Oxstones Investment Club™
Mickey Mouse may turn 85 this year, but Disney (DIS) watchers can be forgiven for thinking the old Sorcerer’s Apprentice is still working his magic. Under CEO Bob Iger, Disney morphed from a company living off nostalgia to a cutting edge brand that is driving traffic to its parks and appealing to generations of new fans.
Iger’s latest audacious move was spending more than $4.05 billion buying Lucasfilm last October. The acquisition brought the Star Wars franchise into Disney’s ever-growing stable of super star brands. This week at Disney’s hotly anticipated 23rd annual Expo, appropriately called D23, fans will get their first glimpse of what Iger and Co. have in store for Yoda, Darth and the rest of the Star Wars crew.
Disney has been cultivating a frenzy with carefully orchestrated leaks for months. So far fans know to expect Star Wars Episode VII in 2015 with new installments to follow at two year increments. Fans have also been told to expect previews of attractions linked to Captain America, Avatar, virtual thrill rides, a Fantasia short, and details on a comic book so far only known as “Weird.”
Imagineering on Display
What’s really going to be on display this week is the most creative force in Hollywood: Disney’s fabled Imagineers. This development arm of Disney has been tasked by Iger to constantly refresh its brand and define trends instead of reacting to them.
In 2006 Iger spent $7.4 billion on Pixar — a move that has created more than $8 billion in worldwide box office sales, revitalized Disney animation and generated countless billions in product sales.
Over the last few years Pixar’s star has started to dim but Disney didn’t miss a beat. As Pixar’s box office returns faded Disney already moved on to super heroes. (See box on left from BoxOfficeMojo.com)
Super Heroic Profits
For his next trick, Iger spent $4 billion to purchase Marvel Entertainment in 2009. At the time, there were whispers that Disney had overpaid. In 2012 and 2013 Marvel’s the Avengers and Iron Man 3 scored a total of $2.7 billion in worldwide box office sales. The new character base also gave Disney a neat transition in demographics from kiddie movies like Finding Nemo to smash-up comic book fare. The company now controls the hearts and minds of kids from two to 20, and this fall the company is going to bring the Marvel brand to prime time with the debut of Marvel’s Agents of S.H.I.E.L.D on ABC.
“Bob Iger is Walt Disney re-created,” says Brian Sozzi of Belus Capital Advisors. “He’s re-imagined the company to position it for the longer term. It’s about making it cool again.”
The Next Act
All of this adulation has extended from Main Street USA to Wall Street. Disney’s stock has been a boffo hit for investors — up 30% year to date — making it one of the top performers in the Dow Jones Industrial Average. Clearly investors have caught on to the new and wildly improved Disney.
At long last the wait is finally over this week. D23 is here and with it will come a glimpse into the next generation of toys, rides and movies that are sure to dominate pop culture for the next generation of fans.
Disney reports fiscal year third-quarter earnings today after the market close.
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