A Legal Look at the Disney Purchase of Lucasfilms

Image by Thomas Hawk

As you may have heard, earlier this week, The Walt Disney Company announced its plans to purchase Lucasfilms Ltd for a purchase price of $4.05 billion with half being paid in cash and the other half in stock with Skadden, Arps and Latham & Watkins serving as legal counsel. Reading about the deal made me curious about each of the companies and the terms of the transaction, so I did a little research.

As a large, publicly-traded company, the Walt Disney Company is easy to research. While it is easy enough to pull up their company filings with the SEC’s EDGAR system, the company also has an entire Investor Relations section of their website, which provides easy access to the Company’s Certificate of Incorporation, Bylaws, and Board of Directors information. On the other hand, since Lucasfilms Ltd. is solely owned by George Lucas, it is bit more difficult to find information about the company, but some is still available. The company’s website provides information on the various divisions underneath the Lucasfilms Ltd. umbrella and basic information about the company’s status and formation date is available through the California Secretary of State website. Those interested in learning more about the terms of the transaction can check out the 8-K filing made by the Walt Disney Company on October 30th, announcing the transaction.

The transaction raises some other interesting legal issues beyond the structure of the deal itself too. Some have already voiced concerns that the sale to Disney will usher in a new, less welcoming, approach to fan fiction. Lucasfilms has been fairly open to fans creating their own Star Wars-related works. The company has even hosted The Official Star Wars Fan Film Awards and released tools to make it easier for fans to remix Star Wars content (you can read Professor Lawrence Lessig’s thoughts on it, and the terms users had to agree to in order ot use the tools, here). This policy has led to some fun creations, such as this ad for the Law Office of Lando Calrissian. Based on past enforcement actions, some believe Disney will be less receptive to these types of works. Another interesting aspect of this deal is that George Lucas has announced that he plans to put the majority of his proceeds from this sale into a foundation to work on funding education initiatives, which leads to interesting questions about how he may structure such a donation.

For now, more information probably won’t become available unless and until the deal passes Hart-Scott-Rodino review and is finalized, but in the meantime, you can continue your legal contemplation of Star Wars by reading this analysis of whether Han was legally justified in shooting Greedo from the Legal Geeks (since we all know Han shot first).

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