20th Century Studios' Diminished Future: "I Don't Think the Label Means Anything Anymore"

As Emma Watts exits, Disney’s former Fox unit will now be the home to some adult dramas and prebranded remakes, plus Hulu or Disney+ titles and four 'Avatar' sequels.

Ten months after Disney gobbled up 20th Century Fox as part of a $71.3 billion deal, Emma Watts was still working out of Building 88, the structure on the Fox lot with the gold doors through which studio founder Darryl Zanuck used to walk.

Watts, who had served as vice chairman and longtime president of production at the studio, was one of the few top Fox execs to survive the Disney merger, and in remaining in Building 88, now inhabited by Lachlan Murdoch, the CEO of Fox Corp., she could symbolically hold onto what the studio once was. But on Jan. 30, roughly a week after finally relocating to a bungalow on the Fox lot, the executive resigned as chief of the newly renamed 20th Century Studios.

After leading a major studio, Watts realized she couldn't stomach the diminishment in power and autonomy that came with running a pared-down fiefdom within Disney, sources close to her tell The Hollywood Reporter. The executive's departure also is a blow to Hollywood's small sorority of female studio executives. Rare among majors, Fox had boasted a deep bench of powerful women in its upper ranks. In the wake of the merger, Watts joins former 20th Century Fox chairman Stacey Snider, former Fox 2000 chief Elizabeth Gabler and former Fox marketing chief Pamela Levine out the door.

Under Disney, 20th will now release about four movies a year theatrically, down from as many as six or seven, and focus equally if not more so on making content for Disney+ and Hulu. Fox's Marvel movies, such as Deadpool, now fall under Marvel Studios president Kevin Feige's purview. For Watts — who worked closely with Ryan Reynolds in bringing the Deadpool series to the big screen and also was behind the larger X-Men franchise — this meant handing over some of her prized projects.

Disney's other production silos, like Marvel, Lucasfilm, Pixar, Walt Disney Animation and Searchlight, have clear identities, and the company's live-action studio, under the firm control of Sean Bailey, has found its billion-dollar niche remaking Disney's animated films, like The Lion King and March's Mulan. The answer to what makes something a 20th Century Studios film is murkier.

The unit's biggest swing by far will be James Cameron's four Avatar sequels, set to hit cinemas in late 2021, 2023, 2025 and 2027. "The label means Avatar and Avatar means the label," says Avatar producer Jon Landau. Disney insiders insist that 20th can pursue anything outside of a family film and that adult-driven titles will be welcomed.

Since the merger closed, Watts had persuaded her bosses, Disney Studios co-chairmen Alan Horn and Alan Bergman, to forge ahead with Ridley Scott's tentpole The Last Duel. The 14th century period pic starring Adam Driver, Matt Damon and Ben Affleck is set to open Dec. 25, during the heart of the next awards season.

Watts oversaw the majority of 20th's 2020 slate prior to the merger, including upcoming releases The Call of the Wild, The King's Men, The New Mutants, Free Guy, Death on the Nile and Steven Spielberg's West Side Story. Other projects in active development at 20th include Home Alone and Cheaper by the Dozen reboots for Disney+ as well as the R-rated John Cena comedy Vacation Friends for Hulu.

"I don't think the label means anything anymore," says Bill Mechanic, who was CEO of Fox Filmed Entertainment from 1994 to 2000. "It's a repository for rights to either remake pictures or use characters. You're making four movies a year out of branded product."

Fox and Watts endured a brutal 2019 box office, with major misses including X-Men spinoff Dark Phoenix and the Cameron-produced Alita: Battle Angel. The losses prompted Disney chief Bob Iger to say on an August earnings call that the performance of Fox films was "well below where we'd hoped it would be when we made the acquisition," resulting in a loss of $170 million in the second quarter of 2019.

The near future doesn't look much brighter. The Call of the Wild, which saw its $125 million budget balloon after reshoots, is tracking to open in the $15 million range over the Feb. 21-23 weekend, while New Mutants, the final installment in the X-Men series scheduled to open April 3, has been delayed since early 2018.

Watts, who declined to comment for this piece, also notched wins in her recent tenure, including Ford v Ferrari ($220.8 million so far) and Bohemian Rhapsody ($903.6 million). She's expected to have her pick of job options, and an obvious landing pad would be Paramount under studio chief Jim Gianopulos, her former boss at Fox.

At Fox, new projects were often born out of Watts’ close ties to filmmakers; she endorsed James Mangold’s Ford v Ferrari after he delivered a hit with the X-Man installment Logan, and backed Reynolds’ Free Guy after the huge success of his Deadpool movies. But the executive didn’t feel she would have the latitude to continue to make those kinds of decisions.

For Disney, losing a top female production executive is not a great look, although the studio still has in its key ranks Kathleen Kennedy at Lucasfilm, Jennifer Lee at Walt Disney Animation Studios, Searchlight co-chief Nancy Utley and Cathleen Taff, the only female distribution chief at a major studio.

Few in Hollywood were surprised that Watts departed, but many were shocked that Disney let her go so easily. Both sides stress that the exit was a "kumbaya moment," unlike the abrupt dismissal of Gabler within hours of the merger closing. Disney aims to fill Watts' diminished job quickly, and the studio is under some pressure to find a woman for the role.

“I hope they bring in someone who is filmmaker centric,” says Landau. “Both people at the studio and the filmmakers have to have the same goals. You have to have mutual respect to have the best results.”

Borys Kit contributed reporting.

A version of this story first appeared in the Feb. 5 issue of The Hollywood Reporter magazine. Click here to subscribe.