Disney Deathwatch: The Christmas Edition
This has been a rough December for Disney films.
Wakanda Forever has legged out with a box office at $780 million. There might be a little more money coming in, but the theatrical run has defied my predictions and is settling about $100 million lower than I had forecast.
This is bad news for me, nut seriously bad news for Disney because that means it has lost at least $100 million.
I know it has to be surprising that Marvel would have to break $900 million before it sees a profit on a film that had a budget of $250 million.
Here are the problems:
First, the theatrical cut at the end of the run is going to work out to about 50% of the box office intake. This means that out of (for simplicity’s sake) $800 million, Disney will recover $400 million.
Second, you now have to add in the marketing costs which have shot through the roof in the last five years. Not that long ago it was fifty percent of the film’s budget. Which now looks like a bargain because at this point the marketing expenses have hit dollar for dollar of the film’s budget. Consequently, the film’s production and marketing budget have a combined price tag of $500 million and that doesn’t include the interest on the junk bonds that financed it all.
$400 million – $500 million = $-100 million. Except it gets worse for Disney. After the Lightyear debacle, it was obvious, even to Disney Studios that there was no market for gay-friendly family entertainment. Consequently, Strange World (that was testing miserably anyway) had its marketing budget stripped out and added to Wakanda Forever’s. The Black Panther “sequel” was testing better than anything else out there, the hope was the added marketing muscle in the second weekend would give it strong enough legs to get over the billion-dollar mark. Or at least not lose money.
That didn’t happen. It’s not a bomb but it’s still a huge loss for Disney when least they needed a loss.
As of now, Wakanda Forever is dead at the box office because Avatar 2 has eaten what was left of its lunch.
This brings us to the unpleasant subject of Avatar 2’s performance.
Originally it was tracking for $185 million. It has delivered $135 million. This is a terrible start for the most expensive movie in history. Please note, I haven’t seen it yet and I don’t know where I can steal three hours to do so with the backlog of work I’m catching up on.
James Cameron’s movies have an established track record of having very long legs. There is an upward ceiling to how much this helps. This first weekend is the most vital for the studio because they get about 90% of the opening week take. The theaters mostly make their money on popcorn but so long as the theater is packed they’re laughing. As time goes on the balance of the box office take shifts to heavily favoring the theaters. At the end of the day, it usually works out to about a 50/50 split.
What Disney really needs is sellout crowds at the Large Prestige Format screens (IMAX and the like). The LPF take is vital that first weekend because the tickets are much more expensive. And none of that matters if the overall take on Avatar: The Way of Water is only $135 million at the end of the first weekend.
I’m not going to predict that Avatar 2 is going to lose a shit load of money, but I don’t see how it can’t.
Disney needed a Christmas miracle. They aren’t going to get one.
Okay, I’m done here.
UPDATE: Foreign box-office has been huge for Avatar 2, and $301 million. I don’t have a breakdown yet but if a lot that is China, then Disney only sees 25% of that FBO. Regardless, Cameron’s The Way of Water hasn’t sunk yet.
