As Hollywood grapples with the difficult economics of its business, Walt Disney Studios has canceled plans to partner on the next film in the "Chronicles of Narnia" series, "The Voyage of the Dawn Treader."
A Disney spokeswoman confirmed Wednesday that the Burbank studio decided not to exercise its option to co- finance the third movie in the franchise based on C.S. Lewis' classic children's books because of "budgetary considerations."
Though the budget of the movie came in significantly below the $200-million cost of "Prince Caspian," the second film in the "Narnia" series, it could still escalate during production, and that made Disney wary, according to a person close to the movie. Disney was partner with Walden Media, which owns the rights to the books, on the first two "Narnia" films.
Disney's decision not to proceed with "Dawn Treader" shows how it is being more selective in the number of pictures it releases. Studios are scrutinizing costs more carefully and in many instances passing on expensive pictures that until recently might have been given an automatic green light.
Disney was also uneasy that the budget of "Dawn Treader" was subject to other uncontrollable factors, such as uncertainty about the tax breaks and rebates, a weak U.S. dollar and the high cost of visual effects.
One person close to the matter said there were also "creative" differences between Disney and Walden, and that the two disagreed on when to release the film in 2010.
Walden said Wednesday that it hoped to find a new financial partner and proceed with plans to shoot the film in the first quarter of next year with director Michael Apted.
"We're disappointed that Disney has decided not to go forward," said David Weil, chief executive of Walden's parent company, Anschutz Film Group. "But we regard 'Dawn Treader' as an extremely valuable property and remain committed to the franchise."
Getting a new partner to take on half the risk could prove a challenge for Walden given that "Prince Caspian" fell below expectations when it was released in May. The film generated $419 million in worldwide ticket sales, far less than the first "Narnia" movie, "The Lion, the Witch and the Wardrobe," which grossed $745 million in 2005.
As in the case of many films, "Prince Caspian" did not earn its money back from ticket sales. But Disney and Walden hope it will become profitable as the result of DVD sales.
On Wednesday morning, the Hollywood Reporter website was first to report that Disney was pulling out of "Dawn Treader."