Ant-Man and the Wasp: Quantumania was an expensive failure for Marvel
Disney has revealed that it expects last year's Marvel super hero movie Ant-Man And The Wasp: Quantumania to end up over budget after it spent $131.9 million (£106.1 million) on post-production in 2022 bringing its total costs to $326.6 million (£262.6 million).
The effects-heavy movie is the third instalment in the Ant-Man series and stars Paul Rudd as the eponymous hero who can shrink on command thanks to a suit powered by the mysterious Pym particles. He teams up with Oscar winners Michael Douglas and Michelle Pfeiffer to stop a time-travelling conqueror called Kang, played by the disgraced Jonathan Majors, who narrowly avoided jail time earlier this month after being convicted of assaulting his ex-girlfriend.
The movie's title refers to the microscopic Quantum Realm which acts as a portal to other periods in time and looks like the cover of an eighties rock album. Forks of lightning from purple clouds strike ruined rock forts set on sweeping deserts which are home to a bizarre range of aliens including one made of Jell-O and others with blank screens for faces.
The majority of the movie was set in the Quantum Realm which increased the post-production workload after filming wrapped in November 2021. Special effects firms, including Disney's Industrial Light & Magic (ILM), created the film's psychedelic visuals and this sent the cost soaring far beyond the $194.7 million spent on pre-production and filming as we revealed last year in the Daily Mail.
Although it's hard to tell it from the film, Quantumania was made in the United Kingdom and this had a magic touch on its finances.
Studios filming in the UK benefit from its Audio-Visual Expenditure Credit which gives them a cash reimbursement of up to 25.5% of the money they spend in the country.
At the start of this year the UK government slightly raised the reimbursement ceiling by 0.5 percentage points in the face of competition from other countries which are offering similar schemes. It has helped to make the UK a dream ticket for movie makers and according to the British Film Institute, foreign studios contributed around 77% of the $1.8 billion (£1.4 billion) spent on making films in the country last year. However, the reimbursement comes with a catch.
Movie budgets are usually a closely guarded secret as studios tend to absorb the cost of individual films in their overall expenses and don't itemize the cost of each one. Films shot in the United Kingdom are exceptions to this rule.
To qualify for the reimbursement, shows must pass a points test based on factors such as how many members of the production team are from the UK and how much of the post-production work is done in the UK. Furthermore, at least 10% of the core costs of the production need to relate to activities in the UK and in order to demonstrate this to the government, studios set up separate companies to make each movie.
These companies are responsible for everything from pre-production to delivery of the movie and paying for services relating to the finished film. Crucially, they have to file financial statements which show everything from the headcount and salaries to the level of cash reimbursement and even the movie's total costs.
Detective work is required to obtain the financial statements as the companies often have code names to stop them raising attention with fans when they file permits to shoot on location. The Disney subsidiary behind Quantumania is called Pym Productions III in a nod to the Pym particles which power Ant-Man's suit. Its latest financial statements were lodged in December and cover the year-ending December 31, 2022 which was just over a month before the movie was released.
The filings reveal its $326.6 million costs which are a staggering 63.3% higher than the estimate from Variety which claimed that Quantumania had a "production budget of $200 million".
It is also higher than Disney's own projections as the financial statements reveal that "at the year-end the cost was forecasted to exceed the production budget". Is is a marked departure from the outlook the previous year which said that the pandemic has had "a limited impact on the company. Additional costs have been incurred as a result, however it is still the intention of the company to complete the production within its agreed production schedule and within the agreed budgets."
The movie was a poster boy of Disney's profligate spending in the pandemic era when the media giant's stock price was on a high. As the pandemic receded, consumers were left carrying the cost so purse strings were pulled and Disney's stock price plummeted. It led to Disney ejecting its chief executive Bob Chapek in November 2022 and replacing him with his predecessor Bob Iger.
A few months after Iger returned, he slashed Disney's spending and the number of productions in its pipeline as part of a $7.5 billion cost reduction plan. He told a Morgan Stanley
One of Pym Productions III's biggest expenses was the $20.9 million (£16.8 million) spent on production staff which peaked at 226 people without even including freelancers or agency workers who represent the majority of the crew.
Filming in the UK doesn't just generate jobs for locals, it also drives spending on services such as security, equipment hire and special effects firms. It explains why the UK government offers such generous fiscal incentives for studios to film there and the filings reveal that Quantumania received a total reimbursement of $50.6 million (£40.7 million) bringing Disney's net spending on the movie to $276 million. Its box office haul failed to cover this cost.
Panned by critics, Quantumania was only the second of the 32 films in the Marvel Cinematic Universe (MCU) to be rated "Rotten" by review aggregator Rotten Tomatoes. Although the movie got an 82% audience score, only 46% of critics were positive about it with the consensus being that its visual effects aren't up to scratch.
Some compared the digital appearance of one of its villains to a character from 2003 children’s movie Spy Kids 3-D: Game Over. This was blamed on over-worked visual effects staff who had to deal with Marvel's massive pipeline of movies and streaming shows. The disenchantment was a running theme early last year and formed the backdrop to the firing in March of Marvel's president of physical and post-production, VFX and animation production, Victoria Alonso.
Quantumania's special effects were widely derided © 2022 MARVEL.
It followed a disastrous debut for Quantumania which grossed $476.1 million according to industry analyst Box Office Mojo. It is a lower tally than almost every other Marvel movie and gave Disney an estimated $238 million as studios typically get 50% of the box office receipts with theaters retaining the remainder. This fell $38 million short of covering Disney's net spending on the movie though it excludes the DVD and Blu Ray sales as well as licensing and merchandising. However, it is also believed to exclude marketing costs which often exceed these ancillary revenue streams.
Whilst Quantumania made a $38 million loss on its box office revenue, Marvel's team-up movies Avengers: Infinity War and Avengers: Endgame made $1.2 billion of profits as we revealed. It makes them the very definition of MCU tentpoles - big-budget movies which make enough income to compensate the studio for its less profitable productions.
The Ant-Man series started very differently. The first instalment in 2015 had just the right balance of humour, tension and action to make a movie about a hero with the power to shrink seem believable. In contrast to Quantumania, it was set in the real-world location of San Francisco and lacked excessive effects. Surprisingly, both movies had the same director – Peyton Reed – who used the first one to prove that he was a master of both big set-pieces and intimate scenes that put his production head and shoulders above its rivals.
Director Peyton Reed on the set of Quantumania with star Paul Rudd
Instead of being a billionaire, a god or a scientist like his fellow Avengers, Ant-Man was introduced as a reformed thief dealing with real-life issues like getting a job and making maintenance payments for his daughter to his ex-wife. It humanized the character who, bucking the trend, doesn’t win over his ex-wife in a saccharine-sweet happy ending.
Reed's snappy dialogue is peppered with humour and carried off naturally in an inspired performance by Rudd. Douglas plays a retired hero and gives the role gravitas that highlights the easy-going attitude of Rudd’s character making him even more relatable.
These ingredients are carefully woven together by Reed and complemented with stunning special effects from ILM and a score by Canadian composer Christophe Beck which evokes the tension throughout the movie building up to a high-tech robbery at the finale. It grossed $519.3 million whilst its sequel, Ant-Man and the Wasp, rode on the hype train in the run up to the 2019's Avengers: Endgame boosting its box office to $622.7 million. It makes Quantumania's $476.1 million haul even less of a happy ending.
The future of the Ant-Man franchise is now uncertain following reports that a fourth movie has been put on hold along with sequels to Eternals and The Marvels which were both big-budget disappointments as we reported.
Worse still, Majors was being lined up as the next major villain of the Avengers franchise raising questions about the future of Marvel's biggest cash-cow. Now more than ever the studio needs some of its characters' trademark punching power.
