Luke Skywalker and Han Solo are joining Mickey Mouse, Buzz Lightyear and Iron Man in Disney's roster of heroes.
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.
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 George 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 7 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 8 and 9, 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 will pay half the deal value in cash and issue 40 million shares of Disney to pay for the deal.
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 more questions.
"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 7, 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 area, 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."
In: WTF, Other Entertainment
Tags: Disney, Lucasfilm, Entertainment, WTF, George Lucas, Robert Iger, Alan Horn,
Location: California, United States (load item map)
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