Disney's $4 billion deal for Lucasfilm and "Star Wars" just keeps getting better for the House of Mouse.
The company is banking on the latest installments, "The Last Jedi" in December and a Han Solo movie in May, to drive people to theaters. But that's far from the end of money-making opportunities from Han Solo, R2-D2, Kylo Ren and Rey. In fact, CEO Bob Iger said Thursday that the company is now planning a brand-new "Star Wars" trilogy, which will be the fourth in the franchise.
Disney has drawn big profits from the strengths of its TV channels — namely ESPN — but that growth is challenged as more people dump cable subscriptions. As people turn to online replacements such as Netflix, Disney is hoping to lure them with a streaming service planned for 2019. "Star Wars" movies will be a big part of that; so will a new "Star Wars" series Iger also announced Thursday.
Disney also wants to squeeze cash from "Star Wars" fans in the forms of toys and, theme park visits and hotel stays.
FILE - This Wednesday, May 10, 2017, file photo shows the ABC logo, a Disney brand, in an advertisement at a bus stop near their television studio on the West Side of Manhattan, in New York. The Walt Disney Co. reports financial results on Thursday, Nov. 9, 2017. (AP Photo/Mary Altaffer, File)
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MOVIE MONEY
"Star Wars: The Force Awakens," released in December 2015, pulled in more than $2 billion in worldwide ticket sales, trailing only "Avatar" and "Titanic" as the best-selling theatrical release ever (without adjusting for inflation). It also bumped up home entertainment revenue from DVD sales. "Rogue One," last year's installment, made over $1 billion in global box-office revenue.
"The Last Jedi" will continue from where "Force" left off. Michael Nathanson of MoffettNathanson has a "somewhat conservative" estimate of $1.9 billion in box-office haul for the film. He also expects the latest "Avengers" installment to bring in $1.3 billion.
Big-budget, sequel-generating movies deliver big wins for studios. In fiscal 2016, when Disney released "The Force Awakens," the studio's profit was $2.7 billion. That's expected to fall this year and jump back up to $2.84 billion in 2018, thanks to "The Last Jedi" and several Marvel movies.
In the July-September quarter, however, the studio's revenue fell 21 percent to $1.43 billion. "Cars 3" wasn't as big a hit as "Finding Dory" in 2016.
Overall, The Walt Disney Co.'s net income slipped 1 percent to $1.75 billion. Revenue dropped 3 percent to $12.78 billion.
FILE - This file image provided by Lucasfilm shows a scene from the upcoming "Star Wars: The Last Jedi," expected in theaters in December. Disney's $4 billion deal for Lucasfilm and "Star Wars" just keeps getting better for the House of Mouse. (Industrial Light & Magic/Lucasfilm via AP, File)
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DISNEY EMPIRE
Disney is funneling its movie hits to other parts of its sprawling empire to help it make money repeatedly from its intellectual property.
For example, "Star Wars"-themed areas at Disneyland in California and Disney's Hollywood Studios in Florida will open in 2019.
"They're huge and I think very exciting in terms of how we're using technology to create really interesting attractions and experiences," Iger said at a September investment conference.
The company is also planning a "Star Wars"-themed hotel at Walt Disney World in Florida. Disney touts it as an "immersive" experience; guests will be able to dress up as their favorite characters.
Disney is making other big investments in its parks, too, as it races to catch up with Universal's enormously popular Harry Potter-themed areas. In the latest quarter, revenue rose 6 percent to $4.67 billion, helped by the international parks. In the U.S., Hurricane Irma shut down Walt Disney World for two days, hurting domestic results.
Analysts expect merchandise revenues to get a bump in fiscal 2018; Nathanson cites the "Star Wars" and Marvel movies, as well as "Frozen" coming to Broadway, as drivers.
FILE - This Jan. 31, 2014, file photo shows plush Disney characters piled up in a display at a Disney Store in Saugus, Mass. The Walt Disney Co. reports financial results on Thursday, Nov. 9, 2017. (AP Photo/Elise Amendola, File)
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GEARING UP AGAINST NETFLIX
The movies will also serve as a lure for Disney's streaming service, which will contain hundreds of movies and thousands of TV episodes and shorts. Pixar, "Star Wars" and Marvel films will be included along with Disney-brand video. Disney's deal with Netflix is expiring and won't be renewed, making the new service the exclusive online home for much of Disney's prime content.
Morgan Stanley estimates that the service can, after a decade, become a nearly $5 billion-a-year business, with roughly 30 million subscribers. (Netflix's streaming revenues for just the last nine months were $8.1 billion, with 109 million subscribers.) Disney will lose out on hundreds of millions from Netflix when it pulls its movies, and UBS estimates that it needs 32 million subscribers for the app just to break even.
Iger said Thursday that the streaming service will cost less than Netflix at launch. Netflix's streaming plans start at $8 a month.
Disney also plans an ESPN streaming service, which it announced Thursday will be called ESPN Plus, that will launch in spring 2018. It won't air the same sports as its channel — but one day might. ESPN, long its cash cow, has been losing subscribers as attention shifts online.
In the fiscal fourth quarter, the media networks' revenue fell 3 percent to $5.47 billion; profit slid 12 percent, to $1.48 billion. At ESPN, content costs rose and ad revenue fell, but Disney wrangled higher payments from cable companies.
Shares rose 1.4 percent to $104.09 in after-hours trading Thursday.
ANAHEIM, Calif. (AP) — Performers who help bring Disney's beloved characters to life at its Southern California theme parks filed a petition Wednesday to form a labor union.
The workers include parade performers, character actors and support staff at Disneyland and an adjacent theme park, Disney California Adventure. More than two-thirds of roughly 1,700 eligible workers signed the petition to seek an election through the National Labor Relations Board, the workers said, noting that a vote will likely be held in May or June,
At a news conference in Anaheim, which is home to the two theme parks and the Downtown Disney shopping and entertainment district, workers said they also asked The Walt Disney Co. to recognize the union they are calling “Magic United.”
Several workers said they love helping create a magical experience for Disneyland visitors. But they said they grew concerned when they were asked to resume hugging patrons after returning to work during the coronavirus pandemic and they face certain challenges, including injuries from costumes, erratic scheduling and a lack of clear communication from management.
Mai Vo, a 37-year-old performer who has worked for Disney for two decades, said she wore black contact lenses as part of a costume and that they stained her eyes gray. She also was paid less for that job than someone who played a similar role but who was in a union, she said.
“I love my job, but I know that we all deserve better,” Vo said. “I am confident that by standing together, we will be strong and be able to advocate for positive change.”
Most of the more than 35,000 workers at the Disneyland Resort, which includes the theme parks, already have unions. Parade and character workers announced their plans to unionize in February under Actors’ Equity Association, which represents theatrical performers at Disney’s Florida theme parks.
In a statement Wednesday, Disney officials said: “We support our cast members’ right to a confidential vote that recognizes their individual choices.”
Union membership has been on a decades-long decline in the United States, but organizations have seen growing public support in recent years amid high-profile contract negotiations involving Hollywood studios and Las Vegas hotels. The NLRB, which protects workers’ right to organize, reported more than 2,500 filings for union representation during the 2023 fiscal year, which was the highest number in eight years.
Disney has a major presence in Anaheim. Disneyland, the company’s oldest park, was the world's second-most visited theme park in 2022, hosting 16.8 million people, according to a report by the Themed Entertainment Association and AECOM.
In California, Disney’s cleaning crews, food service workers, pyrotechnic specialists and security staff are already unionized. The company has faced allegations in recent years of not paying workers a livable wage for Southern California, despite raking in profits. Wage issues have even wound up in the courts.
Parade performers and character actors earn a base pay of $24.15 an hour, with premiums for different roles that can vary widely, workers said. Until January, the base pay was $20 an hour.
The effort to organize character and parade performers in California comes more than 40 years after those who play Mickey, Goofy and Donald Duck in Florida were organized by the International Brotherhood of Teamsters, a union traditionally known to represent transportation workers. At that time, the Florida performers complained about filthy costumes and abuse from guests, including children who would kick the shins of Disney villains such as Captain Hook.
Kate Shindle, president of Actors' Equity, said she was confident the California workers would win the election through the NLRB, the federal agency that protects workers' rights to organize.
“They just want to be paid fairly, to have a more humane scheduling system, to know that they are safe on the job, to have clear and respectful communication at work.” she told reporters while flanked by more than a dozen Disney workers wearing blue T-shirts with union slogans.
Shantall Segura, a 29-year-old character performer, was among them. She said she worries she might fall in slippery shoes after it rains, or soak her feet while walking through puddles on uneven ground.
Parade performer Courtney Griffith, 26, said her coworkers are frequently injured by ornate or heavy costumes and developed a rash after donning one particular costume but were told to keep wearing it. She said the costume was finally shelved after a manager tried it on and developed a rash, too.
“I would like to work here as long as possible. This is my dream job,” Griffith said. “We’re all experiencing similar issues and our management is not being given the resources by the company to help us.”
FILE - Mickey Mouse interacts with guests at Disneyland in Anaheim, Calif., Friday, April 30, 2021. Workers who help bring Disneyland's beloved characters to life said Wednesday, April 17, 2024, they have collected enough signatures to support their push for a union. (AP Photo/Jae C. Hong, File)
A view of Disneyland's amusement park Matterhorn, far left, is seen through a window in Anaheim, Wednesday, April 17, 2024. Workers who help bring Disneyland's beloved characters to life said Wednesday they collected enough signatures to support their push for a union. (AP Photo/Damian Dovarganes)
A view of Disneyland's amusement park lot is seen through a window in Anaheim, Wednesday, April 17, 2024. Workers who help bring Disneyland's beloved characters to life said Wednesday they collected enough signatures to support their push for a union. (AP Photo/Damian Dovarganes)
Workers who help bring Disneyland's beloved characters to life take a picture with the logo of the Actor Equity Association, after announcing they've collected enough signatures to support their push for a union doing a news conference in Anaheim, Wednesday, April 17, 2024. (AP Photo/Damian Dovarganes)
Gloria Alvarado, Director of the Orange County Labor Federation, at podium left, congratulates workers who help bring Disneyland's beloved characters to life, as they announce they collected enough signatures to support their push for a union during a news conference in Anaheim, Calif., Wednesday, April 17, 2024. (AP Photo/Damian Dovarganes)
Actors Angela Nichols, far left, and Courtney Griffith, center, and workers who help bring Disneyland's beloved characters to life as they announce they've collected enough signatures to support their push for a union during a news conference in Anaheim, Calif., Wednesday, April 17, 2024. Workers who help bring Disneyland's beloved characters to life said Wednesday they collected enough signatures to support their push for a union. (AP Photo/Damian Dovarganes)
