Walt Disney Agrees To Buy Lucasfilm
for $4.05 Billion
(By James Shillinglaw, TravelPulse.com, 30 October 2012)
"For
the past 35 years, one of my greatest pleasures has been to see Star Wars
passed from one generation to the next," said George Lucas, chairman and
CEO of Lucasfilm. "It's now time for me to pass Star Wars on to a new
generation of filmmakers. I've always believed that Star Wars could live beyond
me, and I thought it was important to set up the transition during my lifetime.
I'm confident that with Lucasfilm under the leadership of Kathleen Kennedy, and
having a new home within the Disney organization, Star Wars will certainly live
on and flourish for many generations to come. Disney's reach and experience
give Lucasfilm the opportunity to blaze new trails in film, television,
interactive media, theme parks, live entertainment, and consumer
products."
Under terms
of the deal, Disney will acquire ownership of Lucasfilm, a leader in
entertainment, innovation and technology, including its Star Wars franchise and
its operating businesses in live action film production, consumer products,
animation, visual effects, and audio post production. Disney also will acquire
the substantial portfolio of cutting-edge entertainment technologies that have
kept audiences enthralled for many years. Lucasfilm, headquartered in San
Francisco, operates under the names Lucasfilm Ltd., LucasArts, Industrial Light
& Magic, and Skywalker Sound, and the present intent is for Lucasfilm
employees to remain in their current locations.
Kathleen Kennedy, current co-chairman of Lucasfilm, will become
president of Lucasfilm, reporting to Walt Disney Studios Chairman Alan Horn. In
addition, she will serve as the brand manager for Star Wars, working directly
with Disney's global lines of business to build, further integrate, and
maximize the value of this global franchise.
Kennedy will
serve as executive producer on new Star Wars feature films, with George Lucas
serving as creative consultant. Star Wars Episode 7 is targeted for release in
2015, with more feature films expected to continue the Star Wars saga and grow
the franchise well into the future. Disney
said Star Wars continues to resonate with consumers around the world and
creates extensive opportunities for Disney to deliver the content across its
diverse portfolio of businesses, including movies, television, consumer
products, games and theme parks. The Lucasfilm acquisition follows Disney's
acquisitions of Pixar and Marvel. The boards of directors of Disney and
Lucasfilm have approved the transaction, which is subject to clearance under
the Hart-Scott-Rodino Antitrust Improvements Act, certain non-United States
merger control regulations, and other customary closing conditions. The
agreement has been approved by the sole shareholder of Lucasfilm.
Disney Buys Lucasfilm For $4 billion
(Buzzfeed.com, October 2012)
Disney is
buying Lucasfilm for $4 billion, adding the legendary Star Wars franchise to
the entertainment giant's stable of characters. Lucasfilm is 100% owned by
founder George Lucas. The purchase culminates a one and a half year pursuit of
the Lucas empire, Disney's CEO said.
Lucas, who receives 40 million Disney shares from the deal, will be the
second-largest non-institutional shareholder of Disney, Bloomberg News says,
behind the trust of deceased Apple co-founder Steve Jobs. The 68-year-old Lucas will serve as a
creative consultant but plans to retire.
"For the past 35 years, one of my greatest pleasures has been to
see Star Wars passed from one generation to the next," said Lucas,
chairman and CEO of Lucasfilm, in a statement. "It's now time for me to
pass Star Wars on to a new generation of filmmakers."
Said Disney
CEO Robert Iger: "This is one of the great entertainment properties of all
time, one of the best branded and one of the most valuable, and it's just
fantastic for us to have the opportunity to both buy it, run it and grow
it." The big screen isn't the only
place that there might be tales from the galaxy far, far away. "We really
like Star Wars' potential on TV as well," Iger says, "and we think
(cable-satellite channel) Disney XD will be a great home for that." The buyout is Disney's fourth largest deal
ever. It's behind the $19.7 billion, $7.6 billion and $5.2 billion buyouts of
Capital Cities/ABC in 1995, Pixar in 2006 and Fox Family in 2001, respectively,
says S&P Capital IQ. It tops the $3.96 billion Disney paid for Marvel in
August 2009.
Disney
expects to more aggressively expand the Star Wars film schedule, Iger said in a
statement. Following the release of Episode VII in 2015, "our long term
plan is to release a new Star Wars feature film every two to three years,"
Iger said. Star Wars Episodes VIII and
IX, Iger said, would follow "probably on a cadence of every other year and
then go from there. . . . The (first) film is in early stage development right
now." Based on Disney's closing
price on Oct. 26, the deal is valued at roughly $4.1 billion. Disney (DIS) will
pay half that value in cash and issue 40 million shares of Disney to pay for
the rest. Also included in the deal are special-effects house Industrial Light
& Magic, Skywalker Sound and video game company LucasArts.
Lucasfilm
spokeswoman Lynne Hale said Disney's "intent is for everyone (in Lucas'
various companies) to stay where they are." ILM is headquartered in the
Presidio in San Francisco, while Skywalker Sound and Lucasfilm are on a series
of ranches Lucas owns in Marin County. "As
far as the legacy George has created, we don't take that lightly," Disney
chief Iger said. "We definitely plan to expand the presence of Star Wars
in our parks which could include new parks." Wall Street is hopeful Disney can quickly
recoup the money by fully tapping the potential for more movies, theme park
tie-ins and merchandise, says David Miller, analyst at investment research firm
Caris. "If you look at how acquisitive Disney has been, it's all about
content," he says. Lucasfilm "is one of the great entertainment
franchises of all time." Many
investors were caught off guard by the announcement, but there have been
questions about what Disney would do with its mounting pile of cash. Disney had
$4.4 billion in cash and short-term investments as of the end of June.
"Disney did a good job keeping this quiet," Miller says.
Kathleen
Kennedy, co-chairman of Lucasfilm, will report to Walt Disney Studios Chairman
Alan Horn. Kennedy, who produced Schindler's List and War Horse, will become
the new studio president and be executive producer on the new films. Film critic Leonard Maltin, also a historian
of the medium, was taken aback by the news and had questions about it. "There's no way of telling where this is
going to go at this point," Maltin said. "Obviously Disney, as they
did with Marvel, is investing in a bluechip property that will yield dividends
for years to come. "But it's not a
fresh property," he added. "But it remains to be seen if they revive
the characters. There are a lot of unanswered questions." The latest part of the Star Wars saga, Star
Wars Episode VII, is targeted for a 2015 release.
Peter Sealey, a California professor and
former president of marketing and distribution for Columbia Pictures, says it
appears Lucas gains the most out of the deal.
"George Lucas was never a part of Hollywood, he was always an
outlier who left for northern California as soon as he had a hit," Sealey
said. "So this is an end of an era,
the story of a brilliant filmmaker who had one incredibly long home run. This
was the only exit strategy he really had. He never wanted to grow the
company." Sealey said he can't
imagine Disney would let Lucasfilm's entities keep operating away from Disney's
home base in the Los Angeles area. "I don't see how or why you keep any of
this up in that area, it'll all move down to Burbank," he said.
Disney's
theatrical lineup could use a boost in some areas. While the studio's animated
Wreck-It Ralph, due Friday, has healthy buzz, other recent releases such as
Mars Needs Moms and John Carter have disappointed. "We actually determined that we'd be
better off as a company releasing a sequel to Star Wars than probably most
other, I'll call them 'not yet determined' films," Iger said. "So we
love the fact that this will take its place in our live-action strategy as an
already-branded, already-known quantity."
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