Wednesday, July 14, 2004

After year of hits, Disney struggles

By Gary Gentile
The Associated Press

LOS ANGELES - The Walt Disney Co. is counting on spooky film master M. Night Shyamalan, a crooning Julie Andrews and a family of aging superheroes to rescue it from a cold streak that even the legendary King Arthur couldn't snap.

The studio, which last year produced a record $3 billion in worldwide box office revenue, has yet to have one film hit the $100 million mark domestically - despite hopes for movies such as The Alamo, Home on the Range, and Hidalgo.

And with a first-weekend take of only $15.2 million, it doesn't look like the historic epic King Arthur, a Jerry Bruckheimer film starring Clive Owen and Keira Knightley, will make it either.

"We're in a slump," Disney head of distribution Chuck Viane said Tuesday. "We're not pleased with our performance in the first half of the year."

King Arthur cost about $150 million, according to analysts, and may never turn a profit.

The slump will not affect Disney's profits this year, thanks to huge profits generated by home video sales of last year's hits, including Finding Nemo and Pirates of the Caribbean: The Curse of the Black Pearl.

Disney's studio has already produced more operating income in the first three quarters of this year than it did in all of fiscal 2003, fueled mainly by DVD releases.

But without a big box-office hit, Disney will be left with little to fill next year's home-video pipeline.

Things could conceivably turn in the second half for Disney, which will release the supernatural thriller The Village, from Sixth Sense director Shyamalan in two weeks.

Disney is also counting on the sequel Princess Diaries 2: The Royal Engagement, in which Julie Andrews sings on screen for the first time in years.

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