The Hollywood trades are reporting that Disney has decided to bail on the Narnia franchise and will not participate in the financing of The Voyage of the Dawn Treader, the third film in the trilogy.  Disney cited budgetary considerations “and other logistics” as the reasons for the studio’s decision to abandon the once promising franchise in spite of the fact that its producing partner on the Narnia films, Walden Media, had announced that the budget for Dawn Treader had been reduced to $100-$150 million versus the more than $200 million cost of Prince Caspian, the second film in the series.

What probably spooked Disney was the drop-off from the first Narnia film, The Lion, The Witch and the Wardrobe, which earned $715 million worldwide, to the second, Prince Caspian, which brought in $419 million.  In better economic times Disney might have hoped that Dawn Treader would be able to return the franchise to immediate profitability, but in the midst of the current recession, the studios are becoming increasingly wary about backing big budget franchise projects with declining trend lines.