Marvel Hasbro Spider Man Crawling Toy

Spider-Man is one of the world's richest licensing brands, of which Disney now owns 100%. Credit: Marvel Entertainment.

The annual shopping ritual is almost upon us. Black Friday is when retailers that have spent most of the year in the red find their way to profitability. A good number of them will be hawking merchandise from Walt Disney (NYSE:DIS).

According to License Global! magazine, Disney imprints accounted for more than $40 billion in retail sales last year -- more than double PVH Corp. (NYSE:PVH), its next closest competitor, and over four times more than fifth-ranked Mattel (NASDAQ:MAT). Here's a closer look at how each of the top five has performed over the past three years: 

Top 5 Licensors
2013
2012
2011

Disney

$40.9 billion

$39.3 billion

$37.5 billion

PVH Corp.

$18 billion

$13 billion

$10 billion

Meredith

$16.6 billion

$11.2 billion

Not available

Iconix Brand Group

$13 billion

$13 billion

$12 billion

Mattel

$9 billion

$7 billion

$7 billion

Source: License Global! magazine.

To be fair, some of Disney's growth is the result of its 2012 acquisition of Lucasfilm, which on its own had accounted for $3 billion in imprint sales in 2011. What happens with all that cash? Disney's Consumer Products segment collects a portion via licensing and merchandising contracts.

Tens of thousands of deals spawn billions in revenue each year. In fiscal year 2014, Consumer Products generated just under $4 billion in revenue and $1.36 billion in operating profit. That's up from $3.6 billion and $1.1 billion, respectively, in the year prior, according to data supplied by S&P Capital IQ.

Count last year's rich deal with Hasbro for Marvel and Star Wars toys among the more recent catalysts. Related clothing and specialty items should do just as well on Black Friday and carry all the way through to Cyber Monday, if CafePress' top sellers lists for movies and entertainment are any indication.

Hasbro Star Wars Command Sdcc Photo

At San Diego Comic-Con, Hasbro introduced fans and collectors to Star Wars Command. Credit: Tim Beyers/The Motley Fool.

Why licensing is so important
"The Marvel slate that we just announced, what we talked about with Star Wars, they will be [drivers of Consumer Products revenue] as well. But then we have other creative content engines of the company that are also helping Consumer Products. Disney Junior is another example of that, when you look at Doc McStuffins and a variety of other product coming out of the Disney Channel organization. So Consumer Products right now has a wealth of properties or intellectual property to mine across ... many categories," CEO Bob Iger said in a response to a question about the division during the most recent earnings call.

Here are three more things you might not know about Disney's Consumer Products business:

1. Spider-Man is a huge catalyst. According to data compiled by The Licensing Letter and reported by The Hollywood Reporter, Marvel's wall-crawler generates $1.3 billion in annual retail sales. That's bigger than Batman ($494 million) and Superman ($277 million), which can't be pleasing to Time Warner (NYSE:TWX) and DC Entertainment chief Diane Nelson.

But this is a bigger win for Disney than it is a loss for Warner. Disney Chief Financial Officer James Rasulo cited Spidey and merchandise based on Frozen as catalysts for Consumer Products sales in fiscal Q4. Repurchasing exclusive merchandising rights from Sony in 2011 helped Disney cash in on May's release of The Amazing Spider-Man 2.

2. We're only two years into the Lucasfilm deal. Disney Consumer Products has grown asymmetrically in recent years, with gains accelerating since Marvel's The Avengers took theaters by storm. Fiscal year 2012 revenue for the division improved $203 million over the year prior. Fiscal year 2013 revenue improved another $303 million while fiscal year 2014 added $430 million. The message? Build a world that fans want to play in -- which the Marvel Cinematic Universe is -- and you can sell a lot of licensed products to satisfy their craving. Expecting anything less from Disney's expanded Star Wars universe would be folly.

3. Pixar is out of the picture -- for now. Once a huge driver of both studio and licensing profit, Pixar has settled into the background at Disney over the past year. That changes next June when Inside Out enters theaters. The Good Dinosaur arrives just five months later, followed by Finding Dory in June 2016 and Toy Story 4 in June 2017. New lines of toys, games, and wearable merchandise will coincide with the release of each one of those films.

With the National Retail Federation estimating a 5% year-over-year increase in spending -- or $804.42 per person -- Black Friday is going to be a bonanza for a lot of retailers. Yet none of them stands to win as big as Disney.

 

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google (A and C class), Netflix, Time Warner, and Walt Disney at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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