Walt Disney will incur a $200m writedown on John Carter, the action film based on the Edgar Rice Burroughs novel.
Walt Disney will incur a $200m writedown on action film John Carter
Film about an American civil war hero who journeys to Mars
The film has failed at the box office despite a $300m production budget
Los Angeles (Financial Times) -- Walt Disney will incur a $200m writedown on John Carter, the action film based on the Edgar Rice Burroughs novel which has failed at the box office despite a $300m production budget and an extensive global marketing campaign.
The film about an American civil war hero who journeys to Mars is shaping up to be one of Hollywood's costliest flops. It has generated $184m in global ticket sales but with about half its takings going to cinema chains, Disney has had to adjust its earnings guidance for the quarter to reflect the film's performance.
The company said its "current expectation" is that its movie studio division will incur an operating loss of between $80m and $120m for the quarter following the release of the move.
The writedown deals a blow to Rich Ross, the chairman of Walt Disney Studios, who has been trying to improve returns at the division following a restructuring and a focus on films made under the Disney, Pixar and Marvel brands.
The studio has better prospects for the rest of the year, when it will release Brave, the latest film from Pixar, and The Avengers, a superhero movie featuring characters such as Iron Man and The Incredible Hulk. Disney said the two movies had "tremendous potential to drive value for the studio and the rest of the company".
However, the abject failure of John Carter is not likely to be forgotten in an industry where a single flop can wipe out a studio's annual profits. Hopes were initially high for John Carter: Its director, Andrew Stanton, had made the critically lauded and commercially successful Finding Nemo and Wall-E.
But the director openly admitted to struggling with the transition from animated film-making to live action directing. Meanwhile, Burroughs' source material, which inspired filmmakers such as James Cameron, has failed to energise young, male cinema goers, a crucial demographic for any big-budget action movie.
The film comes a year after another costly Disney flop -- Mars Needs Moms -- but although it is likely to provoke some soul-searching at the company, privately executives are standing behind Mr Stanton and saying the company will continue to take risks in the pursuit of creative success.
John Carter was "greenlit", or put into development, by the previous management regime at Disney's studio. Since the departure of Dick Cook, the former studio chairman, Disney has cut its marketing costs and reduced the headcount at its home entertainment division to reflect an industry-wide slump in DVD sales.
It is also producing fewer movies, concentrating instead on distributing titles produced by DreamWorks, the movie studio created by Steven Spielberg, Pixar and Marvel, the comic book publisher it acquired in 2009 for $4bn.
© The Financial Times Limited 2012