Disney bows out of 3rd "Narnia" film, citing budget

British actress Anna Popplewell (L) and British actor William Moseley arrive for the German movie premiere of 'The Chronicles of Narnia - Prince Caspian of Narnia' in Kaltenberg, southern Germany, in this file photo from July 22, 2008.

LOS ANGELES (Reuters) - The Walt Disney Co will not partner on a third film in the "Narnia" franchise it shares with Walden Media because of "budgetary considerations and other logistics," a Disney spokeswoman said on Wednesday.

The two companies co-financed the 2005 hit, "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe", based on the first volume in the C.S. Lewis children's book series.

That film grossed $745 million at box offices worldwide and became a top-selling DVD for the year, leading Disney to tout it as a franchise with the potential for up to seven films.

The sequel, "Prince Caspian," was released in May 2008 but competition from "Iron Man" and "Indiana Jones and the Kingdom of the Crystal Skull" cut its global box office take to $420 million.

The title fared better in DVD release, becoming one of the top holiday sellers since its December 2 release.

Disney, which distributed the "Narnia" films worldwide, got a 50 percent cut of profits from the special effects-laden franchise, which cost an estimated $180 million to $200 million to make.

Disney had an option, which it will not exercise, to make a third film, "The Voyage of the Dawn Treader," that had been scheduled for release in 2010.

(Reporting by Gina Keating; Editing by Gary Hill)