Mark Hamill Skipping SW Celebration
RIP Star Wars
Check his Twitter
This is a franchise in severe crisis...and Disney is not even close to making back their investment yet.
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$4.8 billion - 40% to exhibitors - $1.2 billion in production costs (both low-ball estimates) = $1.7 billion.
Doesn't account for digital movie sales, video games or merchandising, but they haven't made $2.3 billion from those sources.
Their shareholders would be aware of that and screaming from the rooftops if the investment was not paying off in the way that was being publicly announced. Or there'd be a court case by now if it was being falsely declared.
But keep dreaming Jack.
Those are the numbers. Doesn't mean it was a bad investment. It was a good investment that will pay off over time, despite having been poorly managed.
shareIf the investment in LFL hadn't already paid for itself, but it was being falsely declared in the press that it had, then we would be hearing about it from shareholders.
shareLike Texas Jack outlined to you...THOSE ARE THE NUMBERS when it comes to their films. Are you also forgetting the last Star Wars film, Solo, LOST 100 million dollars?
The merchandise sales have been in the crapper for the last couple of years as well . Disney has publically acknowledged this.
Long story short: there is no way on God's Green Earth that they have made back their 4.3 billion dollar investment.
Well we are just random people speculating.
Also, to show hpw silly this speculation is, there are already quite a few incorrect pieces of info circulating here.
Corrections (this was to TexasJack, so yes you said 4.3 not 4.8):
It was 4.05 billion, not 4.8share
Also, half of it was in stocks, only half was cash (making Lucas a significant Disney stockholder)
Lastly, Disney bought Lucasfilm, not just Star Wars.
Oh and Solo lost 100 mil IN THEATER, that doesnt mean an actual loss. The movie income doesnt stop when it leaves the theater.
shareIn this case, it's being falsely declared by the press. The article doesn't quote anyone from Disney or LF, just some media analyst.
shareYeah but half of the purchase being stock means you have to cut the purchase price in half, and then do the calculations.
shareWe'd still be hearing about it. And not from fans with an entrenched position telling us "I reckon..."
shareIt was 4.05 billion, not 4.8
Also, half of it was in stocks, only half was cash (making Lucas a significant Disney stockholder)
Lastly, Disney bought Lucasfilm, not just Star Wars.
$4.8 billion is the box office gross receipts number cited in the article and that was the basis for including it in my equation.
shareOops, my bad, I got distracted by Queen listing a 4.3 billion figure for the Lucas purchase
shareWait....so even though Disney now has Star Wars stores and sells Star Wars merchandise in Disney Stores and is opening Star Wars areas of their theme parks.....none of that money goes towards recouping the investment Disney made in buying LucasArts? Who gets those profits?
shareBzzt https://www.cnbc.com/2018/10/30/six-years-after-buying-lucasfilm-disney-has-recouped-its-investment.html
The article is wrong. They're not stupid, so obviously they know it's wrong.
The four movies together made about 4.5 to 5 billions. That seems a lot, but Disney only gets half of it. Let's round up to 2.5 billion. Now let's say the average budget is about $400 millions, marketing included. Four movies, that would make $1.6 billion.
That means the benefits has been less than a billion. For a $4 billion loan, that would only pay loan's interests during those years.
Not sure why you're talking about loans.
Half of the 4 billion was in stock, so Disney only actually paid out 2 billion, and made George Lucas a major shareholder of Disney.
The acquisition was also Lucasfilm, not just Star Wars. The income from Star Wars itself also encompasses more than just the box office receipts. I mean, we don't even know how much Disney has pulled in from licensing fees alone, which seems minor but it could be a huge amount of money considering how many companies output Star Wars merchandise (like Kotobukiya in Japan -- Did you know they do some of the best Star Wars merch? Have you heard of Kotobukiya? Check them out, I'm a big fan)
You're also only looking at box office receipts, like Queen up there who said that Solo lost 100 million, but that doesn't mean the movie actually lost money!
We're dealing with very limited numbers and if anyone wants to do the math, they gotta get it right.
• "Half of the 4 billion was in stock, so Disney only actually paid out 2 billion, and made George Lucas a major shareholder of Disney."
That doesn't change anything. Obviously, Disney can use a loan or it can use its own capital, either cash or shares. So the IRR shouldn't be compared with the loan's interest but with the weighted cost of capital.
However, loan's interest and wacc use to be close. It's pointless to enter into technical terms here when numbers are gonna be quite the same.
• "The income from Star Wars itself also encompasses more than just the box office receipts."
Of course. You have merchandise and videogames too. But neither of them are doing well. The videogame franchise failed (up to the point it's almost abandoned now) and merchandise is underselling.
Where do we get info about merch sales, though? And is it everything or just action figures?
As for games, what games? I assume the Battlefront series, which #2 (2017) is still going strong, still supported. There will probably be a third.
The Oculus Rift game "Vader Immortal" looks like its going to be the first true lightsaber game.
The Star Wars TV properties were also successful and the current one is strong.
This upcoming IX is gonna make a lot of money.
Last, Lucasfilm purchase was half stock half cash. Stock is just a piece of ownership of their huge corporate conglomeration, it doesnt "cost" them.
He can't give you the figures for the sales in merchandise because they aren't public, but I think it is fair to assume they are substantial.
shareLucasfilm also includes Indiana Jones, Industrial Light & Magic and Skywalker Sound which also bring in money. Older Star Wars movies must be a cash cow because they repeat them on TV constantly. They also have numerous licensee deals with multiple companies that must bring in substantial money.
New videogame being released in 2019 is EA's Star Wars Jedi:Fallen Order which actually sounds more interesting than this movie.
Disney also includes other brands like Marvel, Pixar and Fox and they're debuting a new streaming service which caused their stock to rise over 11% on Friday and hurt their rival Netflix.
Indiana Jones is a paused franchise right now. Interests keep growing.
IL&M is not a cash cow anymore. Right now, competition in the CGI market is hard, and benefit margins are extremely narrow.
EA's Star Wars Jedi:Fallen Order is far from being a sure cash flow. EA is not doing well, last year it dropped hard. And it doesn't seem like they have any plan. They closed Visceral Games because they were specialized in single player games, that weren't doing well enough. Then last year multiplayer games started to fail a LOT (the market was saturated), so what EA does? it announces that Star Wars Jedi:Fallen Order will be a single campaign game. But Respawn has made no single player games before, Visceral Games is already closed, what do you expect from Respawn to create in three years, which is a ridiculous amount of time for a AAA game that seems to have started as a multiplayer and then shifted to single player.
Miracles are rare. This looks really really SHITTY
Us, Birdbox, Captain Marvel, Aquaman, Jurassic World, Avengers, etc. ILM is doing fine and Disney can create their SFX in-house which saves them money.
They'll probably reboot Indiana Jones with a younger actor. It still makes some money through licensing every time they show it on TV which is ad nauseam.
Disney also owns ABC and partially HULU. Disney is thinking long term and including all of their brands when they think about profit. If one thing fails, they have multiple other brands that are making them money. Star Wars is one brand out of many and has many products.
Personally, I like single player games. I'm more interested in this game than the movie, but won't likely buy it for a while only because I don't have a console or PC that can run it. Under Lucas, I would've gladly bought a new PC, but Disney will likely not put in the effort for creativity and quality that Lucas demanded.
• "Us, Birdbox, Captain Marvel, Aquaman, Jurassic World, Avengers, etc. ILM is doing fine and Disney can create their SFX in-house which saves them money."
Maybe. Or maybe not. Companies have been outsourcing for years. Well, who knows, perhaps they were losing money on purpose.
Don't get me wrong. I think outsourcing is a bad idea long term, since you barely can control the quality of the product. That's much easier to control when you own the company. But I could be wrong (not often, but sometimes it happens), and outsourcing has been the most usual strategy last decades. I suppose there's a reasonable reason for that.
• "They'll probably reboot Indiana Jones with a younger actor. "
Maybe. But interests' growth won't wait until then.
• "Disney also owns ABC and partially HULU"
Sure. But Netflix has been in negative cashflow for years, even though it was THE monopoly. Now you'll have several players. It's a big market, but it's not that profitable.
Investors have faith in Disney's streaming service especially since they plan to charge half the fee of Netflix, already have plenty of content and have plans for new content through their many brands and with other companies.
Netflix lost money when it had to buy content. Disney already owns most of its own content. Disney bought Fox assets, too.
In-house probably saves them money. They own production, post-production, distribution, media, merchandise, resorts. And it's global. It's like they're playing Monopoly and own 80% of the boardwalk.
I stand corrected. Indy 5 is in the works. Reboot later.
Trailer for new SW game:
https://www.youtube.com/watch?v=0GLbwkfhYZk
Looks good. I may have to buy that new PC after all.