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The Disney Way with acquisitions

Disney's track record with blockbuster buyouts is nothing short of magical. How will Lucasfilm fare? Ben Parr weighs in.

Ben Parr
Ben Parr is co-founder of #DominateFund, an early-stage venture capital fund; a CNET commentator; and the former co-editor of Mashable.
Ben Parr
3 min read
What will Disney do with Yoda? Great things, I predict. Lucasfilm

"The Disney Way" often refers to the Disneyland employee handbook, which introduces staff ("cast members") to the values that embody Disney. But it should also refer to Disney's habit of making bold acquisitions and turning them into home runs.

The Walt Disney Company just sent shockwaves through the entertainment, tech, media, and finance worlds with its $4 billion blockbuster acquisition of Lucasfilm, the creators and owners of the "Indiana Jones" and "Star Wars" franchises. Lucasfilm has also provided the visual effects for countless blockbusters, including "The Avengers" (a Disney franchise), "The Hunger Games," and "Pirates of the Caribbean" (another Disney franchise).

And in very Disney-like fashion, the entertainment giant also announced "Star Wars: Episode VII" for 2015, with Episodes VIII and IX waiting in the wings.

The acquisition isn't all that surprising though, if you take a step back and look at the big picture that is The Walt Disney Company. After Coca-Cola's unsuccessful attempt to acquire Disney in 1982 (it acquired Columbia Pictures instead) and Saul Steinberg's failed buyout in 1984, Disney started making a steady stream of high-profile acquisitions. Let's check out the timeline of some of Disney's most important buyouts in the last two decades:

  • 1993: Miramax Films
  • 1996: Capital Cities/ABC (including ESPN)
  • 1996: Baseball's Anaheim Angels (renamed the LA Angels of Anaheim in 2005)
  • 2001: Fox Family Network (now ABC Family)
  • 2001: Saban Entertainment (owners of the "Power Rangers" series)
  • 2004: The Muppets (but not Sesame Street)
  • 2006: Pixar
  • 2007: New Horizon Interactive (creators of Club Penguin, now called Disney Online Studios Canada)
  • 2009: Marvel Entertainment
  • 2010: Playdom
  • 2012: Lucasfilm

Of those 12 acquisitions, 2 have been sold (Miramax and the Anaheim Angels), and 1 saw some of its assets sold (Saban Entertainment). The rest are still part of The Walt Disney family.

Let's focus on the other eight acquisitions. Out of that list, I would say that one of those acquisitions was a failure -- New Horizon Interactive, whose Club Penguin failed to meet its targets. We have yet to see how the Playdom acquisition will play out ("Gardens of Time" and its Marvel-based games are doing OK, but social gaming is just down in general), and of course we can't make a judgment on Lucasfilm yet.

However, the rest of Disney's acquisitions are thriving. Marvel's "The Avengers" is Disney's biggest success yet, and Marvel is poised to make billions with the "Iron Man," "Captain America," "Hulk," and "Thor" franchises. Pixar ranks among the best acquisitions of all time (Disney got a moneymaking machine and Steve Jobs). The new Muppets film was a financial success. ABC Family has found recent success with "Kyle XY," "10 Things I Hate About You," and "The Secret Life of an American Teenager." And let's not forget ABC itself, which was worth its weight in gold, if only because of the outrageous success of ESPN.

Disney knows how to grow its Kingdom. Disney

Six out of eight of its major acquisitions are outright successes. That's a batting average that Google could only dream of obtaining.

Acquiring great properties and plugging them into the Disney system is simply something that the entertainment giant excels at. As a result, Disney's market cap has nearly tripled in a decade, to $90 billion.

This is why I have absolute confidence that Disney will successfully leverage its acquisition of Lucasfilm into a multibillion dollar success story. It gains two incredibly valuable franchises ("Star Wars" and "Indiana Jones"), the best visual effects team in the business (Industrial Light & Magic), and a proven game studio (LucasArts). Disney knows what to do with these assets, and it has one of the most powerful merchandising operations on the planet. If you thought Lucasfilm did a good job with merchandising, just wait until Disney works its magic.

This is how Disney does business -- this is how Disney grows. It doesn't make a lot of acquisitions, but when it does, they're big and they're very successful. The Disney Way is alive and well.