Disney’s live-action The Little Mermaid, released on May 26, 2023, was poised to be a cornerstone of the studio’s ambitious remake strategy, following the billion-dollar successes of The Lion King and Aladdin. Starring Halle Bailey as Ariel, the film promised a fresh take on the 1989 animated classic, blending nostalgia with modern flair. Yet, despite a staggering investment approaching half a billion dollars, the film has become Disney’s most notorious financial flop in recent memory, grossing just $569.6 million worldwide against a production budget of $355.1 million and marketing costs estimated at $140 million. The colossal misfire has sparked heated debate, with fans, analysts, and insiders dissecting what went wrong, from production challenges to cultural backlash, and what it means for Disney’s future.
A High-Stakes Investment
Disney spared no expense on The Little Mermaid, aiming to create a visually spectacular adaptation that would rival its most successful live-action remakes. Directed by Rob Marshall, known for Chicago and Mary Poppins Returns, the film boasted a star-studded cast, including Bailey, Jonah Hauer-King as Prince Eric, Melissa McCarthy as Ursula, and Javier Bardem as King Triton. The production, filmed primarily at Pinewood Studios in the UK, faced significant hurdles due to the COVID-19 pandemic, which delayed shooting from early 2020 to January 2021. These delays, coupled with multiple crew members contracting the virus, drove costs sky-high, with financial filings revealing a production budget of $355.1 million by August 2022, far exceeding initial estimates of $250 million.
The film’s lavish budget was fueled by its ambitious underwater sequences, which relied heavily on cutting-edge CGI to bring Ariel’s aquatic world to life. From the vibrant coral reefs to the menacing tentacles of Ursula, the visual effects demanded a small army of artists and technicians, pushing costs further. Disney also invested heavily in marketing, with a $140 million global campaign that included partnerships with McDonald’s, Booking.com, and Kellogg’s, making it the studio’s most expensive promotional push for a live-action remake. The goal was clear: to position The Little Mermaid as a billion-dollar blockbuster, akin to The Lion King ($1.7 billion) and Aladdin ($1 billion). But the numbers told a different story.
A Disappointing Box Office Run
Despite a strong domestic opening of $118.6 million over the Memorial Day weekend, The Little Mermaid struggled to maintain momentum. The film grossed $298 million domestically but faltered internationally, earning just $270.9 million, with a particularly dismal $3.6 million in China. Industry analysts estimate that studios typically retain about 50% of box office revenue, leaving Disney with roughly $285 million from theatrical earnings—well below the $355.1 million production cost, let alone the additional marketing expenses. To break even, the film needed to gross at least 2.5 times its production budget, or approximately $887.75 million, a target it fell far short of.
The financial fallout was stark. After accounting for a $56.8 million tax rebate from the UK government and a $4.2 million COVID-relief grant, the net production cost was reduced to $294.1 million. Even so, analysts estimate the film lost Disney between $50 million and $127.8 million at the box office, depending on ancillary revenues like streaming and merchandise. The failure was particularly jarring given Disney’s track record, with seven films crossing the billion-dollar mark in 2019 alone. Social media erupted with shock, with posts like “Disney spent HALF A BILLION on The Little Mermaid and it flopped?! Unbelievable!” capturing the widespread disbelief.
What Went Wrong?
The reasons behind The Little Mermaid’s failure are multifaceted, blending production woes, creative choices, and cultural backlash. The COVID-19 pandemic played a significant role, inflating costs through delayed shoots and safety protocols. Filming at Pinewood Studios was halted for six months in 2021 due to outbreaks, forcing costly rescheduling and extended post-production. The reliance on CGI for underwater scenes, while visually impressive, was a gamble that didn’t fully pay off. Critics and audiences noted that characters like Sebastian and Flounder appeared “eerie” and “lifeless,” with some describing the CGI as triggering an “uncanny valley” response, undermining the charm of the hand-drawn originals.
Casting decisions also sparked controversy. Halle Bailey’s performance as Ariel was widely praised, earning a 94% audience score on Rotten Tomatoes, but her casting as a Black actress in a role traditionally depicted as white fueled a racist backlash. The #NotMyAriel hashtag trended on social media, and the film’s teaser trailer became the most-disliked for a Hollywood production, amassing 3.8 million dislikes on YouTube. In China, where the film grossed a mere $3.6 million, some attributed the poor performance to racial bias, though broader competition from domestic films also played a role. The backlash extended to IMDb, where bots posted negative reviews to tank the film’s rating, prompting the platform to adjust its scoring system.
The film’s international performance was a particular weak point. Unlike Aladdin and The Lion King, which thrived overseas, The Little Mermaid struggled in key markets like China, South Korea, and France. Analysts point to a lack of cultural resonance, with audiences abroad less attached to Ariel’s redesign and the film’s modernized narrative. The story’s tweaks—emphasizing Ariel’s independence over romance—drew mixed reactions, with some praising the empowerment angle and others feeling it strayed too far from the original’s fairy-tale charm. “It’s not the Ariel I grew up with,” one fan posted on X. “Disney tried too hard to make it ‘relevant.’”
Disney’s Broader Struggles
The Little Mermaid’s flop is part of a larger pattern of challenges for Disney’s live-action remake strategy. While Cinderella (2015) and Beauty and the Beast (2017) were hits, recent efforts like Mufasa: The Lion King (2024) and Haunted Mansion (2023) have underperformed, signaling audience fatigue with reimagined classics. Disney CEO Bob Iger acknowledged the issue in 2024, vowing to reduce budgets after The Little Mermaid’s “extraordinarily expensive” production. The studio’s reliance on high-cost CGI and global marketing campaigns has raised the financial bar, making break-even points increasingly difficult to reach.
Streaming provided some relief, with The Little Mermaid drawing 16 million views in its first five days on Disney+ in September 2023, making it the most-watched Disney film premiere since Hocus Pocus 2. However, Disney’s shift away from licensing content to third-party platforms like Netflix has limited revenue streams, putting more pressure on theatrical performance. Merchandise sales, bolstered by both classic and live-action Ariel designs, helped mitigate losses, but not enough to offset the film’s deficit. The synergistic nature of Disney’s empire—spanning theme parks, streaming, and merchandise—makes it hard to quantify the film’s full financial impact, but the box office numbers paint a grim picture.
Fan and Industry Reactions
The revelation of The Little Mermaid’s near-$500 million price tag sent shockwaves through fandoms, with X posts ranging from outrage to sarcasm. “Disney dropped half a billion on a mermaid movie and it tanked? Fire whoever greenlit that budget!” one user wrote. Others defended the film, arguing that Bailey’s performance and the film’s visual splendor deserved better. “It’s not a flop if you loved it,” one fan posted. “Halle was perfect, and the haters just made too much noise.” The polarized reactions reflect broader debates about representation, with Bailey’s casting hailed as a milestone for diversity but also a lightning rod for controversy.
Industry insiders have pointed fingers at Disney’s bloated budgets and overreliance on nostalgia. “The studio assumed The Little Mermaid would be a slam dunk like Aladdin,” one analyst noted. “But they didn’t account for how much the market has changed.” The film’s failure prompted Disney to restructure its live-action division, with Sean Bailey stepping down as president in February 2024 after a string of flops. David Greenbaum, formerly of Searchlight Pictures, took over, signaling a shift toward leaner budgets and more creative oversight.
What’s Next for Disney?
The The Little Mermaid debacle has forced Disney to reassess its approach to live-action remakes. Upcoming projects like Moana and Hercules are reportedly being developed with tighter budgets, and Iger has emphasized “quality over quantity” in recent statements. The studio’s 2025 slate, including Lilo & Stitch and Snow White, faces increased scrutiny, with fans wary of more high-cost misfires. Meanwhile, The Little Mermaid has found a second life on Disney+, where its streaming success suggests it may yet become a cultural touchstone for a new generation, despite its theatrical struggles.
The film’s failure is a cautionary tale about the risks of unchecked ambition in Hollywood. Disney’s gamble on The Little Mermaid—a nearly half-billion-dollar bet—has become a symbol of the challenges facing the studio in a post-pandemic, polarized world. As fans continue to debate Bailey’s casting, the CGI controversies, and the film’s legacy, one thing is clear: Ariel’s journey to the surface was far costlier than anyone could have imagined.
