, though higher for big-budget movies.

This question came to mind looking at Disney’s big budget movie performance in 2022, early 2023, and looking at the rest of this year.

 

Deadline.com recently provided some valuable estimates, with one report focused on 2022’s most valuable blockbusters, and another on Hollywood’s biggest bombs of 2022. Disney was well represented on both lists.

 

As for the biggest successes, four of the top 10 were Disney films. Avatar: The Way of Water came in at number one, with Doctor Strange in the Multiverse of Madness at number four, Black Panther: Wakanda Forever at number five, and Thor: Love and Thunder at number nine.

 

However, it also should be noted that among the three Marvel movies on the list, while Dr. Strange ranked as unique, interesting and entertaining, Thor: Love and Thunder was largely panned by critics, and Wakanda Forever was, well, a yawner.

 

Meanwhile, Disney had three of the five big budget bombs noted by Deadline. In fact, Disney had the three worst performers. The losses by Deadline’s estimates were staggering, with Disney’s Strange World coming in the very worst at a $197.4 million loss; followed by the Disney/New Regency vehicle Amsterdam losing $108.4 million; and then Pixar/Disney’s Lightyear registering the third biggest loss at $106 million.

 

Yikes.

 

And then we had Ant-Man and the Wasp: Quantumania arrive in theaters this past February. This movie is supposed to kick off Phase 5 of the Marvel Cinematic Universe. But that film’s global gross was only $474.6 million, according to BoxOfficeMojo.com. Critics were displeased as well. A reported pre-production and filming budget of nearly $200 million means that when everything is tallied up in the end, Ant-Man and the Wasp: Quantumania likely will be a money loser for Disney.

 

Double yikes.

 

And what lies ahead for the rest of this year? Well, Guardians of the Galaxy Vol. 3 opens this weekend. It has a reported pre-production and filming budget of $250 million.  Opening weekend box office projections are running at $250-$260 million globally. Of course, it’s staying power will be the test. But when you look at the coming MCU titles, Guardians 3 offers Disney its best hope on the MCU front.

 

The next installment is The Marvels, arriving in November. And quite frankly, it’s hard to find any excitement or anticipation for this movie, and the same pretty much goes for the 2024 movies on the list – Captain America: New World Order, Thunderbolts and Blade.

 

Disney is hoping for the best with a live-action remake of The Little Mermaid (May 26) and another crack at Haunted Mansion (July 28), while Elemental (June 16) will be a big test to see if Pixar can shake off a period of underwhelming movies – besides the Lightyear bomb. But one doesn’t exactly get a feeling of confidence from this list either.

 

In the end, the greatest anticipation and hope for the Disney box office in 2023 swirls around Indiana Jones and the Dial of Destiny (June 30). There seems to be real excitement for the return of Harrison Ford one more time as the iconic Indiana Jones. We trust that director James Mangold is up to the challenge, and he won’t make the same dumb mistake that the James Bond people made, that is, Mangold will not kill Indiana Jones. 

 

For what it’s worth, after seeing Dial of Destiny, according to Variety, Steven Spielberg declared, “Bob Iger had a screening for a lot of the Disney executives, and I came to the screening along with the director James Mangold. Everybody loved the movie. It’s really, really a good ‘Indiana Jones’ film. I’m really proud of what Jim has done with it… When the lights came up I just turned to the group and said, ‘Damn! I thought I was the only one who knew how to make one of these.’”

 

Indy fans and Disney shareholders are praying that Spielberg is right.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? 

 

Consider books by Ray Keating…

 

• The Pastor Stephen Grant thrillers and mysteries. You can order the latest book in the series – Under the Golden Dome: A Pastor Stephen Grant Novel. Get the signed books here, or paperbacks and Kindle editions right here.

 

• Pre-order The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist. Kindle edition here and signed books here. And don’t forget the first book in this growing series, i.e., The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist. Signed paperbacks at RayKeatingOnline.com or paperbacks, hardcovers and Kindle editions at Amazon.com.

 

• Cathedral: An Alliance of Saint Michael Novel. Signed paperbacks and/or paperbacks, hardcovers and the Kindle edition at Amazon. 

 

• The Lutheran Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement, inspiration and consolation from the Christian faith.

 

• Behind Enemy Lines: Conservative Communiques from Left-Wing New York  –  signed books  or at  Amazon.

 

•  Free Trade Rocks! 10 Points on International Trade Everyone Should Know is available at  Amazon  in paperback or for the Kindle edition, and signed books at  www.raykeatingonline.com. 

 

Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.