Did Disney Actually Make Any Money On Its Terrible Star Wars Movies?

Valliant Renegade looks into the financial filings and finds the answer is, "No."

That's pretty surprising, but he has the receipts, as the 50-year-olds pretending to be 15-year-olds on Twitter say.

Disney has released public statements about the costs of each film. But there is no SEC patrolling their statements for truthfulness. For some reason, entertainment companies are allowed to mislead shareholders about the costs and profitability of their films. (I guess "Hollywood accounting" is accepted by the SEC as the standard accounting for the business.)

Disney claims that all five of its Fake Star Wars movies -- the trilogy, plus Solo and Rogue One -- cost $1.3 billion to make.

But that's not what their British tax filings say. Disney films all of its blockbusters in Great Britain to take advantage of the tax credits that country offers for making movies there. And those filings have to be at least close to accurate, because those expenditures are what the tax credits are based on.

Disney uses fake names for the financial entities operating in Britain to receive these tax credits -- The Force Awakens was made under the auspices of "Foodles International," The Rise of Skywalker was made by a corporation called "Carbonado Industries" -- but if you can figure out which fake-name company was making which movie, you know about how much these films cost to make, because the financial information is public record.

The Star Wars films' budgets -- first their claimed budgets, then the real budgets, as disclosed in British tax filings:

The Force Awakens........$308 million.........$667 million

Rogue One......................$200 million.........$294 million

The Last Jedi...................$262 million.........$409 million

Soylo................................$275 million.........$364 million

The Rise of Skywalker.....$275 million.........$554 million

So they claimed these five films cost $1.3 billion.

But the actual costs are $2.29 billion.

In addition, each of these films had a marketing budget of at least $150 million, and most had expensive reshoots which are probably not tallied in the British filings.

The five films cost, then, more than $3 billion.

And how much did the movies actually generated in income?

All together, they made $5.92 billion in gross rentals. "Rentals" are what they receive from movie theaters in exchange for allowing theaters to exhibit the movies.

But studios only receive a cut of that -- the theater gets its cut too.

The cut the studio gets depends on the market. For US rentals, the studio takes 55% of the box office receipts. For foreign markets excluding China, the studio gets 43%.

For the Chinese market, they take only a pittance -- 25%. Because China is Asshoe.

Crunching the numbers, Valliant Renegade calculates that Disney made about $2.84 billion in rentals on these five films.

So Disney lost money on the movies, at least comparing receipts to expenditures.

There are other numbers to figure in -- they got about $300 million in tax credits from the UK, so that knocks down their costs. And these films have continued making money in the post-theatrical markets of VOD rentals and rentals to streaming services.

But many movies that fail to turn a profit at the box office eventually eke out a profit from TV rentals.

We don't call those movies "hits," though.

So Disney's Star Wars is barely profitable, and it looks like a lot of the blame for that is due to Kaffeine Kennedy's undisciplined, profligate spending. As well as her determination to make divisive films that deliberately alienate the built-in audience. She's basically using super-ultra-blockbuster budgets to make divisive independent movie political fare.

Disney's share price dropped to a fresh new low on September 7th, falling below $80. It has since climbed back to $83-84, which is still almost half its high of $168 during the covid lockdown.

Speaking of profligate spending to chase an ever-sinking audience: Disney's former profit center ESPN has been slowly dying due to cord-cutting, but have refused to stop spending "like drunken sailors" on broadcast rights, to bring costs and revenues into closer alignment.

The era of cable and satellite cord cutting began in the fall of 2014.

Quietly, at first.

So quietly, in fact, that most at ESPN and in the cable industry refused to acknowledge what was occurring. A few million here, a few million there, slowly a trickle turning into a stream and then the stream turning into a river and before long there was a flood of cord cutters.

If they made a movie about the cord cutting disaster -- and at some point they might -- a quant would be the hero. Someone deep in the recesses of ESPN's business department who looked at the cable revenue spigot and started to realize what was going on -- the greatest business in the history of media was sputtering, just as ESPN spent greater and greater sums of money on sports rights. That person probably jumped and waved their arms, begged ESPN executives not to keep spending money on sports rights like drunken sailors.

And that person was summarily ignored.

By the summer of 2023, just nine years after peak cable was hit in 2014, only 70 million households were paying for cable or satellite subscriptions. ESPN had lost 30% of its business, just as the cost for sports rights loomed larger and larger.

And then last week, inexplicably, things got worse. Charter Communications, home to 15 million cable and satellite subscribers, refused to bend the knee to ESPN's price increase demands and cut the channel -- along with ABC and all other Disney properties -- off air just as Florida prepared to kick off against Utah on the opening Thursday night of college football.

...

How did ESPN's business die?

Gradually and then all at once.

Nine years ago ESPN was in 100 million households, without Charter they are in around 55 million households. In the space of nine years, ESPN has lost almost half its audience, half its business, half its subscription revenue.

This is a massive media story, one of the biggest of our lives. And it's not just ESPN. ESPN just stands to lose the most because it had the most lucrative business model in cable. It's all of the cable and satellite bundle, the entire cable neighborhood is on fire.

As much as you've read about this ESPN-Charter battle so far? It should be ten times that much. Because this is how the free ride that most of us sports fans have grown used to comes to a screeching halt. This is bad, very bad, if you're a sports fan, a sports media employee, a sports executive or an employee of a sports team, this is asteroid hitting the planet bad, a dinosaur level extinction event.

Whether you're a star athlete, an owner, or just a fan, if you care who wins games or simply enjoy watching those games, we're all about to have to pay a ton more for that privilege.

Put simply, everyone is f*cked.

Including, potentially, everyone in all of media, not just those of us in sports media.

Because the golden cable cash spigot has suddenly run out of coins and if sports collapses, the entire cable bundle may collapse with it.

His point is that ESPN was only able to drain money out of the wallets of cable subscribers because cable companies bundled ESPN's huge costs into everyone's bill -- including Aunt Gladys, who never, ever watched ESPN. ESPN viewers were therefore subsidized by millions and millions of Aunt Gladyses, who never watched ESPN and had no idea that $20 of every monthly cable bill was going right to ESPN.

ESPN can afford to pay the NFL $100 million per Monday Night Footbal game because they're stealing hundreds of millions from millions of unsuspecting Aunt Gladyses who have no idea that the cable channels they watch are very inexpensive ones, and that most of the money they're paying for The Great British Baking Show is going to pay for NBA games.

But now that people are cutting the cord and paying only for what they want, ESPN can not spread out its massive costs to millions of unwitting subsidizers, and actual ESPN viewers will have to pay costs commensurate with ESPN's actual costs -- which will probably destroy ESPN, because many people will say "No thank you" if forced to pay full freight for a service they only occasionally enjoy.

ESPN's business model relied completely on Aunt Gladys never realizing she was paying an awful lot of money for a channel she never watches. Now that Aunt Gladys has woken up to this, ESPN's whole business model is collapsing.

He points out that ESPN's big solution to this problem is their own streaming offering. But their streaming channel is a trainwreck which no one watches and has barely any content. This is a problem that plagues would-be streamers like CNN: Their contracts with cable companies specify that their content only be offered on cable. So CNN, Fox, and ESPN can't, under their current contracts, just offer the cable fare on their streaming service. They have to invent new, cheap "content" for their streaming service, and then beg people to pay them money for dogshit.

Travis writes that ESPN thinks they can solve the problem of their one collapsing business by adding another business that never collapsed only because it never got off the ground in the first place.

Below, Midnight's Edge reports on the vanity and power-madness of Bob Iger.

This was the old Star Wars -- it worked on such a primal level that even a dog got it.

And now?

This fails the Dog Test.

posted by Disinformation Expert Ace at 04:37 PM

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