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Article / 09 August 2016 at 13:34 GMT

Harry Potter and the seven-year merch deal

Editor / Saxo Bank
  • ComcastCorp’s NBC Universal picks up Harry Potter, Fantastic Beasts rights
  • Deal will let firm screen films on cable networks, build on theme park properties
  • Scale of deal, age of series points to film industry conservatism
Harry Potter and the Deathly Hallows, Part II
According to author J.K. Rowling, Harry Potter nemesis Lord Voldemort's worst fear is death. Given his box office numbers, he has nothing to worry about. Photo: iMDB, Time Warner

By Michael McKenna

Comcast Corporation's NBC Universal picked up the rights to Time Warner’s Harry Potter and Fantastic Beasts franchises yesterday in a deal that the LA Times says is worth “between $200 and $250 million (depending on the box office success of Fantastic Beasts)”. 

At the deal’s core is an arrangement that will give NBC a seven-year window in which its cable networks will have the exclusive right to air the eight extant Harry Potter films as well as the upcoming Fantastic Beasts movies, also the creation of British writer J.K. Rowling. The deal will also let NBC’s theme parks, such as Universal Studios Hollywood, host fan events, screenings, and promotional events.

Revenues at the Universal Studios park in Southern California have already been boosted, reports Bloomberg, by a new attraction called “The Wizarding World of Harry Potter™” which allows patrons to sample a simulation of the characters magical world while (perhaps most crucially) selling Potter-themed merchandise. 

Indeed, speaking at the release of Comcast's second-quarter report in June, CEO Brian L. Roberts highlighted the magic effect Harry Potter has had on earnings since the initial link-up with the brand: "NBCUniversal achieved solid results, driven by strength in our TV businesses and Theme Parks, which benefitted from the successful opening of The Wizarding World of Harry Potter™ in Hollywood. I am excited about the opportunities ahead for our company."
The deal is emblematic of its era in a few ways, from the sheer multiplicity of the brand names involved – NBC Universal is owned by Comcast and will show the films on its USA and SyFy networks; the rights are currently licensed to Disney’s Freeform, previously known as ABC Family, and are owned by TimeWarner – as well as its profound conservatism.

After all, while forecasters expect a strong showing from the first Fantastic Beasts film at its November premiere, the core of the $250 million NCB Universal/Time Warner deal is the proven series of Harry Potter megahits. The deal came about to the value still inherent to these characters, whose nostalgia value and prominence as cultural touchstones is still expected to prompt cable-watchers to tune in, moviegoers to attend re-screenings, and consumers of all stripes to buy merchandise.

It is a fragment of a film industry that, unlike its small-screen counterpart, has come to rely on enormous, intergenerational franchises at the expense of new content, and as such its character is essentially dynastic. 

At the November premiere of Fantastic Beasts, there will doubtlessly be young fans whose parents watched the first Harry Potter film as young teenagers back in 2001; 15 years before, say Star Wars, Universal's top-grossing film was That Touch of Mink, starring Cary Grant. 

As large an outlay as $250 million is, it must be taken in the context of Comcast, a corporation that reported $74.51 billion in revenues last year. As such, the fact that Comcast shares slid by 0.47% in yesterday’s New York session has no significant correlation to the announcement. There are just too many moving parts.

(Time Warner shares, strangely enough, lost 0.47% on the day as well).

At the same time, however, the Harry Potter films ascended to their Star Wars-esque heights of prominence based on extraordinary box-office results; not one of the eight films made less than $900 million in total box office returns, and 2011’s Harry Potter and the Deathly Hallows: Part II returned a staggering $1.34 billion.


The Harry Potter franchise has become every bit as
iconic as the Star Wars universe. Photo: iStock

Given the continued value of the Harry Potter universe and its characters, and the likely success of its Fantastic Beasts spinoff, the cable and theme park revenues from this franchise could continue to provide Comcast with significant return on its investment.

A glance across the Atlantic ocean to Denmark where Lego provides a very promising precedent. Back in 2004 the iconic Danish toymaker ran into serious trouble as children increasingly shunned traditional toys in favour of video games and electronic devices. The trend pushed Lego into the biggest annual loss in its (then) 73-year history and had it tottering on the edge of bankruptcy. 
However, under a new chief executive (the first non-family boss of this privately held firm), Lego expanded into big-brand franchises – first "Star Wars" later "Indiana Jones" and "Winnie the Pooh" and later still "Harry Potter". 

Now, in addition to its boxed sets of traditional bricks, Lego pumps out a constant stream of videos, games and figurines based on its franchise characters and has also built up a very significant internet footprint that exposes the company and its products to more potential customers around the clock. 

The bottom line impact has been powerful. From a net loss of DKK1.9bn ($328m) in 2004, the franchise characters swung Lego into a profit of DKK 7.03bn ($1.07bn) in 2014. Now that's magic.

Is Lego showing Harry the way? photo: iStock

Michael McKenna is an editor at

Additional reporting by Clare MacCarthy


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