The movie season of 2023 began with the failure of Ant Man and the Wasp: Quantumania.

“Failure??!” You might ask. “How could a movie that made almost $500 MILLION dollars be a failure? I’d kill for that much money!” Wait, what?

But seriously: this is going to be a post about numbers. Big, fancy numbers. But the numbers are interesting. Because the way we see movies and the big-budget shows that have been coming up in the last 5 or 6 years is about to change.

Ant Man 3 Profits

Movie budgets have only been getting higher over the last 10 years.

When you see a number like $500 million, it seems unquantifiable. It is a lot of money.

Recently, more and more money has been coming not from domestic (Canada and the US) markets, but International markets, particularly China. Those three markets now form the backbone of most tentpole movies: Domestic, International, and China. Each of those markets have different rules for how much of their cut goes to the studio that makes the movie, how much goes to the local studio in charge of distribution in that country, and how much goes to the local theaters.

These percentages aren’t exact and averages are debated. China is extremely tight on their cut; only 20% of profits in China go to the American or British studio that financed the movie, while local Chinese businesses that the American studios partner with make more money to support the Chinese economy. Traditionally, in North America, 60% of the profits goes to the studio since there are no middle-men handling distribution rights, and 40% to the theaters (that’s why theaters here have to charge so much money for popcorn). Other markets have varying other deals, so the general numbers given is 40% to the American studio. Sometimes the American studio sells the rights for another studio to show the movie in international markets; sometimes the studio partners to co-finance a movie. Either way, they make their 40%.

So, say a movie makes $500 million dollars. According to Box Office Mojo, Ant Man and the Wasp: Quantumania made $215 million domestically, $220 million internationally, and $40 million in China. If you calculate each of those takes, AMATWQ made $129 million in America, $88 million internationally, and $8 million in China. That’s $225 million total made by Ant Man and the Wasp 3 for Disney.

There’s another aspect to add, though: residuals.

Residuals are when an individual, actor, director, producer, or creator receives a direct cut from the profits made by a money. For example, Robert Downey, Jr. had a salary of $20 million for Avengers: Endgame, but when the movie made over $2.7 billion (probably about a $1.4 billion profit), he made $55 million in residuals. He had a deal to make about 4% in residuals; about 4% of the total profit of $1.4 billion would go to him directly, making him $55 million. While it doesn’t seem that Ant Man and the Wasp: Quantumania had any producers or directors make residuals, a lot of those deals aren’t open to the public, especially with more “minor” roles that aren’t as followed by the public, such as producer. So, for Ant Man, $225 million still stands.

In addition, there are incalculable other profits to take in. There’s the money Disney could make from Disney+ subscribers who watch Ant Man. There’s money from rentals on YouTube rentals or Amazon rentals. There’s money for people buying the BluRay. Also there’s millions, sometimes even far more than the movie will make, on merchandise. Plus there’s Disney theme parks that are Marvel themed around the world that make the big bucks. But then there’s the cost of making the DVDs or advertising them on YouTube or TV when it’s available to stream. The cost of running Disney World are NOT small. And sometimes merchandise doesn’t sell. Those costs are far less public than movie theatre profits, so they tend not to be calculated, but they do mean… well, something. We just can’t rely on them.

Doesn’t sound bad, you might think.

But there’s more. How much money did it actually take to make the movie?

Ant Man 3 Budget

How much did it cost to make Ant Man and the Wasp: Quantumania?

Like residuals, the budget of a movie isn’t often public information unless it’s made public for tax purposes. Guesstimates on the budget are around $200 million. Subtract $200 million from $225 million, and the movie made $25 million.

$25 million still seems like a LOT of money. It is for normal people. But we’re talking about giant business with tons of employees. They had to get the $200 million to make the movie from somewhere, and $25 million isn’t going to fund that.

But wait.

There’s more.

The $200 million is only what it cost to make the movie. It’s high. Movies have been getting higher and higher budgets in recent years due to actor’s salaries, bloated production teams at large studios, COVID production increases for materials for things like costume creation and set design, inflation, and late-in-the-game CGI redesign (Marvel is infamous for last-minute changes to CGI). Those costs also include rights for scripts, editing, and the like, but on movies like Marvel movies, less is spent on writing because Disney bought the rights to Marvel years ago. Movies that have the time, like the CGI-heavy Everything Everywhere All at Once, and use more limited locations, only had a budget of $25 million.

I said the budget for making the movie is $200 million. You have to add on to that sky-high marketing expenses. These expenses don’t come out of the same budget as the budget to make the movie. The estimate is that a movie will spend another 40% of its budget on marketing (some say as low as 30%, some as high as 50%, so we’ll take 40% as a solid average). So, a $100 million dollar movie, will have the studio spend $40 million additionally to advertise it. A $200 million movie? About $80 million.

That brings the total “spent” on the movie to $280 million.

Disney and Marvel studios are now $55 million in the hole. Renting, Disney+, and DVD’s might make up for that. But even then, there’s no or little profit. That’s just break even. How do they finance the next movie when they need $200 million, if they just break even now? It needs to not just make money back for its budget but also for the next giant budget. And it needs to still just make money because not everything goes right back into making the next movie.

And the profits can’t just come in the opening weekend. Lately opening weekends have been all the rage, with Ant Man 3 even setting records for the highest February opening. But the next weekend the movie drops and fails to keep up even close to its opening. Don’t just look at the opening; movies need several big weekends to stay up, like The Super Mario Bros. Movie‘s recent several weekend domination at the box office.

In short, with budgets this big, you can’t let a movie break even. It needs to be a mega hit.

So what happens when a bunch of movies and shows that need to be mega hits… just… aren’t?

The Fails Keep Coming

Fast X recently made headlines for one of the largest budgets in recent movie history. The Fast and the Furious franchise has had a mega $1.6 billion hit and a $1.3 billion dollar hit. The budget for this latest installment was huge at an estimated $340 million, not counting marketing in the ballpark of $120 million and probable residuals for Vin Diesel and Jason Momoa.

To date, the movie has made $650 million, more than $500 million of it international or Chinese, most of it being in its opening weekend with a a huge second week drop. That’s a profit of possibly only $370 million, depending on what the international and Chinese cuts were. That doesn’t look like a loss until you do the math a realize the drasticness of it.

The Little Mermaid hasn’t been out for 4 weekends yet, so that’s a tougher analysis. But with three weekends and a $250 million budget, it’s at $230 million in the US, $180 million international, and $3.5 China. Normally Disney live action remakes have an international that eclipses the domestic, and a huge cut in China. Now, none. The second weekend dropped far below the newest release, Spiderman: Across the Spidervese. Profits at $210 million fall far below the needed budget, let alone the marketing budget.

In contrast, Spiderman: Across the Spiderverse had a relatively modest $100 million budget, and it’s already beating The Little Mermaid’s totals at $400 million total gross. In addition, The Super Mario Bros. Movie which will most likely be the highest grosser of the year, at $1.2 billion, has another modest $90 million budget. John Wick: Chapter 4 had a lower $100 million, but a box office of $432 million. Lower budgets but pretty good to great box offices make much higher profits.

We still have one more. Indiana Jones and the Dial of Destiny has a monster $300 million budget. Twenty years ago people said Harrison Ford was too old for Indiana Jones. And he’s back at it again. People are predicting a big flop for this one. It’s been in development for years and will need a big box office to recoup its already huge review losses (it’s been lambasted but critics in early release reviews). And that’ll be another non-moneymaker this year for Disney.

Notice a pattern? It’s been one a long time in coming, since 2012.

Disney and Lucasfilm

In 2012, Disney acquired Lucasfilm, which owns the space opera Star Wars, the adventure classics Indiana Jones, and the obscure fantasy Willow. The cost? $4 billion.

But the first new Star Wars film, The Force Awakens, kickstarted the “Sequel Trilogy,” the mainline Star Wars movies that continue the chronological story of the original moves from the 70s and 80s. It released in 2015. The movie made $2.1 billion and was the second highest grossing movie for a hot minute until Avengers: Endgame in 2019.

Rogue One: A Story Wars Story the year after made just a smidge over $1 billion. That’s pretty impressive for a spinoff.

Star Wars: The Last Jedi, the second in the trilogy of mainline sequel movies, made $1.3 billion in 2017. Quite a bit less than The Force Awakens, but that one was highly anticipated, and The Last Jedi still was fairly impressive.

The next spinoff movie, Solo: A Story Wars Story, was infamous, the first Star Wars box office bomb with just a bit shy of $400 million in 2018. While that is a good box office gross for some movies, like John Wick 4, it wasn’t for Solo, and we’ll explain why soon.

The latest Star Wars movie was the finale of the sequel trilogy, Star Wars: The Rise of Skywalker in 2019. It made just over $1 billion, about the same as Rogue One: A Star Wars Story. The final “main” movie made as much as a spinoff movie only three years ago. It made half as much as its first movie in its series.

All of this seems impressive. “A billion! 2 billion! So much money! It must’ve made more than $4 billion back!” Add onto that the countless Disney Theme Park projects and all of the merchandise they must’ve sold, as well as video games running at the same time as the movies, they must be making money by now. Right?

But wait. Remember what we said about budgets?

Add onto the $4 billion buyout the recently official numbers for just the production of Star Wars: The Force Awakens. It is now officially the most expensive movie of all time, with a production budget of $533 million. That’s not including the marketing budget, which could have been as high as $200 million. While The Force Awakens made $2.1 billion, how much went to the studio? $1 billion? Maybe $1.1 billion? And if the budget with marketing was $750 million… that’s only a $400 million profit if you subtract the budget. Residuals for Kathleen Kennedy, Star Wars’s current head, is a part of that, and for Harrison Ford and Mark Hamill too.

That won’t fund the budget of The Rise of Skywalker; its budget isn’t far behind with a budget $503 million. Adding another $200 million for marketing brings it up to $703 million. Where is that money coming from? And at a box office of $1 billion, it’s only making about $600 million back to Disney. That isn’t enough. That’s a $100 million loss, even if it doesn’t make headlines the same way Solo did.

And why was Solo a bomb? After expensive reshoots (they had to bring all the actors and crew back after firing the directors to basically remake the movie), the budget is estimated to be $300 million. Let’s go low and say $100 million for marketing. That’s massive for a spinoff, not even a main movie in a series. That’s about the same as the budget for Avengers: Infinity War, which was just $50 million shy of breaking Force Awakens’ total at $2.05 billion.

Since Rise of Skywalker did far short of expectations, we haven’t had a movie in theaters.

In addition, the theme park isn’t doing any favors. Only 18 months after Disney opened the Star Wars: Galactic Starcruiser immersive hotel, which featured characters walking around the hallways and pre-arranged “fights” and activities, it closed. The hotel reportedly cost $2 billion to build, let alone to staff and keep running. It closed after having next to no guests.

The merchandise? Fan-made reports are showing (although we can’t get confirmation from Disney: Hasbro has given some numbers but it doesn’t get into specifics) that stores are having piles of discounted merchandise that they simply can’t sell all the way back to The Last Jedi. It just isn’t flying off the shelves. While infamous “Baby Yoda” merchandise from the Diseny+ Star Wars show The Mandalorian is selling like hotcakes, The Mandalorian‘s most recent season bombed both in reviews and viewership ratings. And the cost of one season of The Mandalorian? Possibly as high as $250 million. For a streaming show that you can’t really even figure out profits for.

All of these costs are adding up.

$750 million. $700 million. $400 million. $2 billion for a failed theme park. Mountains of unsold merchandise. $4 billion to buy the thing. That doesn’t stack up with the profits, profits of $400 million, $200 million, anything else.

The math is showing: Lucasfilm can’t stand. And if Indiana Jones fails too… and if Disney isn’t making its money back in theme parks, its live action remakes, and more…

Conclusion?

Will Lucasfilm collapse? Will Disney collapse? Will moviemaking like this collapse?

I can’t tell you.

I don’t know what will swing up next. I don’t know if Disney will recover. Every movie studio is still struggling with COVID costs. What will happen next?

I can’t predict for you. But what I can tell you is that things can’t go the way they’re going now.

Or else movies will implode.