Can Marvel Films Profit Without Playing In China? Here's What Disney CEO Bob Chapek Says

Walt Disney Co. DIS CEO Bob Chapek was equal parts diplomatic and pugnacious in describing his company’s difficulties in getting its Marvel Cinematic Universe films released in China, citing a “very fluid and very complicated” situation while also insisting these films can succeed financially without a Chinese release.

What Happened: During Wednesday night's conference call with analysts, following the release of the company's second-quarter earnings, Chapek acknowledged Disney has been running into obstacles with the Chinese government over its Marvel releases — the most recent, “Doctor Strange in the Multiverse of Madness,” opened domestically last week but is not scheduled for Chinese distribution.

“The situation there has been very fluid, and as you probably guess, very complicated both from a business standpoint and from a political standpoint,” he said. “But as you know, we've got a long record of success and a strong fan base for our brands and franchises in this market.”

Chapek added that Disney’s non-Marvel titles, such as “Death on the Nile” and “Encanto,” were released in China and the company would continue submitting its films for approval to the Chinese authorities.

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What Else Happened: While Chapek did not elaborate on why the Marvel films were being blocked, he also insisted those productions could generate handsome profits without Chinese distribution.

“It's worth noting, I think, though, that at the time that we're having some difficulty in getting our films in China that ‘Doctor Strange’ did extraordinary,” he said. “We've just crossed $500 million in less than a week without this market.

“So we're pretty confident that even without China, if it were to be that we continue to have difficulties in getting titles in there, that it doesn't really preclude our success given the relatively lower take rate that we get on the box office in China than we do across the rest of the world,” he added.

China limits the number of international films that play in local cinemas, and box office success around the world is no guarantee of a local release. While no official reason has been given by the Chinese authorities for their blocking of the Marvel films, it's widely assumed it's a response to criticism of the Chinese government attributed to two China-born artists associated with these films, “Eternals” director Chloé Zhao’s and “Shang-Chi and the Legend of the Ten Rings” Simu Liu. Sony Pictures SONY also failed to get a Chinese release for its Marvel release of "Spider-Man: No Way Home."

The last Marvel film to play in China was “Avengers: Endgame” in 2019.

Photo: Benedict Cumberbatch in "Doctor Strange in the Multiverse of Madness," courtesy of Disney.