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Why Disney Failed with ‘The Lone Ranger,’ and Universal is Succeeding with a Smart Strategy

Why Disney Failed with 'The Lone Ranger,' and Universal is Succeeding with a Smart Strategy

There’s a reason why Legendary Entertainment is heading to Universal Studios. For one thing, they are the studio that has room for the producer-financier. And they are the studio which is clearly on a roll under the leadership of chief executive Ron Meyer and his two co-chairmen, distribution and marketing whiz Adam Fogelson and Donna Langley, who runs production. Universal has bragging rights to Illumination’s “Despicable Me 2,” which could wind up the second highest-grossing summer blockbuster; they imported animation czar Chris Meledandri from Fox, where he had supervised the Blue Sky movies such as “Ice Age.” And they have kept the “Fast and the Furious” series on point. 

In fact Universal, after suffering a predictable setback with Hasbro’s “Battleship” last summer, may have learned some valuable lessons. Fogelson has adopted a different approach from the other studios because he has not inherited multiple franchises to rely on. That partly explains why he sends his movies into the marketplace all year long, a strategy that he thinks other studios could benefit from as well, he said at CinemaCon. “There are very few reasons why almost any film can’t open any weekend,” he said.

Their string of modest hits, as marketing exec Michael Moses pointed out in a tweet, include fairy tale actioner “Snow White and the Huntsman,” which should yield a sequel, Mark Wahlberg comedy raunchfest “Ted,” Tony Gilroy’s “Bourne” reboot with Jeremy Renner, Anna Kendrick musical “Pitch,” Judd Apatow’s family comedy “This Is 40,” Working Title’s Oscar bait musical “Les Miserables,” horror flick “Mama,” starring Jessica Chastain, Melissa McCarthy comedy “Identity Thief,” sci-fi Tom Cruise vehicle “Oblivion,” “Fast and Furious 6,” Jason Blum horror flick “The Purge,” starring Ethan Hawke, and now the blockbuster of the bunch, “DM2.”

All were produced on reasonable budgets, even “Les Mis.” Still to come are “RIPD,” Robert Schwenke’s 3-D sci-fi buddy action comedy starring Jeff Bridges and Ryan Reynolds (July 19); actioner “Two Guns” (August 2) starring Denzel Washington and Mark Wahlberg as two undercover rival cops, co-starring Bill Paxton and Paula Patton; “Kick-Ass 2” (August 16), which ups the wattage with the original cast returning and Matthew Vaughn in producer mode; Vin Diesel returning to “Riddick”; Formula 1 drama “Rush” from Ron Howard; “About Time” from Richard Curtis; the return of the full cast from “The Best Man” for the sequel “Holiday”; and the long-delayed period martial arts actioner “47 Ronin” starring Keanu Reeves for Christmas. We’ll see if the studio was able to make it work. 

Meanwhile Warner Bros. is in management disarray as rookie studio chief Kevin Tsujihara steers a new course after having lost both his TV and motion picture chiefs within months of his taking over the reins. Legendary had clashed with outgoing Jeff Robinov, who may be heading toward running production for chairman Jim Gianopulos at Fox. 

Sony is having a rotten summer, with disappointing and costly flops “After Earth” and “White House Down.” And Disney is seeing its profits from “Oz: the Great and Powerful,” the year’s top blockbuster from Marvel, “Iron Man 3” and Pixar summer smash “Monsters University” pay for the gonzo flop “The Lone Ranger,” which could yield a $150 million write-down.

Everyone saw that coming, even Steven Spielberg, who is starting to look canny indeed. He’s been in the business a long time, and his look at the studio summer slate told him the summer tentpoles were frighteningly expensive. “That’s the big danger, and there’s eventually going to be an implosion — or a big meltdown,” he said at a recent USC event. “There’s going to be an implosion where three or four or maybe even a half-dozen megabudget movies are going to go crashing into the ground, and that’s going to change the paradigm.”

Sure, he’s coming from a place of entitlement where a top-ranked producer of blockbusters should be able to do whatever he wants, even “Lincoln,” without having to struggle to raise financing. “Lincoln” turned out to be a huge success for everyone concerned, a modestly priced excellent movie that was nominated for 12 Oscars. Problem is, the studios genuinely believe that spending more will yield more than spending less, that the only way to get people to come to the multiplex is to pop out their eyes with an epic scale big event like “Man of Steel,” which was a disappointment, or “Pacific Rim.” They want these big movies to make so much money that they will play for their losses. But a lot of these super-expensive movies –even when they turn out well, like “World War Z” –barely recoup. 

With the box office implosion of $250 million “The Lone Ranger” wrangling less than $50 million for the July 4th long weekend, it looks likely that Disney is facing a “John Carter” style write-off again, to the tune of some $150 million. The mistakes that Disney made were made for a reason. They all know how this particular Perfect Storm came to pass. 

New Management. As Warners would do well to note, putting untried movie executives in charge of a studio can be risky. “John Carter” and “The Lone Ranger” were made on the watch of neophyte Disney Channel exec Rich Ross. The scuttlebutt from the set of “The Lone Ranger,” the latest movie from the writing team, producer, and director behind the lucrative “Pirates of the Caribbean” series, was that director Gore Verbinski was yet another runaway director run amok, not unlike Michael Cimino on “Heaven’s Gate,” lavishing millions of dollars on building two working 250-ton 19th-century style trains (hydraulic, not steam) to run on a five-mile oval track, among other things.

The film’s turbulent production history included Ross (since replaced by ex-Warners president Alan Horn, 70) pulling back the budget from $260 million to greenlight the film at $215 million. Dream on. Verbinski’s attitude during production was to spend freely to make the movie he wanted, presumably on the basis that the four “Pirates” films (not all directed by him) had grossed $3.7 billion at the global box office. Everyone in Hollywood knew before it opened that the studio would not get back its estimated $400 million to make and market the film worldwide—especially with a western, as any domestic shortfall is unlikely to be recouped overseas. 

Blockbuster protection. Disney may have thought that giving the “Pirates” team another potential franchise starring Johnny Depp was a no-brainer. In fact, they should have listened to their initial instincts. They were always afraid of this– especially after “Cowboys & Aliens,” starring Harrison Ford and Daniel Craig, divebombed at the box office. But the fact that the “Pirates” team had made the studio so much money gave the filmmakers permission to indulge their own desires on the movie. Johnny Depp on Charlie Rose admitted that the studio was scared of “The Lone Ranger.” Point is, you can’t ask the people behind the “Pirates” movies to make a western starring Depp on a budget. They won’t do it. The studio would have had to go with another creative team. You can’t recreate the magic alchemy that went into a blockbuster like “Pirates.” You can’t just move the formula over to something else. Imitating a blockbuster is a fool’s errand.

Westerns require small budgets. “Rango” was a small, expensive hit that worked within the animated family genre–not as a western per se. Westerns play to older filmgoers. As does the 80-year-old Legend of the Lone Ranger. And westerns don’t play overseas. There was no reason to believe that this would be an exception. 

Star management. The real problem was that Disney wanted to keep Depp happy. A strong management knows how to say no. They wanted Depp back for another “Pirates” and thought they needed to cater to his whims on this. He wanted to play Tonto and fought hard for it. Depp is a global star in the “Pirates” movies and that’s it. Look at the numbers on other films such as “Dark Shadows” and “Sweeney Todd.” Not the same. 

The most depressing thing about the LA Times piece examining the potential long-term fall-out for Disney from “The Lone Ranger” is not that the studio may make changes going forward–see Beth Hanna’s excerpts below. It’s that this will further discourage the studios from pursuing movies that aren’t based on current successes. And this wasn’t an original, far from it! This was a faithful remake of an established brand, one the studio thought they could revive. Maybe they could have, but at a much lower price point. 

1. Big budgets will be reserved for entertainment familiar to audiences under age 30: Think J.J. Abrams’ upcoming “Star Wars” sequel, a new “Pirates of the Caribbean” entry, ditto for “The Muppets,” and “The Avengers” sequel, all of which are under the Disney umbrella. One notable exception is next summer’s “Malificent,” starring Angelina Jolie. It remains to be seen whether “The Sleeping Beauty” spin-off will be safely familiar enough, box-office wise.

2. Keep original film budgets reasonable — under $75 million: This is nothing new. Tom Hanks starrer “Saving Mr. Banks” and Jon Hamm starrer “The Million Dollar Arm” would be examples of Disney films hitting theaters in the next 18 months with in-check budgets. 

3. Jerry Bruckheimer’s relationship with Disney could be permanently strained: “The Pirates of the Caribbean” treasure chest might not be enough to keep the veteran producer in good standing with the studio, now with “The Lone Ranger” and other recent non-performers “The Sorcerer’s Apprentice,” “G-Force” and “Confessions of a Shopaholic.”

4. Disney will continue to strengthen ties with producer Joe Roth: He’s got “Alice in Wonderland” and “Oz the Great and Powerful” in his blockbuster resume; “Malificent” and “Million Dollar Arm” are in the pipeline.

5. Gore Verbinski is in a precarious career position: “The Lone Ranger” was the talented director’s first live-action film since 2007’s third “Pirates” installment. (2011’s “Rango,” however, won the Best Animated Oscar.)

6. Same goes for Johnny Depp: The once box-office infallible actor has had a serious wane in popularity over the past year, with both Tim Burton’s “Dark Shadows” and now his turn as Tonto failing to attract moviegoers. The proof will be in the upcoming pudding: Wally Pfister’s directorial debut “Transcendence,” in which Depp most likely won’t get to rely on his signature heavy costuming and makeup, and the fifth “Pirates” film.

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