Disney Buying Lucasfilm Was a Bad Investment

From Forbes we get a review of the cost of Lucasfilm and the profits generated. Or not generated. Disney’s Star Wars Box Office Profits Fail To Cover Cost Of Buying Lucasfilm

Last month, ahead of Disney's earnings call, the company released a 67 page presentation saying what a great deal they got on Lucasfilm, and how great the return has been. But there is a problem.

However, buried in the fine print is the revelation that the purchase price of Lucasfilm isn't even included in the ROI calculation. Instead, it is purely based on the box office performance of Disney's Star Wars trilogy, its two spinoff movies, merchandise, DVD and Blu Ray sales.

This is beyond a PR-move; this borders on lying to investors.

Forbes then goes into the cost of all the Star Wars movies, and the revenue those movies generated, taking into account the fact that theaters get roughly half of the box office. When it comes down to it, the reason that Disney ignored the cost of purchasing Lucasfilm is that they have not made money on the deal.

Bearing this in mind it's little surprise that Disney's presentation didn't work out the return on its acquisition of Lucasfilm by using the profits of the movies as it has still got a long way to go just to break even.

Of course, the calculation above doesn't include the huge profits Disney makes on the Star Wars merchandise, DVDs and Blu Rays. However, it also doesn't include the massive marketing costs of the movies as well as the costs of the Star Wars streaming shows and theme park attractions which also don't have revenue streams directly connected to them as visitors get access to all of the rides for the price of a single ticket.

Read the whole thing.

And it should be noted that any numbers don't include the money lost on the Disney Star Wars hotel, which closed after 18 months. And while Forbes does talk about a couple of Disney+ shows, notably The Mandalorian, they don't focus on the fact that the budets for these shows are huge, and the payback is nebulous. Did Disney+ see a subscriber growth because of The Mandolorian? How much, and what were the monthly fees relative to the cost of the series. And what about the Obi-Wan Kenobi series that was universally hated, or Andor, which was ignored, or the others?