Disney to Reduce Number of Marvel Movies as Stock Plummets

Disney Executive Chairman Bob Iger attends the Exclusive 100-Minute Sneak Peek of Peter Jackson's "The Beatles: Get Back" at El Capitan Theatre in Hollywood, Calif., on Nov. 18, 2021. Charley Gallay/Getty Images for Disney

Disney intends to reduce the number of movies it produces to “focus more on quality,” CEO Bob Iger said during an earnings call this week.

Walt Disney released its second-quarter earnings report for fiscal year 2024 on May 7, showing a marginal 1 percent increase in revenues from the same quarter last year.

The company’s entertainment segment—made up of TV, streaming, and films—saw revenues decline by 5 percent.

Disney shares had ended May 6 at $116.47. By the end of the day on May 7, shares fell by more than 9.5 percent to $105.38.

This was Disney’s worst single-day decline in 18 months.

Income before income taxes dropped by 69 percent from the same quarter last year. Diluted earnings per share (EPS) was a loss of 1 cent for the second quarter compared to a gain of 69 cents per share in the same quarter last year. The company attributed the decrease in EPS to “goodwill impairments in the quarter.”

During the earnings call, Mr. Iger said that executives have been “working hard with the studio to reduce output and focus more on quality.”

“That’s particularly true with Marvel,” he said. “We’re slowly going to decrease volume and go to probably about two TV series a year instead of what had become four and reduce our film output from maybe four a year to two to the maximum three.”

Last year, Disney’s two big Marvel films—“Ant-Man and the Wasp: Quantumania” and “The Marvels” were box office disappointments.

“Quantumania,” with an estimated budget of $200 million, only grossed $476 million globally, according to data from IMDB. “The Marvels,” with a budget of $220 million, performed even worse with a gross collection of $206 million worldwide.

It is unclear whether the budget numbers include only production. If so, adding in marketing would make the balance sheet even worse.

During the earnings call, Mr. Iger said Disney is “working hard” to identify the path it needs to follow.

“We’ve got a couple of good films in ‘25 and then we’re heading to more Avengers, which we’re extremely excited about,“ he said. ”So overall, I feel great about the slate.

“It’s something, as you know, that I’ve committed to spending more and more time on.”

Marvel has only one movie coming out in 2024—“Deadpool and Wolverine.” In 2025, it has more—“Captain America: Brave New World,” “Thunderbolts,” “The Fantastic Four,” and “Blade.”

Mr. Iger said Disney will “balance sequels with originals” rather than heavily relying on one or the other.

“I just think that right now, given the competition in the overall movie marketplace, that actually, there’s a lot of value in the sequels, obviously because they’re known and it takes less in terms of marketing,” he said.

“In terms of Marvel specifically, it implies there, too, we actually have both. ‘Thunderbolts,’ for instance, is coming up in 2025 as an original. And then, of course, we mentioned ‘Deadpool’ this summer, which is a sequel, and I talked about ‘Avengers,’ and ‘Captain America’ is coming out in 2025.”

“Avengers: The Kang Dynasty” is scheduled for 2026.

Mr. Iger noted that Disney has several films coming out soon from its subsidiary studios.

“We have a number of highly anticipated theatrical releases arriving over the next few months, including ‘Kingdom of the Planet of the Apes,’ which opens this Friday, as well as Pixar’s ‘Inside Out 2’, Marvel’s ‘Deadpool & Wolverine,’ and 20th Century Studios’ ‘Alien: Romulus,’ which are all slated for this summer,” he said.

“Later this year, we’re looking forward to ‘Moana 2’ and ‘Mufasa: The Lion King.’”

Dialing Down Woke Messaging

This isn’t the first time that Mr. Iger has said that he wants Disney to focus on quality. In April, he took aim at woke messaging in films, saying he wants to focus primarily on entertainment.

A May 6 poll by Rasmussen Reports found that 54 percent of respondents thought that including LGBT characters in Disney programming aimed at children younger than 12 years of age wasn’t appropriate.

In addition, 71 percent wanted Disney to “return to wholesome programming and allow parents to decide when their children are taught about sexuality.”

A similar study from Rasmussen in 2022 found that 45 percent of respondents thought the push for diversity and inclusion was making children’s entertainment worse.

In April, Mr. Iger also won a proxy battle against activist groups aiming to get seats on Disney’s executive board.

Disney’s nominees defeated candidates put forward by Trian Fund Management and Blackwells Capital, thus securing Mr. Iger’s control of the company.

Mr. Iger had retired from Disney in 2021 but was brought back a year later in 2022 after his successor, Bob Chapek, was ousted.

Disney is currently facing multiple lawsuits accusing the company of violating labor laws.

In February, “The Mandalorian” actress Gina Carano filed a lawsuit against Disney for firing her from the show, arguing that she was targeted for “harassment, termination, and public defamation—all because she expressed views that did not align with those of Disney and Lucasfilm.”

She claimed that her firing violated the California Labor Code. Disney filed a motion seeking to dismiss the lawsuit.

In the months leading to her firing, Ms. Carano criticized COVID-19 pandemic lockdowns as well as vaccine and mask mandates. She called for cleaning up the election process to “flush out the fake votes.”

Disney’s motion accused Ms. Carano of “attacking the legitimacy of the 2020 Presidential election, and mocking people who identify their pronouns to show support for transgender rights.”

Another labor-related lawsuit was filed in March by 100 current and former Disney hotel maintenance workers and 16 assistant maintenance engineer employees.

The class-action lawsuit accuses Disney of underpaying workers at hotels in Southern California, failing to provide workers with proper meal periods and rest, and not providing accurate wage statements.