Featured The Basement

Dear Forbes: Disney’s Star Wars Films Haven’t Covered the Cost of Their Purchase of Lucasfilm? Were They Supposed to?

An article by Forbes misses the financial point of Disney's acquisition of Lucasfilm while giving the misogynist and racist slime of the internet a false new hope.

To the delight of the rightwing rage-0-sphere, Forbes recently published a piece with the provocative title Disney’ Star Wars’ Box-Office Profits Fail To Cover Cost Of Buying Lucasfilm. In it, Senior Editor Caroline Reid draws numbers from a recently filed financial statement that should be no surprise to anyone: The five Star Wars movies released since George Lucas sold his empire to the Walt Disney Company for $4 billion in 2012 have only profited $1.2 billion, despite box office receipts surpassing the $4 billion Lucasfilm purchase price.

Reid arrives at this number by subtracting each film’s estimated budget, fees, and profit sharing from its publicly accessible box office receipts (courtesy of Box Office Mojo). I won’t bore you with the math for each film (you can read it yourself), but as an example, it reduces The Force Awakens’ staggering $2.1 billion Box Office to several $million less.

This calculation has become common in the racist and sexist dark corners of the internet to “prove” hit movies that offend the whiteness and maleness of viewers aren’t hit movies at all, as if people who’ve paid to see a film at a theater will rethink how they felt about the movie because its box office/budget multiplier was insufficient.

Any studio would kill for that $1.2 billion profit, but Reid’s motive isn’t to teach us how movie-making economics work. Based on her insinuations and language, she wants to build a case where Disney uses underhanded calculations to pad Star Wars’ profitability. Still, she doesn’t mention that the financial moves she highlights are industry-standard and, like all corporate financial projections – are indeed projections. Disney isn’t doing anything other studios don’t do. 

The film industry is inherently speculative, governed by unpredictable consumer tastes and preferences. Consequently, a singular focus on box office receipts divided by production and marketing costs as the sole metric for success is an excessively narrow perspective. It undermines Disney’s larger strategy and the diversity of revenue channels that it has astutely capitalized upon.

Indeed, Disney’s foresighted integration of Lucasfilm includes prudent exploitation of intellectual property rights. This involves an expansive use of characters and storylines (across various media formats) that significantly escalates profitability. The synergy between Lucasfilm’s content and Disney’s worldwide distribution avenues has been instrumental in realizing this value addition.

Lucasfilm’s post-acquisition valuation involves meticulously accounting for myriad, intricate financial elements. Disney’s strategy hinged on leveraging Lucasfilm’s assets across various lucrative verticals, collectively contributing to a staggering $12 billion valuation. This multi-faceted approach acknowledges that the essence of Lucasfilm’s worth extends significantly beyond cinema ticket sales alone.

Evaluating a franchise’s worth necessitates a comprehensive look beyond transient box office success.

  • Merchandise sales, which include toys, apparel, and collectibles, forming a continuous revenue source
  • Home entertainment revenue, encompassing DVD, Blu-ray, and digital purchases/rentals
  • Gaming industry revenues from console, PC, and mobile platform sales
  • Multimedia content, such as TV series, books, and comics, expanding the narrative universe
  • Thematic experiences, including amusement parks and exhibitions that enhance fan engagement
  • Cross-promotional partnerships, which leverage the franchise’s branding for a variety of consumer products

The Forbes writer states that Disney’s Star Wars movies weren’t “smash hits” like the original movies due to an over-reliance on computer-generated effects and a lack of gritty, quirky characters. OK, precisely who has complained about CGI in a 21st-century science fiction movie? The answer is no one. If she thinks Disney’s Star Wars films lacked quirky characters, that’s your first clue she might not have seen them. 

She also nods to the “go woke, go broke” crowd, which might be the actual point of her piece. The only times I’ve seen her article referenced are in the petulant neckbeard complaints about ‘woke Disney.’ I can’t help but think her complaint about the lack of “gritty” characters is a dog whistle for those who whine incessantly about Black and female leads in the films. 

Reid’s article isn’t the revelation she thinks it is. Four of the five Disney movies did a monster box office and made a profit, which has been known for years. The only thing Reid is telling us is that Disney made 1.2 billion in net profit from the films at the box office so far. And this is important: Disney if five films into their planned Star Wars movie universe. More films are coming. And she doesn’t include the massive numbers from merchandising, home video sales, streaming rights, Star Wars-related theme park attractions, etc. 

Reid and the incel cheerleaders of her piece also miss a very crucial point: there are other revenue streams that Disney acquired by purchasing Lucasfilm, but which have nothing to do with Star Wars. The most notable are ILM and Skywalker Sound, both of which work on multiple TV and film projects yearly from all the major studios, generating more revenue for Lucasfilm that helps recoup the $4 billion it cost Disney to acquire.

When you factor in all sources of revenue that Lucasfilm has, it has no doubt earned for Disney what it cost them to purchase the company in the first place. You cannot narrow it down to just the Star Wars films and claim the box office of those films is not enough to justify the purchase.

All non-Star Wars Lucasfilm investments aside, the Star Wars franchise is bigger than ever and was the most popular franchise in 2023. The same financial statements Reid based her article on state Disney’s $4 billion investment in Lucasfilm has generated $12 billion in value.


About the author

J Davis

J is a former rock star, former DJ, comic book & political historian, and novelist who once read the ingredients on a chewing gum wrapper and unlocked the secrets of the universe.

Add Comment

Click here to post a comment