Disney's Treasure sinks at box office

The biggest turkey in the US over thanksgiving weekend was to be found at the box office.

Walt Disney's latest animated effort, Treasure Planet, a reworking of the Treasure Island story in space, flopped. Now the struggling entertainment and media group has been forced to lower its reported fourth quarter results by about 20% and warns that the first three months of 2003 would also be adversely affected.

The firm, which has looked under siege for some time, also disclosed that the US financial regulator, the securities and exchange commission, is investigating the disclosure in August that relatives of several supposedly independent board members had links to Disney.

Long suffering investors yesterday watched the now familiar sight of Disney's shares, which hit a four-year low in August, taking a battering. They were off 85 cents at $17.69 (£11.25) in early Wall Street trading.

Treasure Planet did not get bad reviews but trailed in a weak fourth at the box office - beaten by two classic British characters, Harry Potter and James Bond, and a follow up to the anaemic Santa Clause (also from Disney). Treasure Planet cost $140m (£89m) to make and notched up first weekend ticket sales of less than $17m.

The firm is taking a $74m write down for the fourth quarter to reflect the lower book value of the film and lowering previously reported profits by $47m.

Disney has now been misfiring for several years. The success of its recent cartoon Lilo and Stitch was the exception rather than the norm, with Treasure Planet appearing to be heading for the same fate as the poorly performing Atlantis and Emperor's New Groove.

There had been speculation that patience was finally running out with Disney's long standing chairman and chief executive Michael Eisner. Instead his position looked more secure after a shake up in the boardroom, also announced late on Tuesday, which weakened one of his chief critics, Stanley Gold.

Mr Gold, the financial adviser to Roy Disney, also a board member and a nephew of Walt, would no longer be considered independent under new guidelines. As a result, he will no longer serve on any of the key committees.

But after being associated with the revival of Disney during the 1980s and 1990s, Mr Eisner still faces enormous challenges. Attendance at theme parks, the biggest revenue spinner at Disney, is still suffering from reluctance to travel after the September 11 terrorist attacks and could be affected again by a war in the Middle East. The parks' operating profits in the most recent quarter were down by 25%.