On a day where every media outlet in the world is declaring the new Star Wars film an earth shattering success, I’ll take a little pride in being the only one to point at the doom on the horizon. In a lot of ways I’ll admit hope, as often does happen—more than you’d think—that some executive at Disney will read what I write here and make the market corrections needed—and save the only company in the world truly dedicated to family entertainment. But they won’t. Disney is not run by a strong CEO like it was when Walt Disney ran the company years ago. It’s now run by committees of people—and within those committees are people who seek such a management method because they lack personal courage. Without personal courage and risk, the market potency of a company and its products surrenders box office appeal, and ultimately profits. That is essentially what is wrong with the new Star Wars film, The Force Awakens. As much as I wanted to like the film—and still do in fact—the business side of my brain sees more alarms going off in the cockpit of this starship than it can withstand. Destruction is imminent. So I’m headed for an escape pod before the entire thing falls apart. If you have Disney stock, you should sell it right now because the value will tank very shortly and it will never recover.
Out of all the possibilities and horsepower of Lucasfilm—with all the talent at their disposal—they as a company elected to treat their long line of New York Times bestselling novels like a story treatment for a Hollywood movie. The writing was on the wall when they released the comic series The Star Wars two years ago by Dark Horse comics justifying their decisions to mine the expanded universe and re-write it putting their committee stamp on the material proclaiming that what they did was better. Rather than sit down with a good writer like Lawrence Kasdan is and have him write completely new material, like he did for the Empire Strikes Back and Raiders of the Lost Ark, Lucasfilm under Kathy Kennedy decided to make a reboot of A New Hope and populate it with what the “Star Wars Story Group” thought was the greatest hits of the long series of novels which had been produced carefully with George Lucas over two decades. When they released the comic series showing how the original Star Wars script had evolved over time and necessity they were trying to justify what they were about to do hoping to sell their work as authentic. What they did was infinitely disappointing. At that point in time I had been buying all the comics and books I could get and was reading them all. But when I realized what was happening, I just stopped waiting to see if Disney would do as I feared and just mine the stories that meant something very wonderful to many of the hard-core fans, or if they’d actually continue the story into new territory—which for me was the only justifiable option. They picked the most lazy path possible at a great insult to the fans who kept the market value of Star Wars alive for so long.
The Force Awakens of course made a lot of money—it shattered records that Hollywood may never see again. There was tremendous pent-up multi generational desire to see a new Star Wars film. So everyone who could went to see the movie over its opening weekend. If I didn’t know better I would have thought it was a good movie–it had all the elements present, but it was clearly missing something. That something was the conviction that a risk taking proprietor brings to a project—a leader who has put their reputation and soul on the line to make a product which clearly marked the first two Star Wars films—was missing. The makers of The Force Awakens were happy young people writing stories from the comfort of Lucasfilm employment and the politics of the very progressive city of San Francisco. Like spoiled brats driving their dad’s Mercedes out for a night at the country club to socialize at a charity function thinking they were saving the world—they made Star Wars: The Force Awakens without taking any real risks and mining the material of risk takers who came before them hoping that nobody would notice. I did, and so did many other hard-core Star Wars fans upon leaving the theater for the first time. When the fun dies down and these fans will think about what they’ve seen, Disney will find that they now have a dreadfully divided audience because of their choices which will dramatically affect the market share potential of all the future Star Wars films. It will hurt their book sales, their merchandise, and their box office take for all subsequent films. What they essentially did was brought Star Wars down to the level of the latest Star Trek movies—or the Avengers films. They might make decent money, but Disney executives are planning on insane money—and they’ll need it to survive—because other aspects of Disney’s business portfolio has been wavering in these changing economic times.
Here’s how the Hollywood Reporter announced the pending doom on Friday December 18th as The Force Awakens opened to hungry fans across the world:
Star Wars: Episode VII – The Force Awakens made $57 million domestically Thursday, enough to set a record but not to satiate Wall Street’s fears over Walt Disney’s television business.
In midday trading on Friday, Disney shares were off 4 percent, twice that of the broader markets, as the conglomerate was the topic of at least two negative research notes in the past two days.
On Friday, BTIG analyst Richard Greenfield downgraded Disney to “sell” and put a $90 price target on the stock, suggesting it will fall about 17 percent in the next 52 weeks or so.
“Even The Force cannot protect ESPN,” Greenfield wrote, accusing management of “overpaying for sports rights based on overly aggressive multichannel video subscriber projections.”
Greenfield says Disney’s cable network operating income will shrink in fiscal-year 2017, causing total Disney operating income to be flat.
He also says Disney damaged its long-term prospects for cable in general “by aggressively licensing content to SVOD platforms such as Netflix to prop up near-term earnings.”
While the numbers look impressive at first glance, because of the changing market of the other business interests, such as ESPN and how cable subscribers are dumping their subscriptions in favor of Internet service for their smart phones the media empire of Disney is too reliant on Star Wars to save it from the downsides it’s facing. The Marvel movies are beginning to fade as the newness of them is wearing away. By the time Captain America: Civil War hits in 2016, the franchise will be in clear decline as a box office force. The savor was always going to be Star Wars—and now they’ve screwed that up dividing the fan’s loyalties between a re-tread and the authentic novels.
It is always dangerous to base a movie off a book, because the reader often sees things differently than a film’s director. As long as a movie producer stays close to the source material, often things are forgiven. But regarding Star Wars, where the franchise was kept alive with cooperation between Del Rey publishing and Lucasfilm in close contact with George Lucas approving story details the novels were like the Bible and took on a meaning that Disney obviously didn’t understand. After all, they had been re-writing great literary classics for years, so they had no problem changing things around to suit their market appraisal for the films they wanted to produce.
By insisting that the movies were cannon and not the books which were designed to connect the original movies with fresh material ultimately created by individual authors under the guidance of Lucasfilm—the creative team behind The Force Awakens assumed incorrectly that fans would forgive them. Some will, but not everyone, and for Disney to succeed in this venture they needed everyone. And when the smoke clears around The Force Awakens, they won’t have everyone. And that means financial doom on the horizon within the next five years for Disney as a company. Bob Iger will leave the next CEO at Disney with a terrible burden and there will be no recovery from it. With other aspects of the company losing money, such as ESPN based on inflated sports contracts, it needs a new explosion in growth which Star Wars was supposed to bring.
The Force Awakens felt like a small movie after reading about gigantic events in the novels over the years. The sheer scale of the Star Wars novels would have had enormous production costs to duplicate on film. I’m sure Lucasfilm made the decision to do what they did on The Force Awakens based on the vast number of characters that were in the Star Wars novels—which ultimately brings up the question should a novel be cannon or is the movie a superior product? I clearly think what is written in a novel is the cannon in every case. Movies are dumbed-down versions of books. I can’t think of too many books that were made into movies that were overshadowed by the film version. Star Wars started as a fresh movie experience, but it evolved into a literary journey which became much more powerful than the original films. Lucasfilm made the mistake by trying to reverse that trend, and make a movie by committee instead of individuals and throwing out parts of the series which were too big to project on the silver screen. Rather than trying to do that, they watered down a product that millions had fallen in love with and banked Disney’s future on the result.
Taken by itself Star Wars within Disney will hold its own financially. The films will do fine, the merchandise will be respectable, and the other intellectual work will likely still sell for years to come. But because of where the company as a whole is, with ESPN failing, the Avengers movies in decline, and the lack of new musicals coming from their children films every three years-Disney has serious problems. It would have taken all the Star Wars fans to save them—and they clearly don’t have them all. The Force Awakens proves it. That problem won’t show itself immediately, but will begin to show up in their repeat business numbers within a month of the release.
Kathy Kennedy should have known better. On Twitter the Star Wars people put out a tag line when The Force Awakens opened showing Han Solo and Chewbacca in the Millennium Falcon declaring “we’re home.” They were clearly marketing Harrison Ford’s return to the role of Han Solo to push the box office numbers over the top. I replied to Kennedy’s tweet the reality of what I felt. I said,” Yeah, we’re only home for the funeral.” It was stunning to me with all their build-up that they killed off Han Solo, so to me, The Force Awakens became like going home to a funeral to visit family you hadn’t seen in a while—and likely may never see after. We all knew that Han Solo would die in the movies at some point in time, but in the books he was still performing heroic acts 45 years after A New Hope, so if they had not gone back in time and killed off Han Solo and could have kept the heroics of his novel adventures intact in the canon, it would have been much more digestible. Instead they not only killed Han Solo, but the best that hard-core Star Wars fans had fallen in love with–an epic story on a truly galactic scale. What they gave us in The Force Awakens was the death of a favorite character and a highlight reel of the novels—stories we already knew—all chopped up and spit out with new names and a much smaller frame of reference. Then to insist that an inferior product was the new canon spelled huge problems for the future of Star Wars which will compound into a much worse situation than what Disney is seeing currently with ESPN. And I wish it wasn’t the case, because I love Disney and really wanted it to succeed. But they made all the mistakes that they shouldn’t have—and arrogantly stood by those mistakes to the bitter end.
I don’t know if there is a way that Disney could fix the situation now. I’m afraid it’s too late. But maybe there is a way they can appeal to the hard-core fans before things get out of control. They should try for the sake of everyone—mostly themselves.
Rich “Cliffhanger” Hoffman
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