UPDATED: Disney CEO Robert Iger said the company expects to take a loss of $75 million on “The Finest Hours,” the sea-going ocean rescue film that opened the year as one of the conglomerate’s few flops.
“We also had a miss this quarter,” Iger said at the Deutsche Bank Media, Internet and Telecom Conference. “That will be a negative of about $75 million.”
Although the production cost of the film has not been announced, the film starring Casey Affleck and Chris Pine had substantial CGI work. It made just over $40 million at the box office worldwide.
Although it did passably with critics and many of those who saw it, scoring a 58 on Metacritic and an A- Cinemascore, the 1950s-set drama about a Coast Guard crew rescuing sailors on a freighter failed to gain momentum. Unlike most Disney hits, it was not tied to a superhero or well-known piece of intellectual property. And though it was based on a real-life story that was the most dramatic rescue in the history of the Coast Guard, it was linked to the smallest branch of the U.S. armed services and to a more-than-half-century-old incident few in the public knew about.
Though he acknowledged the film fell short, most of Iger’s hour-long presentation was about Disney’s success with the vast majority of its films. He told investors at the conference that Disney Studios had previously returned about 10% on invested capital but that results had improved dramatically of late — to more than 20% returns in 2014 and to more than 30% in 2015.
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He also said the prospects for 2016 were great, with the huge success of “Star Wars: The Force Awakens” and the recent smash opening for “Zootopia,” which surpassed “Frozen” to record Disney Animation’s biggest-ever opening.
Iger also described the almost uniform success of Disney’s three powerhouse subsidiaries. Since the acquisitions of Pixar, Marvel and Lucasfilm were all completed, there have been 26 films released, 25 of which made money, with an average global box office of $760 million. Iger noted that those big results do not include ancillary revenue from consumer products, theme park attractions, games and the like. “In some cases, we are just getting started,” he said, referring to the short time lapse since the release of the seventh “Star Wars” installment.
As he has frequently in recent months, Iger was also asked to make a case for the resiliency of ESPN, the all-sports network that has seen some subscriber declines. The Disney CEO said the business will continue to grow because of the popularity of live sports and the many rights packages ESPN controls. He said the network will remain a growth engine for Disney in the future. “It’s going to grow, but just not in the way it has in the past,” Iger said.
The Disney chief noted that the conglomerate relied on intermediaries to bring many of its products to the public — cable television operators, movie theater owners and big box retailers included. He said many of those arrangements had worked well for the company but that, in the future, he expected Disney to seek out more direct access to consumers.
He noted that, with theater owners showing its blockbusters, “We don’t have any idea who went to see ‘Star Wars.’ ” Across all the companies businesses, he said, “reaching people more directly is a priority for us.”