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My DD on George R. R. Martin, The Winds of Winter, and potential impacts on the stock market in 2021 : UKInvesting

Thanks to u/SlickMongoose for pointing out I said Dance with Dragons and not Winds of Winter.

If there’s two things I love it’s investing and Game of Thrones, so I thought why not combine them both.

In his New Years blog post, George R. R. Martin, the author of the books, said how he had written ‘hundreds and hundreds’ of pages of the latest book The Winds of Winter in 2020 and how he hoped he would be able to finish and release it this year.

For those of you who don’t know, this book has been heavily anticipated for the best part of a decade and has been delayed many times because of the complexity of writing it. It has taken the longest to write of any of the books so far by a country mile.

Well how can this create an investment opportunity? Here’s how.

In the US and Canada, GoT is published by Bantam which is part of a privately owned conglomerate.

BUT, in the UK, Australia and elsewhere, GoT is published by HarperCollins, which is a subsidiary of Rupert Murdoch’s News Corp., which is publicly traded.

Now for the maths:

90 million copies of GoT have been sold, and with 5 books released that’s 18 million copies of each book. Given that the last book was published before the show took off, chances are that readership will increase dramatically for the upcoming release. I’ll say half of these, 45 million, were sold outside of the US and Canada, so 9 million copies per volume.

Now, the average an author can expect to receive from a sale of one of its books is around 10%. Therefore, the remaining 90% is revenue that is split between the publishers and distributors.

Using the RRP of a single volume of GoT on Amazon UK as £10 (~$13), this equates to £9 revenue per copy to split between distributors and publishers. A distributor will probably take £1/£2 of that and there’s also tax included because it’s the UK. I’ll be pessimistic and call it £6/$8 revenue per copy to the publisher.

Therefore, $8 x 9,000,000 = $72 million in revenue in the weeks immediately following release.

There are several reasons why this is a VERY conservative estimate:

  1. It is the norm for new releases to be hardbacks, which are often double the price of the paperbacks. This could see a RRP of around £20/$25.

  2. Given that the last book was published in 2011, and the hype over how the series ends is far greater nowadays, the likely sales volume will dramatically exceed all precedents.

  3. Given how hyped the release will be, it will likely attract many more readers to the franchise, and thus, sales of all 6 volumes.

The net income of News Corp. in 2019 was $229 million dollars, so using my most conservative figures, this spike in sales would cause a significant spike in the stock price.

This will be a release akin to Harry Potter and the Deathly Hallows in 2007, but I don’t know how to look up historical stock data to see how that affected the stock price. If anyone does I’d be very grateful.

I know this isn’t yet a fully formed argument that Game of Thrones will create an investment opportunity, and there are several issues, like the sheer size of News Corp. as a company and the many things that could influence the stock price, so I’d be really interested to see what people think. All feedback is welcome.

Valar Morghulis.

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