Disney has always been one of the largest film studios in Hollywood, but when they purchased Lucasfilm in 2012 they acquired one of, if not the most successful film franchises in history. Star Wars holds a Guinness World Records title for the “Most successful film merchandising franchise”. Both films which have been released since Disney took over have performed amazingly with Star Wars Ep. VII: The Force Awakens (2015) grossing over $2 billion while Rogue One grossed north of just $1 billion.
Star Wars is the closest Hollywood gets to a guaranteed hit, so with that knowledge Disney wields tremendous power over exhibitors who wish to screen their films. A new report from The Wall Street Journal explains that the Walt Disney Company is forcing theaters which wish to show The Last Jedi, to agree to secret terms which many theater owners are calling “the most onerous they’ve ever seen.”
The reports disclose that Disney will receive 65% of revenue from ticket sales, the highest percentage a Hollywood studio has ever demanded. Theaters will be forced to screen the film in their largest auditorium for at least four weeks. In the past the studio had required 64% of revenue from ticket sales for Star Wars films and four week commitments, but typical Disney movies only require a two week commitment.
The studio will charge a 5% penalty fee, raising their take to a staggering 70% of ticket sale revenue if theaters are found breaking any condition of the agreement. Most theaters will be screening the new Star Wars film, so Disney’s secret terms won’t end up affecting the majority of theaters or movie-goers . The biggest impact will be felt on smaller theaters not the conglomerates like Regal and AMC.
With Star Wars: The Last Jedi set to hit theaters on December 15, 2017, only time will tell if these terms have a meaningful impact on Disney’s bottomline.