Free Enterprise Staff  | May 4, 2015

May the Fourth Be With You

For millions of people around the world, May 4 is among the most important days of the year. The reason? It marks Star Wars Day, dedicated to honoring what is arguably the most popular and successful film franchise of all time.

Released on May 25, 1977, “Star Wars: A New Hope” ushered in a new era of fandom, one that has continued in earnest for nearly four decades. Just recently, in fact, the latest trailer for December’s feverishly anticipated new installment of Star Wars—the J.J. Abrams-directed “Star Wars: The Force Awakens”—was released into the wild, attracting tens of millions of views in a matter of days.

Unsurprisingly, such fervent fan devotion comes with a huge monetary reward for those involved in Star Wars. Its biggest beneficiary has, of course, been George Lucas, the mastermind behind the perennially popular science fiction brand. Lucas, whose net worth Forbes estimates at $5.1 billion, is equal parts entrepreneur and filmmaker: While he remains a driving force behind Star Wars, he sold Lucasfilm, his eponymous film studio, to Disney for a whopping $4 billion. Some might call that a decent exit strategy.

Why would Disney pay such a hefty sum for a film production company? Lucas and his carefully crafted universe are fundamentally valuable, particularly to a global conglomerate like Disney, which has similarly created an ecosystem in which its intellectual property—everything from Mickey Mouse and Pirates of the Caribbean to Toy Story and Wall-E—drives sales, engagement, sales, and brand awareness. And sales.

Consider the Pirates of the Caribbean: Once an interactive ride at Disney’s theme parks, it was subsequently turned into a film franchise—one that’s produced four films and counting—whose global ticket sales alone have generated more than $3.7 billion, according to Box Office Mojo. That figure doesn’t take into account the huge profits Disney has since reaped from renewed fan engagement and toy and merchandise sales.

When Lucasfilm was being shopped around, it was a deal that was just too good for Disney to pass up. According to the 2014 book “How Star Wars Conquered the Universe,” the Star Wars brand has generated more than $37 billion since the first movie’s otherwise inauspicious debut.

Apart from its six major film releases, Star Wars has made such a staggering amount of money thanks to its lucrative endorsement deals and tie-ins from non-tent pole films, television shows, video games, and—of course—toys and other types of merchandise. Even with tens of billions of dollars in receipts under its belt, Star Wars is expected to be the gift that keeps on giving for its new corporate overlords.

As evidenced by fans’ reaction online, the next iteration of the film series is expected to be a major box office draw. That, in turn, will enable Disney to aggressively market the rights to the brand’s characters to companies that are itching to make money from stalwart fans of the iconic series. With a mix of old and new characters, the newest additions to the Star Wars franchise are also guaranteed to please fans of all ages.

In the hands of the Mouse House, there’s no telling how much more money Star Wars can deliver over the coming decade. Doubtful of Disney’s ability to market Star Wars to an entirely new generation of fans? Consider this: Released only 18 months ago, Disney’s smash feature film “Frozen” already generates more than $1 billion in retail revenue each year, according to the New York Times.

May the Fourth be with you.