Disney has revealed that the cost of making the live action version of its classic cartoon The Little Mermaid swelled to nearly $300 million by the end of August last year, eight months before the movie opened.
The colossal cost blows its estimated budget out of the water. Variety forecast that the movie had “a $250 million production budget” and there is good reason why it sailed past that.
Filming was reportedly due to begin in the United Kingdom between late March and early April 2020 but was repeatedly delayed by the pandemic. It eventually got underway in January 2021 at Pinewood Studios, just outside London, but was temporarily halted in June due to multiple crew members contracting COVID-19. It all came at quite a cost.
Recently-released filings from Disney confirm that the “cost exceeded the production budget primarily due to the COVID-19 impact.” This isn’t the only reason the movie had its work cut out for it before it eventually opened in May this year.
Black actress Halle Bailey was cast as the eponymous heroine Ariel in a marked departure from the 1989 cartoon that the movie was based on. It fueled a racist backlash centered on the #notmyariel social media campaign whilst online giant, The Internet Movie Database (IMDb), was awash with negative reviews of The Little Mermaid, posted by bots, in a bid to bring down its average score.
In the wake of the review bombing, IMDb said it had made changes to its rating system but the movie was already in choppy waters by then. A lot of the criticism focused on its computer-generated graphics which made the once-cute hand-drawn characters look like eerie aliens.
“There’s something about these depictions that triggers an uneasy response,” wrote Vox. “Maybe it’s the prolonged, lingering shots on their ‘smiling’ faces or that their tiny mouths are contorted in unnatural ways. It’s as though there’s almost something sinister hiding underneath the computerized animal skin – and that’s even before they start singing and dancing.”
It contributed to the movie scoring a critics’ score of just 67% on review aggregator Rotten Tomatoes. The audience was more complimentary and awarded it 94% though this didn’t translate into a blockbuster performance at the box office.
The Little Mermaid grossed $95.5 million domestically over its Memorial Day opening weekend. It beat the $91.5 million that Disney’s Aladdin remake opened with in 2019 but, according to The Hollywood Reporter, The Little Mermaid’s opening was still far adrift of its $115 million to $120 million forecasts.
Overseas, the movie started off with a disappointing $68.1 million from 51 markets and drowned in China where it opened to just $2.5 million. It ended up with a worldwide gross of $569.6 million which was respectable but a far cry from the $1.7 billion haul of Disney’s live action Lion King in 2019 and the $1 billion that Aladdin made in the same year.
Studios receive around half of theater takings giving Disney an estimated $284.8 million from The Little Mermaid. Calculating whether this covered its production cost requires knowing how much Disney spent on the movie which would usually be a closely-guarded secret. This is because studios’ financial statements typically combine the costs of all of their movies without itemizing how much was spent on each one.
Movies filmed in the UK are an exception. Studios put up with higher levels of disclosure when they film there in order to benefit from the UK government’s Film Tax Relief scheme. This gives studios a cash reimbursement of up to 25% of the money they spend in the UK provided that it represents at least 10% of the film’s total costs.
In order to demonstrate this to the government, studios set up separate companies to make each film and they have to file financial statements showing everything from staff numbers, salaries and costs, to the amount of cash reimbursement they receive.
The companies usually have code names so that they don’t raise attention with fans when filing for permits to film on location. The Little Mermaid was made by Disney’s subsidiary Sand Castle Pictures and its financial statements shine a spotlight on the windfall from the UK government as well as the precise amount it cost to make the movie.
Staffing was one of its single-biggest expenses as cumulative pay came to $26.8 million (£22 million) with the production team peaking at 252 people during the five months to 31 March 2020. Five days later Disney revealed the gulf in pay between men and women on the Little Mermaid. Women occupied 17% of the highest paid jobs on the movie and 41% of the lowest paid jobs whilst their average hourly pay was 22.1% lower than men’s. The following year the gulf widened as the average hourly salary of the women working on The Little Mermaid was 53.3% lower than the amount paid to men.
Its financial statements reveal that a total of $297 million (£243.5 million) had been spent on the movie by August 31, 2022 and then comes the cash reimbursement. As this author recently revealed in the UK’s Express newspaper, The Little Mermaid received $56.8 million (£46.6 million) from the UK government bringing its net spending down to $240.2 million.
However, that is just the start as the financial statements do not show the marketing costs of the movie. On the flipside, the share of the box office isn’t the studio’s only return from a movie so offsetting it from the costs shown in the financial statements does not show whether the movie made a profit or a loss overall. “There will be other income generated by the production (such as DVD/Blu Ray sales, merchandising, etc.). It’s not reflecting a true account of whether the film was overall profitable,” says a Disney spokesman.
Offsetting Disney’s share of theater ticket sales from the expenses in the financial statements simply shows whether the movie covered its production costs at the box office or made a profit or a loss. In the case of The Little Mermaid, Disney’s $284.8 million share of the box office left it with a $44.6 million profit after deducting its $240.2 million net spending. However, its profit is likely to nosedive as post-production was still well underway at the date of the financial statements and this will increase the movie’s costs.
The Little Mermaid has had a renaissance in recent weeks as it has been hugely popular on the Disney+ streaming platform. The movie launched last month and had 16 million views in its first five days alone. However, subscribers to Disney+ don’t pay per movie, they are billed monthly or annually and get access to a studio’s entire library, along with any new content released during their subscription period. This means it isn’t possible to attribute subscriber fees to specific productions, such as The Little Mermaid, and in turn that piles the pressure on pictures to succeed at the box office.
At its peak in 2019, seven Disney movies made more than a billion Dollars at the box office including Avengers: Endgame, which alone generated $2.8 billion, making it the highest-grossing movie of all time when it was released. However, so far this year none of Disney’s movies have crossed that threshold. Despite its surging cost, The Little Mermaid has failed to stop the drought.
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