On an earnings call yesterday Disney CEO Bob Iger expressed disdain over the fact that the company’s acquisition of Fox had not resulted in the fiscal year third quarter value they thought it would. The film side of Fox had an operating loss of $170 million dollars, which was a major surprise to Disney, who guessed about $180 million operating income for the same period last year during the acquisition. So despite an increase of 33% year-over-year to $3.8 billion for all of Disney’s other films, the company and Wall Street are none too pleased.
“One of the biggest issues we faced in the quarter was the performance of the Fox film business,” Iger said. “It was well below what it had been and well below what we thought it would be when we did the acquisition.”
The brunt of the blame for this falls on the woeful performance of Dark Phoenix. The movie cost around $200 million to make, barely broke $250 million for its global box office, and was shoved out of theaters early. It was a massive flop that landed directly on Disney’s books.
That wasn’t the only issue, though. Across the board, Fox’s live-action films have underperformed for the year either because they weren’t that good or because the buyout affected their quality and marketing. It took nearly a year for the $71 billion buyout to go through, so Fox was simply waiting for it to actually happen with little instruction on how to proceed while they did. That led to a host of films and projects not getting the attention they deserved, some of which still have yet to come out.
This, however, is really just a minor hiccup in a takeover that gives Disney control of a massive catalog of film and television properties that they are already utilizing to dive deep into the streaming competition by offering more content than any other streamer at a drastically lower price. Iger also announced that the company is already planning to leverage Fox properties on Disney+ by rebooting Home Alone, Night at the Museum, and Diary of a Wimpy Kid. The future of the film side of things doesn’t look all that bad either, with Iger laying out Disney’s plan for Fox, which involves focusing on fewer films. He also recognized powerful IPs like Planet of the Apes, Avatar, and the host of Marvel characters that have been brought back into the fold.
“We like some of the movies that are coming up. There’s a specific one, Ford vs. Ferrari, which we’ve all seen and it’s great,” Iger said. “It will probably take about a year, maybe two before we’re able to have a real impact on projects in development, but we’re confident that we can turn around the fortunes of Fox live-action.”