'The Lone Ranger' could have Disney playing Scrooge

The film's box office collapse likely means more cost cutting lies ahead for a media giant needing to show bottom-line growth.

By Jonathan Berr Jul 19, 2013 8:33AM
People ride the Mad Tea Party at Disneyland in Anaheim, California on August 6, 2009 (© Paul Hiffmeyer/Disneyland/AP Photo)Walt Disney (DIS) CEO Bob Iger, who has been in cost-cutting mode for a while, may have to ramp up his efforts in the wake of  The Lone Ranger's bombing at the box office.

The film, which stars Johnny Depp and Armie Hammer, cost a reported $250 million to produce and had grossed a mere $71 million as of last weekend, according to Box Office Mojo. It seems likely that the media giant will need to take a write-down because of the film, which may serve as a catalyst for Iger to slash expenses even more.

According to Bloomberg News, in addition to Disney's trimming its workforce and outsourcing noncore operations such as video game development, it's eliminating perks such as car allowances, which in one case amounted to $900 a month.

Even ESPN, which has long been a cash cow for Disney, is cutting back. The "Worldwide Leader in Sports" eliminated as many as 400 positions in May. An additional 120 have lost their jobs at Disney's film studio.

Shares of Disney have risen more than 35% this year, but that's well less than those of rivals such as Viacom (VIA), which climbed more than 52%, and 21st Century Fox (FOXA), which has jumped more than 56%. So Wall Street is especially keen to see Disney bolster its bottom line. The company has long been an investor favorite, known for rarely missing analysts' expectations.

When Disney reports quarterly earnings next month, investors will be keenly interested in the results at Disney's Parks and Resorts business, its second-largest by revenue, because it's viewed as a barometer of the overall economy. Walt Disney World and Disneyland are also among the top destinations for foreign tourists visiting the U.S., which gives the parks an even greater significance.

It will be interesting to see whether Disney's price increases are affecting these businesses. Probably not, given the overall rise in consumer confidence. Indeed, when my family and I visit Disney World later this summer, we expect the place to be packed.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.


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51Comments
Jul 19, 2013 10:10AM
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How much of a pay cut did Iger or any top execs take?  They approved a bomb and the workers take the hit.  What the hell is wrong with THIS picture? 
Jul 19, 2013 11:11AM
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sad to say but even putting Johnny Depp as Tonto and expecting to turn the "Lone Ranger" saga into the "Tonto and Sidekick" show was a mistake.  The premise is "the LONE RANGER" which means Tonto should not have been the STAR.  Depps "quirkiness" is what carried the PIRATES franchise but he was the lead and the star so it was expected.  To make the second banana the main interesting character defies logic.
Jul 19, 2013 2:27PM
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The movie cost 250 million ? That's  the salaries of about 6 executives get rid of them and you will be okay.
Jul 19, 2013 2:41PM
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How come the cost cutting mode never includes trimming the obscene salaries of these jerko CEOs?
Jul 19, 2013 2:22PM
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This is corporate greed at it's finest.  The board is all over the CEO's a$$ to make money and after a horrendously bad movie the CEO is trying to save his cushy job and hoping to save his yearly bonus by cutting costs and gutting the company instead of manning up approaching the board and telling them "we messed up on this one, we will continue to offer a great product to the public and will  have a more in depth review process for future film plans before we decide to produce them to maximize returns". 
Jul 19, 2013 2:35PM
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Does anyone agree with me that The Lone Ranger was going to be a bomb for the mere reason that the current youth (saying up to most 30-year-olds) don't know who the Lone Ranger was? The only reason I knew about the character was through my grandparents.  

Therefore most youth won't bother seeing the movie because they don't identify with the character such as they would with either Batman or Spider Man. I understand that both Batman and Spider Man have been around for a while but they are just more advertised and well-known.

Jul 19, 2013 2:36PM
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Corporate America's CEOs are the biggest threats to peace, prosperity and security of this country, as we saw in the aftermath of the 2008 economic catastrophe that laid to waste this country. While they give themselves obscene salaries and golden parachutes, they never punish themselves for these obscene misjudgments such as 250 million dollars for a silly western.  Instead, they raise fees on already expensive park entrance fees, lay off workers who had nothing to do with these decisions, and in essence make everyone else pay for these moron CEOs' mistakes.
Jul 19, 2013 2:11PM
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The prices at Disneyland are absolutely outrageous, and the medium income people cannot afford to take their children, they raise the prices, and cut perks from their employees and outsource what they can, but they still make lots of money.

The movie was a satire, but only the baby boomers would know it. I thought it was funny and enjoyable. Just wait and see when they release the next set of Star Wars movies, money ,  money, money will flow!!!!!!!!!!!!!!!!!!!!!!!!!

Jul 19, 2013 2:48PM
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How about cutting the price of the Park Entrance? Geez, as if 80,000 people at $130 a head is reasonable. Bring back E Tickets and a cheap General Admission.
Jul 19, 2013 2:24PM
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I love the bulk of Depp,s work. butt this film had the lone ranger looking like a accidental buffoon.   Don't make a move with a hero  where the hero don't, shine ... Johnny you should have known better.
Jul 19, 2013 3:07PM
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We used to go as a family every other year to Disney World. Too costly now. We can go to other vacation spots and spend far less. We wind up having as much if not more fun because we do not have to be so cost conscious. Been 5 years since we have been there.
Jul 19, 2013 2:07PM
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Any and I mean any "The Lone Ranger" movies or books or anything else about he hero of the west needed to be in line with the actual radio ,tv,or anyother production of the character needs to be right up to date. I met Jay Silverheels in person ay a race horse outing. I got to ask one question.How he felt about being a second to the Ranger. He said it was an honor for his native American people to be in a very popular tv show. He was just as great when talking as being the friend of the Ranger...Matbe Disney should have let General Mills be the executive producer of the film,they were the sponcer while I was growing up,it taught me to repect grown ups and all kinds of the world races. Cheerios was the best and still is great. Sometimes on a Saturday morning while eating a bowl,I still can go back to that time. U see I am now a sr. citizen. I even live where Hopolong Cassidy was a resident, but the ranger was who was all mine..As for Disney stay out of the west altogether, if you can't get it right...
Jul 19, 2013 2:37PM
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I visited  Disney world the week of Christmas and it's always been packed. their not losing money im sure. now lets hope that gas prices will come way down since they been raping us for years now
Jul 19, 2013 3:51PM
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He Mr. Iger!  Want to make more money?  Don't cut operating costs, CUT THE COST OF GOING TO DISNEYLAND / DISNEY WORLD!  There's a concept for you; make the parks more affordable for everyone and more people will go!  If you really, really feel the need to squeeze people at the gat, tier the park entry cost based on season/day of the week.  How many people go to Disneyland in the middle of the week on October?  You could attract TONS of local business if you cut the rate in half during your slower season(s).

 

Shee**** not rocket science, it's supply and demand!

Jul 19, 2013 9:12AM
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I do not listen to the so called professional critics about movies, tv shows or anything else for that matter.

 I saw this movie and was thourghly entertained by it. I thought this film was every bit a good as any of Depps Pirate of the Carribean movies.  I have seen it twice and can't wait for the DVD to be released. 

  OK, I know it aint Citizen Cain, but it doesnt pretend to be. It's a great way to spend a couple of hours to escape the world and have some laughs. Go see it for your self. and help the mouse.

Jul 19, 2013 2:52PM
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A wonderful moment in the movie True Lies - Arnold "borrows" a police horse and gives chase to the bad guy.  The bad guy uses a motor cycle to make an outragous jump from one high rise to another.  Arnold is going to chase right after him, until at the last moment... the horse stops.  Even the horse knew it was impossible to do and wasn't ready to die trying.

 

So when I see a trailer that shows a horse jumping on top of a moving train - then raceing across the top of rail cars... I remember that even a horse would say no.

 

And honestly, they lost me the first time I saw JD with that bird stuck on top of his head.  Again, even a horse would know that was wrong.

Jul 19, 2013 3:20PM
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I grew up watching The Lone Ranger as a kid. It was a must for many years on Saturday mornings.  It is one of televisions iconic series of all time.  The treatment in this movie is a joke not worthy of the series it is based on.  While I generally like JD, casting him as Tonto is a disaster not to mention the slap in the face to the Native American community, although given the disaster this movie is they may be just as glad to not be associated with it. 
Jul 19, 2013 2:34PM
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The sidekick as star and a bumbling "hero?" As good as Depp is in this movie, it just does not work.

I would rather have seen a confident hero and Depp's character tell the Lone Ranger to "go to Hell" when told, "Tonto, you go to town."
Jul 19, 2013 2:48PM
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Depp should have been the Ranger and played with less camp.
Jul 19, 2013 3:45PM
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Director Gore Verbinski and producer Jerry Bruckheimer, Johnny Depp and Armie Hammer all took 20% pay cuts already to get the movie made (this was last year, that % may have changed). Why isn't anyone else willing to take a pay cut? Perhaps Bob Iger since he's in charge of everything? Hmmmm....
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