‘Star Wars: The Force Awakens': Breakdown of Box-Office Records

20 Jan 2016 | Author: | No comments yet »

‘Star Wars: The Force Awakens’ reflects our diverse, modern world.

J.J. The strong opening weekend at the box office for Star Wars: The Force Awakens could boost profits at Walt Disney Co. by US$1.1 billion, and it also provides the company with another franchise to leverage across its consumer products and parks businesses. Abrams’ movie — relaunching the marquee sci-fi franchise — comes in ahead of estimates after scoring the biggest Sunday of all time in North America, where its opening is now pegged at $247 million or higher. After collecting US$238 million in Canadian and U.S. ticket sales on opening weekend, breaking the previous record of US$208 million held by Jurassic World, the global total for the latest Star Wars movie stood at US$517 million as of Sunday.

Interviewed by Entertainment Weekly following a US screening for the Writers Guild of America over the weekend, the film-maker revealed that the Scottish actor recorded new lines of dialogue for a key flashback scene involving Daisy Ridley’s Rey. It beat out Universal’s “Jurassic World,” which made $208.8 million when it premiered this summer. “The enthusiasm has really turned into a cultural event,” Dave Hollis, Disney’s executive vice president of theatrical distribution, said in a statement. “It’s unbelievable.” “It feels historic.

The marketing team has embarked on a two-plus year journey to create this event feel,” he added. “It’s hard to think you could replicate this, but never say never.” The original Star Wars is also included on my “best of all-time list” and after watching the latest film, I think I’ll watch the original over the holidays to determine which film was the best.

But that doesn’t include Disney’s other businesses, particularly since it has two Star Wars themed lands at its amusement parks. “…The successful theatrical revival of Star Wars kicks off a multi-year, cross-divisional, hugely profitable franchise for Disney,” she said. “…We believe Disney shares remain attractive given the company’s growth profile and unparalleled ability to monetize intellectual property over the long-term across its divisions.” The voices of both Obi-Wan Kenobi and Yoda can be heard, with the former telling the young scavenger: “Rey … these are your first steps.” Abrams revealed: “Here’s the cool part. While “The Force Awakens” drew enormous pre-sales, the film was kept under lockdown from the press and critics until mere days before it was released to the public. The second sign arrives when a Stormtrooper removes his helmet to reveal the face of a black man, English actor John Boyega, whose character, Finn, emerges as a conflicted combatant central to the action.

Rentrak’s Senior Media Analyst Paul Dergarabedian said that’s the key element that may push the film to the $2 billion mark by the end of its run. EPR Properties (NYSE:EPR) – formerly known as Entertainment Properties Trust – went public in November 1997 and is a ~$5.8 billion REIT (based on total capitalization) based in Kansas City. You can still break records with one gender being the dominant one.” He predicted that over time, Daisy Ridley’s protagonist may help even the gender breakdown. With gross assets of around $4.2 billion, EPR is the largest owner of entertainment-related real estate, with a large concentration in the theater industry, comprising 49.6% of its total portfolio (based on NOI), as well as charter school properties (17%), ski hills (8.4%), entertainment retail centers (12%), and other sub-sectors.

EPR is a specialty REIT that invests in properties in select categories which require unique industry knowledge, while offering the potential for stable and attractive returns. The breadth in casting extends beyond the leads to supporting roles, including gifted rebel pilot Poe Dameron, played by Guatemala-born actor Oscar Isaac; Maz Kanata, a computer-generated, thousand-year-old female pirate with Yoda-like wisdom, played by Kenyan Oscar winner Lupita Nyong’o; and fearsome Stormtrooper commander Capt.

The performance so far of Force Awakens is a massive victory for Iger and Disney’s film studio. “Our sole focus has been creating a film that delivers that one-of-a-kind Star Wars experience, and director J.J. Women and people of color are well represented in background roles too — as pilots, medics and politicians who flash on-screen for glimpses but together paint a portrait of a world where those kinds of jobs are accessible to diverse groups of people. Abrams’ sequel, set 30 years after the events of Star Wars: Episode VI — Return of the Jedi, features a strong female heroine in Rey, a young scavenger played by newcomer Daisy Ridley. Typical gender roles are inverted in this “Star Wars” — in the one moment in the film when a character shakes silky tresses out of a helmet, it is long-haired “Girls” star Adam Driver as the mysteriously angry villain Kylo Ren.

A few years back, EPR changed the name of the REIT to reflect the company’s growing transition into other asset classes beyond entertainment (a.k.a., theaters), specifically education (a.k.a., charter schools) and recreation (a.k.a., differentiated retail). As someone who has long wondered where women in space go to get great blowdries, I’m relieved to see a science fiction world where men finally enjoy such a service too. The film also stars Oscar Isaac, Adam Driver, Lupita Nyong’o and Domhnall Gleeson, along with original trilogy stars Harrison Ford, Mark Hamill and Carrie Fisher. Some of the movie’s most satisfying scenes center on the growing friendship between Harrison Ford’s Han Solo and Ridley’s Rey, who share a knack for the mechanical.

At this rate, there’s no telling how high Force Awakens will ultimately fly in terms of box-office revenue, since films over the year-end holidays can see huge multiples. When an impressed Han offers Rey a job, the frisson between older man and younger woman comes from mutual respect, not sexual tension — a theme that also pops up in Nancy Meyers’ “The Intern” between characters played by Robert De Niro and Anne Hathaway. Signature theaters represent a majority of EPR’s revenues and the REIT’s focused income strategy provides investors with considerable growth opportunities.

The idea, Arndt revealed at a post-screening Q&A, picked up on a scene in 1977’s Star Wars in which the astromech droid is able to scan the Empire’s mainframe while the heroes hunt for Princess Leia on a star ship. “We had the idea about R2 plugging into the information base of the Death Star, and that’s how he was able to get the full map and find where the Jedi temples are,” said Arndt. As a landlord for AMC Entertainment, Cinemark Holdings (NYSE:CNK), and Rave Cinemas, EPR has targeted its core income strategy around leasing facilities to specialized sector specific chains. Carrie Fisher’s Princess Leia is now General Leia, who brings a warmth and steadfastness to her command, and she shares a brief but meaningful scene with Rey.

Added Abrams: “BB-8 comes up and says something to him, which is basically, ‘I’ve got this piece of a map, do you happen to have the rest?’ The idea was, R2 who has been all over the galaxy, is still in his coma, but he hears this. Why wouldn’t we make our picture available?” said Chris Aronson, Fox’s president of domestic distribution as to why they released their film “in the teeth of the hurricane.” In third place, the Tina Fey and Amy Poehler comedy “Sisters” earned an estimated $13.4 million out of the gates. And it triggers something that would ultimately wake him up.” Continued Abrams: “While it may seem, you know, completely lucky and an easy way out, at that point in the movie, when you’ve lost a person, desperately, and somebody you hopefully care about is unconscious, you want someone to return.”

This is the biggest overall weekend in box office history with combined grosses north of $300 million, putting 2015 in range of becoming the first $11 billion year in history. Nevertheless, Leia, for all of her pioneering action scenes, never got to wield a lightsaber, nor did she have access to the power of the Force the way her brother, Luke Skywalker, did.

With enhanced content presentation in virtually every EPR facility, customers are attracted to alternative content that increases ticket sales, including utilization of sports, concerts and special events revenue. The recreational category consists of 27 properties (100% leased) including 10 Metropolitan ski areas, 5 Waterparks, and 12 Golf Entertainment Complexes. The ski properties have enjoyed strong multi-year performance, and the recent cold weather has positively impacted the resorts – attendance through January 2014 is up 18% over the prior year. Strict Bechdelists may disagree, but for me it passes, because the female characters are talking about the Force.) Boyega’s portrayal of Finn, meanwhile, is a gigantic leap for a nonwhite character in this universe. New and innovative learning models provide students with alternative sources of education that has resulted in a national waiting list of almost 1 million students.

This project was the only “nose bleed” for EPR in 2013 (negative NOI for this project of $1.2 million); however, the company announced “new life” and as a result, the Adelaar project is now underway. The new project, located 90 miles from New York City, is estimated to create nearly 5,000 jobs and will sit on 1,700 acres of land at the site of the former Concord Resort. The approval of the gaming regulations paves the way for the issuance of a gaming license with the Adelaar casino and resort project sometime during the fourth quarter of 2015. (source: Q3-15 earnings call).

At quarter end, EPR has $1.2 billion of unsecured bonds, all with about $271 million of this debt is either fixed rate debt or debt that has been fixed through interest rates swaps with a blended coupon of approximately 5.2%. EPR is committed to low leverage (35% to 45% of gross book value) and the company maintains flexible funding sources (common, perpetual preferred, convertible preferred). During Q3-15, EPR borrowed the remaining $65 million available under the $350 million term loan portion of this facility and prepaid in full 7 mortgage notes payable totaling $66.3 million but had an average annual interest rate of 5.74%. Here’s a snapshot of EPR’s historical AFFO per share performance: EPR provided 2016 FFO guidance of $4.70 to $4.80 per share (The Street was $4.73) and the midpoint of guidance implies 7.1% FFO growth in 2016.

Investor perception has improved, and now that the company has a new CEO in place (Gregory Silvers), I expect to see continued progress in de-risking the balance sheet. I currently own shares in O, WPC, GPT, STAG, and LXP – all Net Lease REITs – and I am not increasing my exposure in EPR given my current allocation levels. However, I’ll make the reference a pitch for investors owning REIT shares – an asset class with highly predictable income attributes – since by law, REITs must payout at least 90% of taxable income (in the form of dividends).

As I have no knowledge of individual investor circumstances, goals, and/or portfolio concentration or diversification, readers are expected to complete their own due diligence before purchasing any stocks mentioned or recommended.

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