Disney earnings show why 'Solo: A Star Wars Story' should have been released in December

Key Points
  • Disney's box office and merchandise sales in the first quarter were hindered by not having a "Star Wars" film released in December.
  • "Solo: A Star Wars Story" was released in May, unlike the previous three "Star Wars" films.
A scene from Solo: A Star Wars Story.
Source: Disney

If Disney's first-quarter earnings are any indication, the media company could benefit from the Force in December.

In 2015, after decades of "Star Wars" films appearing in theaters in May, Disney decided to release its newest trilogy in December. Since then, every "Star Wars" film, even the "Rogue One: A Star Wars Story" has debuted just before Christmas, except one.

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"Solo: A Star Wars Story" found itself with a May release and that was detrimental to both the film and the company behind it.

In 2017, Disney released "Coco," "Thor: Ragnarok" and "The Last Jedi" during the first quarter. Together the three films made more than $1 billion at the box office in the U.S., according to data from Comscore.

Cut to 2018. Disney released "The Nutcracker and the Four Realms," "Ralph Breaks the Internet" and "Mary Poppins Returns" and earned only $388 million domestically.

"Star Wars: The Last Jedi" brought in more than $500 million in the U.S. between Dec. 15 and Dec. 31 and continued to make money well into the second quarter. Not only was it a box office hit, it also drove sales of toys, apparel and other merchandise.

"The theatrical success of 'Star Wars: The Last Jedi' in Q1 last year was a key driver to licensing results so the absence of a comparable franchise title in Q1 this year created a meaningful headwind to our licensing results," Christine McCarthy, Disney's chief financial officer, said during an earnings call Tuesday.

Without a big blockbuster like "Star Wars" in December, Disney missed out on money at the box office and through retail.

"Home Entertainment results also faced a difficult comparison given Q2 titles last year included 'Star Wars: The Last Jedi,' 'Thor: Ragnarok' and 'Coco,'" McCarthy said. "As a result we expect operating income from our theatrical and home entertainment businesses to be $450 million to $500 million lower than in Q2 last year, which was the best second quarter in the studio's history."

"Solo" faced a number of issues ahead of its release, prompting some to suggest that Disney regroup and push the release date from May to December.

To start, there was behind-the-scenes issues the caused directors Phil Lord and Chris Miller to leave the project three-quarters of the way through principal photography. The pair had about three and a half weeks of shooting left and five weeks of already scheduled reshoots to complete. Ron Howard was brought on to salvage the project.

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Despite the upheaval, Disney did not change the film's May 10 release date. "Solo" was sandwiched between two of Disney's big summer films: "Avengers: Infinity War" and "The Incredibles 2" and hit theaters a week before "Deadpool 2."

"There was too much crossing of the streams, to quote another franchise," Shawn Robbins, senior analyst at BoxOffice, said.

"Solo" was widely panned at the box office, making under $400 million worldwide in 2018. It is the lowest-grossing "Star Wars" film in history.

"When it comes to the creative side, it's always hard to speak in definitives," Robbins said, noting that "Solo" may have benefited from having its release date pushed and allowing Lucasfilm to spend more time reworking the story and reshooting the film.

Of course, there was no guarantee that "Solo" would have been a box office success in December, even with tweaks.

The film would still have had to compete with Warner Bros.' "Aquaman," which pulled in $324 million in the U.S. and has gone on to make more than $1 billion at the international box office.

"You can second guess it," Paul Dergarabedian, senior analyst at Comscore, said. "But, perhaps it was better to get the movie out there and just weather the storm of reviews.... Disney is so big and so successful that they can weather this and move on."