Disney does it once again

HIGH POINTS: The Walt Disney Co. remained the market share leader in 1996, with 20.9%, well above second-place Warner Bros.’ 15.7%. As the year came to a close, Disney had four $100 million-plus grossers in the bag with “The Rock,” “Ransom,” “Phenomenon” and “101 Dalmatians” passing the box office benchmark.Under studio chairman Joe Roth, Disney has gotten back into business in a big way with the live-action “event” picture. But it came at a price, with Roth generating criticism in town for spending so substantially on marketing and advertising. Previously, the studio’s only event films were its animated musicals. But its toon event film for 1996, “The Hunchback of Notre Dame,” came just shy of making it into the $100 million club, with its domestic take of $99.9 million lagging behind previous animated blockbusters such as “The Lion King,” “Pocahontas,” “Beauty and the Beast” and “Aladdin.”

One of the pleasant surprises for the studio came with the word-of-mouth hit “Mr. Holland’s Opus,” which brought in $82.6 million. “Toy Story,” released in 1995, continued to pull hefty numbers in ’96 for Disney, rallying $45.7 million for a total of $191.2 million domestically.

With 30 releases, the company fared well during 1996. “It’s been the biggest year any company has ever had in the industry,” said Richard Cook, chairman of the motion picture group. “We’ll wind up at $1.2 billion. That means we’ve had three years in a row that are over $1 billion.”

LOW POINTS: Disney had its share of high-profile box office flops including Barbet Schroeder’s “Before and After,” with Meryl Streep and Liam Neeson; the Sharon Stone starrer “Last Dance”; the Winona Ryder starrer “Boys”; the Whoopi Goldberg comedy “The Associate”; and disappointing openings for the animated “James and the Giant Peach” and “The Preacher’s Wife.”

“On balance, this has been a very good year for us when you look at the number of successes that we’ve been fortunate to have,” countered Cook.

But as Disney played out its two-year plan to phase out Hollywood Pictures, the subsequent politicking and restructuring left executives wondering what was happening in their own backyard. At one point, the situation got so murky that executives resorted to calling reporters to try to find out what was happening.

Cook got his promotion from president of distribution in August, after months of speculation and jockeying among execs that left motion picture group chairman Chris McGurk on the outside looking in. McGurk subsequently found a home at MCA.

Hollywood Pictures president Michael Lynton, who had relocated from New York to L.A. two years earlier, went back to Gotham to head Penguin Publishing. Other Hollywood Pictures executives were placed elsewhere in the company or exited altogether. The bulk of Hollywood’s projects were absorbed by Touchstone Pictures, which is overseen by Donald Deline.

Meanwhile, former Disney chairman Jeffrey Katzenberg sued his ex-employer, claiming that Disney owes him at least $250 million for his share of studio profits. In August, Disney president Michael Ovitz was brought in to try and smooth things over between Katzenberg and Disney, but efforts failed; the complaint is moving to trial in the spring or summer.

Disney also ran into bad timing overseas. It signed filmmaker Martin Scorsese (a former Ovitz client) to a deal driven by his Dalai Lama project “Kundun.” At the same time, Disney, led by Ovitz, was aggressively working on expansion plans in China. But the Chinese were not pleased with the film, complaining that it glorifies an enemy of the Communist mainland. The Chinese complaints put pressure on Disney to back off on production of the pic – which Chinese officials have denied – and threatened the studio’s blueprints for the mainland.

WHAT TO WATCH:

* Roth’s strategy has become the new industry clarion call: fewer pictures, more event films. It will be interesting to see how the company’s market share will be affected by the cutback in releases from 30 in ’96 to 24 this year. According to Cook, “It won’t dramatically affect us because so many (of those) movies are either art films or quasi-art films that we won’t have in our future schedule.” But will the company be able to stick to a planned 24 releases? It has 15 projects already for the first half of 1996.

* How will the unprecedented, 10-year exclusive worldwide promotional alliance between Disney and McDonald’s Corp. work? The agreement between the two corporate giants turned Hollywood and corporate America on its ear. The deal aligns the No. 1 name in fast food with the No. 1 name in family entertainment globally.

* How will the onslaught of marketing dollars spent on more event films affect profitability? It didn’t work on Francis Ford Coppola’s “Jack,” which was one of the first projects ever packaged under the new regime as an event picture. “Jack” cost about $45 million and grossed some $58 million domestically

* The company is still operating without a No. 2 after the sudden exit of Ovitz in December. Michael Eisner said that he doesn’t wish to fill the post, but that may change.

OUTLOOK FOR 1997: It appears to be very mixed. The year starts with the Eddie Murphy buddy actioner “Metro” this month, and the studio could pull a tidy profit from David Vogel’s Walt Disney Pictures banner with Robert Simond’s remake of “That Darn Cat.”

Tim Allen, who enjoyed huge success with Disney/Hollywood Pictures’ “The Santa Clause,” is back in business with the studio in March with the comedy “Jungle2Jungle.”

Demi Moore, who has not had much success opening a film on her own, marches out in Ridley Scott’s “Matter of Honor” in April. Meanwhile, Disney’s summer looks promising, with “The Rock” team of producer Jerry Bruckheimer and star Nicolas Cage joining forces for the actioner “Con Air” in June, followed by the animated musical “Hercules” and the Brendan Fraser starrer “George of the Jungle,” which McDonald’s is backing with its promotional muscle.

Disney will re-release the animated musical “The Little Mermaid” for Thanksgiving and is pushing ahead with the Robin Williams starrer “The Absent-Minded Professor” from Great Oaks Entertainment.

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