May the Force be with Disney

Yesterday brought some surprising news for the Star Wars franchise:

The Walt Disney Company, in a move that gives it a commanding position in the world of fantasy movies, said Tuesday it had agreed to acquire Lucasfilm from its founder, George Lucas, for $4.05 billion in stock and cash.

The sale provides a corporate home for a private company that grew from Mr. Lucas’s hugely successful “Star Wars” movie series, and became an enduring force in the creation of effects-driven science fiction entertainment for large and small screens. Mr. Lucas, who is 68 years old, had already announced he would step down from day-to-day operation of the company.

Combined with the purchase of Marvel Entertainment for $4 billion in 2009 and of Pixar Animation Studios for $7.4 billion in 2006, the acquisition solidifies Disney’s status as a leader in animation and superhero films. And it strengthens the legacy of Robert A. Iger, Disney’s chief executive, who has become known for his aggressive expansion of the company since taking charge in 2005.

But the strange timing of the announcement got the wheels spinning at New York Magazine:

Disney called Star Wars an “evergreen” media property today. But the prospect of keeping the Star Wars series going ad infinitum, and expanding it to regions and age groups in which it isn’t already well known or loved, is far from a sure bet with consumers. It essentially amounts to wagering that die-hards will continue to flock to anything with the Star Wars name on it, while also betting that new movies will draw a younger generation that didn’t grow up on Millenium Falcon references.

Disney can’t rely on old intellectual property — it needs Lucasfilm to keep throwing off cash to justify its $4 billion price tag. But with aging cultural cachet (the first Star Wars came out 35 years ago) and a consumer base that has lots of other popular franchises clamoring for its attention, it’s hard to think that the marketing machine of a decade ago can keep chugging along at pace. As this chart from Box Office Mojo points out, recent Star Wars movies (adjusted for ticket price inflation) have generally underperformed older ones. Why would newer versions, released by Disney, fare any better?

George Lucas, who has seen the Star Wars franchise go from revered cultural touchstone to virtual punchline, may have accepted a lowball bid in an effort to wash his hands of the series altogether. But I doubt it. We won’t know for sure until Disney reports LucasFilm’s financials, but it seems to me that Lucas may have gotten the better deal here.

If Disney can’t keep a parade of Star Wars sequels from suffering diminishing returns, its “evergreen” acquisition may be more like a wilting flower. And if Disney knows it overpaid, or even senses it might have, then burying the news makes all the sense in the world.