Why Disney Buying ‘Star Wars’ Was the Greatest Deal Ever Made in the Galaxy
Disney buying Star Wars in 2012 was not cheap. There’s not many of us with a spare few billion dollars lying in wait for something worthwhile. But Disney took the leap and purchased Lucasfilm for a cool $4 billion, effectively putting the final lynch pin in its quest for sci-fi and fantasy film dominance.
As with any newsworthy acquisition, the skepticism that The Walt Disney Company would earn its money back was heavy. But if anyone could do it, it’d be Disney. And the most popular theme park in the world would do it with ease. Massive box office success and brilliant marketing schemes skyrocketed Disney profits.
The proof is in the numbers. Here are eight reasons why Disney buying Star Wars was the best deal in the world — err galaxy.
1. Star Wars is one of most popular franchises in history
Part of what made the Mouse House’s acquisition of Star Wars one of the greatest chess moves of all time was scoring the rights to one of the most popular franchises in history. The Star Wars franchise is ingrained in our everyday lives, even decades since its debut. Darth Vader is still considered one of the coolest cats in the industry, and “may the force be with you” is recognized even by younger generations. Within about 40 years, Star Wars managed to conquer the galaxy with eight live-action films, two animated series, hundreds of novels, comics, video games, billions of dollars of toys and accessories, and beyond.
The Walt Disney Company is no stranger to commercializing popular franchises. Just look at its long track record of monetizing Disney-Pixar and Marvel — both of which infiltrated mall shelf space around the globe and annihilated even the most steadfast holiday gift budgets every Christmas. Disney-Pixar animations have grossed profits of over $4.5 billion and counting, while Marvel brought home $4.2 billion thus far. Star Wars has already grossed over $3.7 billion to date, making it crystal clear that not even the sky is the limit for Disney’s profit potential.
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2. It gives parks a needed upgrade
This Star Wars deal allowed Disney to implement plans to update its parks and spur additional press, with new features surrounding the franchise. Slated for debut in 2019, Disney is constructing a 14-acre Star Wars-themed “land” in both the Florida and California locations. Star Wars: Galaxy’s Edge plans to take visitors inside the Millennium Falcon while also immersing them in a battle between the First Order and the Resistance.
“Both Star Wars-inspired lands will transport guests to a never-before-seen planet, a remote trading port and one of the last stops before Wild Space, where Star Wars characters and their stories come to life,” according to the Disney Parks blog.
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3. Merchandise has boosted Disney profits
Disney clearly knows a thing or two about profitable deals. It’s still reaping benefits from its purchase of Pixar in 2006 and Marvel in 2009. But regardless of the inevitable box office profits from Lucasfilm, Disney also made bank in merchandise and other royalties associated with the deal. Variety reports that Star Wars movies boosted overall merchandise sales by 4.4% to a staggering $262.9 billion in total revenue.
And Disney’s busy reaping all the rewards. U.S. consumers spent almost $760 million on Star Wars toys alone. Plus, with the implementation of a buying event dubbed “Force Friday,” Disney has primed consumers to open their wallets again on a Star Wars shopping spree for merchandise, such as toys, collectibles, books, and apparel.
Next: Who can deny box office success?
4. Box office success is pretty much guaranteed
No one will be surprised to see all future Star Wars films accomplish the same feat as their predecessors. It’s easy to do when you’re one of the most popular franchises in history.
The franchise has continued to reinvent itself and change with the times, not once slipping from its top-tier box office dominance. Walt Disney Studios set an industry record by becoming the first Hollywood studio to top $7 billion in global movie ticket sales in a single calendar year (2016) thanks to the success of Rogue One and The Force Awakens.
In its opening weekend, Star Wars: The Force Awakens recouped its film budget and then some by making over $247 million in ticket sales. It reached $1 billion in profits in just 12 days. And after hitting $2 billion shortly thereafter, it broke all sorts of records.
Next: Introducing a whole new generation
5. It’s a new way for Disney to reach more adults and kids
There’s hardly a boomer or older millennial who didn’t believe in the Force as a child. But the acquisition allows Disney, one of the most influential brands of all time, to introduce the saga to a whole new generation of youngsters who have yet to revel in the magnificence of the phenomenon. Entertainment Weekly reports Disney will debut a new storytelling series on YouTube highlighting female heroes in Forces of Destiny. Then, in a stroke of pure Disney brilliance, it will turn those animated shorts into TV specials on Disney Channel.
An entirely new generation of men, women, and children are experiencing Star Wars for the first time in a way only Disney can do it. The Force Awakens attracted a much younger audience, suggesting Disney did exactly what it needed to recoup its budget for today’s franchise efforts. The top attendance demographic were men, ages 18 to 49, which is impressively noteworthy for a franchise that began its reign way back in 1977.
Next: Uncapped potential
6. Uncapped potential makes the deal overwhelmingly worthwhile
Many investors are balking at the deal, claiming it will take Disney years to recoup a $4 billion purchase. And that might be true. An analysis by Benzinga says Disney can assume an average profit of $640 million per Star Wars film — not exactly an instantaneous reward. But what naysayers are not considering is the high potential for future success with this deal. There are already four additional films slated for release by 2020, one debuting each year.
It’s also worth noting that Disney acquired the rights to the Indiana Jones franchise when it bought Star Wars, which is a box office stunner in its own right. Disney already decided on a tentative summer 2019 release for Indiana Jones 5.
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7. The timing was perfect
Disney was in dire need of a new franchise mogul to capture the hearts and minds of America. 2014 and 2015 were very profitable years for Disney, thanks to the relentless success of the movie Frozen. According to Forbes, Frozen merchandise increased Disney’s consumer product profit 13% to $4.5 billion compared to 2014. Disney also attributed its fourth quarter (the holiday season) 2015 success to Frozen, even though the movie was 2 years old at the time.
But the Frozen effect thawed, and a new deal had to be made to keep profits rolling in. Thankfully, Star Wars was willing to pick up the slack.
Next: Immediate results are the best results.
8. The deal was Disney’s destiny
Disney buying Star Wars was a move that just made sense. Its relationship with Lucasfilm was always a close one, as Disney World ran Star Wars weekends at the park until 2015. (They returned in 2017.) That connected the two brands in valuable ways.
Over the years, Disney has seen unprecedented success at developing brands with a broad demographic appeal through princesses, fairies, and superheroes. Who better than to reinstate and intensify a Star Wars grip on consumers than Disney?
Follow Lauren on Twitter @la_hamer.