The box office profit generated by Disney’s Star Wars films is $2. 8 billion less than the media giant’s acquisition of the author of the sci-fi saga, Lucasfilm, according to an analysis of recently filed financial statements.
Disney bought Lucasfilm for $4 billion in 2012 and temporarily greenlit a new trilogy of Star Wars films that reunited rising stars Daisy Ridley and John Boyega with Mark Hamill, Harrison Ford and the late Carrie Fisher, who spearheaded the original films more than 30 years earlier.
All the stars aligned when The Force Awakens, the first film in the new series, was released in 2015. According to Mojo, a box office analyst, it grossed a staggering $2. 1 billion, prompting Disney to commission two spin-off videos, as well as the two sequels that were created. However, as the series progressed, there was a break in the force due to an over-reliance on computer-generated effects and a lack of quirky, realistic characters that caused the original films to ruin the hits.
In 2019, The Rise of Skywalker, the third installment in the new trilogy, grossed nearly the same amount at the box office as The Force Awakens, the series experienced a temporary revival. Just weeks before the first case of Covid-19 was discovered in December 2019, Disney unveiled its first Star Wars streaming series, The Mandalorian.
The moment of good luck thanks to the unlikely duo of its protagonists. The series is named after a gruff armored bounty hunter, played by Pedro Pascal, who is tasked with tracking down the family of a pointy-eared green man. alien named Grogu.
Photos of the cute character have gone viral due to his resemblance to the beloved Star Wars sage, Yoda. The timing couldn’t have been better, as it put The Mandalorian in the spotlight just as the world was going into lockdown. Spectators remained confined indoors for most of the time. next year, leading to a surge in subscriptions to Disney’s streaming platform.
The Mandalorian has been watched more than any other series and, according to Nielsen, racked up 5. 4 billion minutes watched in its seven weeks, peaking at 1. 2 billion in the week its finale aired. This has only won over enthusiasts but also critics.
Audiences gave The Mandalorian a score of 92% on review aggregator Rotten Tomatoes, while critics went even further with a score of 93%. In fact, the industry liked him so much that he was nominated for six Primetime Emmy Awards and forty-two Primetime Creative Awards. Emmy Awards for the Arts, winning in 15 categories.
The Mandalorian, a huge success for Disney
Unsurprisingly, it was renewed for two more seasons and even spawned its own spin-off series, The Book of Boba Fett, which premiered in December 2021. The only explanation why a fourth season of The Mandalorian hasn’t gone into production is because a movie founded on its two stars will be released in 2026. It doesn’t stop me from getting there.
The good fortune of the series fueled the progression of a number of new Star Wars productions. Since its debut, three other streaming shows have been released and there are three more films in development in addition to The Mandalorian and Grogu.
The waning interest in Disney’s initial trilogy of films turns out to be a distant memory, and the Mouse has made the most of it. Last month, Disney released a 67-page presentation in which a song praised CEO Bob Iger in an effort to convince. shareholders to side with him in the war against activist investors.
One of its main boasts is the supposedly fascinating return on investment generated through the franchises acquired through Disney under Iger.
The filing gives the impression that Disney’s Star Wars trilogy has generated a return on investment 2. 9 times greater than the purchase of Lucasfilm, as this figure is presented along a timeline of key moments in the production company’s history. They come with the release of Disney’s videos and the acquisition of Lucasfilm, which is the milestone marked with a star. Adding to this impression is the fact that at the other end of the timeline is the Star Wars logo and a photo of The Mandalorian with its green boyfrifinish.
However, in the fine print is the revelation that Lucasfilm’s acquisition value is even included in the ROI calculation. Instead, it only builds on the box office functionality of Disney’s Star Wars trilogy, its two spin-off films, products, DVDs, and Blu-Ray sales.
As revealed, the method is questionable because Disney based the return on investment on the profits generated by movies, products, DVDs, and Blu Rays rather than the profits made as it deserves. Using profits instead of profits artificially inflates the results because it doesn’t take into account the prices Disney had to pay.
Even that wasn’t enough for the media giant, so it also forecast the profits it expected Star Wars movies, products, DVDs, and Blu Rays to generate over a ten-year period and based its calculation on that as well. , Disney did not make the profits used to calculate the return on investment.
In short, despite this appearance, Disney’s filing doesn’t reveal whether its Star Wars videos covered the cost of its acquisition of Lucasfilm. Possibly there would be a clever explanation for it.
An analysis of more than 800 pages of documents filed through the company indicates that the cost of making Disney’s five Star Wars films amounted to $2. 1 billion, peaking at $567. 3 million (£449. 1 million) for The Force Awakens. However, this is just the beginning.
Aware that this was a successful budget, Disney came up with an ingenious way to monetize the film. Instead of shooting it in the United States, he chose Pinewood Studios in the United Kingdom, where the original trilogy of films was made. This allowed him to take advantage of the UK government’s Audiovisual Expenditure Credit, which provides studios with a coin rebate of up to 25. 5% of the coins they spend in the UK, as long as it is at least 10% of the film’s total costs.
Earlier this year, the UK government increased the refund limit to 25% against festivals in other countries offering similar schemes. This has helped make the UK a dream country for filmmakers and, according to the British Film Institute, foreign studios contributed. about 77% of the $1. 8 billion spent on cinema in the country last year.
With so much at stake, Disney took no chances and won approval from the British government early on. In 2014, Treasury Secretary George Osborne proudly announced that Pinewood would host not only The Force Awakens, but also its two sequels. “This will mean more jobs and more investment,” he said. “This is wonderful news for the rest of the people who work at Pinewood Studios, from set designers to carpenters. “
The production also influenced more places. The sets depicting the iconic Millennium Falcon and X-Wing spaceships were built on a Royal Air Force base about 55 miles west of London, while the mountainous Lake District region in northern England was the setting for the planet Takodana, the sword’s hideout. a lightsaber weapon belonging to Hamill’s Luke Skywalker character.
The use of local staff was not the only advantage presented by the generous tax incentives. Film budgets are a closely guarded secret, as studios tend to absorb the cost of individual photographs into their overhead and not detail how much they spent. in each. However, prices for films made in the UK are aggregated into individual corporations that record annual financial statements that include refunds of money, staff, salaries, overhead, and much more.
Production companies regularly use code names so as not to draw attention to themselves when requesting permission to shoot off-location. Disney’s subsidiary, The Force Awakens, is named Foodles Production after the coffee next to Kerner Optical’s headquarters in San Rafael, California, the original practical effects department of the Industrial Light Company
A condition of receiving the money back is that corporations will have to be blamed for everything from pre-production to delivery of the film to paying for facilities similar to those of the finished film. This is one of the reasons why Foodles still takes pricing into account. in their monetary statements more than 8 years after the release of The Force Awakens.
Another reason is that companies record their financial statements about a year after the covered period. That’s why the latest Foodles results were recorded in December 2023 and relate to the year ending December 31, 2022. During this period, the company spent $3. 5 million. (£2. 8 million), bringing The Force Awakens’ overall budget to a whopping £567. 3 million (£449. 1 million).
Surprisingly, this is no more than Disney expected, as the financial statements stated that “at the end of the year, the total estimated cost within budget. “Salaries alone amount to a total of $22. 7 million (£18 million), with a workforce of 258, not even adding freelancers and freelancers who make up the majority of the crew.
This was followed by the $92. 2 million (£73 million) refund, bringing the film’s net prices to $475. 1 million. As we revealed last year in the British newspaper Sunday Times, adding up streaming shows, Disney has earned more than $410 million (£325 million). ) in reimbursements from the UK government Unido. No it’s no wonder that Disney thanked Osborne in the credits of The Force Awakens and gifted him several replica lightsabers.
The second-largest budget for 2019’s The Rise of Skywalker, which cost $542. 4 million to make. At the other end of the spectrum are the two Star Wars spin-offs, also made in the UK. Rogue One is a prequel to the first Star Wars film, while Solo tells the origin story of Ford’s character Han Solo.
Several Disney Star Wars streaming series have also been made in the UK, so their prices are known but, unlike the movies, their profit cannot be calculated. That’s because Disney subscribers pay a one-time payment that gives them access to all of their content, making the amount of subscription cash generated through express programs highly unlikely. On the other hand, if they had been shown in theaters, audiences would have had to pay separately to see them all.
Movie theater chains get about a portion of the revenue, with the rest going to the studios. Deducting Disney’s net box office cost of $475. 1 million for The Force Awakens, the result is a successful profit of $559. 6 million. That’s 1. 2 times its net cost, giving Disney a 1. 2x return on investment.
Its 2017 sequel, The Last Jedi, had a net profit of 1. 1 times, as did the 2016 spin-off film, Rogue One. However, as the chart below shows, its net profit in dollars was part of that of The Force Awakens.
The Earnings From Disney’s Star Wars Movies
Disney spent a total of $298. 7 million (£236. 5 million) to make Rogue One, which was a huge gamble since it largely featured little-known actors. Although the film made a significant profit, it may have made even more since its release. The dossier states that “the final charge is higher than the agreed budget. “
On the other end of the spectrum is Solo: A Star Wars Story, the only loss-making Star Wars movie. During the production of the original 2018 Han Solo photography, directors Phil Lord and Christopher Miller were replaced by Oscar winner Ron Howard. who allegedly carried out revivals, driving up costs.
The effect of this is revealed in the financial statements of the production company behind Solo, which states that “the final cost was higher than the agreed budget. “A total of $350. 4 million (£277. 4 million) was spent on making the film. film, which was also reimbursed $63. 2 million (£50 million), bringing its net expense to $287. 2 million. However, the film exploded at the box office as it grossed just $392. 9 million, leaving Disney with an estimated loss of $90. 7 million.
Aside from this loss, the difference for the lower profit and return on investment of Disney’s Star Wars series goes to The Rise Of Skywalker, even though monetary statements reveal that their prices were “below production budget. “Its net profit of $112. 4 million (£89 million) brings the overall net profit of Disney’s five Star Wars films to $1. 2 billion, $2. 8 billion less than Lucasfilm’s acquisition price.
With that in mind, it’s no surprise that Disney’s presentation didn’t calculate the return on profits from Lucasfilm’s acquisition of the films, as it still has a long way to go to break even.
Of course, the above calculation doesn’t come with the huge profits Disney makes from Star Wars merchandise, DVDs, and Blu Rays. However, this also doesn’t come with the great marketing prices of videos, as well as the prices of Star Wars streaming screens. and theme park attractions that also don’t have directly similar revenue streams, as visitors have to access all the rides for the value of a single ticket.
Similarly, the calculation does not include the effects of other Lucasmovie franchises. As we recently revealed, Disney lost $134. 2 million at the box office with its latest Indiana Jones movie and Lucasmovie’s streaming series based on the 1988 fantasy film Willow has been canceled despite the mouse having invested more than $100 million in it. Lucasmovie also owns Industrial Light’s visual effects division
Disney on Indiana Jones and the Dial of Destiny ©2023 Lucasfilm Ltd.
Star Wars videos are Lucasfilm’s crown jewel and generate the highest percentage of revenue, which is why Disney highlighted them in its presentation timeline. With several Star Wars videos in the works, Disney still has a chance to get their money. Movies have rediscovered the magic formula for seducing enthusiasts, but they are not yet a force to be reckoned with through investors.