A fall for Disney Studios
Walt Disney Co. is poised to release “Up,” another anticipated hit from Pixar Animation Studios.
Studio brass hope the same will be true of the movie division’s next quarterly earnings.
Rather than attribute Disney Studios’ dismal results to the weak global economy, Chief Executive Robert A. Iger bluntly put the blame on Burbank’s doorstep.
The studio’s operating income plummeted 97% in the company’s second fiscal quarter to $13 million, down from $377 million a year earlier.
Disney has been on something of a cold streak, as it ratchets back the number and variety of pictures it makes and relies more heavily on “branded” family movies and concepts forged on Disney Channel cable TV shows for the tween market.
The strategy can lead to wide swings at the studio, where a few movies that do not live up to expectations can have a deleterious effect on the bottom line.
“You could say their studio disappeared in the quarter,” said Laura Martin, a media analyst with Soleil Media Metrics.
Indeed, at a time when many of the studios are enjoying a feast in ticket sales at the box office, Disney is experiencing a comparative famine. The studio so far this year has ranked at the bottom of the six major Hollywood studios -- as it was in all of 2008 -- in U.S. box office share because of several misfires, including the ill-timed comedy “Confessions of a Shopaholic” and the much-hyped “Jonas Brothers: The 3D Concert Experience,” starring the teeny-bopper phenomenon.
Citing a combination of disappointing box office results and lower DVD sales, Disney reported revenue for its studios was $1.4 billion, down 21% from $1.8 billion.
The results, in a generally abysmal quarter for both Disney and other media companies, caught some on Wall Street by surprise.
During the company’s conference call, an analyst asked Iger to explain how, when “the box office is having a record year,” the studio could post such a downturn with its movies. Iger replied with an unusually candid assessment.
“It’s about choice of films and the execution of the films that have been chosen for production,” Iger said. “We’ve had a rough year in terms of the performance of the slate. So, in that case, it’s not the marketplace. It’s our slate.”
The four films released during the quarter -- which also included the Adam Sandler comedy “Bedtime Stories” and “Race to Witch Mountain” with Dwayne Johnson -- fell far short of results from the prior-year quarter’s releases “National Treasure: Book of Secrets,” “Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour” and “Enchanted.”
Iger told analysts that the studio was weighing additional cost cuts in production and marketing expenditures, and a further reduction in the number of movies it releases.
For the last three years, Disney has been reducing the number of movies it releases. At its peak, the studio had reached more than 30 pictures a year.
Iger also said Disney would consider more consolidation of its overall European operations, which would include the studio.
Despite expressing disappointment in Disney’s releases, Iger said he was enthusiastic about such upcoming films as “Up,” its hand-drawn animated “The Princess and the Frog” and next year’s “Toy Story 3,” the second sequel in Pixar’s lucrative franchise.
He also touted the prospects of two films coming from producer Jerry Bruckheimer -- 3-D family comedy “G-Force” and video game-inspired “Prince of Persia: the Sands of Time” -- as well as “Disney’s A Christmas Carol,” starring Jim Carrey, and a fourth film in its “Pirates of the Caribbean” series.
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dawn.chmielewski@latimes.com
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