‘Dark Phoenix’ was a giant bomb that hurt Disney earnings

Daniel Roberts
Senior Writer

This summer, “Avengers: Endgame” became the No. 1 box office cash cow of all time. Three of this summer’s top five movies globally so far are Marvel character movies: “Endgame,” “Captain Marvel,” and “Spider-Man: Far From Home.” Six of the top 10 biggest U.S. opening weekends belong to Marvel movies.

But not every superhero movie in 2019 is a guaranteed hit.

“Dark Phoenix” was a giant bomb. The movie had a worldwide box office haul of $252 million. It was such a bomb that it lost money for Disney in the third quarter.

The movie starred Sophie Turner of “Game of Thrones,” and came out just two weeks after the hit show’s series finale—that still wasn’t enough to save it. The movie was lowest-grossing X-Men movie ever.

In its Q3 earnings press release, which was the company’s first full quarter after its $71 billion Fox deal closed, Disney (DIS) said its Studio Entertainment revenue grew 33%, and profit for the division grew 13%, thanks to an increase in theatrical distribution from hits like “Endgame” and “Captain Marvel.”

Actress Sophie Turner attends at a press conference for her new movie "X-Men: Dark Phoenix" in Seoul, South Korea, Monday, May 27, 2019. (AP Photo/Lee Jin-man)

And yet, “These improvements were partially offset” by a loss for the 21st Century Fox (21CF) business. The loss at 21CF was “driven by the performance of ‘Dark Phoenix,’ for which we also recorded a film cost impairment.” Because of the film, the Fox studio business (not Disney’s overall studio segment) had a loss of $170 million in the quarter.

Yikes.

On the Disney earnings call, CEO Bob Iger said the Fox studio performance in the quarter “was well below where it had been and well below where we hoped it would be when we made the acquisition.”

It’s important to note that “Dark Phoenix” is about a Marvel character—Jean Grey of the X-Men—but was a Fox-produced film. (Similarly, “Spider-Man: Homecoming” in 2017 and “Spider-Man: Far From Home” this summer were Sony-produced films about a Marvel character—but those movies were hits.) Disney didn’t make “Dark Phoenix,” it inherited it.

Graphic by David Foster/Yahoo Finance

Because of that, Disney bulls could argue that the movie’s failure isn’t a stain on Disney. But it was certainly a financial burden.

Disney and its subsidiary Marvel Studios are certainly not backing off the superhero train. Last month, the company unveiled “Phase 4” of the Marvel Cinematic Universe, a kitchen sink of new Marvel prequel movies, sequel movies, and spinoff shows for the Disney+ streaming service launching in November.

Daniel Roberts is a senior writer and show host at Yahoo Finance and closely covers Disney. Follow him on Twitter at @readDanwrite.

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