The Force is strong with Disney’s Lucasfilm buy

Nov 30, 2012
The collective effect of Lucasfilm's announced sale to <a href="http://money.cnn.com/quote/quote.html?symb=DIS&amp;source=story_quote_link" title="">Walt Disney</a> was not unlike the planet-size explosion caused by the Death Star in the original <em>Star Wars</em>: Minds were blown. Not only will the family-friendly firm control the crown jewel of nerddom -- who knew it was even for sale? -- but the first of a new batch of <em>Star Wars</em> films is already due in 2015.

The move fits into <a href="http://features.blogs.fortune.cnn.com/2012/11/05/iger-disney-will-protect-star-wars/" title="">Disney CEO and chairman Bob Iger's</a> strategy: Buy winners, leave them alone, then wring greater profits from them by running content through the company's massive international distribution network, including its cable channel. In 2009, <a href="http://money.cnn.com/2009/08/31/news/funny/marvel_disney_strategy.fortune/index.htm" title="">Disney bought Marvel Entertainment</a> for $4 billion, a deal that resulted in this year's <a href="http://money.cnn.com/2012/05/04/news/companies/avengers-hollywood/index.htm" title="">$1.5 billion blockbuster <em>The Avengers</em></a>. Three years earlier, <a href="http://money.cnn.com/2006/05/15/news/companies/disney_pixar_futureof_fortune_052906/index.htm" title="">Disney bought Pixar Animation Studios</a>, maker of <em>Toy Story</em>, for $7.4 billion. "I'm going to do this one the same way," Iger told Fortune.com.

Lucasfilm will furnish Disney with a trove of valuable material at a time when only the most recognizable franchises -- your James Bonds or Batmans -- are certain to turn a profit. This summer, box-office revenues fell for the first time in seven years, to $4.27 billion, down 3% compared with last year. Worse, the number of tickets sold shrank to about 532 million, down 4% from summer 2011 -- the smallest audience movies have attracted since 1993 during their busiest months. Disney, like all studios, is forced to place fewer bets. A bet on films with an already avid fan base is smart.

And <em>Star Wars</em> has something even more powerful behind it: dads (and moms). When the first film of the second trilogy came out in 1999, ticket lines were packed with parents who had been fans in their youth, introducing the series to their sons and daughters. Hollywood.com analyst Paul Dergarabedian says it was one of the greatest "transgenerational marketing moments" in history. (There is a thriving world of web videos and blogs dedicated to advising parents on introducing their kids to the franchise.) Fan conferences like the Star Wars Celebration, photographed above and in the following gallery, attract tens of thousands of devotees and are prime grounds for indoctrination.

As for the timing of the deal, Lucas says he is donating the proceeds to charity. With Lucas acting as executive producer, could Christopher Nolan, who rebooted the Batman franchise, or J.J. Abrams, who remade<em> Star Trek</em>, be lured to direct? There is a precedent. The most critically acclaimed of all the <em>Star Wars</em> films, <em>The Empire Strikes Back</em>, was not directed by Lucas.
The collective effect of Lucasfilm's announced sale to Walt Disney was not unlike the planet-size explosion caused by the Death Star in the original Star Wars: Minds were blown. Not only will the family-friendly firm control the crown jewel of nerddom -- who knew it was even for sale? -- but the first of a new batch of Star Wars films is already due in 2015. The move fits into Disney CEO and chairman Bob Iger's strategy: Buy winners, leave them alone, then wring greater profits from them by running content through the company's massive international distribution network, including its cable channel. In 2009, Disney bought Marvel Entertainment for $4 billion, a deal that resulted in this year's $1.5 billion blockbuster The Avengers. Three years earlier, Disney bought Pixar Animation Studios, maker of Toy Story, for $7.4 billion. "I'm going to do this one the same way," Iger told Fortune.com. Lucasfilm will furnish Disney with a trove of valuable material at a time when only the most recognizable franchises -- your James Bonds or Batmans -- are certain to turn a profit. This summer, box-office revenues fell for the first time in seven years, to $4.27 billion, down 3% compared with last year. Worse, the number of tickets sold shrank to about 532 million, down 4% from summer 2011 -- the smallest audience movies have attracted since 1993 during their busiest months. Disney, like all studios, is forced to place fewer bets. A bet on films with an already avid fan base is smart. And Star Wars has something even more powerful behind it: dads (and moms). When the first film of the second trilogy came out in 1999, ticket lines were packed with parents who had been fans in their youth, introducing the series to their sons and daughters. Hollywood.com analyst Paul Dergarabedian says it was one of the greatest "transgenerational marketing moments" in history. (There is a thriving world of web videos and blogs dedicated to advising parents on introducing their kids to the franchise.) Fan conferences like the Star Wars Celebration, photographed above and in the following gallery, attract tens of thousands of devotees and are prime grounds for indoctrination. As for the timing of the deal, Lucas says he is donating the proceeds to charity. With Lucas acting as executive producer, could Christopher Nolan, who rebooted the Batman franchise, or J.J. Abrams, who remade Star Trek, be lured to direct? There is a precedent. The most critically acclaimed of all the Star Wars films, The Empire Strikes Back, was not directed by Lucas.Photo: Landon Nordeman

The collective effect of Lucasfilm's announced sale to Walt Disney (dis) was not unlike the planet-size explosion caused by the Death Star in the original Star Wars: Minds were blown. Not only will the family-friendly firm control the crown jewel of nerddom -- who knew it was even for sale? -- but the first of a new batch of Star Wars films is already due in 2015.

The move fits into Disney CEO and chairman Bob Iger's strategy: Buy winners, leave them alone, then wring greater profits from them by running content through the company's massive international distribution network, including its cable channel. In 2009, Disney bought Marvel Entertainment for $4 billion, a deal that resulted in this year's $1.5 billion blockbuster The Avengers. Three years earlier, Disney bought Pixar Animation Studios, maker of Toy Story, for $7.4 billion. "I'm going to do this one the same way," Iger told Fortune.com.

Lucasfilm will furnish Disney with a trove of valuable material at a time when only the most recognizable franchises -- your James Bonds or Batmans -- are certain to turn a profit. This summer, box-office revenues fell for the first time in seven years, to $4.27 billion, down 3% compared with last year. Worse, the number of tickets sold shrank to about 532 million, down 4% from summer 2011 -- the smallest audience movies have attracted since 1993 during their busiest months. Disney, like all studios, is forced to place fewer bets. A bet on films with an already avid fan base is smart.

And Star Wars has something even more powerful behind it: dads (and moms). When the first film of the second trilogy came out in 1999, ticket lines were packed with parents who had been fans in their youth, introducing the series to their sons and daughters. Hollywood.com analyst Paul Dergarabedian says it was one of the greatest "transgenerational marketing moments" in history. (There is a thriving world of web videos and blogs dedicated to advising parents on introducing their kids to the franchise.) Fan conferences like the Star Wars Celebration, photographed above and in the following gallery, attract tens of thousands of devotees and are prime grounds for indoctrination.

As for the timing of the deal, Lucas says he is donating the proceeds to charity. With Lucas acting as executive producer, could Christopher Nolan, who rebooted the Batman franchise, or J.J. Abrams, who remade Star Trek, be lured to direct? There is a precedent. The most critically acclaimed of all the Star Wars films, The Empire Strikes Back, was not directed by Lucas.

Muppet troopers wait backstage during a costume contest at the Star Wars Celebration, a gathering of thousands of Star Wars fans, at the Orange County Convention Center in Orlando.
Muppet troopers wait backstage during a costume contest at the Star Wars Celebration, a gathering of thousands of Star Wars fans, at the Orange County Convention Center in Orlando.Photo: Landon Nordeman

Muppet troopers wait backstage during a costume contest at the Star Wars Celebration, a gathering of thousands of Star Wars fans, at the Orange County Convention Center in Orlando.

Costumed attendees in the men's bathroom
Costumed attendees in the men's bathroomPhoto: Landon Nordeman

Costumed attendees in the men's bathroom

<em>Star Wars </em>creator George Lucas (not pictured) made a surprise appearance.
Star Wars creator George Lucas (not pictured) made a surprise appearance.Photo: Landon Nordeman

Star Wars creator George Lucas (not pictured) made a surprise appearance.

Attendance peaked at just over 30,000.
Attendance peaked at just over 30,000.Photo: Landon Nordeman

Attendance peaked at just over 30,000.

Darth Vaders, practicing their pose. The first "Celebration" of the beloved franchise was held in Denver in 1999 -- just weeks before the release of <em>The Phantom Menace</em>, the fourth installment of the series.
Darth Vaders, practicing their pose. The first "Celebration" of the beloved franchise was held in Denver in 1999 -- just weeks before the release of The Phantom Menace, the fourth installment of the series.Photo: Landon Nordeman

Darth Vaders, practicing their pose. The first "Celebration" of the beloved franchise was held in Denver in 1999 -- just weeks before the release of The Phantom Menace, the fourth installment of the series.

Celebration attendees cruise through a hotel lobby en route to an afterparty.
Celebration attendees cruise through a hotel lobby en route to an afterparty.Photo: Landon Nordeman

Celebration attendees cruise through a hotel lobby en route to an afterparty.

Ken, the Elvis Trooper, walks toward his hotel.
Ken, the Elvis Trooper, walks toward his hotel.Photo: Landon Nordeman

Ken, the Elvis Trooper, walks toward his hotel.

A man dressed as the Wookiee named Chewbacca, a character from <em>Star Wars</em>, waves to fans during Star Wars Celebration VI.
A man dressed as the Wookiee named Chewbacca, a character from Star Wars, waves to fans during Star Wars Celebration VI.Photo: Landon Nordeman

A man dressed as the Wookiee named Chewbacca, a character from Star Wars, waves to fans during Star Wars Celebration VI.

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