Walt Disney (NYSE:DIS) CEO Bob Iger is trying to transform its huge box-office bomb John Carter into a teachable moment where nobody will lose their jobs. What a pity.
As The New York Times pointed out over the weekend, there’s plenty of blame to go around for this turkey of a sci-fi 3-D mega-flick. First, the script — based on a forgotten story by Tarzan creator Edgar Rice Burroughs — was a mess. Then there was the $350 million price tag, expensive even by current Hollywood standards. Director Andrew Stanton, whose credits include animation hits Finding Nemo and Wall-E, had never done a live-action picture before. His inexperience showed in this confusing mess of a film, according to critics.
“The movie eagerly sells itself as semitrashy, almost-campy fun, but it is so lavish and fussy that you can’t help thinking that it wants to be taken seriously, and therefore you laugh at, rather than with, its mock sublimity,” wrote New York Times film critic A.O. Scott.
The website Rotten Tomatoes is even more brutal, arguing that John Carter “suffers from uneven pacing and occasionally incomprehensible plotting and characterization.” Adding further insult, Universal Studios’ kid-friendly film version of Dr. Seuss’s Lorax had a second-weekend box-office take that walloped John Carter’s debut weekend, $39.1 million to $30.6 million.
Disney will need to take a quarterly write-down of as much as $160 million because of John Carter’s poor performance, according to the Times, which added that the film will have to gross as much as $600 million just to break even, a feat that’s seems impossible.
Shares of Disney have barely budged over the past year and have underperformed their peers such as Comcast (NASDAQ:CMCSA), which have each posted gains, because of concerns about its movie business.
As the Times notes, Iger is refusing to pin blame for the John Carter fiasco on one person, telling executives, “this may be a colossal miss. . . but it’s the company’s miss. . . . Learn from it, was Mr. Iger’s message.” That’s sound management because companies succeed and fail as a team. Unfortunately for Disney shareholders, though, there are no signs that the company has learned from other mistakes made in its film business.
Legendary director Steven Spielberg was furious with Disney studio head Rich Ross about not being consulted before Disney marketing chief MT Carney was replaced, according to The Hollywood Reporter. Tinseltown executives anger important players such as Spielberg at their own peril.
Cars 2 received such a critical drubbing that director John Lasseter took the unusual step to publicly defend his picture, which was less of a hit than its predecessor. Disney also reportedly sunk $175 million into Mars Needs Moms, both critical and box-office failures. Disney’s box-office market share plunged about 15% in 2011 to 12.2%, finishing in 4th place behind Viacom‘s (NASDAQ:VIA) Paramount, Time Warner‘s (NYSE:TWX) Warner Bros. and Sony‘s (NYSE:SNE) Columbia, Box Office Mojo says.
Another test for Disney’s Ross, a company veteran who started his current job in 2009, will come next year with the release of The Lone Ranger. The film, which has a reported budget topping $200 million, was almost canceled once already because of its soaring costs. If The Lone Ranger is as big of a bomb as John Carter and Disney’s stock continues to tread water, both Iger and Ross may be out of a job.
Disney shares, which have finally shown some life, gaining almost 13% this year, trade at a price-earnings ratio of 15.97, near their five-year high, according to Reuters. Wall Street analysts have an average one-year price target of $45.62 on Disney, about 8% above where it currently trades. The stock, though, should be avoided until the cloud over the studio Mickey built lifts.
–Jonathan Berr doesn’t own any shares mentioned here.