Disney's 'Lone Ranger' Could Lead to $150 Million Loss (Analysis)

"The Lone Ranger"
"The Lone Ranger"
 Disney Enterprises, Inc.

Disney's The Lone Ranger has ended up in the box office stockades, with the studio and even producer Jerry Bruckheimer facing a substantial loss after the meek opening of the Johnny Depp-Armie Hammer Western in North America and in its first overseas markets.

Just as Lone Ranger began rolling out in theaters July 3, Cowen & Co. analyst Doug Creutz predicted a $100 million write-down for Disney. Now, box office experts and rival studio insiders tell The Hollywood Reporter that the loss could approach or even surpass $150 million based on final opening numbers, although they add that Disney likely can weather the storm thanks to summer box office hits Iron Man 3 and Monsters University.

BOX OFFICE REPORT: 'Lone Ranger' Marks Third Big-Budget Bomb of Summer 

Directed by Gore Verbinski, Lone Ranger -- based on the 1930s radio show and 1950s television series -- posted a five-day opening of $48.9 million domestically, an abysmal number considering the film's $250 million production budget and a worldwide marketing spend in the neighborhood of $175 million, the norm these days for many summer event pics.

Given its poor opening and stiff July competition, box office experts now calculate that Lone Ranger will reach only $125 million domestically, if that. Overseas, it may earn $150 million for a worldwide total of $275 million. In 2011, Disney was forced to take a $200 million write-down when the ill-fated John Carter -- costing more than $250 million to produce -- topped out at $282 million worldwide. (Disney should fare a bit better on Lone Ranger because it will do better domestically than John Carter's $73 million, and the studio receives a higher percentage of revenue from domestic theaters than it does from international theaters.)

"It's very disappointing," said Disney executive vp worldwide distribution Dave Hollis. "Everything was perfect on paper, so today was incredibly frustrating."

Despite Depp's international star status, Lone Ranger hasn't fared well overseas, where Westerns are an especially challenged genre. The film grossed a tepid $24.3 million from 24 markets for a lackluster worldwide opening of $73.2 million, trounced by Universal's Despicable Me 2. Lone Ranger took in $6.6 million in Russia, well behind the $16.5 million opening of Disney's ill-fated 2012 tentpole John Carter, and only $3.2 million in Australia, on par with John Carter.

Depp's big-budget films have done huge business overseas, even those that have underperformed domestically. The Tourist grossed just $67 million in North America in 2010 but took in $211 million internationally. Last May's Dark Shadows sputtered with $79 million domestic but doubled that total ($166 million) overseas. Lone Ranger could break that winning streak and raise big questions about Depp's star status.

Lone Ranger fared even worse in South Korea, opening to a dismal $1.6 million in a likely harbinger of how the movie will perform in the rest of Asia (as a way of comparison, World War Z recently grossed north of $6 million in its second weekend in South Korea).

Reuniting the same team behind the blockbuster Pirates of the Caribbean franchise -- Bruckheimer, one of the most successful producers in Hollywood history, Verbinski and Depp -- Lone Ranger was intended to launch a new live-action franchise for Disney, even though Westerns are a tricky genre, particularly overseas.

In the film, Depp applies his penchant for playing quirky characters to the role of Tonto, while Hammer plays the Lone Ranger, both characters first made famous in the radio show.

Disney insiders aren't trying to sugarcoat their disappointment or gloss over the movie's problems, including a lengthy running time of 149 minutes and withering reviews. It has a 24 percent rating on Rotten Tomatoes, compared to 79 percent for Pirates of the Caribbean: The Curse of the Black Pearl, the first title in that series.

Sources say Lone Ranger could strain relations between Disney and Bruckheimer, who are supposed to reteam on Pirates of the Caribbean 5, set for release on July 7, 2015. Outside of the Pirates films -- which have racked up $3.7 billion in global ticket sales -- and the successful National Treasure franchise, several of Bruckheimer's Disney films have underperformed at the box office, including The Sorcerer's Apprentice, Prince of Persia: The Sands of Time and G-Force.

In August 2011, former Walt Disney Studios chairman Rich Ross suspended production of Lone Ranger because of concerns over the $250 million budget in the wake of box office bomb Cowboys & Aliens, also a Western.

But after Bruckheimer and Verbinski promised to scale back the budget to $215 million, Disney gave the go-ahead. As part of the agreement, Bruckheimer also agreed to pay for a portion of any budget overages, although it isn't known what the split is between him and Disney. That arrangement could put some of the financial loss on Bruckheimer's shoulders.

Ross was let go in April 2012, and by the time Alan Horn took over the top job that June, Lone Ranger was midway through shooting. There were a number of setbacks during the shoot, including poor weather and problems with complex train sequences, causing it to run over schedule and drive the budget up.

In North America, the film failed to appeal to younger moviegoers unfamiliar with the Lone Ranger brand. About 68 percent of the audience was over the age of 25 -- including 24 percent over the age of 50. Only 16 percent of the audience was under 18, a glaring deficit. Pirates of the Caribbean was fueled by both families and adults, and Lone Ranger needed to draw upon those same demos.

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Some have criticized Lone Ranger for its violent beginning. Family-friendly Internet site Parents Previews gave Lone Ranger a C grade overall, including a D for violence. Curse of the Black Pearl, released in 2003, earned a B- overall, and a D+ for violence.

In an interview with THR on the eve of Lone Ranger's opening, Horn said he takes responsibility for the film even though he didn't greenlight it.

"When I came in, they were a little more than halfway through shooting. I want to assume responsibility. Bob Iger is running a $40-plus-billion gross-revenue operation. He’s got a really big job. So when I got here, the ship had certainly sailed, and it was halfway to shore. You’ll see that it’s entertaining, and we’ll see what happens," Horn said.

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