Disney’s ‘Avengers’ Smashes Box-Office Mark to Start Summer

Monday, 07 May 2012 11:45 AM

“Marvel’s The Avengers” crushed U.S. box-office records with $200.3 million in ticket sales, opening the summer movie season with a huge win for Walt Disney Co. following the mega-flop “John Carter.”

“The Avengers” surpassed the previous-best opening weekend of $169.2 million in the U.S. and Canada, set last year by “Harry Potter and the Deathly Hallows: Part 2,” researcher Hollywood.com Box-Office said yesterday in a statement. Forecasts had ranged from $150 million to $170 million.

“Two hundred million is a staggering number,” said Jeff Bock, box-office analyst at researcher Exhibitor Relations Co. “This is definitely the kind of momentum that’s going to carry over and ride the wave through summer.”

The movie’s performance validates Chief Executive Officer Robert Iger’s strategy of focusing on fewer, more-expensive films with characters that can be marketed by Disney’s merchandise, cable-television and theme-park arms.

Iger paid $4.2 billion for Marvel Entertainment in 2009, gaining comic- book characters such as Thor, the Hulk and Captain America, and $7.01 billion for Pixar Animation Studio in 2006.

“The Avengers” is the first Marvel film Disney has distributed since buying the comic-book company. The numbers underscore Marvel’s staying power and Disney’s ability to capitalize on the brand, said Dave Hollis, executive vice president for distribution at Walt Disney Studios.

Beyond the box office, there is a “ton of enterprise-wide value for ancillary business, whether it be consumer products or the networks,” Hollis said in an interview.

Each $60 million in additional ticket sales exceeding forecasts for “The Avengers” generates 1 cent a share in profit for Burbank, California-based Disney, Todd Juenger, an analyst with Bernstein Research in New York, wrote in a May 4 research report. That figure doesn’t include the lift to home-video sales such as DVDs and cable television, consumer-product sales or other tie-ins with Disney properties.

A hit “is usually a bigger deal for Disney than it would be for the other major studios,” Juenger wrote, citing the company’s “unparalleled ability to wring additional value.”

Disney bore the risks of its bet-big strategy with the March release “John Carter,” which cost $250 million, according to Box Office Mojo, and failed to resonate with audiences. Rich Ross, the head of Disney’s film unit, resigned the following month, and the company hasn’t yet hired a replacement.

Disney, which is scheduled to report fiscal second-quarter results on May 8, has said it lost $200 million on the movie and as much as $120 million at the film unit in the period.

“This was a needed shot in the arm for Disney and its live-action business,” said Paul Sweeney, senior analyst with Bloomberg Industries in Skillman, New Jersey. “This really validates the acquisition of Marvel Entertainment.”

Disney advanced 1.1 percent to $43.93 at 10:14 a.m. in New York. The shares gained 14 percent this year before today. The company releases Pixar’s “Brave” on June 22.

For other film studios, “The Avengers” raises the competitive bar at the start of the all-important summer season, which made up more than 40 percent of domestic sales last year.

Films scheduled in coming weeks include Warner Bros.’ “The Dark Knight Rises,” directed by Christopher Nolan, and Sony Corp.’s “Men in Black 3,” a sequel that reunites Will Smith and Tommy Lee Jones as government agents managing Earth’s secret alien population.

Summer ticket sales in the U.S. and Canada are forecast by Bock to surpass the record of $4.4 billion set last year. For all of 2011, sales were $10.2 billion. The full-year mark of $10.6 billion was set in 2009.

“The Avengers” helped push domestic box-office receipts to a 16 percent gain year-to-date, to $3.57 billion, according to Hollywood.com. Attendance is up 19 percent.

The movie brings together Marvel heroes featured singly in previous films. The Hulk, Iron Man, Thor and Captain America must overcome egos and discord to band together to fight an army led by Loki, the unscrupulous god of Norse mythology. The film stars Robert Downey Jr., Chris Evans, Mark Ruffalo and Scarlett Johansson.

The movie, which has generated $641.8 million in sales worldwide, was the only new picture opening in wide release in the U.S. this weekend.

Disney’s Hollis credited director Joss Whedon and the actors, as well as Marvel President Kevin Feige for weaving together the narratives of the multiple Marvel films leading up to this one, including the two Iron Man movies, and last year’s Captain America and Thor.

The international opening, as well as a Marvel record of $100 million in sponsorships, including from Honda Motor Co.’s Acura and Harley-Davidson Inc. helped generate interest and draw a diverse audience that was half over 25 and 60 percent was male, he said. Fifty-two percent of the gross was in 3D theaters such as those using RealD Inc. systems, and 8 percent was in theaters equipped by Imax Corp., which ran out of tickets.

“You hope for a mix like this,” Hollis said. “This is what you shoot for.”

RealD, based in Beverly Hills, California, added 0.4 percent to $11.18 in New York trading. Mississauga, Ontario-based Imax gained 2.7 percent to $24.55.

The movie’s huge opening leaves Disney well-positioned for three more films based on Avengers characters over the next two years.

“Iron Man 3,” is scheduled for release in May 2013, “Thor 2” in November 2013, and “Captain America 2” is planned for April 2014, according to the website Imdb.com.

For “The Avengers,” the company hasn’t made any decisions regarding changes to the DVD or pay-per-view release schedule, Hollis said.

“We’re too busy picking our jaws up off the ground,” he said.

While there were no other new releases, among returning films Sony Corp.’s “Think Like a Man” dropped to second place with $8 million after two weeks in first. “The Hunger Games” was third with $5.7 million. The movie has generated $380.7 million in domestic ticket sales for Lions Gate Entertainment Corp. since it was released on March 23. The romantic drama “The Lucky One” dropped to fourth with $5.5 million for Warner Bros., and Sony’s animated “The Pirates! Band of Misfits” was fifth, down from second place, with $5.4 million.

Weekend revenue for the top 12 films surged 56 percent to $241.8 million from a year earlier, Hollywood.com said. Amounts are based on actual ticket sales for May 4 and May 5 and estimates for yesterday.

© Copyright 2018 Bloomberg News. All rights reserved.

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