Movies With Butter

A couple weeks ago, Disney reported that they’ll be hit with a $200M write down for “John Carter” by the end of the fiscal second quarter, which just ended on March 31.

A lot of people took this to mean that Disney lost $200M for the science fiction film. What people don’t realize is that it’s only for the second quarter. I don’t think it includes money that it’ll make afterwards, namely those from home video and TV rights. That could amount to hundreds of millions in additional revenue.

Since Disney and none of the media mentioned it, I’m pretty sure home video and tv revenue are not included. They’re numbers Disney won’t have until the movie finishes its run in theaters, and it’s only been out for about a month.

Let’s take a look at the numbers from theatrical so far: $66M domestic and $188M overseas, $254M total. At its current rate, it’ll probably end with $280M worldwide, depending on how it does in Japan, the last major market on its schedule.

Now, let’s apply a formula used by Tony Wible, an analyst from Janney Montgomery Scott, in an article on The Hollywood Reporter with updated box office figures.

If Disney’s split with exhibitors is 40%, then Disney will net $112M in revenue from $280M in worldwide box office. They’ll make about the same from home video - sales, rentals, and vod - which gives them a total of $224M. Let’s say “John Carter” will make $35M from global TV rights. That’ll give Disney $259M in total net revenue from “John Carter.”

The film’s budget is $250M, and its marketing cost is $100M, for a total cost of $350M. Subtracting $259M net revenue from the total cost will give Disney a write down of $91M. That’s still a lot of money, but not nearly as bad as $200M.

We probably won’t know for sure how much the company will lose on “John Carter” until it’s done with home video and TV, which could be another year or two. By then, no one probably cares anymore, but they will remember incorrectly that “John Carter” lost $200M for Disney.

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