Studio executives have a limited shelf life in Hollywood -- especially if they release a flop. Rich Ross, who resigned as Disney's movie honcho last week, was responsible for a pair of them. Most recently he signed off on the sci-fi epic John Carter and the animated bomb Mars Needs Moms. His departure bruises the reputation of the Mouse, but fear not -- it's still in pretty good shape. Your favorite character on a lunchbox Ross failed to deliver Disney what it wanted, which, to put it allegorically, was more pirates -- Pirates of the Caribbean, that is. In other words, over the past few years the company has aimed to produce splashy big-budget movies that turn a healthy profit and thus possess the potential to become franchises. That's because the company's success depends in large part on leveraging its intellectual property across all of its business units. A successful movie series can beget a best-selling action figure or a popular Disneyland ride (or vice-versa in the case of Pirates). That's how the Mouse keeps its margins consistently between 10% and 12% and its cash flow robust enough to maintain or increase its dividend over time. Contrast this with a purer entertainment play like Lions Gate, for which every reporting period is a roll of the dice. In 2011 the company posted wildly mixed quarterly net results of $46.1 million, $12.2 million, -$24.6 million, and -$1.7 million. Sometimes the Lion roars, and sometimes it whimpers. What it doesn't produce is predictable earnings or a dividend.
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