Fox’s Future Under Disney May Hinge on ‘Ford vs. Ferrari’

“Disney will definitely be more selective than Fox once was,” MKM Partners analyst Eric Handler says

While much of the box office conversation this fall will be around Disney’s push to cross $10 billion in annual domestic grosses, the studio also will release a film that will not rank high on the charts but will mark a major moment in its new ownership of 20th Century Fox’s film and TV assets.

James Mangold’s “Ford vs. Ferrari,” starring Matt Damon and Christian Bale as a real-life racecar designer and driver who led Ford’s challenge to Ferrari at the 1966 24 Hours of Le Mans race, will be the test of how adult dramas even with big stars fit into a modern Disney slate dominated by superheroes and familiar characters.

The film, released this November after a world premiere at the Toronto International Film Festival next month, is the sort of film that Fox and its indie wing Fox Searchlight regularly put out prior to being acquired by Disney, with adult dramas like “Hidden Figures”and avant-garde Searchlight acquisitions like “Black Swan” among the films that have earned financial and awards success.

“I think that if ‘Ford vs. Ferrari’ makes over $100 million domestic and gets a lot of awards talk, it will really convince the Disney execs that Fox should keep putting out these prestige films with recognizable stars,” Exhibitor Relations analyst Jeff Bock told TheWrap. “But if it doesn’t work, will they just decide that these sort of movies aren’t worth the extra marketing effort it takes to make them hits when they can just rely on Fox brands that market themselves?”

Once upon a time, Disney had labels, such as Touchstone and the Harvey Weinstein-run, largely independent Miramax that distributed mature films that didn’t fit the studio’s family-friendly brand, from 1993 to 2005 (when Disney sold off the division). Having that ability to offer fare that didn’t have to adhere to PG standards allowed Disney to keep up with other studios during the 1990s and 2000s.

This was especially the case in 2002, when Touchstone’s “Signs” became Disney’s highest grossing film with $408 million worldwide, topping the biggest grosser from the main Disney label, “Lilo & Stitch.” It was also true in 1998, when Touchstone’s “Armageddon” topped “A Bug’s Life” and “Mulan” with over $200 million domestic and $550 million global.

All of this changed the following decade, as Disney began its ascent into the brand stable it is known as today. Touchstone’s production wing was shut down in 2006 due to rising costs, but thanks to its distribution deals with DreamWorks and Jerry Bruckheimer Films, it still had success in the first half of the decade with Oscar-winning films like “Lincoln” and “Bridge of Spies.”

By that time, Disney had begun transitioning away from a broad movie slate to its current strategy of releasing less than a dozen films from recognized IP that have the best shot at earning four-quadrant appeal. In 2013, 11 months after buying Lucasfilm, Disney and Jerry Bruckheimer Films announced they would not renew their distribution deal, with Disney studio head Alan Horn saying there were no plans to revive Touchstone as a production outlet.

Disney no longer needed to make adult-skewing films to appeal to older demographics. With Pixar, Marvel, “Star Wars” and a theatrical industry more reliant on blockbusters than ever, they could bring all the demographics to them.

In 2016, the year Disney became the first studio ever to gross $3 billion domestically, Touchstone released the final film in its DreamWorks deal: the Michael Fassbender flop “The Light Between Oceans.” The label has remained shuttered ever since.

With Fox and Searchlight now in its portfolio, Disney has a chance to get back into the adult audience business. The question is how much will they do. Publicly, both Disney and Searchlight have said that the indie wing will be able to operate as usual. While Searchlight has been in somewhat of a holding pattern while the Fox acquisition was completed, it is entering this year’s Oscar season with the Natalie Portman astronaut drama “Lucy in the Sky” and Taika Waititi’s satire “Jojo Rabbit,” two films that are very much in the distributor’s wheelhouse.

But since Disney’s earnings call later this month, Fox’s future is very up in the air. CEO Bob Iger announced that the majority of existing Fox development would be canceled after disappointing results from Fox’s film division in the second quarter (particularly the X-Men spinoff “Dark Phoenix”). He also said that when Disney starts shaping the Fox slate in 2021, it will involve far fewer films than the studio had previously released.

But Iger also said that Disney is very optimistic about “Ford vs. Ferrari” and its box office potential, hinting that Disney will give it a full push this fall. MKM Partners analyst Eric Handler notes that the film’s story about the motorsports rivalry between Henry Ford II and Enzo Ferrari can appeal to American and European audiences.

“The international appeal of the story and the presence of Matt Damon and Christian Bale reduces the risk somewhat,” Handler said. “If you can market a film with a budget of well under $100 million overseas, that’s going to be something any studio is interested in.”

Handler also says that there’s another plus to returning to mature dramas: courting filmmakers. Disney, and in particular Marvel Studios, has spent the past few years courting indie directors like Chloe Zhao and Taika Waititi to make its blockbusters. In fact, Searchlight’s “Jojo Rabbit,” Waititi’s satirical take on hate and Nazism, was meant to be the director’s brief return to indie filmmaking before heading back to Marvel to make his second “Thor” film, “Love & Thunder.”

Handler suggested that Fox and Searchlight could be used as a bargaining chip for Disney to encourage directors to make both their passion projects and franchise films under their umbrella.

“If they go in that direction, Disney will definitely be more selective than Fox once was. But with the right director, stars and story, it could be an investment not just in reaching out to different audiences but also in the future of their brands,” Handler said.

If “Ford vs. Ferrari” disappoints or remains an afterthought during awards season, the door may open for other studios to fill in the niche that Fox leaves behind. Rival studios like Universal and Warner Bros. already are filling in that void with recent hits like “Green Book” and “Crazy Rich Asians” as well as upcoming films like Universal’s WWI drama “1917.” But those studios wouldn’t be able to completely make up the gap that Disney would leave behind if 20th Century Fox becomes just another brand factory.

“Even if Disney only goes searching for the next ‘Bohemian Rhapsody,’ movie theaters need that variety of films to keep moviegoers coming in,” Bock said. “If fewer studios are actively searching for grown-up films, that means fewer directors are going to get the opportunities to make those films.”

Jeremy Fuster

Jeremy Fuster

Box Office Reporter • jeremy.fuster@thewrap.com



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