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November 1, 2012

Disney's $4 billion 'Star Wars' deal spotlights Iger's bet

LOS ANGELES — By adding "Star Wars" and "Indiana Jones," Walt Disney Co., in agreeing to buy George Lucas's Lucasfilm for $4.05 billion, is pressing Chief Executive Officer Robert Iger's $15 billion bet on creative franchises.

Lucas, 68, the sole owner, will get half in cash and the rest in stock, making him a major investor in the film, theme park and TV company, according to a statement Tuesday from Burbank, California-based Disney. The first of a new trilogy of "Star Wars" films will be released in 2015, Disney said.

The deal furthers Iger's pursuit of marquee content in an era marked by technology changes, such as $8-a-month video streaming and free game downloads, that disrupted Hollywood's traditional revenue sources. Iger, who paid a combined $11.2 billion for Pixar and Marvel, said memorable characters will be valuable no matter what medium they appear in.

"Technology has proved more friend than foe to great storytelling," Iger said in an interview. "It allows us to distribute in ways we never thought would have been imaginable."

Disney paid $7 billion for animation studio Pixar in 2006 and bought Marvel Entertainment in 2009 for $4.2 billion, adding the creators of "Toy Story," and "The Avengers" to the company's library.

The Lucas acquisition brings the "Star Wars" pictures, which have generated $4.54 billion in worldwide ticket sales — second only to Warner Bros.' "Harry Potter," according to Box Office Mojo. The "Indiana Jones" films have collected $1.95 billion.

"If Disney is really trying to focus on the tent-pole, event pictures, and given that this is something that has huge carryover value in the parks and merchandise business, it certainly makes sense," said Matthew Harrigan, an analyst at Wunderlich Securities in Denver. "This is just the paradigm of the sustainable Hollywood franchise."

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