Posted on 12/06/2002 7:51:38 AM PST by Liz
LOS ANGELES, Dec 5 (Reuters) - The Walt Disney Co. (DIS) has taken a $140 million gamble on an epic cartoon and lost -- raising questions over whether the studio that once was "The Lion King" among animators has strength left to roar.
The box office failure of "Treasure Planet" has raised questions about the future direction of Disney's fabled animation unit amid reports that its chief, Thomas Schumacher, was already considering leaving the division.
The failure of "Treasure Planet" also puts extra pressure on Disney to continue its profitable ties with computer specialist Pixar Animation Studios Inc.(PIXR), creator of "Monsters, Inc.," analysts said. According to reports, Pixar wants to end its 50-50 split with Disney and pay the studio only a distribution fee.
Disney's animation unit helped launch the company. Hit "Snow White," the first full length animated feature, earned the money to buy the land for the studio lot, and the animation unit helped revitalize Disney in the 1980s and 1990s, thanks to "The Lion King" among other films.
"Treasure Planet", an interplanetary version of Robert Louis Stevenson's "Treasure Island," cost a reported $140 million to make but brought in only a paltry $16.5 million in the United States and Canada over the long Thanksgiving weekend, causing Disney to restate and lower its fiscal fourth quarter profits by $74 million before taxes.
Industry experts blamed tough competition and the blatant pitch for the fickle teenage boy market for the film's failure. Kaufman Bros. financial analyst Paul Kim wrote in a research note that the restatement meant that Disney's total fiscal fourth quarter operating profit was down 14 percent from a year earlier compared with a 2.2 percent drop before the restatement.
"It puts a lot of pressure on them. They rolled the dice on a $140 million picture," said lawyer Nancy Newhouse Porter, a partner at Newhouse Porter Hubbard which represents several animated film directors.
BOTTOM LINE
Disney had already said that "Treasure Planet" was the last of the series of big-budget animated blockbusters.
Studio Chairman Richard Cook, who declined to be interviewed for this article, told analysts recently that the company was now more than ever making creative decisions with a look at the bottom line.
He pointed to animated feature "Lilo and Stitch", made for a reported $80 million, as a template. The protagonist of that movie, Lilo, wore a dress that in early drafts had a rich -- and expensive -- pattern. Cook said Disney reaped substantial savings by giving the dress a simple print.
Many analysts say Disney has learned it has to control its wallet. "In today's economy, these films can't cost $140 million," said Heather Kenyon, editor in chief at Animation World Network, www.awn.com, a Web publisher and information clearinghouse. "I think Disney understands that."
She said Disney was a victim of its own phenomenal success with "The Lion King" at a time when there was not much competition for animated features.
Disney animation has about 1,200 employees, about half its peak of a few years ago and it is not clear if animation chief Schumacher will stay. "I think that will be the final piece of the puzzle for Disney animation's future," Kenyon said.
Aside from Disney's own animators the company has begun to work with partners like Pixar, the creator of hit "Monsters, Inc.", DVD sales of which contributed strongly to Disney's recent quarter.
Pixar is about to approve production of its first film beyond its current deal with Disney, and there is pressure on the studio to cut a new deal. "Pixar is a huge profit center for them," said animation lawyer Newhouse Porter. "You always want to hang onto one that is four for four."
Kaufman Bros's Kim said that the results of "Treasure Planet" spelled continued challenges for Disney. "This adjustment suggests that the company's core animation franchise could face some rough waters ahead," he said. REUTERS
© 2002 Reuters
Having a senior moment? Heck, you're in great shape for the US Senate .....Frank and Strom need a buddy to wheel down the halls of Congress with. You ought to run.
Enjoyed it. Went with my 30-something son-in-law and 20-something nephew over a Thanksgiving weekend. We all enjoyed it though I didn't get numerical scores from the other guys. $140 mil for an animated film seems a bit much. I much preferred both Monsters, Inc. and Shrek from last year but they were true masterworks. Treasure Planet was a fine reinterpretation of the Robert Louis Stevenson classic. I hope that Disney can recoup most of the investment.
Oh, I'm sorry.
BWWWAAHAHHHHHAAAAAAA :-)
Toy run. Tomorrow 7AM, Pompano. 36,000 Harleys on parade.(all w/hangovers), Bring a toy! Bye. :-)
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