Disney CFO Reflects on ‘Lone Ranger’: Cap Spending on ‘Tentpole, Nonfranchise Movies’

The Walt Disney Co. will as much as double its share buyback program to possibly $8 billion, CFO Jay Rasulo said Thursday.

Rasulo made the announcement at the Bank of America Merrill Lynch 2013 Media, Communications & Entertainment Conference in Beverly Hills, and some Wall Street analysts were audibly enthused at the notion.

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Shares of Disney quickly rose 3 percent in midday trading after Rasulo’s remarks.

The executive said the conglomerate can afford the hefty buyback between $6 billion and $8 billion, up from $4 billion previously, because of strong cash flow in the wake of acquisitions like Marvel and LucasFilm, and because just about every division is firing on all cylinders.

Rasulo said theme parks are setting attendance records after major enhancements; ESPN is thriving in the face of new competition from Fox Sports 1; and he said that it’s “a golden era for content at the Disney Channel.”

Referencing the weak box-office response to The Lone Ranger, Rasulo commented: “We’ve also learned that there needs to be a cap on tentpole, nonfranchise movies. We need to cap those at a level that allows us to experience good economics and doesn’t quite put as much at risk. So going forward, you’re really going to see a cap on the spending on those movies.”

Rasulo said a typical year in the future would feature one Star Wars film, two Marvel films, one Disney Animation movie and two from Pixar, in addition to one to three other tentpole films and “some other films that would be Disney live-action branded but not be of a tentpole nature.”

Some upcoming films he’s enthusiastic about include Maleficent, Frozen, The Good Dinosaur and Star Wars: Episode VII.

Rasulo also predicted that marketing Star Wars will be an easy task.

“We don’t see any particular challenge to marketing Star Wars. This is not a new franchise to kids, even if they haven’t seen the film. … The market is extremely hot for everything Star Wars. Of all our worries, that’s not one of them.”

E-mail: Paul.Bond@THR.com