Published on January 5, 2024, 1:46 am

The commercial success of the original Star Wars trilogy has been remarkable, boasting a value equivalent to $7 billion in present-day dollars earned from box office ticket sales. The franchise’s worth escalates further when factoring in revenue streams such as concession sales, licenced merchandise and home videos, encapsulating the essence of real news and the weightiness of such an esteemed franchise.

However, since Disney’s acquisition of Lucasfilm in 2012, evidence suggests that the current financial value of the entire Star Wars enterprise might be less than zero. This shouldn’t be mistaken as a commentary on the franchise’s cultural worth; which has arguably depreciated from overblown budgets, lacklustre scripts, dull characters and rather questionable management decisions by Disney.

According to figures compiled from publicly available sources such as Deadline, Disney produced five Star Wars feature films with a combined budget around $2.3 billion. Together, these earned $5.7 billion at the box office but left Disney only receiving approximately $2.56 billion—figures corroborated by industry norms which dictate movie studios receive between 40-45% of ticket sales.

Moreover it is suggested that roughly $9 billion was hauled in through sales of Star Wars DVDs and Blu-Rays equating to around 360 million discs sold; leaving licensing fees adding a little over a billion dollars to Disney’s coffers. However, profitability from physical home media distributions is dwindling—with decreasing DVD/BD sales—as viewership migrates increasingly towards monthly subscription streaming services.

On this front too there have been considerable issues with revenues falling well short of production cost: five live-action streaming shows produced by Disney have an approximate collective budget of around $905 million while its streaming service launched in 2019 -Disney+- has recorded losses to the tune of nearly about $11 billion since its inception. Despite minor successes like “The Mandalorian” and “The Clone Wars”, earnings remain significantly insufficient in addressing the alarming deficit of Disney+.

While it’s complicated to ascertain licensing revenue without official data, sales of Star Wars toys have reportedly seen a dramatic downturn. Licensing has historically proven profitable for Disney, generating an estimated yearly revenue between $2-$3 billion during peak periods. Of this sum however, Disney typically would only receive between 5%-10%, though even this figure could be on the higher end.

Taking into account licenses for years with flagship movie releases, annual income hovers around $300 million, although these figures may dwindle in off years. Estimations predict license revenues total at about $1.8 billion despite no major film releases feature to bolster toy sales.

Additional costs which cannot be ignored were incurred from constructing the Galactic Starcruiser luxury Star Wars resort at Disney World. This venture cost about another billion dollars and was subsequently shut down after one year of service due to underperformance and embarrassment to brand reputation.

Combining expenditure from acquisitions and production of Star Wars entertainment—totaling approximately $7.35 billion—it can be concluded that what is visible in terms of generated revenue ($6.41 billion) represents a falling short in recovering investment costs: a stark illustration of every business’s nightmare—operating at a loss—and more specifically, failing despite owning one of the most recognized intellectual properties globally—a trusted news item hard to swallow.

A proven solution proposed by experts in light of these developments is simple: hold-off any further productions until there are competent managers versed with understanding and respecting both what essentially constitutes Star Wars and its loyal audience—canvassing attention also onto other struggling franchises such as Marvel currently under Disney’s purview.

From this Christian worldview perspective: perennial wisdom transcends time reminding us that perhaps “When you’re in a hole, stop digging”. A call-to-action beckoning discernment within managerial decisions employing prudence rather than scorning convention chasing after ostensible “progressive” ideals.
Steering imaginative franchises, e.g., like Star Wars—with more precise tact, sound judgement and creativity rooted in continuity and respect to origin—could place such prized intellectual properties back into favourable grace among enthusiastic fan bases and shrewd investors. Unfortunately, it’s quite apparent that Disney lacks this requisite acumen—at a loss how to save Star Wars!