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Have JK Rowlings’ trans comments cursed the Harry Potter business empire?

Bloomsbury, AT&T and Comcast have all built up significant exposure to the Wizarding World
Have JK Rowlings’ trans comments cursed the Harry Potter business empire?
  • JK Rowling’s comments on transgender people have sparked a backlash from some of her biggest fans
  • This could pose a problem for the companies that cash in millions from Harry Potter Inc every year

For some young fans, Harry Potter is losing its magic. In February, pupils at a Sussex secondary school voted to remove JK Rowling, creator of Gryffindor and Slytherin, from the name of one of their houses. Only a few months before, 28-year-old pop-star twins Jedward suggested that people should use her books as firewood.

Millennials are not falling out of love with the Harry Potter franchise itself. But many who once fantasised about going to Hogwarts have come of age and realised that they do not share the real-life views of the author, who has became the most prominent figure in a heated debate over transgender rights.

Although none of Rowling’s opinions on this issue are expressed in the books, some former fans have decided to ditch Harry Potter altogether as a form of protest. If more join them, the huge popularity of the franchise could be threatened, and with it the millions that it generates every year for companies around the world.

Harry Potter, the most successful book series of all time, is also the centre of a global business empire. Bloomsbury (BMY), the company that has published all novels in the series since 1997, says more than 500m Harry Potter books in 80 different languages have been sold worldwide. On the back of that huge success, media giants from AT&T (US:T) to Comcast (US:CCZ) have cashed in millions from film adaptations, theme parks, video games, merchandise and more.

Even after the final book was published in 2007, Harry Potter Inc has rolled on, as companies build new spin-offs inspired by the series into their long-term growth strategies. But none of them could have foreseen the controversy that began last year, when Rowling first publicly criticised an article for using the phrase “people who menstruate” rather than “women”.

Her comments, which warned against “erasing the concept of sex”, appeared to diverge from the beliefs of most young people. According to a survey by YouGov (YOU) in June, 18 to 24-year-olds are the only age group where the majority say transgender men are men and transgender women are women. Social media has empowered many to criticise those who say otherwise.

The same month that Rowling first tweeted her comments, staff at Rowling’s current publisher, Hachette, threatened to walk out, rather than work on her novels. The Lagardère (FR:MMB) subsidiary, nonetheless, has since doubled down on its support for Rowling, announcing last week that it will be releasing her next children’s story in October. The decision is unlikely to harm the company for now; many older parents will doubtless buy the book for their kids. But when the next generation has children of their own, will businesses still be able to profit from Rowling’s work?


Harry Potter Inc.

Ethical boycotts of products are not a new phenomenon. Rowling is also far from the first writer to express views that are anathema to many readers.

But comments made by authors before her do not appear to have sparked such widespread controversy. Successful financial boycotts have also typically punished objectionable actions, usually by companies or states, rather than personal views; to protest against racial segregation, for instance, consumers and governments boycotted South Africa throughout the 1980s, hitting local businesses and pushing the country to end apartheid.

Threats to boycott all Harry Potter products because of comments made by Rowling personally likely represent a generational shift in how consumers respond to public figures that they disagree with – what Rowling and her supporters criticise as 'cancel culture', but what many young people now see as their responsibility to stand up for minority groups.

If Rowling was truly cancelled tomorrow, Bloomsbury would be likely to feel the impact more than other companies. Its gamble on the Harry Potter books more than two decades ago has since lifted it from a small-time publisher to one of the biggest names in the industry. In the year to March 2020, Bloomsbury’s three biggest-selling print books remained Harry Potter novels; the company said ensuring that new children discover them every year continues to be part of its long-term growth strategy.

Other listed businesses may have less exposure to the Wizarding World franchise, relative to their overall size, but have also banked millions on its continuing success. NBCUniversal, a subsidiary of Comcast, acquired the rights to broadcast the Harry Potter films on television in 2016, in a deal reportedly valued as high as $250m (£179m); it is also believed to have invested almost as much developing a Harry Potter theme park that since 2010 has boosted the popularity of its Universal Orlando resort.

AT&T subsidiary WarnerMedia, which distributed the eight Harry Potter films, also wants to keep milking the Hogwarts cash cow. It now plans to release five movies in a prequel series, Fantastic Beasts; the most recent installment made $655m at the box office in 2018, equivalent to about 12 per cent of the money generated by all Warner Bros films that year.

The company may be hoping that the popularity of Harry Potter can outlast the controversy surrounding its creator. WarnerMedia has a highly publicised Harry Potter video game in the works that it has deliberately distanced from Rowling, stating that she was “not directly involved”; the game will also feature transgender wizards. Many former fans, regardless, are already calling for a boycott.


Not burnt at the stake yet

Until the game hits the shelves, it is impossible to tell to what extent the social media outrage will translate into a material financial impact. For now, most people remain unwilling to publicly express their feelings on trans issues; the Investors’ Chronicle approached three analyst firms to get their opinions for this piece, but all of them declined to provide a spokesperson.

Among Harry Potter fans of all ages, there may be as many silent supporters of Rowling as there are critics; Bloomsbury recently reported that a jump in Harry Potter book sales during lockdown helped it to its best six months in a decade.

Rowling has also shrugged off controversy before; Jedward were not the first to encourage people to burn her books. In 2019, evangelical priests in Poland posted images online of her novels being set on fire, citing religious texts that criticise witchcraft. When Rowling retweeted criticisms of Donald Trump in 2017, numerous supporters of the then-President responded with threats to burn their Harry Potter books.

The Boy Who Lived has survived many threats. For now at least, the magic lives on.