2013 was one heck of a year for Disney (NYSE:DIS). The company's stock closed the unlucky-numbered member of the 2000s near its 52-week high, which meant that it was in the mid-$70 price range. For those who remember when the shares seemed they would be stuck in an obnoxious range closer to the mid-$30s forever, this is just an amazing achievement.
A lot of the company's success can be traced back to CEO Bob Iger's acquisition strategy. Although I am not a true fan of that strategy -- I personally feel that we could have gotten to these levels by focusing on innovation over purchases, but that's a story for another day -- I would have to assume that a lot of the institutional interest that is pushing the stock higher and higher is rooted in the collection of assets that Iger has accumulated during his tenure.
One such asset is Lucasfilm. Besides the "Star Wars" stuff that came with it, the company also controls the "Indiana Jones" IP that fanboys and gals go wild over. 2013 was the year that saw Lucasfilm buy back certain distribution rights from Viacom's Paramount film division so that Disney would be able to proceed with a new "Indiana Jones" adventures sometime in the next few years. Tim Beyers mentioned this in a previous article, and he also asked an interesting question: Is Disney going to bring back Harrison Ford, Mr. Jones himself?
Don't do it!
Disney easily could bring Ford back. The nonsense that he's too old for the role is just that: nonsense. Here's a little secret: Ford is playing a character, he isn't actually doing all the daredevil stuff that's going on in the film. Audiences know this and can simply intellectually accept that Indiana Jones, even as an old guy, is that rare individual who can still be the superhero archaeologist. The last film, which contained interdimensional aliens and the refrigerator on the nuclear testing site, possessed a few references to the character's age. I thought that was superfluous. Jones is Jones, and he's simply a spry elderly adventurer as far as I am concerned.
Here's why Disney shouldn't bring Ford back, though: the company needs to make the movie as cheaply as possible. This would also be the reason Steven Spielberg and George Lucas should be given the boot, too.
Disney can't just collect assets. The company and its execs have to manage them properly for profit maximization. I get that everyone is excited about Lucasfilm and Marvel, but now is the time for specific ideas to be put in place that bring costs down. That's what it's about at this point: bring costs down so that the most can be made of these big brands.
Either "Indiana Jones" is a brand or it isn't. If it is, then it doesn't matter who is in it. Some might think a Bradley Cooper should be the next Jones, or maybe even Johnny Depp; maybe even some would love to see Tom Selleck finally be given the chance! (No one wants to see Shia LaBeouf in the role, though, I'm pretty sure of that.)
Brand equity trumps even Harrison Ford
You know who I want to see play Jones? Someone that no one has ever heard of. Whoever that might be. Just find the best unknown out there and be done with it. Find an economical director, an unknown screenwriter, and similar low-cost talent and we're in business.
Going against the grain like this might seem foolhardy, and it very well could be. Risk, however, is part of Hollywood. I would rather take the chance of casting an unknown from the Disney Channel so that my shares could benefit in the best possible way should the film turn out to be a big hit. Let's be honest: Indiana Jones and the Kingdom of the Crystal Skull grossed $786 million globally back in 2008, according to Box Office Mojo. Could Disney go too wrong with a Ford/Spielberg/Lucas-less "Indiana Jones" film after that? I doubt it.
Iger seems to have, at the moment, all of the cool assets he wants. Granted, when the next CEO takes the reins in a couple years, he or she might continue looking at media assets to add to the portfolio. For now, the main goal should be to cut costs wherever possible, increase the exploitation of the assets by banking on brand equity over talent equity, and to roll the dice. If the first unknown-actor-driven "Indy" film doesn't work, that's OK -- make another one. It's unlikely, though, that using an unknown is too much of a risk since casting agents employ a combination of strict science to go along with the art of selection. In other words, Disney works with smart professionals, and it won't let unqualified thespians step into a role that has been made iconic over the past 30+ years.
Sorry, Mr. Ford, you may not be worth it
Harrison Ford is a great actor. There's no question about it. But his presence in a film doesn't guarantee success; it only guarantees a big payday for Harrison Ford. Recently, my portfolio was banking on a film that was supposed to be a huge hit in part because he graced its frames with his presence.
I am, of course, talking about Lions Gate Entertainment's (NYSE:LGF-A) Ender's Game. The movie grossed $112 million worldwide (at the time of this writing) against a reported budget of over $100 million (according to Box Office Mojo.) Remember the hype on that one? It was sold on its potential to be a significant cultural event at the cinema, but it fizzled instead.
Again, failure is fine, so long as one is hedged as much as possible. Keeping Ford away from the next "Jones" film is nothing less than exercising financial prudence.
If he wanted to work for a few million dollars and no profit participation, give him the fedora and the bullwhip. It's doubtful that he'd take the cut in salary, though. For that reason alone, I do not want Harrison Ford in the next "Jones" project. Buying Lucasfilm is not the stroke of genius in and of itself -- the genius is in how the expansion of the intellectual properties contained within that company is handled.