The Profitability of the Marvel Cinematic Universe in Phase Three--and Afterward

Taken together Deadline's lists of the most profitable movies of the year from 2015 on give those of us who are not studio insiders a better-than-usual picture of the economics of the blockbuster because they go beyond production budgets and box office grosses to a fuller accounting of costs and revenues, at least at the top of the market. In the process they give us a fairly good picture of the Marvel Cinematic Universe's commercial performance, precisely because it has been so prominent at the top, with this going in particular for Phase Three--ten of the MCU's eleven third phase films making Deadline's lists, which is to say, all but Ant-Man 2 (an omission unlikely to skew the picture very much even if we had the numbers, given its lower cost and lower earnings).

Going by Deadline's numbers Disney-Marvel expended some $5.6 billion on the ten films listed here, counting everything from production, to prints and ads, to overhead and interest, to video costs, to participations and residuals. Beyond those expenses it made some $3.5 billion from theatrical rentals, home entertainment, streaming/TV--a better than sixty percent "cash-on-cash" return for the lot. Granted, this was money in yesteryear's prices spread out in rather uneven fashion over many years, but making some account of inflation it seems to me that we still have a $7 billion or so outlay in March 2023 dollars, and over $4 billion in earnings above that outlay, not changing the proportions much.*

All of this only underlines what a force to be reckoned with the MCU was at its height, commercially speaking. Of course, this was disproportionately due to the two-part Avengers battle with Thanos, which took in $1.4 billion in estimated profit in 2018-2019 (and $1.7 billion in real terms in today's dollars), but even without them I calculate the average for the other non-Avengers movies discussed here as (helped by the particular successes of Spider-Man: Far From Home, Black Panther and Captain Marvel) in the vicinity of $275 million in today's terms (and even the weaker Ant-Man 2 unlikely to drag this down much were it included).

The result is a very high standard of profitability indeed--the kind that no reasonable person can expect to see go on for any franchise for very long, and which Disney especially should not have expected to see go on forever given its experience with Star Wars--in which Episode VII made over a $900 million profit, and then Solo made a $77 million (or even worse) loss just two-and-a-half years later, a literal billion dollar drop in returns.

The MCU has yet to have its Solo, of course, and I am not sure that it will, the MCU perhaps too big for even a failure that severe and that unambiguous to stop in its tracks (especially so long as the films bring viewers to Disney's streaming service, and help to keep MCU merchandise selling). All the same, this puts into perspective the performance of its most recent movies. Thor 4 and Black Panther 2 were still money-makers, but brought in just half the profit their predecessors did, while looking at Ant-Man 3's theatrical performance it seems possible that it might barely break even, or lose a little money, even with the home entertainment-type revenue counted in, while the upcoming releases of Guardians of the Galaxy 3 and The Marvels may be up against significant headwinds, and any Avengers vs. Thanos-caliber event, or even Spider-Man: No Way Home-caliber event, looking a long way off as of April 2023.

The fact matters the more because even if this is cause for anxiety rather than full-blown disaster, Disney faces so many problems on so many different fronts. The company is now coping not just with the hole in its balance sheet made not just by the pandemic (which took a toll on its movies like everyone else's), but also reckless overspending on for-streaming content (admittedly a problem everyone else had), the shaky results of its investment in Lucasfilm as of late (with Indiana Jones 5 not a sure winner and the plans for the Star Wars franchise on the big screen remaining unsettled year in, year out), and the massive losses in its original mainstay of animation (with Strange World and Lightyear together losing the studio over $300 million all by themselves, on top of the money almost certainly lost by the hugely expense yet straight-to-streaming Turning Red). All of that means that it really, really needs wins here, and these are getting to be fewer and smaller.

* I adjusted the figures by converting the figures’ value in the month of the movie’s release for March 2023 prices using the Consumer Price Index and got $6.7 billion in costs, $4.1 billion in return-on-cash--a method that seemed sufficiently rough to merit rounding to the nearest billion to be on the safe side.