Walt Disney Co. (DIS:US) will end its partnership with “Pirates of the Caribbean” producer Jerry Bruckheimer as the company looks to rein in film costs and focus on movies from Pixar, Marvel and Lucasfilm Ltd.
The first-look deal with Bruckheimer, one of the best-known action producers in Hollywood, won’t be renewed when it expires in 2014, Burbank, California-based Disney said yesterday in a statement. They will continue to work together on projects including the fifth “Pirates of the Caribbean.”
The decision underscores the pressure on studio Chairman Alan Horn to limit risk while placing huge bets on a handful of big movies with blockbuster potential. While the first four “Pirates” films generated $3.73 billion at the global box office, Disney pulled the next one from its release schedule, and Bruckheimer stumbled in July with “The Lone Ranger,” which may lose $190 million for the company.
“We have had an incredibly successful collaboration over the past two decades and he is a friend to many of us here,” Horn said in the statement. “We will continue to work together in the future.”
Bruckheimer, 67, spent 25 years with Disney, making 27 films ranging from “Armageddon” to “Pearl Harbor” to “National Treasure: Book of Secrets.”
In 2003, he turned the buccaneer-themed attraction known to legions of Disney park visitors into a movie starring Johnny Depp as a rowdy pirate channeling rocker Keith Richards. The film generated more than $650 million at the global box office, according to researcher Box Office Mojo.
While the “Pirates” sequels were successful, Bruckheimer and Depp hit a pothole with “The Lone Ranger,” which cost $215 million to make, not counting marketing costs, and delivered $244.7 million in worldwide ticket sales, according to Box Office Mojo. Ticket revenue is generally split with theater chains. The company said in August it expects to record a loss of as much as $190 million this quarter on the film.
“We’ve also learned there needs to be a cap on tentpole non-franchise movies,” Chief Financial Officer Jay Rasulo said last week at a Bank of America investor conference. “We need to cap those at a level that allows us to experience good economics and doesn’t quite put as much at risk.”
Last week, Disney delayed production of Bruckheimer’s next “Pirates” movie indefinitely, without an explanation. The film was slated to reach theaters on July 10, 2015.
Disney also shuffled its Pixar slate, saying yesterday it would delay 2014’s “The Good Dinosaur” by 18 months. That left the company without an annual movie from the animation studio that produced “Toy Story” for the first time since 2005.
Disney fell 1.1 percent to $65.01 at the close in New York. The stock has advanced 31 percent this year, compared with an 18 percent return for the Dow Jones Industrial Average. (INDU)
With earnings growth at the company’s ESPN sports networks projected to slow, Disney will need to rely on less predictable businesses such as movies and consumer products, Benjamin Swinburne, an analyst at Morgan Stanley, said in a report published yesterday.
Hits including last year’s top-grossing “Marvel’s The Avengers” haven’t added meaningfully to profit because of rising film costs and soft home-video demand, said Swinburne, who cut his rating on the stock to the equivalent of hold from buy. Disney’s film studio has written off about $800 million of movie investments since 2009, according to the report.
Operating profit (DIS:US) at the studio totaled $722 million in the last fiscal year, down from $1.2 billion five years earlier.
Bruckheimer will look to produce more mature films outside of the Disney brand, according to the statement. He said he looked forward to making films like “Beverly Hills Cop” and “Black Hawk Down,” which were done with other studios.
“We will continue working together on ‘Pirates of the Caribbean,’ ‘National Treasure’ and other projects we have developed together at the studio,” Bruckheimer said in the statement.
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