Disney’s Film Formula Starting to Lose Magic : News analysis: High concept, low budget was working, but lately box-office receipts have been embarrassingly low.

The movies all seem to have catchy titles with easy-to-understand themes.

“Blank Check”: A lonely 11-year-old boy “cashes in” on an opportunity to become very popular when an impatient crook runs over his three-speed bike and absent-mindedly leaves a blank check to cover the damage. The boy boldly fills in the check for $1 million.

“My Father the Hero”: A vacationing, love-struck 14-year-old girl concocts a scheme to pass her father off as her lover in order to impress the boy of her dreams.

“The Air Up There”: A college coach travels to Africa to woo a 7-foot tribal member to play American basketball, and then dons tribal paint and takes part in a full-court game against other African players in a contest fraught with consequences.

So high concept. So low budget. So Disney.

For years, Disney has proudly adhered to a philosophy that differs from many other Hollywood studios. Make high-concept movies on relatively small budgets, keep talent costs down, advertise like crazy, then flood the marketplace with product week after week. If it fails, there are always video and other ancillary markets.

“Beauty and the Beast” and “Aladdin” may have stirred audiences with their brilliant animation and delightful tunes, reaping hundreds of millions of dollars for the Disney empire, but more often than not over the last year the Walt Disney Co. in Burbank has continued to churn out a steady stream of forgettable movies: “Cabin Boy,” “Aspen Extreme,” “Life With Mikey,” “Father Hood,” “Born Yesterday,” “Swing Kids,” “Super Mario Bros.,” “Blame It on the Bellboy.” Critics winced and audiences didn’t show up.

Over the past couple of years, Disney’s philosophy has generated handsome profits with such live-action films as “Cool Runnings,” a film about a Jamaican bobsled team at the Olympics that grossed more than $65 million; “The Hand That Rocks the Cradle,” a 1992 nanny-from-hell movie produced for pittance ($87 million), and Whoopi Goldberg’s comedy “Sister Act” ($140 million). Even some of Disney’s live-action family films such as “Homeward Bound” ($42 million) were very profitable relative to cost.

But, often Disney’s low-ball strategy has backfired at the box office.

Nowhere has this been more apparent than at the studio’s Hollywood Pictures division, which saw box-office receipts for many of its movies remain embarrassingly low.

Formed in 1988, Hollywood Pictures has long been the source of conjecture in the film industry. Until this week, it had been headed by Ricardo Mestres, a close friend of studio chief Jeffrey Katzenberg and his boss, chairman Michael Eisner, since the days a decade ago when all three worked at Paramount Pictures.

On Tuesday, Mestres was forced out after one lackluster film after another. Mestres took the fall publicly, even though it is widely known that Katzenberg and Eisner sign off on virtually all movies that flow from Hollywood Pictures, as well as its sister divisions, Touchstone Pictures and Walt Disney Pictures.

Many wondered why Katzenberg had waited so long to act, but sources said his Achilles’ heel had always been that he liked Mestres too much, was too loyal to simply dump him.

Sources confirm that it was Eisner who last week abruptly mandated the resignation of Mestres. Ending months of speculation, Mestres relinquished his stripes and accepted a long-term production deal with the studio.

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While a successor was not immediately named, the supposed front-runner for the job is a non-movie executive from Disney’s Hyperion Books named Michael Lynnton, a close friend of Touchstone president David Hoberman. Hoberman is poised to be appointed head of all three movie divisions under Katzenberg.

But in the wake of Mestres’ departure, questions that have dogged the studio for years have resurfaced. Is Disney pursuing profitability above good filmmaking? And, has Disney become creatively stifled because of its tightfisted cost controls and overbearing management style?

Executives at Disney argue that management has already begun to rethink its strategy and make changes. They point to such upcoming products as the Julia Roberts/Nick Nolte romantic action movie “I Love Trouble”; Meg Ryan and Andy Garcia in “When a Man Loves a Woman”; and the Robert Redford directed “Quiz Show.”

In an attempt to diversify its product and boost its creative output, Disney has brought into the fold some respected moviemakers, including former 20th Century Fox chairman Joe Roth, the filmmaking team of Ismail Merchant and James Ivory, and bought the independent New York-based Miramax Films, best known for releasing such unconventional fare as “The Crying Game” and “The Piano.”

Upset with criticism about primarily making mindless movies, one high-level Disney executive said, “Well over a year ago we made adjustments and are doing a more balanced program of movies. . . . This event (Mestres’ departure) has nothing to do with any of that.”

But others say Hollywood Pictures is a good example of why Katzenberg’s system needed altering.

“What’s happened is that Disney had an idea to do high-concept, low-budget movies,” said entertainment lawyer Peter Dekom. “On the whole, that concept hasn’t performed. The movie business is a business of balance. High-concept has its place, but so do other kinds of movies.”

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It also hasn’t escaped Wall Street’s attention that what is driving Disney’s film studio is its animated product, not live-action films.

“Profitability, in large measure, is coming out of their animated film product,” analyst Jeffrey Logsdon said recently. “When you get right down to statistics, about 15% of their revenues on film entertainment side come out of live-action features, their non-animated product. That gets down to a really uninspiring number. But they’ve always been driven that way. It’s not as if that’s some big revelation.”

Some who have worked in the Disney system contend that too many studio executives exerting control over projects has stifled creativity.

“There are too many cooks to spoil the broth,” said one producer who made movies for Hollywood Pictures. “Too many executives telling you how to change this and that.”