Reactions to the transaction, which includes at least three new Star Wars films, are so lopsidedly enthusiastic that I’m hoping to see at least one analyst offer a contrarian view. Someone could start by addressing a question that was posed yesterday to Disney CEO Bob Iger, but that he mostly sidestepped: To paraphrase, he was asked whether there’s a risk that Hollywood may run into trouble by feeding audiences too many superhero/sci-fi/fantasy films. Susquehanna Financial Group’s Vasily Karasyov made a case last year that as theaters become inundated with these computer-animated extravaganzas — especially featuring comic book superheroes — “risk of underperformance increases and upside surprises become progressively less likely.” His view of Disney’s new deal is that we’ll have to wait to see how the next Star Wars film performs in 2015 to determine whether Iger made a smart move. “Until then, bulls will point to the success of The Avengers and bears will say that no franchise lasts forever,” he says. (Those interested in the subject of a superhero glut should also check out critic David Denby’s powerful cultural critique, “Has Hollywood Murdered The Movies?”, that ran last month in The New Republic.)
Meanwhile, Wall Streeters say that Iger was shrewd to add Lucasfilm to his studio properties that include Pixar and Marvel. It’s not a big deal that Disney’s shares are down 2% today: That reflects the fact that the transaction will result in a short-term hit to earnings — and reduces the likelihood that the company will increase its stock-repurchase plans.
RBC Capital Markets’ David Bank observes that “Star Wars is one of the most desirable franchises in the boys demo. It lends itself to exactly the type of opportunity that Disney monetizes best — cross platform opportunities including Movie Studio, Consumer Products, Theme Parks, and TV properties.”
Credit Suisse’s Michael Senno says that “Lucasfilm is a better companywide strategic fit, offers more synergies and, in turn, should create more shareholder value” than another widely speculated deal for Disney to buy Scripps Networks.
Bernstein Research’s Todd Juenger says that the $4B purchase price works for Disney if it sees $1.5B in worldwide box office for each of the next three Star Wars films, and finds $150M in annual synergies from Lucasfilm — which generates $860M a year in revenue. Those targets are “Not heroic, given the Star Wars brand and Disney’s unparalleled global consumer products network.” Disney said yesterday that each of the three most recent Star Wars films generated $1.5B in box office sales adjusted to today’s dollars.
And Wells Fargo Securities’ Marci Ryvicker says that the deal with Lucas could be even more lucrative than the one with Marvel, “specifically as it relates to international distribution, 3-D, consumer products and interactive gaming.” Unlike with Marvel — which had committed some of its titles to Paramount — there’s no complication involving Star Wars, which had been distributed by Fox. Disney management “highlighted these rights are for PRIOR films only,” she says.
New ‘Man Of Steel’ Television Spot #6


The fact is, these are our new myths. Superheroes, jedi, vampires and zombies have taken the place of tales of Celtic/Norse heroes, demigods, and demons. I think unless we see another huge paradigm shift in cultural thinking, people will want to see these types of stories.
Headlines to which the answer is No.
Reading analysts about the Lucasfilm deal is hysterical. If any of them had kids and imagination rather than being Wall Street guys, they’d realize this is a brilliant move for Disney. Not only has Star Wars endured for 40 years, but it continues to grow in popularity with their target demo despite the fact that there hasn’t been a good movie since “The Empire Strikes Back.” With the franchise’s worst enemy, George Lucas, being shuttled to an emeritus position, this incredible universe he created back in the 70s has a chance to flourish and grow and be monetized to levels way beyond what has come before. There’s a reason kids were buying empty action figure boxes for Christmas back in ’77. What a great fit for Disney and under the stewardship of a smart and talented cookie like Kathleen Kennedy, there is truly new meaning to the phrase A New Hope.
Kathy used to say the stupidest things. Frank always had to smooth it over.
This is a no brainer, Lucas cashed in Danny glover style, I’m getting too old for this… Disney got a STEAL. 4bil to get a 30 bil IP??? And now FUTURE WORLD at Disneyland has a theme they can hang their ears on. And we’ll get all the spin offs the fans have been begging for. This is win win for everyone. Well played.
While it may seem ubiquitous to us because of the toys and tie-ins, the STAR WARS franchise is actually very underexploited. And considering the box office of the largely derided prequels were hhuge, I fail to see a down side in this deal. Seriously. Besides Disney already had little girls with Princesses so now maybe they’ll get the little boys back who think Mickey and DOnald are for babies.
David, you make a good point. But the flip side is what occurs every time a franchise runs its course. As the final Harry Potter film neared completion there was a lot of speculation as to what WB will do now without HP, Matrix, or LOTR. But you’re right about having too much content thrown at the public from the same studio. Imagine if John Carter and Prince of Persia had been successes. Disney would be juggling those, plus Captain America, Thor, Iron Man, Avengers, Oz the Great and Powerful, Pirates of the Caribbean, Lone Ranger, and Star Wars. The question is whether or not any one studio can give each of those properties the attention they deserve. I imagine if Feige is the lord of Marvel, KK is the lord of Star Wars, and Bruckheimer shepherds his projects, then you’re okay. Still, it’s a lot for one entity.
Every dime that Disney puts into supporting Star Wars will be money they won’t be spending creating the NEXT big, new, creative franchise. As you say, they now have to juggle Marvel, Pixar, Pirates, Oz, Star Wars, AND all the classic Disney products. With the mandate now in place to exploit Star Wars on all Disney fronts, where’s their incentive to create a new action franchise for boys? I’ve been in these meetings where something great gets pitched to Disney Channel and they say “Sorry, but we’re putting all our eggs in the TRON basket, TRON is going to be Disney’s next big action show, so we can’t take pitches for action shows because TRON is going to be a massive hit and so we’re not going to develop anything new.” Look how great that turned out for them. Now it’ll be “Sorry, but Star Wars and Marvel are our big action franchises for boys, we can’t develop anything new because we have a mandate to synergize Star Wars.” There is a finite limit to development funding, and when there are big franchises that the company feels compelled to develop come hell or high water, new creative IP always takes a back seat to exploiting the stuff that the company already owns. This deals just makes it less likely that anything new will get made at this company, which is sad news for creators.
Why would someone take their new creative IP to Disney in the first place? Just develop it somewhere else, keep creative and financial control, wait for it to get super popular, and then in ten or twenty years sell it to Disney for a million times more than they would have paid for it in the first place. Easy!
Agreed. But that’s always been the case with Disney to my knowledge. The Matrix would never have gotten made at Disney, even as a PG film. I don’t think they’re ever interested in anything that isn’t an existing IP.
Don’t forget…Star Wars AND ET were both pitched to Disney…who passed. Disney also passed on The Amazing Race and the CSI franchise…and those have done so poorly on CBS. Who cares if Disney didn’t make the Matrix…someone else did…and look at the popularity of the film….but there was no franchise. Companies today like Disney and NBCUniversal need the extensions beyond the screen when and where they can get them.
Disney also could have had The Lord of the Rings if Eisner hadn’t of insisted that the story be told in one film.
I feel your frustration, but there is MORE than one Disney Channel out there and MORE than one Walt Disney Studio. If Disney wants to toss all their eggs into one basket let them! Tron killed them as did the series. Check the ratings…the only new Marvel show really succeeding on Disney XD is Spider-Man. Why do you think they did the integration with Phineas& Ferb/…to get those characters into a comedic environment. Action…does not play with kids anymore…if it ever did. Non-episodic comedy is GANG busters….so Star Wars will not cure their ills anymore than Clone Wars was a break out on Cartoon Network…it wasn’t! If you aren’t getting your pitches picked up…go someplace else or try someplace new like Yahoo or YouTube. The pipeline is getting bigger..not smaller.
Fact check: Not that I like the show, but Clone Wars is HUGE. The Season Four finale last summer was the #1 watched telecast of the day versus all of television among boys 9-14, and #1 for its timeslot among boys 6-11 (according to TV By The Numbers). Season 5 just started and seasons 1-2 enter syndication.
All these movies take time to produce, it’s not like they are cranking them out once a month. One every two or three years at most, Marvel’s product is two or so a year Pixar is one per year. Disney is fantasy and nature always has been. The Pixar purchase paid off very well just think of what would have happened to Pixar if it was owned by anyone other than Disney, Marvel has paid off and Lucasfilm will too.
Overabundance of fantasy movies? There isn’t enough, Disney can spread the merchandising around to so many platforms it can make the other Hollywood studios heads spin with envy. From Disney Channel Worldwide to ABC Television to cable channels ABCfamily, Parks, Cruise ships, to Book publishing, to Music to Disney Stores, no other studio has the reach that Disney has in marketing. Disney’s hands off approach to Pixar and Marvel has worked very well.
It’s when Disney tries to do a movie themselves that they get into trouble.
As long as they stick to only putting out one Star Wars movie every three years, I don’t see them having too much of a problem. The difference between Star Wars and Marvel though, is that Marvel is literally hundreds of potential franchises connected through a shared universe. Star Wars is one. They could conceivably spin-off different characters, but despite the popularity of the prequels and cartoons with younger children, the number of iconic, popular characters in the franchise that aren’t identified with actors too old to play them, is low.
Sorry…”was” huge…
Calling Denby’s elitist, douchey, out-of-touch piece “powerful” is an affront to the Hulk. And Vader.
I know, right.
If I have to read one more reference to the Denby piece in a proper news piece, I will lose it. For one thing, the ‘cinema is dead’ thesis is way, way old: Isidore Isou and David O. Selznick suggested the same thing in the mid-20th Century – before the debuts of Godard, Scorsese and Coppola.
For another thing, this isn’t the first time Denby has cried wolf like this for a long, long time (check out his 1998 piece “The Moviegoers” in which he makes the exact same contention. Or, better yet, don’t). This guy is the James Horner of film criticism, hoping that you might not notice the fact that he steals … from himself.
Frankly, I have no idea how anyone can see Denby as a culturally serious film critic. Denby mostly ignored foreign-language films in his article, only considering those foreign filmmakers who work in the studio system (like Del Toro) to be “artists”. Then again, I wouldn’t expect anymore from a guy who once cheerfully wrote, “one of the extraordinary advantages of growing up French is that you can be absurd without ever quite knowing it.” And THIS GUY is meant to be a serious film critic?
George lucas now 4 billion richer
Disney has proven itself to be the ultimate brand steward in the entertainment business which is why this is a brilliant move all the way around. Add Kathleen to the mix and you’ve got pure gold.
True, no franchise lives forever, but SW has been going since 1977 and despite six films of varying quality (New Hope and Empire were pretty good; Clones OK and Jedi, Phantom and Revenge just God awful) they are still insanely popular…. and part of that is Lucas’ mostly questionable re-distribution process of variants and special editions. I mean, they are mostly questionable from a fan POV but brilliant from a corporate POV. How do you get the fans to own several versions of the same movie?? LOL
What’s Lawrence Kasdan doing these days? He made Empire the best of the series.
I don’t think Disney has anything to worry about. The animated Clone Wars has accounted for 4 billion in revenue by itself over it’s short life. Along with all the other properties ( ILM, Indiana Jones etc.) this makes it an attractive deal. Then add into the mix that Kathleen Kennedy is now wearing mouse ears and the future looks very bright indeed.
Smart move for Disney. These are the kinds of films 3-D is made for and will get folks back to the theaters for the spectacle. Good luck.
So, when can we finally have a decent Dr. Strange movie? Imagine the 3-D possibilities!
Wait. So they won’t buy Scripps Networks? Crud.
Other than that, very appropriate deal. A Star Wars movie “every few years” forever sounds strange, but that’ll probably change. I guess. Hasn’t stopped “Pirates.”
I want a new Star Wars movie every year not just every two or three years. Disney needs to make at least 10 New Jedi movies over the next 10 years. Anything less will be a disappointment. Star Wars nothing but Star Wars. A new movie every year for Christmas. Think of the stock holders who have invested in Disney. They deserve an annual reward. Keep the budgets low don’t go crazy and they can do a new movie every year.