Disney made an estimated $296.4 million loss at the box office on just two of its Marvel superhero movies in 2023 according to analysis of recently-released financial statements.
They reveal that the cost of making The Marvels and Ant-Man and the Wasp: Quantumania came to a staggering $762.4 million (£609.3 million) before Disney banked $124.9 million (£99.4 million) in government incentives bringing its net spending on the movies down to $637.5 million. They both bombed at the box office.
According to industry analyst Box Office Mojo, the movies grossed a combined $682.2 million with theaters typically retaining 50% of the takings and the remainder going to the studio. This reflects the findings of film industry consultant Stephen Follows who interviewed 1,235 film professionals in 2014 and concluded that, according to studios, theaters keep 49% of the takings on average. It would give Disney just $341.1 million from The Marvels and Ant-Man and the Wasp: Quantumania. No expense was spared on them.
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Disney does not publicly discuss how much it spends on specific productions and did not respond to a request for comment. Budgets are usually a closely-guarded secret. This is because studios combine the costs of individual pictures in their overall expenses and their filings don’t itemize how much was spent on each one. Films made in the UK are exceptions and both The Marvels and Quantumania fall into this category.
Studios shoot in the UK to benefit from its Audio-Visual Expenditure Credit (AVEC) which gives them a cash reimbursement of up to 25.5% of the money they spend in the country.
To qualify for the reimbursement, at least 10% of the production costs need to relate to activities in the UK. In order to demonstrate this to the UK government, studios tend to set up a separate production company in the country for each movie they make there.
The companies have to file financial statements which shine a spotlight on their budgets. They reveal everything from the headcount and salaries to the level of reimbursement and the total costs. Studios directly receive the revenue from theater tickets, streaming and Blu-ray sales and carry the costs of marketing as the function of the UK companies is purely making the movies.
I’m sorry, did I just read that DISNEY received $125 Million in government incentives to make a comic book movie?
It’s not like they were handed a blank check, they spent hundreds of millions more paying people and buying stuff in the UK to get that rebate
“As the CEO, if I pay myself $100 million for making this movie, I will get $25 million of that back from government reimbursement.”
No big budget movie will ever make a profit because they make sure the big wigs get paid the amount the profit would have been. It is intentional.
It goes into more detail in the article about how they qualify for that rebate, and no, that’s not how it works.
Easy. I’m the new CEO of the company we set up there. Employee salary is an expenditure, and being a company in that country, it qualifies for that rebate unless there’s more details I’m missing. I was also grossly over-simplifying in my original comment, I’m sure it’s more complicated than that. I also just attribute Hollywood Accounting (see other commenter’s post) to anything listed as a box office loss.
In the UK things like that get checked when it comes to grants, they will usually only be valid purchases if spent with approved companies.
https://en.m.wikipedia.org/wiki/Hollywood_accounting
Wait till you find out the literal billions Georgia (USA) gives away to filmmakers via a tax credit that’s been proven to not be more effective than social programs by a significant margin at generating community wealth…
(https://www.audits.ga.gov/ReportSearch/download/28730)
It’s because trickle down-style policies give more wealth and social power to those at the top while allowing the argument that the economic activity that results from that wealth benefits everyone down the pyramid (which also creates a dependency on more instances of these transfers as businesses grow to accommodate the extra demand).
Social programs do that without giving more wealth or social power to people at the top.
The effectiveness that they care about isn’t the economic benefit or allowing people to become more independent, it’s about funneling money to the rich in the hopes that they will funnel some of it back in a way that won’t look so much like corruption.
Indeed. You’d be shocked the amount of people I’ve spoken with that believe otherwise. They see the positive side of the numbers and don’t think about the long term implications for even a moment it seems.
The company I currently work at is relocating its HQ to Atlanta GA due to similar incentives. I’m slightly curious just how many millions of dollars in incentives they’re receiving to relocate ~30 employees and hire another 30-60 local employees, because apparently Atlanta outbit Dallas TX on the questionable business incentives