Disney’s Bill For ‘The Marvels’ Came To $130 Million Two Years Ago

Disney has revealed that the cost of making its upcoming superhero team-up movie The Marvels hit $130 million after just two months of filming.

Earlier today Disney dropped the first trailer for the movie which stars Oscar-winner Brie Larson as the Marvel Comics character Captain Marvel – a former fighter pilot who gets super powers from an alien artefact. She is joined by 20 year-old newcomer Iman Vellani and Teyonah Parris, stars of Disney’s hit streaming series, Ms. Marvel and Wandavision.

The Marvels appears to be a slapstick sci-fi firmly-focused on the youth audience as the trailer shows the trio of stars changing places involuntarily. It is the sequel to 2019’s Captain Marvel which grossed $1.1 billion at the box office so Disney is sparing no expense.

Although The Marvels is partly set in space, it was filmed at Pinewood Studios and Longcross Studios just outside London. This shines a spotlight on its finances.

Movie budgets are usually kept a closely-guarded secret as studios tend to absorb the cost of individual pictures in their overall expenses and don’t itemise them in public filings. However, the costs of movies made in the United Kingdom are consolidated in single companies in order to benefit from the government’s Film Tax Relief scheme. This allows production companies to receive a reimbursement of up to 25% of their costs in the UK provided that at least 10% of the total is spent there.

The reimbursement is funded with taxpayers’ cash and it can only be paid to a UK company which handles all aspects of the movie-making process. This stretches from pre-production of the film to distribution to cinemas. Studios usually set up separate production companies to make each movie and they all have to file financial statements showing staff numbers, salaries, costs and the level of reimbursement.

The production companies have code names so that they don’t raise attention with fans when filing for permits to shoot on location. The Disney subsidiary behind The Marvels is named Warbird Productions II UK in a nod to Larson’s character.

As this author reported in the Sunday Express newspaper, the company’s latest filings state that over the 13 months to the end of September 2021 it spent a total of $128.7 million (£103.6 million) which “was forecasted to be in line with the production budget.”

Second unit filming, which is typically action sequences with stunt performers, began in mid-April 2021 in New Jersey. However, the bulk of the shooting took place during the principal photography phase which started in the UK in early August 2021.

Filming in the UK drives employment and the filings reveal that $16.8 million (£13.5 million) was spent on 240 production staff, which doesn’t even include freelancers and self-employed workers who make up the majority of the crew.

The spending on staff was more than covered by the $25.6 million (£20.6 million) reimbursement of the company’s costs. However, they are set to soar even higher as filming continued for more than seven months after the date of the financial statements. According to the filings, Disney also expects that the budgeted production costs “will increase significantly due to ongoing obligations and costs required to implement safety measures and social distancing in line with government guidance.”

The majority of the special effects work tends to take place in post-production and the UK benefits from this as it is home to a number of the leading agencies, including Disney’s Industrial Light & Magic which is working on The Marvels.

There is tremendous pressure to keep costs under control as Disney is in the middle of a restructuring process which will see the loss of 7,000 jobs and $3 billion of content cost savings.

Last month, Disney’s chief executive Bob Iger said he is “really pleased that the support that I’m getting from the content creators of the company is significant and real. It comes in the form of reducing the expense per content, whether it’s a TV series or a film, where costs have just skyrocketed in a huge way and not a supportable way in my opinion.”

Ironically, his comments echo those of Iger’s long-time nemesis Ike Perlmutter who is Disney’s biggest individual stockholder. Perlmutter took control of Marvel Comics in the late 1990s and got around 1% of Disney’s stock when it bought the business for $4 billion in 2009. Perlmutter became chairman of Marvel Entertainment until he was laid off in the first round of job cuts last month.

In a subsequent interview, he told the Wall Street Journal that “I care about the bottom line. I don’t care how big the box office is”. It will take more than the wave of a wand for The Marvels to make a profit given how much Disney has shelled out on it. The stakes are especially high as Marvel has had a run of bad luck in recent years.

Its last movie to gross more than $1 billion was 2021’s Spider-Man: No Way Home which was a co-production with Sony Pictures. As we have reported, February’s Ant-Man and the Wasp: Quantumania had the 25th-lowest takings of all 31 Marvel Studios movies and its is in a no-win situation with its next production, Guardians of the Galaxy Vol. 3. Its director James Gunn has left to run the rival DC Studios so if the movie is successful, it gives its competitor more kudos whilst Marvel has no guarantee it can repeat its performance. If it fails then it compounds Marvel’s problems. It isn’t the only one on the edge of its seat.

The dearth of blockbusters combined with the rising popularity of streaming has been a perfect storm for movie theaters.

In July last year, Europe’s biggest privately owned operator, Vue, was taken over by its lenders and two months later the curtain came down on the US operations of the world’s second-largest cinema chain, Cineworld. Weighed down by $8.9 billion of debt and lease liabilities, the US arm of the London-listed company filed for bankruptcy protection in September. Just last week it announced that it too will be taken over by its creditors after it failed to find a buyer for its US and UK operations.

Their plight raises the question of whether UK taxpayers’ cash should instead be spent on stricken local companies. Harriet Finney, deputy CEO of the British Film Institute (BFI), counters that the tax relief plays “a vital role in ensuring the UK continues to be competitive in a global industry – a production center of choice offering exciting talent, world-class crews, brilliant craftspeople and technological inventiveness.”

She adds that this generates “thousands of new jobs and demand for production facilities and services, which collectively contribute real benefits to the UK economy.” Given the growing cost of living crisis in the UK it remains to be seen whether taxpayers see this as being a happy ending.