Just dialed into the investor call. Should be interesting.[DOUBLEPOST=1351629288][/DOUBLEPOST]No George Lucas on call.[DOUBLEPOST=1351629323][/DOUBLEPOST]ILM, Skywalker sound and LucasArts all included in deal.[DOUBLEPOST=1351629373][/DOUBLEPOST]Brand compatibility and mutual understanding of iconic characters and protecting/leveraging brand to create value.[DOUBLEPOST=1351629480][/DOUBLEPOST]2015 Star Wars Episode 7, first feature under Lucas/Disney.
Episode 8 and 9 also planned.
New Star Wars film should be expected every two to three years.[DOUBLEPOST=1351629547][/DOUBLEPOST]Talking about Pixar and Marvel acquisitions, integrated business structure.[DOUBLEPOST=1351629699][/DOUBLEPOST]CFO says only Disney can create value from Lucas IP (including Indiana Jones and Star Wars) but only care about SW.[DOUBLEPOST=1351629749][/DOUBLEPOST]More breadth and depth of Star Wars content domestically, and using Disney's distribution to take it global.
Parks and resorts, games and TV big focus for Disney expansion of LucasArts.
Interestingly enough, they valued LucasArts at the same as Marvel, but based the LucasArts valuation on just Star Wars alone, any extra content is a bonus.
LucasArts has 17,000 characters to utilize.
Questions from audience:
1. How does Marvel acquisition compare to LucasArts?
Marvel was way better at global distribution and had better licensing and shelfspace.
2. How much did Marvel acquisition make you?
No details announced. Value-creating for shareholders. Share price compared to pro-forma has been positive. Feel equally strong about LucasArts.
3. Recurring library revenue from LucasArts?
Can't reveal breakdown. A quarter of Lucas Films revenue is from their film library, the rest is other licensing deals.
4. Any other movies from Lucas?
Nope, concentration on just Star Wars. Extensive and detailed treatment for the next trilogy. 2015 for Episode 7, 8 and 9 in 2017 and 2019 respectively.
5. Doubling down on film while home entertainment is going down. What opportunities for parks?
Box office own has grown exponentially. All good. Being conservative in this purchase. 4 parks, 2 recently redone, incorporate more Star Wars into parks, build on Asian parks. Star Wars #2 franchise in the world by Forbes. "Sci Fi Fantasy" and "Super Hero" franchises under disney control.
6. What Star Wars films come in lieu of at Disney? What happens to Marvel? Pixar? Concerns about saturation?
Strategy has been 1-2 Marvel films a year, 1 Pixar film a year, 1 Disney animated per year, a couple live action tent poles with 2017 Star Wars being one of those. No huge extra investment in film. Better to invest in sequel to Star Wars than a brand new IP, known quantity, easier ROI.
7. Annual Consumer Product Licensing - $215M per year, confirm?
Confirmed for 2012
8. Projections for future film $?
Erred on conservative side. Considering no SW film since 2005, most revenue calculated from future exploitation of SW film franchise.
9. Dilutives, single digit EPS and accretives, share buyback in 2 years. Does that include buyback?
Single digit drop in EPS caused by dilutives. Accretives are caused by buyback.
10. All those revenue projections, were they for 2005 when the last movie was made?
No, for calendar year 2012.
11. $2 Billion of stock being issued, $100 Billion outstanding. Why is that only single digit change to EPS?
Amortization of intangibles and deferred revenue around licensing. Net income impacts different. Transaction and restructure costs also offset OI.
12. Do you get ALL characters, unlike Marvel where some characters were precluded?
There are very little incumberances. Some distribution incumberances with Fox and previous movies, and Paramount incumberances with Indiana Jones. Fewer incumberances than we had with Marvel.
13. Congrats! You're risking the wrath of the entire Internet! What are you doing with ILM?
Let it remain as is. They do work for multiple studios, no change. Does decent business, every intention of staying in.
14. How much did 3D revenue differential affect 3D strategy?
Can't compare recent movies to old ones. Adjusted actual BO to inflation with international BO today, relative to old ones. Adjusted prominence of 3D to tent pole films and revenue stream. Total value of past three films = $1.5B. 40% of BO comes from 3D releases for tent pole films.
15. Interactive, social gaming? Lucas seems good, what is strategy around that? Social vs console gaming.
Focus more on social and mobile instead of console. Licensing property vs developing. Based on story telling and characters.
16. Anything personally going on GL and why he's selling out now?
(Adam note, lol) No words in George's mouth. About 4-5 years ago, he started contemplating a form of retiring, he put that in process. Identified Kathleen kennedy to run company. Started discussing with Disney 1.5 years ago. He will serve as consultant, doing consulting now on the basic development for next SW film trilogy starting 2015. He intends to retire.
17. Indiana Jones - Does Paramount require exit fees?
Disney didn't ascribe any values to IJ because of encumberances. Not factored into acquisition.
18. Acquiring Marvel filled void for boys IP. Disney had princesses and fairies. Does SW further fill that boys IP licensing void.
Gives good footprint, never looked at boys vs girls for shelfspace. Just look for great IP.
Just happy to build on SW. Want to increase Boys IP for TV more than anything as seen with Disney XD and Marvel shows.
19. Distribution deal. If Fox has distro rights, how will that change with new deal?
No distribution rights for future films. When bought Marvel, Fox still had rights to some future film distribution.
20. What kind of production costs assumed for new SW films?
Too premature.
End of call and discussion of GAAP and forward looking statements.
