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‘Star Wars: The Force Awakens’ Box Office Can’t Lift Disney, Theater Stocks

Star Wars Episode VII The Force
Courtesy of Disney/Lucas FIlm

UPDATED: Record-breaking box office results for “Star Wars: The Force Awakens” couldn’t lift shares of the Walt Disney Company.

The media company behind the seventh film in the space fantasy franchise saw its stock close Monday down 1.05% to $106.59. Disney spent $4 billion in 2012 to acquire Lucasfilm, the company behind the “Star Wars” series, and plans to create a new trilogy of films as well as spinoff pictures.

“It’s frustrating, but it’s not surprising,” said Matthew Harrigan, an analyst with Wunderlich Securities. “The karma on media stocks is so bad right now.”

Analysts expect that “The Force Awakens” could make nearly $2 billion at the box office and sell as much as $5 billion in merchandise. The film had the biggest global opening in history, making an estimated $528 million worldwide in its first weekend.

But Disney has been hit hard by concerns that ESPN, its popular sports network, may have its earnings power diminished by cable subscriber defections. On Friday morning, a BTIG Research report argued that ESPN had overpaid for broadcasting rights to certain sports events at a time when the company stands to lose affiliate revenue.

In an interview with Bloomberg on Monday, Disney CEO Bob Iger downplayed the anxiety over ESPN’s longterm prospects.

“It’s clear that television is experiencing some disruptive sources shall we say?” said Iger. “Lord knows what impact just calling it disruptive forces will have. But it’s clear that’s happening. There’s just so much more competition. … We feel long-term ESPN will be just fine.”

Disney’s shares fell nearly 4% heading into the weekend, but the Dow Jones Industrial Average also fell that day due to growing fears of falling global oil prices and a negative reaction to the Federal Reserve’s interest rate hike.

Exhibitors weren’t benefiting from the “Star Wars” phenomenon either. Major theater chains, such as Cinemark (-0.71%), AMC(-2.58%) and Regal (-1.60%), all saw their share prices dip on Monday. Carmike Cinemas closed Monday up 0.76% at $22.64.

The Dow, the NASDAQ, and the S&P 500 all closed up on Monday following the stock slide.