DIS Walt Disney Co

NBCUniversal is betting big on "Harry Potter" and "Fantastic Beasts."

In a wide-ranging seven-year deal with Time Warner Inc.'s Warner Bros. that takes effect in 2018, the Comcast Corp.-owned media company will obtain commercial television rights to the eight "Harry Potter" movies, which will air mainly on the USA and Syfy channels.

NBCUniversal also will get rights to the coming "Fantastic Beasts" franchise from "Harry Potter" author J.K. Rowling, and will be able to use the "Harry Potter" and "Fantastic Beasts" source material at several of its Universal theme parks in conjunction with its hugely popular "Wizarding World of Harry Potter" attraction.

Terms of the deal weren't disclosed, but people familiar with the agreement said it could be valued as high as $250 million, based in part on the box-office performance of the three "Fantastic Beasts" movies, the first of which opens this November. That would make the pact one of the largest for a movie franchise.

An NBCUniversal spokeswoman would only say it is the largest movie acquisition in the company's history.

Walt Disney Co., which currently holds the rights to the "Harry Potter" franchise through June 2018 and typically airs the movies primarily on its Freeform network (formerly ABC Family), sought to continue the relationship with Warner Bros.

"NBC was willing to step up significantly to acquire the franchise," said Jeffrey Schlesinger, Warner Bros. president of Worldwide Television Distribution. "It made sense to marshal all the assets we have," he added.

Besides the financial commitment from NBCUniversal, its "Harry Potter" park attractions also appealed to Warner Bros.

The "Harry Potter" movies will become available to NBCUniversal on July 1, 2018. NBCUniversal has the right to air them on all its networks, including the NBC broadcast network.

The agreement with NBCUniversal is separate from Warner Bros.' longtime pact with sister pay-TV channel HBO, which gets movies from the studio first before they migrate to commercial television.

Like all media companies, NBCUniversal is trying to figure out how to attract young audiences as consumers cut the cord or trim their monthly cable bills. USA and Syfy this season have suffered viewership declines of 11% and 21% in prime time, respectively, among viewers 18 to 49, amid declines throughout the industry, according to Nielsen.

At the same time, the company and parent Comcast have looked to emulate Disney's success in landing big franchises that work across TV, film and theme parks. NBCU hopes the "Harry Potter" deal will help on those fronts.

"When you have an iconic franchise like this, it has a lot of value," said Chris McCumber, president of NBCUniversal Cable's entertainment networks unit.

"You end up getting a younger audience who comes in to discover them," he added.

NBCUniversal also has high hopes for the 2016 Olympics in Rio, which it is telecasting on its networks. The opening ceremony on Friday drew 26.5 million viewers on NBC, a 35% decline from London's 2012 Games and the lowest-rated start since 2004.

Although the "Harry Potter" movies have been on television for years, they are steady performers, continuing to attract new generations of fans. The movies have drawn almost 1.3 billion viewers to date on television, according to Nielsen, making it the most-watched franchise in modern television history.

Popular theatrical movies have become a staple of cable television because they can provide a "comfort food experience" to viewers and require little promotion and marketing. While cable networks are becoming more cautious in buying reruns of sitcoms and dramas, the appetite for movies has only grown. In 2010 about 40 networks aired theatrical movies and now more than 60 do.

The "Harry Potter" attractions have also been a huge success for Universal's theme parks over the past six years. Annual revenue more than doubled between 2010 and 2015 to $3.34 billion and operating cash flow grew by 148% to $1.46 billion.

Earlier this year, NBCUniversal opened the "Wizarding World of Harry Potter" attraction at its Universal Studios Hollywood Park and it has proved a popular draw.

Write to Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

August 08, 2016 00:55 ET (04:55 GMT)

Walt Disney (NYSE:DIS)
Historical Stock Chart
From Mar 2024 to Apr 2024

Walt Disney (NYSE:DIS)
Historical Stock Chart
From Apr 2023 to Apr 2024