Just how big a hit will Disney take for The Lone Ranger?
For the second year in a row, The Walt Disney Company has to deal with a very expensive, potentially franchise-starting film that ended up a box-office bomb. In 2012 that film was John Carter, the Andrew Stanton-directed adaptation of Edgar Rice Burroughs' classic sci-fi novels that reportedly cost the company as much as $200 million after lukewarm reviews and poor performance made it one of the year's most high-profile bombs. This year that film seems to be The Lone Ranger, the Johnny Depp-starring, Gore Verbinski-directed action flick that reportedly cost upwards of $200 million to make and has so far picked up only $86.9 million at the U.S. box office (which is more than John Carter managed, but still not enough to save the film from disaster). Granted, the film is still not done rolling out internationally (it hits United Kingdom theaters this weekend), but Disney executives are already bracing for another tough loss.
So how big will that loss be? On an earnings call this week, Disney's chief financial officer Jay Rasulo said the company is expected to take a loss of between $160 and $190 million on the film, after its $215 million budget failed to pay off in revenue. That puts Lone Ranger's bomb status roughly on par with John Carter's, though Disney is likely still hoping that international numbers will push the film's losses to the lower end of the range Rasulo gave.
It sounds like a disaster, but in many ways this is part of the strategy Disney has chosen. Yes, they lose money on things like Carter and Ranger, but they also make big money on stuff like The Avengers and (hopefully) the forthcoming Star Wars Episode VII, not to mention the money they get from the still-lucrative Pixar Animation Studios. The company is making high-profile blockbusters built around big tentpole franchises, and while that doesn't always pay off, so far there seem to be plenty of rewards to outweigh the risks.
But will it always be that way? What do you think? Is this strategy worth it for the cash Disney is likely to earn on more Star Wars and Marvel films, or will the company end up regretting taking Lone Ranger-sized risks?