After having just come off National Star Wars Day (May the 4th), it seems only appropriate that we look to the global phenomenon that is Star Wars and the newest movie that will be released. Walt Disney Co. (NYSE: DIS) scheduled the U.S. release date for December 18, 2015, and after this the company has five additional Star Wars films planned in the coming years.
According to Bob Iger in a CNBC interview, Star Wars is already the number one franchise in the world for consumer products. Iger said, “I think you can expect that the No. 1 franchise in the world is only going to strengthen.”
This appears to be the outlook on Star Wars on all fronts. Whether its consumer products or media, Disney has it all under control. If there was one buyer who could turn a great franchise like Star Wars into an even greater franchise ahead, it is of course Disney — studios, theme parks, merchandise, DVDs (or downloads), cross-marketing and on and on.
At CinemaCon in January, Disney announced that it would be releasing a new Star Wars film each year beginning in 2015. At the same time there will be some spin-off films, potentially a back story on Boba Fett, Han Solo or even Yoda.
A long time ago (2012) in a board room far far away, Disney paid $4 billion for Lucas films, which considering its other investments in studios such as Marvel, seems like a solid move. The Mouse House paid $4 billion in 2009 to acquire Marvel. So far worldwide, the first 10 films released have grossed $7.36 billion (not including “Avengers: Age of Ultron”).
“Avengers: Age of Ultron” just opened in the United States, showing on 4,276 screens across the country. The new film is estimated to have sold $187.7 million in tickets, about 9% below the total racked up by “The Avengers,” which banked a first weekend total of $207.4 million.
Ultimately, if the Star Wars franchise proves as profitable for Disney as Marvel has been, then the entertainment giant should be in the money. Looking back to when the deal went down, 24/7 Wall St calculated out how much the Star Wars brand would be worth to Disney over time, and the result was a staggering $30 billion.
Like Han Solo, it looks like Disney shot first and shot true on its deal acquiring Star Wars. However, more will be seen in the coming months as Disney looks to take full advantage of the fanfare surrounding the release. The company already as a promotional program leading up to the release, “Journey to Star Wars: The Force Awakens.”
The main question remains of how the public will receive the new Star Wars, but right now it looks like the Force is strong with Disney. The real consideration is how well each of the offshoots is likely to do after Episode 7 is released late in 2015. Off-shoots are not assured successes in all genres, but if one franchise is likely to have a massive cram-in on demand for more and more, then it would have to be Star Wars.
What seems very likely to consider ahead is that the lifetime value of Star Wars should place it as the most valuable film franchise of all time. Imagine if those Star Wars sales from the first three films were calculated at $10 and $12 box office sales (or higher).
Episode 7 is expected to take in hundreds of millions of dollars in box office sales, and it is certainly not out of the question that it could hit or come close to hitting $1 billion in the United States alone. What if the off-shoot films manage half of that? Without considering extra revenues geared toward theme parks and other events and merchandise, Disney may have already come close to pre-booking enough future revenue for shareholders in the next few years that the future beyond then already will have been paid for.
Shares of Disney were up 1% at $112.10 Tuesday, in a 52-week trading range of $78.54 to $113.33. The stock has a consensus analyst price target of $110.96.