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How Cinderella's $70 Million Opening Could Be Worth Twice As Much For Disney

How Cinderella's $70 Million Opening Could Be Worth Twice As Much For Disney
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Walt Disney Co (NYSE: DIS) celebrated another theatrical win last weekend with the debut of "Cinderella." The live-action remake proved to be box office gold, earning $70 million from domestic theaters.

Ticket sales may only be half of the revenue that Disney earns, however.

"For every dollar Disney generates in the box office, they generate an additional dollar in the rest of the empire through consumer product sales and incremental theme park attendance," Needham analyst Laura Martin told Benzinga.

The film has earned $62.4 million overseas, bringing global box office receipts to $132.45 million. Based on Martin's estimates, Disney's revenue should actually be $264.9 million.

The long-term earnings could be astronomical. "Maleficent" made $758.4 million worldwide. If "Cinderella" continues to excel, it should make at least that much. This would provide Disney with more than $1 billion in total revenue ($758 million in ticket sales + $758 million in merchandise/park attendance = $1.5 billion).

Disney's next big movie, "Avengers: Age of Ultron," arrives in theaters on May 1, 2015. The original "Avengers" earned $1.5 billion during its box office run in 2012.

Related Link: Why Disney's Apple-Google Deal Isn't A Big Deal

Everything Old Is New Again

Albert Fried & Company Director of Research Rich Tullo said that "Cinderella" demonstrated the power of Disney's content portfolio.

"They're taking the old programming and old rights they've had and refreshing them and they're doing great," said Tullo.

Looking ahead to other big properties, Tullo did not seem too worried about Disney's decision to rush the release of future "Star Wars" films.

"If you look at what Lionsgate has done with 'The Hunger Games' and their other franchise, 'Divergent,' it's the trend," he said. "Long-term, it's harder because you need to have something for the end of it."

Tullo is concerned that this strategy may not be beneficial long-term, but there might be a good reason for Disney to move quickly.

"Maybe it makes it more imperative that you watch the first one, 'cause the next one is coming out so soon," Tullo said of the upcoming Star Wars films.

"Star Wars - Episode VII: The Force Awakens" will be released on December 18, 2015. "Star Wars: Rogue One," the first standalone movie, is due in December 2016. "Star Wars - Episode VIII" has been scheduled for May 26, 2017.

By comparison, part one of "Avengers: Infinity War" will not arrive until May 4, 2018 -- three years after the first sequel.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Latest Ratings for DIS

May 2018B. Riley FBRMaintainsNeutralNeutral
Apr 2018BMO CapitalUpgradesUnderperformMarket Perform
Apr 2018Pivotal ResearchUpgradesSellHold

View More Analyst Ratings for DIS
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