Wednesday, October 31, 2012

Disney Buys Lucasfilm & Star Wars - Now What?

If you are like me, your Twitter feed exploded yesterday with the news that the Walt Disney Company had purchased Lucasfilm, including the Star Wars universe, Industrial Light and Magic and Skywalker Sound.  Indiana Jones is also included, but was not figured into the deal because the rights are still entangled with Paramount.  At $4 billion, it was not a cheap purchase.  So what does it all mean?

Dollars and Cents

Was it a good financial move for Disney?  Well, let’s look at the numbers.  There is no doubt that this purchase will actually save Disney some money over the next few years.  That licensing fee that they pay for Star Tours and Star Wars Weekends?  That’s probably over.  The money that they spend getting special effects done at ILM or sound at Skywalker Sound? Definitely reduced.  No way to know for sure, but that probably saves Disney a good amount.

Then there’s the big money – content.  The rumored Star Wars live action show that Lucas was working on that most figured would end up on ABC?  Well, Disney no longer has to pay for that, they can just have Lucasfilm produce it and start selling ads. The Clone Wars cartoons on Cartoon Network?  Will those move to Disney XD?  Probably not soon, but it’s not implausible.  The increase in ad revenues from those two properties to the Disney networks could be very big.

But the biggest part of the announcement was the idea that Star Wars Episode 7, 8 and 9 will be coming soon, beginning in 2015.  If you look at the box office figures for the last three Star Wars films (Episodes I-III), they made over $1 billion between them.  Presuming Disney actually does as they say they will and release the next three films, that means a minimum of $1.5 billion in inflation adjusted dollars if the films perform as the last three did.  Add it all up, and you’re looking at coming close to the $4 billion purchase price in around 10-15 years.  That’s a good move.

The Walt Disney Studios

What does yesterday’s announcement mean for the fate of the Disney studio?  At this point, Studios chairman Alan Horn is basically presiding over several fiefdoms within the Studio structure.  There’s John Lasseter running Pixar and Walt Disney Animation Studios, with two or three films a year coming between the two entities.  Then there’s Kevin Feige and the Marvel team, who are releasing two films a year for the foreseeable future.  Then there is Jerry Bruckheimer, who will continue to produce Pirates/Lone Ranger/National Treasure films as long as Disney will let him.  Add all of those together and you see a slate of five or six films every year before Walt Disney Pictures really gets anything going.

Now add Lucasfilm putting out a Star Wars film every three years.  Doesn’t leave a whole lot of room for original films, does it?  Right now, Disney’s slate outside of the big four entities listed above is mainly re-hashing old turf:  Malificient, Saving Mr. Banks, Oz the Great and Powerful are all revisiting older Disney films or ideas.  So the complaint that Disney is no longer a factory for original, live action content is kind of a lost cause anyway.  As much as I wish it wasn’t the case, Tron Legacy did not perform to expectations, and neither did John Carter.  Both were good, not great films that audiences tuned out.  Name the last Disney live action film that performed well at the box office and was a completely original idea.  I’ll wait.  A case can be made that Enchanted was the last one, and that’s still drawing from Disney’s past.  Beyond that, you have to look WAY back to the Narnia films, and perhaps even The Santa Clause.  I’m not saying Disney doesn’t make good live action films (I quite enjoyed The Odd Life of Timothy Green) but the public is not responding to them.  This move keeps them in the mode of churning out franchise product and relying on Pixar/WDAS to create the new properties.

The Creative End

The real key to this whole deal is Star Wars Episode VII.  Don’t let anyone tell you differently.  Yes, many of us geeks disliked the prequels, but audiences responded to them.  My son likes Anakin Skywalker more than Luke.  The next generation of kids will respond to the heroes of Episodes VII-IX.  But only if the movie gets it right.  The biggest decision from Disney/Lucasfilm is who will write and direct this film.

Within their “walls” Disney now has two of the best story people in Hollywood in Lasseter and Marvel’s Joss Whedon.  Both understand the importance of story first. Sure, Lasseter and the Pixar brain trust were not able to save Tron Legacy completely, but they sure improved it based on what you read about the film. Between Disney’s existing talent and the allure of Star Wars, they should be able to get whomever they desire to work on the film.  And that is the key decision.

Outside of the films, the mind boggles at the possibilities.  I already mentioned the live action show that Lucas has been working on for several years.  The Clone Wars TV show is well into its run, but who’s to say it couldn’t go on for a while longer and move over to Disney XD.  If the new Star Tours is any indication, the Imagineers are clearly drooling over the opportunities to include new Star Wars attractions at the parks.  Personally, I am looking forward to a cold beverage at Mos Eisley Cantina in the future.

The End Result

Based on all of this, Disney made a very shrewd move.  When Iger took over the company, they had great success with the Princess brand and somewhat with the Cars brand on the merchandise side.  Since then, he’s brought Pixar into the fold, giving Disney access to the Toy Story characters as well as the Incredibles.  He’s bought Marvel, bringing the Avengers and (hopefully) eventually the X-Men into the parks and movie theatres.  Now with Star Wars, Disney is a complete content company with the best loved brands by young boys AND young girls.  They have toddler programming, world class attractions, the best movies and an unmatched merchandise program.  Think of this: the next time you go into a Target or Walmart, Disney now owns at least two entire aisles in the toy department.  That alone makes this a huge move, but the possibilities to come are endless.  I can’t wait to see what happens.

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