Star Wars a galaxy not so far away

Unless you have been in a galaxy far far away you would know that Disney releases the new Star Wars film on December 18. It is predicted to rank no.1 or no.2 on the list of highest grossing films ever likely behind or just ahead of Avatar at $2.8 billion. It could very easily be number one especially as the movie is supposed to be more female friendly than previous films. The strength of the Star Wars franchise means Disney will receive 60% or more of each ticket sold up from the usual 50/50 split. As with Disney it is not just about the movies but toys, themeparks and cruises. If you needed more of an excuse to visit Disney Land Disney is planning a Star Wars land in California and Orlando each site will be 14 acres of land the largest single theme expansion ever.

Artisit rendition source Disney blog

The theme park you've been looking for
Great news this is. That galaxy far far away will be just a little closer. I'm sure there will be some interesting rides they have confirmed the Millennium Falcon (see above) and you guessed it galactic space food like in the Cantina on Mos Eisley. There has been no opening date set but it's going to take a while plans are to break ground in 2016.

Star Wars a galaxy not so far away aisle 9
The toys are big business Hasbro has the Star Wars toy licensing rights out to 2020. Most royalty rates range between 10-15% but Hasbro had to pay 20% given the strength of the brand. Disney has released toys months ahead of the film release with more to come once the movie is out (they don't want to reveal too much of the plot). There are toys for both collectors and kids so far the most popular items are the new build your own lightsaber, BB-8 ball droid and lego Star Wars.

Other retailers have already complained about being crowded out of the aisle. This is before the movie has even been released. Disney cannot recognize the Star Wars VII merchandise revenue until the movie is released which should result in a outsized number next result. Disney is very easily going to recoup the $4 billion they paid for Lucasfilm. The momentum will continue with a new film every year (next year Rogue One) over the next six years. In a world with more competition for time Star Wars is helping Disney stand out. Disney has even brought the Star Wars experience to their cruiseship the Disney Dream. May the force sail with you!

Jason

http://www.decisiveassetmanagement.com/

Decisive has a long position in Disney (DIS). The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.