Meanwhile, the battle for the Star Wars license heats up with huge $$$ at stake:
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Monday February 10 8:23 AM EST (c) Reuters/Variety
George Lucas Ups Ante In Toy Game
By Gary Levin
NEW YORK (Variety) - On the heels of a huge reopening for the 20-year-old Star Wars, another intergalactic battle is shaping up on the toy front.
Hasbro and Lewis Galoob Toys currently share rights to the sci-fi trilogy's toy line, which has sold an estimated $2 billion at retail and is expected to generate $500 million more this year.
But Lucasfilm, which produced the trilogy and controls merchandising rights, has invited giants Mattel and Playmates Toys to its play yard, sources said, in an attempt to boost the upfront payment it collects for granting rights to the film's characters.
All four toy makers are eyeing future returns from a new "Star Wars" prequel trilogy, now in development. The first film in this series is due out in 1999. And for them, the Luke Skywalker saga has special significance, as it ushered in the modern age of movie merchandising. The four-way competition is generating buzz at the International Toy Fair, which opens Monday in New York, crowding out a host of new films also looking for marketeers' attention.
A Lucasfilm spokeswoman declined to comment about the contracts, due to expire within the year. But industry sources said Mattel and Playmates already have pitched deals to the company, providing enough leverage against the incumbents that Lucasfilm stands to collect an astounding $100 million-plus in upfront guarantees against a royalty rate nearing 15%.
Average toy royalties are in the 7% range, with movie tie-ins hovering around 10%, and highly sought-after licenses by Disney worth 17%. Mattel last year signed a long-term exclusive contract with Disney after the Mouse House invited a similar counterproposal from Hasbro. This summer's Hercules is the first film in the new Disney-Mattel pact, and a separate deal between 20th Century Fox and Galoob kicks in with this fall's Anastasia.
But Star Wars far exceeds potential licensing revenues from those films, and its estimated $69 million haul from two weekends of re-release places it within $8 million of the No. 1 spot on the all-time domestic grossers list. "E.T. - The Extraterrestrial" is the reigning champ with $399.8 million.
20th Century Fox is distributing the current reissues of the first three films and is expected to get the OK for the second trio, but much to its chagrin, the studio has no stake in merchandising revenues. A Lucas decision as to whether to shift toy companies is expected in about a month.
(c) Reuters/Variety |
