Harry Potter Mania Is Coming Back to Time Warner and Comcast

Movies and theme parks two areas Harry Potter continues to hit 13 years after his big screen debut.

May 31, 2014 at 9:00AM

Attention all muggles, wizards, and fans of Harry Potter: there are more stories and thrills to come for the franchise that grossed more than $7 billion worldwide. Fans will be happy to check out new movies and theme park attractions. Investors should be excited about the possibilities coming for Time Warner (NYSE:TWX) and Comcast (NASDAQ:CMCSA).

More Harry Potter movies = high box office for Time Warner
Daniel Radcliffe isn't heading back to the big screen to reprise his role of Harry Potter. The popular franchise is getting a new trilogy, however,  based on the "Fantastic Beasts and Where to Find Them" book. The first movie will be set 70 years prior to the first Harry Potter film and will hit theaters on Nov. 18, 2016.

Time Warner CEO Kevin Tsujihara persuaded Potter author J.K. Rowling to turn the "Fantastic Beasts" plot into a movie. It helps that the prior eight movies grossed $2.4 billion in domestic markets and $5.3 billion in international theaters. The films averaged almost a billion dollars each in box office revenue. The most recent film, Harry Potter and the Deathly Hallows Part 2, grossed $381 million in domestic markets and over $1.3 billion worldwide. The film ranks as the fourth-highest grossing movie of all time worldwide.

The strength of Harry Potter led to many successful years of box office dominance for Time Warner. The movies released in 2001, 2002, 2004, 2005, 2007, 2009, 2010, and 2011 all led the box office their respective years, with the exception of 2011. In fact, Time Warner has only failed to lead the box office in three years since 2001.

Time Warner saw revenue increase 4% to $29.8 billion in the last fiscal year. The Warner Brothers film division made up $12.3 billion of that total. Despite shares of Time Warner trading close to 52-week highs, there are two big reasons investors should get excited about the company's future. The addition of Fantastic Beasts in 2016 now makes the year one to remember for the company, going along with the highly anticipated Batman vs. Superman: Dawn of Justice. Batman vs. Superman is one of several DC Comics adaptations coming in the future, which will help pad box office profits going forward.

Later in June, Time Warner will finally split off its underperforming Time division, which owns several popular magazines. Time has seen revenue and profits decline, and stripping away this division will help Time Warner's growth and operating margins going forward.

Comcast sees lift in Theme Park segment via Harry Potter
The strength of The Wizarding World of Harry Potter at Universal Studios Orlando is leading the expansion of the Comcast segment. Soon, the two Florida Universal theme parks will be connected via the Hogwarts Express, a train themed around the train in the Harry Potter movies. By 2016, a new $200 million expansion at the Universal theme park in California will include Harry Potter rides and attractions.

Universal theme parks play a minimal part to Comcast's annual revenue and operating profits. While the theme park segment won't overtake other important Comcast segments, it will continue to see strong growth going forward, with several international deals still in play. A theme park in Japan will have  the first international version of The Wizarding World of Harry Potter, with a cost of $500 million and an opening date in late 2014. Theme park expansion continues with planned Universal Studios parks in South Korea , Dubai, and Beijing .

The theme park in China may be one of the biggest items in Universal's theme park segment. Disney is set to open Disneyland Shanghai by the end of 2015. Not to be outdone, a Universal park is set to open in January of 2018, with construction scheduled to start the end of 2014. Universal has partnered with Beijing Tourism Group and should see a substantial return on their investment as the park opens and sees strong attendance numbers.

In fiscal 2013, Comcast saw revenue grow 3.3% to $64.7 billion. Theme parks saw strong growth of 7.2% to $2.2 billion. While theme parks make up only three percent of revenue, the operating cash flow comes closer to 6% thanks to strong growth of 5.3% in fiscal 2013. First quarter revenue also grew 5.4% in the theme park division, thanks to an increase in per capital spending. The company cited strong performance for the fiscal year "driven by continued success of The Wizarding World of Harry Potter."

Final Thoughts
Theme park attendance should continue to pick up for Universal as more Harry Potter rides and attractions are built. The theme park segment should continue to see increased revenue and operating profits as more international parks are built where Universal acts as more of a partner that gets licensing fees. Time Warner continues to be a strong media bet for upcoming growth. With a stable backlog of DC Comics-related movies, the addition of the "Fantastic Beasts" trilogy adds to an exciting blockbuster potential for the company and shares of Time Warner going forward. 

Your cable company is scared, but you can get rich
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple. 

 

Chris Katje has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers