Studio Report Card: For Disney, Big Hits But Also Big Bills

In its transition year under Rich Ross, the studio became the first to have two billion-dollar grossers in the same campaign … but they came at a high price

Fifth in a series of studio report cards from TheWrap; previously:

UNIVERSAL: Studio Grows Some Green Shoots
FOX: For Fox, a Hot Start to 2010 Goes South
LIONSGATE: Stallone, 'Exorcism' Fuel Lionsgate's Low-Cost Hit Streak
SONY: Sony Bets on Originals in Franchise-Heavy Market

Grade: B
Disney was the first studio to have two billion-dollar grossers in one year in "Alice in Wonderland" and "Toy Story," but huge production costs and low b.o. on "Prince of Persia" and "Sorcerer's Apprentice" offset the wins.


It was a year of transition for Disney, with Rich Ross — who took over the chairmanship from Dick Cook in October of last year — making big executive changes in almost every major department.

Going into the year, Disney executives spoke openly about cost containment. "We didn't make money on some of these movies because they cost too much," lamented theatrical distribution president Chuck Viane, who was kept on by Ross, in TheWrap's 2009 Disney Studio Report Card.

And there were efforts to control costs in 2010, perhaps most publicly, convincing Jerry Bruckheimer to trim the production budget on the upcoming "Pirates of the Caribbean: On Stranger Tides."

But studio brass had to once again live with big price tags for this year's slate — with many of the studio's films costing well in excess of $200 million.

Not that it really mattered for its two biggest hits, 3D films "Alice in Wonderland" and "Toy Story 3," which together made Disney the first studio ever to release two billion-dollar grossers in the same year.

Cost did, however, matter on films like the 3D-animated "Tangled," which was developed over several years by Disney/Pixar animation guru John Lasseter at a widely reported nut of $260 million.

The solid performance at the worldwide box office by the Rapunzel-themed film — $232.4 million and counting — is helping relieve some hair loss in Burbank, though profitability long-term still seems iffy.

Likewise, the Bruckheimer-produced period-adventure flick "Prince of Persia: The Sands of Time" was a bonafide international hit over the summer, overcoming a soft $90.8 million domestic performance with a huge $244.4 million gross in the foreign territories.

But again, the film's $200 million negative cost curtailed profits. Likewise, Nicolas Cage's "The Sorcerer's Apprentice" managed to make over $200 million ($215.3 million), but a $150 million produciton nut kept it out of the green.

For his part, Viane stressed that across production, marketing and distribution, the studio is adapting to a business that no longer has a huge DVD upside to factor into budgets. "We've gotten better, and we're going to get better next year as we figure out how to play this game," he told TheWrap Tuesday.

While Bruckheimer's fourth "Pirates" movie — still robustly budgeted at well over $200 million and slated for May release — highlight's Disney's 2011 slate, you can expect to see a few less costly spectacles from the Mouse House.

In their stead will come a first round of more moderately priced projects from DreamWorks, such as youth sci-fi drama "I Am Number Four" and Shawn Levy-directed robot-boxing movie "Real Steel" starring Hugh Jackman.

Also on the slate: 3D-animated family films "Mars Needs Moms" and "Cars 2," a Lasseter-overseen update of "Winnie the Pooh," and a new "Muppets" movie.

Viane believes the performance of "Alice" and "Toy Story 3" shows that Disney has the team in place to exploit all of these properties to their full potential going forward.

"The communication and coordination of the marketing and distribution teams has been honed really well this year," he said. "We're talking about a great collaberation. You don't get to a billion dollars on two films without the wheels being perfectly greased."