Disney Admits US$200-mil Loss over 'John Carter'
"If it were Lion's Gate it'd put them out of business. But it's Disney- it's hard to get much bigger or more successful than Disney," says Lawrence Turman, a former movie producer and chairman of the Peter Stark Producing Program at the University of Southern California. "They've been around forever, they'll be around forever."
Just looking at ticket sales, the John Carter failure looks as epic as the film's storyline, about a Civil War veteran who finds himself transported to Mars. The film has taken in around US$184 million in ticket sales thus far, compared to the US$250 million production budget, plus US$100 million for marketing.
Within the broader context of the Disney empire, the loss looks like much less of a blow. US$200 million equals around 14 percent of Disney's first-quarter, fiscal year 2012 net income, and around 4 percent of its fiscal year 2011 net income. That's certainly not insignificant, but it's not a bank-breaker for the international entertainment conglomerate. One reason is that Disney has a business model that is much bigger than movies and includes theme parks, television, and music. In that way, Disney exemplifies a key tenet of business: diversifying can be a safe and smart strategy.
But the John Carter flop illustrates one point that makes the film industry different from many other industries, says Turman.
"Oddly enough, making movies is one of the few businesses where you manufacture an expensive product that you're not sure everybody really wants to see," he says.
There can be no doubt John Carter will go down in history as a box-office bomb, and with its entrance into Hollywood's Hall of Shame, it is interesting to note that six of the top 15 movie misfires have been made since 2005, when Hollywood has been in high gear with pricey, special effects budgets.
In 2011 alone, there were two big losers. Disney released Mars Needs Moms, for which it took a write-down of at least US$70 million, on a film that had a worldwide box office of only US$38.9 million. Warner Bros released its take on DC Comics' Green Lantern, starring Ryan Reynolds as the keeper of the green ring. That film lost US$108.6 million, according to the Wikipedia list.
"The studios are just spending too much money and there's just not the box office there to support it," said Paul Dergarabedian, president of Hollywood.com.
"John Carter's bloated budget would have required it to generate worldwide tickets sales of more than US$600 million to break even, Dergarabedian said, a height reached by only 63 films in the history of movie-making.