ST Disney's Interest in Episode VII Being Released in December 2015

My head is exploding.

 

Correct. As I had mentioned before, many shareholders were annoyed with perceived delays in kick-starting the Star Wars franchise. After all they had paid some $4.2 billion for a franchise and were being asked to wait some 2-3 years before seeing a sizable return on that investment; and add to the fact many were questioning the need to buy the franchise at all.

Disney originally was pushing for May release dates to maximize profits. A May release allows you to double dip on merchandise as fans buy up merchandise prior to the release of the film, then when the movie gets its October/November home video release Disney reaps the benefits of the success of the film with its merchandizing push for the Holidays. You've taken that off the table with December releases... again investors not happy. This largely explains why Alan Horn stated that he would like to get back to May releases for Star Wars, and probably explains why Lucasfilm/Disney have been quick to announce directors for the first two spinoffs and Episode VIII. With Johnson on board now, he can begin work in earnest on the screenplay and even start pulling resources for preproduction now, and be ready to go in front of the cameras next summer. That would allow for a schedule like this:

December 2016: Episode VII
December 2017: Spin Off
May 2018: Episode VIII

This is an incorrect assessment, Iger clearly implies the film is meant for a Summer 2015 release. He suggests Star Wars will be Disney's tentpole film (that means Summer release) in 2015 as Marvel's plans were still in flux. He also suggests the acquisition will be a positive to their financials in fiscal year 2015. This figure takes into account Disney buying back the shares they sold to Lucas... that has not happened as of yet. Lucas is smart, he's going to hold on to those shares until he's contractually obliged to sell them back meaning the acquisition will cost even more than the original $4.2 billion.


Yancy

 

You're talking like business is a zero sum game, and if the films are the only way for Disney to see a profit, and as if Star Wars in particular is the only way for Disney to see a profit.

Disney is much, much, MUCH more than its film business. In fact, theatrical distribution isn't even the primary source of revenue for the studio entertainment division: that honor falls to television and SVOD distribution. And studio entertainment is a drop in the bucket, revenue wise, compared to the media networks division and the parks and recreation division.

Disney's shareholders understand the whole. They're not fixated on the part, unlike some.

Also, Wall Street was quite happy with the acquisition. Few in the financial world questioned the need to buy the franchise. It was a slam dunk: it fits perfectly into Disney's core values, strategic vision and company strengths. Marvel was more of question, and look how that played out.

Finally, people here seem to assume that only the new films will drive profit. That's wrong. In fact, the films are incredibly costly to make, market and distribute and will initially be debits on the ledger. They probably won't earn back their investment until after the first theatrical window.

The profit from Lucasfilm will come from increased consumer product sales and licenses across all the product, including PT, OT, Clone Wars, and Indiana Jones. Disney is seeing that money already. Rebels will provide another bump in terms of consumer products, TV licensing deals and home entertainment distribution, plus hopefully driving ad revenue and support for the Disney channels that air it worldwide. Oh, and then there are ILM and Skywalker Sound, which are fairly healthy businesses.

The part you quoted is not assumption. It's a fact.

The phone call was held in 2012, before they started seriously working on production. After looking at the script and its needs, the release fate was fixed in December. Disney's fiscal year runs October 1 - September 30. A December 2015 release means the film will hit the books in first quarter 2016. Period.

You're holding Iger's feet to the fire for something he said almost two years ago. Stuff happens. Plans change. They dealt with it.

And Disney's EPS has risen, so stockholders are happy today.

You seem to be arguing that the film should be released in Summer 2015. That's never going to happen. Now the question is whether production can work around Ford's ankle and still finish on time for December 2015, or whether they will need to push again into 2016.

Also, Disney isn't "buying back shares sold to Lucas."

The actual quote from the investor phone call in 2012 is:

I don't have time (nor, I suspect, would others on this board want me) to explain how the stock market works. Suffice to say that these shares go into the greater Disney pool - or pie, if you will. The more shares there are, the smaller the sliver of the pie, and the less value each one can earn for every stockholder, not just George.

Then later, Rasulo says:

Therefore, buying back stock has nothing to do with George Lucas personally. George might decide to hold onto ALL of his shares, because as other shares are bought up, each share theoretically should increase in value - the bigger the slice of pie. Buying back stock can be done for many reasons: to potentially increase EPS and/or the P/E ratio; to reinvest excess cash; to increase ROA (return on assets); to avoid becoming a takeover target; etc.

Disney is indeed already buying back stock. Here's a story from Motley Fool in 2013 that explains it better (note: Lucasfilm isn't mentioned once. And yet Disney is called a great longterm investment). Disney spent $4.1 billion on stock buyback in 2013, up from $3.0 billion in 2012. In the phone call to investors for second quarter 2104, Rasulo says, "We continued to repurchase our stock during the second quarter and we are still on pace to repurchase between six and eight billion dollars for fiscal 2014. During Q2 we repurchased 19.9 million shares for about $1.5 billion dollars. Fiscal year-to-date, we have repurchased 58.2 million shares for $4.3 billion dollars."

I understand the general need to point fingers, but some of the pointing just doesn't take into consideration how companies, Wall Street and investors actually function.

 

I'm beginning to think SOMEBODY needs to do so, if only to provide people with a better appreciation of one of the factors involved in Disney's decision-making.

 

Yes, I'm sure all Disney's revenue is dismissed because it wasn't made from a "live action franchise".

Well, except for the modest hits that are the Avengers films...

 

Let's not forget December 18th, 2015 is Steven Speilberg's 69th birthday... and he's good friends with George Lucas, Kathleen Kennedy, JJ Abrams, & Harrison Ford. So if its going to be a December release its a great day for everyone to agree upon cause clealy they're going to invite Speilberg to the premeir a few days before and then be able to then hang out with him for the next few days since they're now all in town together plus now there work on VII is finally over besides some advertising quick appearances.

Plus you know, Avatar kinda made billions on that week too with next to no real compitition.

 

As great a character as Han Solo is, I think it's jumping to major conclusions that he has a huge role in Episode VII, and that the injury will push the entire production back 6 months. I mean, there's so many other things going on in the story: Luke, Leia, their KIDS for pete's sake, the Republic, the bad guy, R2, 3PO shenanigans. I doubt Han's role will be bigger than ESB, which was his biggest, and even in that movie he was mostly in a cockpit. With the incredible technology these days (love it or hate it, it's here), Han Solo's part in the movie will be covered one way or another. Remember The Crow? The main actor DIED and they still finished the movie, in the 90's no less.

 

I was actually wondering about their fiscal year. Ironic that they could push it back to May 2016 and it is the same FY as Dec 2015.

 

Again, when Disney says the acquisition will no longer have a negative impact on their financials in fiscal year 2015 they are talking about Oct 2014-2015, not 2016, so obviously something has to happen between those dates. Clearly the intention was to release a film in May 2015. Iger would not be describing a "tentploe" release and the situation with Marvel's lineup if the suggestion were not a summer release. Until Thor 2 ALL of the Disney/Marvel releases were summer films. It's pretty obvious that's what he's intimating.

Which again dovetails with what Horn's statements that he would like to move the franchise back to May. The reality is J.J.'s decision to jettison Arndt's script and bring in Kasdan necessitated this shift in schedule.

Also you're misconstruing Disney's stock buy back program and Lucas' conditional stocks offered as part of the sale. I've held onto my whopping 12 shares in Disney for some 10 years and have watched my numbers rise dramatically. In the case of Lucas he was specifically sold stocks in lieu of cash with the proviso that Disney would buy those specific stocks back from him as cash at a specified date (in early 2015), or he had the option to sell the stocks beforehand. Lucas filed in early 2013 to sell his stocks, but per his attorney he opted to keep his stocks for now. Obviously this is the smart move because as we move closer to the release date and Marvel likely continues its string of successes, it's very likely the value of those stocks will be substantially higher in 2015 than now.


Yancy

 

Oliver Reed wasn't the main actor by any means, but HE died during the shooting of Gladiator. They managed...

 

Disney probably wants the December 2015 release date since there would be no serious competition.

 

Or Pirates of the Caribbean.

Yes. That was the assumption.

In 2012

It's 2014.

Things change. The script wasn't finished then.

Disney knows this, Wall Street knows this, investors know this.

In addition, the film is not the end and be all. There are consumer product sales, TV sales, revenue from exploiting Star Wars in other lines of business. I'm sure they expect Rebels to make a positive and not negative contribution.

Yes, those things happened. So we currently have a December 2015 release. Not quite sure what your point is, other than May 2015 ain't ever gonna happen now. But again, film release dates shift all the time, especially when the scripts aren't finalized and the dates are years out. That's just Hollywood 101.

No, I'm not. I do believe you're probably conflating Lucas's stock grants with Disney's stock buy back program, however.

I can't find anything on the web that says Disney must buy Lucas's stock. If you have a link, great. I find it very hard to believe, given the sheer number.

Lucas didn't file to sell; he and Disney filed mandatory regulatory paperwork with the SEC.
http://m.deadline.com/2013/02/george-lucas-disney-shares-registered-for-possible-sale-bloomberg/

 

If Disney wants a Star Wars movie every year from next year they have to release in 2015. After all if they don't they then have to delay the first spin-off until 2017 & Episode VIII until 2018. They don't want that.

It's still easy to get Episode VII finished by December next year even with Ford's injury. I can't believe he'll be out as long as the media have said.

 

Yeah, it would be awkward to have a SW movie in Summer 2016, and then another one (spin-off) in Christmas 2016.

 

Disney presumably doesn't want two movies out a year right now. To make the franchise work they want to gauge the reaction to each movie at a time. If they have 2 a year from the off it makes it harder to adjust or cancel stuff. Once the ST is finished they might move to several movies a year like Marvel does but I doubt they'd do it before.

Plus there's TV shows to factor in. Easier if you have a year between movies to then run a show to fill the time

 

If Episode 7 is pushed, it doesn't automatically mean a delay in the subsequent films. It just means Episode 7 moves its release date.

Like what happened this year to Pixar - no Pixar film in 2014, two Pixar films in 2015. Disney also makes a practice of releasing multiple Marvel films a year.

There are no hard and fast rules. There are no movie release police. Honest. Studios release films on the dates which they think will best serve the production AND reach the largest target audience possible AND allow them to market/distribute the film in the most cost efficient manner possible.

And studios change their minds. Release dates get moved. Productions get put on hold - although that's incredibly expensive, so it's a major decision.

It's not science. It is, however, business.

 

They can release multiple Marvel movies because it is now a viable franchise that will do well. Star Wars is new for Disney so they will want to start slowly & be sure to get a good product out before they start releasing several movies & a TV series every year.
Rebels might not do well, Episode VII might not be well received. They need to take it one step at a time right now

 

Look this film began shooting 18 months before its scheduled release. That's a joke. I don't blame Disney for wanting to keep its December 2015 release date. If JJ and the gang can't get this done in that period of time, regardless of Ford's injury, then that's an indictment of the filmmakers. They are not being asked to build Rome for God's sake, they are simply making a film.

 

If EP7 is not out by Christmas 2015 then there just won't be rolled ankle's there will be rolled heads .....a delay in EP7 will mean a delay in the first spin-off ect & Disney will not have that - there is still just under 18 months till release date - if they film all other scene's without Ford then film the scene's with Ford when he's recovered then they still have the best part of a year for post production so you would have to be pretty slack not to get EP7 out on time......

 

Star Wars isn't a viable franchise with audience recognition and interest?

The point is, Disney will do what they want. They are well known within the industry for taking a very analytical approach, more so than the other studios. They'll crunch the numbers and do the projections. But they aren't going to hold to a date out of fear, and they aren't going to hesitate to release two Star Wars films a year if they feel the market is right and it is in their best interest.

 

They obviously had the production schedule mapped out as it was for a reason. However, Guardians of the Galaxy started filming 12 months ago and it's being released in just over a month; similar schedules seem to work for the other Marvel films. There's no reason to think this can't hit December 2016. I imagine the biggest issue is the availability of the cast, hence some possible rewrites.

 

I'm sorry but no film should take that long. Period. Especially with modern day technology (editing, lighting, special effects, etc.) which makes filmmaking faster in general. And I think Disney realizes this too which is why it is having the movies come out every two years rather than every three years. Now if Lucas, when he was behind the movies, wanted to release films every three years because, say, he wanted to chill out for a year or more between releases then fine, so be it. But 18 months from beginning of principal photography to release is an embarrassment of riches in so far as time is concerned.

And, no it being a SW film doesn't make it extra special or extra difficult. What was Lucas doing when he was working on the PT that required all those years in between? Shoring up the script? Improving CGI to the point that it all look life-like? Studying up on the craft on how to direct flesh-and-blood human beings? Don't think so. Hell, Michael Bay's Transformers films, which I despise, are flawed in the same areas that I found the Prequels to be flawed in. Nonetheless when Bay was doing that first trilogy of movies it wasn't taking THAT long to put out the product. There wasn't this 36 month gap between all of those films. And you can't tell me those Transformers flicks have far less special effects to plug in than the SW movies.