By investing several hundred million dollars into big-budget releases with little return, Disney continues to lose boatloads of money, perhaps more than previously reported.
In the past few years, it appears the studio has been fudging the numbers on the production budgets of its theatrical and streaming releases.
It’s been suspected for quite some time that Disney has been vastly underreporting its budgets, but reports have only recently confirmed that suspicion.
In July, Disney revealed that Marvel’s “Doctor Strange in the Multiverse of Madness” cost $94.5 million more than expected, according to Forbes. Its estimated budget, previously $200 million, now totals nearly $300 million.
Because it was filmed in the U.K., the superhero sequel was eligible for a 25 percent reimbursement of $54.5 million. Before that, the film cost about $349 million to make — and that’s without marketing.
For context, the movie brought in $955.8 million at the worldwide box office but only made a $183.4 million profit.
According to the report, U.K. companies set up by movie studios disclose their financial statements long after films come out. In this case, the financials were released about 14 months after the “Doctor Strange” sequel premiered in May 2022.
There’s no telling how many other films received similar treatment.
This glaring issue with Disney’s self-reported financials is further confirmed by popular YouTuber Gary Buechler, also known as Nerdrotic. Buechler revealed a recent Marvel Cinematic Universe director privately told him that Disney is lying upfront about its budgets.
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The sleight of hand accounting also pertains to production budgets for television shows originally intended for Disney’s streaming service.
Some original series such as “The Mysterious Benedict Society” were supposed to debut exclusively on Disney+, according to The Wall Street Journal. They instead premiered on TV networks, including Disney Channel, to sneakily draw away the production and marketing costs from Disney+.
As a result, the streaming platform’s financials looked better to investors.
This accounting trick was reportedly done under the direction of former CEO Bob Chapek before he stepped down in November. Bob Iger, who formerly ran Disney from 2005 to 2020, returned to replace Chapek.
Disney’s misleading financials are starting to catch up with the company, however.
Facing lawsuits on multiple fronts, the entertainment conglomerate is in legal trouble for hiding streaming losses and keeping box office profits from investors.
On Tuesday, an investment partner alleged Disney shifted streaming costs to make Disney+ appear more successful than it actually was, according to The Hollywood Reporter.
This lawsuit comes just two weeks after another investor sued Disney for withholding hundreds of millions of dollars in profits to boost its stock price at the investor’s expense, The Wall Street Journal reported.
These examples illustrate that no matter how hard Disney tries, its financial downfall appears inevitable.
