Walt Disney Co. will take a $50 million write-down in the current fiscal quarter for a stop-motion animation project it canceled in August.
The untitled movie was to be directed by Henry Selick, the well respected filmmaker behind "Coraline" and "The Nightmare Before Christmas." Previously set to be released in October 2013, the picture had been in production for about a year when new Walt Disney Studios Chairman Alan Horn halted work.
News of the write-down came in a presentation that Disney chief financial officer Jay Rasulo made to investors at the Bank of America/Merrill Lynch Media, Communications and Entertainment Conference in Beverly Hills on Thursday.
Rasulo did not specify the reasons for the write-down, stating only that the move in its fourth fiscal quarter, which will cost the company two cents per share, was for "some work we discontinued after looking at it."
A knowledgeable person not authorized to discuss the matter publicly confirmed that the write-down was for the Selick movie.
Rasulo also said that Disney did not see as big of an increase in advertising for its television networks and stations as it expected following the Olympics, during which advertiser and audience attention was glued to NBCUniversal-owned networks carrying the sporting events.
"We did not see the kind of rebound after the Olympics that we thought we would when we gave our last view of advertising with our third-quarter results (Disney's third fiscal quarter ends June 30)," Rasulo said. "We do not see that persisting. Our first fiscal quarter advertising looks very, very strong."
Touting some of the company's most successful initiatives, Rasulo pointed to the Cars Land attraction at Disney's California Adventure, ESPN in Latin America, and the global expansion of the Disney Channel.
"Disney Channel has become the biggest franchise grower for the company worldwide," he said. "It used to be animation, but the amount of time kids spent in front of the TV and web devices ... mobile devices ... in front of the Disney Channel make this an incredibly powerful vehicle."
He also predicted a strong holiday season for the company's consumer products division, noting that items tied to Merida, the main character from "Brave," should boost the Disney Princess line.
He said that retailers were conservative in ordering products tied to "The Avengers" after "Iron Man 2" products fared poorly. But given the blockbuster box office success of the super-hero team-up movie, he said, "We hope they can catch up by Christmas."
Asked about changes that Horn, who was named to his job in May, is making at the movie studio, Rasulo said he expected the former Warner Bros. president to only better execute on the preexisting focus on franchises.
"You shouldn't look for a fundamental change in our strategy of limiting our slate to films that we can successfully exploit and build brands around," he said. "With his experience in this business, he is focused on every aspect of it ... [including] how big the studio has to be to support the kind of slate we have out there and how we can efficiently deliver great products to the screen."
After a 3-D version of "Finding Nemo" this weekend, Disney's next two big screen releases are the stop-motion "Frankenweenie," directed by Tim Buron, in October, and "Wreck-It Ralph," from Walt Disney Animation Studios, in November.