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Related:
Investors Assess Damage From Disney’s ‘John Carter’ Debacle
Disney Expects $200M Loss For ‘John Carter’
The early responses show that Disney watchers are miffed by the studio unit’s debacle with John Carter, but not enough to change their overall opinion of the company as one of their darlings. Here are some of the initial reactions. After the analyst’s name and affiliation, I’ve noted the person’s stock recommendation, any change in his or her earnings-per-share forecast for the fiscal year that ends in September, and key comments. I’ll add reports if and when they come in.
Drew Crum (Stifel Nicolaus) Rating: Buy. Change to FY 2012 EPS: -7 cents to $2.96. “(N)o change to our thesis here as we … continue to view the FY12 slate as weaker vs. last year…While discouraged by another large film loss (last year it was Mars Needs Moms) we’re not deterred and continue to focus on the positives including Media Networks + Parks.”
Marci Ryvicker (Wells Fargo Securities) Rating: Market Perform. Change to FY 2012 EPS: -8 cents to $3.02. Disney “only has 12 films scheduled for FY2012, compared to 14 films in FY2011, so the impact of John Carter is clearly a set back for a limited schedule. That said, according to our conversations, it doesn’t appear that investor expectations for (Disney’s) overall slate in FY2012 are all that high. The good news for (Disney) is that the upcoming summer films Brave and The Avengers have the potential to modestly offset some of the John Carter weakness. Furthermore, we think the film slate for FY2013 looks particularly strong, with potential blockbusters in Iron Man 3, Thor 2, Monsters University, The Lone Ranger, Robopocalypse, and Oz: The Great and Powerful.”
Barton Crockett (Lazard Capital Markets) Rating: Neutral. Change to FY 2012 EPS: -15 cents to $3.04. “While the loss over the life of the movie is larger than the $140M we had been anticipating, we were not overly surprised by this news.” But the projection that the Studio unit will end up with a loss of between $80M and $120M this quarter “suggests to us that the balance of the studio performance was worse than we had modeled.”
Michael Nathanson (Nomura Securities) Rating: Buy. Change to FY 2012 EPS: -6 cents to $2.90. “We do not expect the weaker film results to affect any of the business segments (e.g. we did not anticipate strong consumer products revenue related to John Carter)… one-off charges at the Studio segment are not indicative of the overall health of the company’s core businesses – namely the Media Networks and Parks. We view any pullback in the stock around this higher film loss as an enhanced buying opportunity.”
Spencer Wang (Credit Suisse) Rating: Outperform. Change to FY 2012 EPS: -7 cents to $2.91. “Disney shares could come under some modest pressure from this news, although the financial impact is relatively modest in the context of Disney’s overall operations. While John Carter is clearly a disappointment, we are optimistic about Disney’s upcoming slate which includes The Avengers and Brave.”
Todd Juenger (Bernstein Research). Rating: Outperform. Change to FY 2012 EPS: -6 cents to $2.97. “We have concluded this is a blip investors should ignore….This is a very different kind of a miss than, say, if theme parks generally (or one of the capital projects specifically) was off-track, cable networks were off-track or consumer products was off-track. …There is no reason to believe future results at theatrical, or other segments, will be harmed. If anything, we would expect the studio to be especially ruthless on costs for the rest of the year and beyond.”
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If Nikki wants a story she should try to figure out why Disney is so quick to declare this film a bomb. Usually (and I’m sure she knows this better than anyone) a studio will try to put whatever spin they can on a film – especially when there is positive spin to be had. The film is #1 internationally and has 50% of the critics saying it’s a good film and yelling at the other 50% of the critics that “didn’t seem to get it”.
Something smells wrong here and I can’t put my finger on why Disney wanted to put negative spin on a film. Did they have a multi-picture deal with Stanton they want to go away? Did they purposely want stock to drop for some reason?
This sure seems like it’s a story right up DH’s alley…
Agree with everything you said. This whole thing feels strange. Is it to embarass the former regime at Disney??? Would they take it this far.
Film can still do very well worldwide, like “Prince Of Persia,” I don’t understand the instant “Its a flop” reports… Especially this early???
They released the statement declaring it a massive failure so that it’s not surprising when they fire somebody important next week.
The SEC should investigate to determine if insiders were short selling shares in their own company. By labeling the film a flop those insiders make money if the stock price drops but it has not dropped which means they might be screwed twice they haven’t made money on their short sale and they could be investigated for other violations. How ironic would it be if this turns out to be true?
The reason they’re not worried. One word. Pixar. They have a summer that will make John Carter’s failure less impactful.
They should seriously think about changing the title to “John Carter of Mars” and add some esteem to the story by telling folks it’s from Edgar Rice Burroughs when they release it on dvd. What to they have to lose at this point? Try SOMETHING Disney!
To be honest, I have lost faith in Pixar animation. Do not assume the Pixar brand alone will restore equilibrium to the losses of John Carter.
Cars 2 was a deplorable movie that should never have been made.
Andrew Stanton’s decisions for the 200 million dollar fiasco proves he is not the movie god people are hyping him up as being.
John Lasseter’s strategies to save Disney Animation and restore hand-drawn animation and old-fashioned storytelling have greatly disappointed; (Some say he FAILED).
On top of that, I am puzzled by the plot/story to Brave, judging by the trailer, even more so than John Carter.
So no, Pixar is not the automatic Savior.
John Carter deserved better reception than this. It is actually a very good movie and I will not hesitate purchasing the Blu-Ray when released. Unfortunately, John Carter will probably go the way of “I Am Number Four”. I Am Number Four was a fantastic movie based upon the book plus a second book in the series “The Power of Six” has already been released. Since, I Am Number Four, did not do very well at the box office, the second novel may never be filmed. I Am Number Four was one of the best movies released in 2011.
John Carter was poised to a have series of potential movies released since Edgar Rice Burroughs wrote (11) novels in the Mars series. Of course, since John Carter, did not do very well at the US box office compared to its production cost, one would assume it is a certainty that Disney will not make a sequel.
I wonder if the Disney brand is not what hurt this movie to begin with. Disney makes movies that generally appeal to families and children but somehow this movie was supposed to appeal to those action oriented single 18 to 30 year olds as well. With a Disney brand on it, I wonder if those single 18 to 30 year olds, didn’t think the movie would be a serious action adventure sci-fi movie. So Disney lost a good chunk of that age group possibly. Then since it was an action movie, many families did not take there children to this movie.
Somehow, Disney lost its core audience and did not bring in the sci-fi action adventure audience as well. The “love story” was not even marketed at all in the trailers so there you lost any interest from girls and women. I thoroughly enjoyed John Carter. Sadly, John Carter, may ultimately go down as a box office failure when it deserved much better. Ultimately, this was a marketing failure because the movie, overall, delivers exactly what it was supposed to.
I’m always baffled by the idea that studios can throw in a token romance and get a female audience to an action picture. Would you go see Sex and the City 3 if they threw in a car chase?
It just shows how badly Hollywood caters to the female 50% of the audience.
Agreed. That technique is so insulting and infuriating.
Strong lead female role and romance. Nuff said. Lisa and Megan apparently didn’t see the movie.
BTW, this was based on “A Princess of Mars” which was subtitled a romance when it was first published as a book. The romance was even stronger in the books.
Hollywood, Disney, and Pixar are sexist.
I remember very well when the Princess and the Frog disappointed at the box office back in 2009. Everyone knew it was a disappointment, and no questions were asked. Immediately, the top execs and marketers blamed the studio for including the simple mention of “Princess”‘ in the title for isolating potential boy viewers…
…now John Carter clearly bombed and lost the studio 200 million, why is there so much unshaken determination from analysts to prove JC is “not” a bomb???
If this had been a princess movie (or a hand-drawn animated feature, for that matter,) the underperformance of JC would have been the pulled plug, with no more similar features developed in the future pipeline. But no, no, no. Just you wait: Disney will continue their macho boy-driven nonsense.
This was not a ‘token’ romance. The romance was the most important part of the book and the film.
It should have been made clear that this was a romantic fantasy in a way Twilight and other films of that ilk never could be.
I think if they’d showed Lynn Collins’ great performance more, they would have drawn in more (or any) women to see this. She’s wonderful, and she’s a flesh-and-blood character, not some T&A afterthought.
Put me down with the conspiracy theorists on this movie. I can see this movie struggling to break even, or making a smaller profit, given the pricetag. But it’s a fantastically fun movie, and the terrible marketing that told the audience NOTHING about the film, plus Disney embracing the “bomb” talk rather than rejecting it or trying to sell the movie another way, makes this look like they sunk it on purpose.
Sorry I have to disagree with you on I Am Number Four. “one of the best movies released in 2011″ Seriously??
Alex Pettyfer was stiff and a boring lead as was Dianna Argon. The movie gave hardly any backstory of the other worlds and bad guys – hence we don’t care about the main characters’s struggle. And except for the scene towards the end at the school there was hardly any action. Glad it didn’t do well and there will not be a sequel. It didn’t deserve it.
Totally agree with that ‘I am Number Four’ assessment. Virtually unwatchable rubbish.
Otherwise though I have to laugh at claims that half the critics (or perhaps anyone else) slating JC just didn’t ‘get it’.
I mean, you know you’re on thin argumental ice when that’s the best that you can come up with as a defence of the dud.
Probably just setting expectations for the quarterly report. Set the bar lower and then most likely exceed it (Disney usually exceeds EPS estimates). I’m guessing analysts are seeing it that way too.
I surmise this is the case. It remains to be seen. In the meantime Disney’s marketing team and higher ups should begin working on changes (never too late) for the US market, perhaps changing the film’s name (wasn’t this done, ever?), testing which ones work and targeting specific groups differently with different advertising media.
This movie should have been pitched as a mid-level film (like The Rocketeer was in its day), and made for half the cost. After all, no one but sci-fi aficionados has ever heard of “John Carter of Mars”, and then cast a bland, unknown actor as the lead. How many people thirty years old and younger even know who Edgar Rice Burroughs was anymore? It sounds as if they were hoping for a Star Wars, but produced an Eragon.
You just summed it up perfectly with those two flicks!
There’s a challenge given the age of the material, but not as much as you’d think. The books are great fun, even a hundred years later. They really should sell themselves…IF they bother to put ANY of the action in the damn trailers.
It’s clear Disney wants Andrew Stanton know they’re not working under his rule the same way ever again.
But what this whole write-off debacle REALLY means is that Disney will quietly be jacking up the prices on Epcot tickets this summer. Heavy sigh, I already told the kids we’d go. Dammit, why didn’t I get them hooked on that Henry Potter or whoever.
I don’t understand this $200 million write off story. This is all over the web as the biggest bomb. I don’t agree.
$250 million cost
$150 million (maybe) marketing
Total amount $400 million dollar for overall cost. Let me if I’m missing an other additional costs. Currently only in its second week from boxofficemojo
Domestic: $53,227,248 29.7%
+ Foreign: $126,100,000 70.3%
Worldwide: $179,327,248
200 million seems very unrealistic as a write down unless it has to do with corporate filing. It was $70 million last week foreign box office and made another 56 million this week. I’m assuming $200 to $240 for overall foreign plus 70 million for US – total $300 million worldwide ( 150 million loss ). Blu-ray, DVD, TV rights, rentals, etc will be over the loss amount in a year so overall this movie isn’t a bomb like Hudson Hawk which took years before breaking even.
Why do idiots ALWAYS assume Theaters show the films for free?!?! They’ll do long involved math calculations to defend their hobbyhorse failure of movie, but then exclude the theaters’ cut of gross. They do this every day on industry sites and fan sites both. Why is this concept so hard to understand and penetrate their thick skulls?
This. With this being a tent pole Disney most likely agreed to a 90+ minus house fee structure to maximize their potential profits. Since this movie bombed its likely they will see not much if anything at all from the theater run after paying the house cut. That 53 million in N America is more like 30 million. Each week this becomes more and more unfavoriable for Disney. Disney will see in the 45 million range for N America when all is said and done. Internationally given the market this movie has been strong in Disney is looking at closer to a 40 percent take then a 50 percent take. So around 60 million there for a total around 105 million.
TV rights generally go for 20 percent of the domestic gross. Or about 16 to 18 million. Bringing it up to 120-125 million range.
Juat to get to 150 million the DVD will have to be a top 5 selling DVD of the year.
You do realize that theaters almost do show the films for free initially. They get a small percentage of the take, but it’s a small percentage. That’s why they charge so much for food and take in advertising. You aren’t so misled to think the theaters are getting rich by showing films, are you?
The longer a film is in the theater the larger the percentage the theater makes. That’s why when a film ends up in a second run theater they can charge lower prices for the tickets – they get a large percentage.
That’s also why you will occasionally here that a theater cheats and gives you a ticket for the wrong film. If they have a film that’s been on another screen for quite awhile (which they make a higher percentage on) they’d rather report that film as getting more business than the film that just opened.
This doesn’t happen quite as much what with electronic ticket machines, but it will occasionally occur still.
They get a small portion of the take after the House has been paid. The agreement for a tent pole will usally be something like the first 2 or 3k per screen goes to the theater chain then after that the studio takes 90 percent plus leaving the rest for the theater.
Every movie has its own agreement. With the new Batman movie for example WB can basically name the price they get back from the theaters because its a presold properity. John Carter likely had a more theater favoriable split towards the house because it was not a presold properity.
As someone who works in the exhibition industry, I likewise am always stunned by people who think we make a lot of money from ticket sales. We make some money on the small – SMALL – slice of ticket sales we keep, as well as selling advertising space, but we are essentially snack bars that happen to show movies to entice people to buy soda, popcorn, and candy. I’ve read some articles about this claiming that “half of the ticket sales go to the theaters.” That would be news to me.
It’s clear that JOHN CARTER is going to unfortunately be a money-loser for now (hey, even WATERWORLD made a money…eventually). But some of these numbers seem out of whack to me. Also, $150 million for marketing? Spent on what?
The 150 million for marketing. This total will include distrubution which for a day and date world wide release is going to be 40 or so million (don’t know how many screens overseas its on or the breakdown of digital versus film). Depending where they want to stash it on the budget subtitles/dubbing which is around 7 million. This leaves 100 million for what most people think of as marketing TV, Print, Internet and Radio ads. They sunk 4 or 5 million on the Superbowl ad. They are doing this across the world. Its not too hard to see how the figure starts to get up there.
This only works if they really only spent 150 million total instead of 350 million. They are very smart at Disney so it’s possible all along they hyped the inflated budget figure to fool people into thinking they spent that much but in reality they only spent half as much. Perhaps it was a money laundering scheme. They tell the SEC and their stockholders they spent twice as much as they really spent and they keep the difference in various offshore bank accounts. With these large amounts of money nobody would ever be able to trace it for an accurate accounting.