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Disney to Acquire Marvel Entertainment for $4 Billion

by Anne Thompson
August 31, 2009 4:34 AM
3 Comments
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Thompson on Hollywood

Marvel Entertainment was so successful as an independent studio that it's a surprise to see it gobbled up by the Mouse House. Disney announced early Monday that it plans to acquire the comics company that spawned Spider-Man, Iron Man, X-Men and The Hulk, among some 5,000 Marvel characters. “We believe that adding Marvel to Disney’s unique portfolio of brands provides significant opportunities for long-term growth and value creation,” said Disney chairman Robert Iger.

Why would Marvel (which started producing its own movies in 2005) sell with profits rolling in? The economy, stupid. Marvel has financing and investors like everyone else; their main backing came from Merrill Lynch. If it was hard for Steven Spielberg to line up financing for DreamWorks, Marvel also faced tough going. In another environment, it would have made sense to remain in charge of their own destiny.

Thompson on Hollywood

"Disney is the perfect home for Marvel’s fantastic library of characters given its proven ability to expand content creation and licensing businesses,” said Marvel CEO Ike Perlmutter. “This is an unparalleled opportunity for Marvel to build upon its vibrant brand and character properties by accessing Disney’s tremendous global organization and infrastructure around the world.”

The question going forward: will Disney have the sense to grant Marvel the autonomy that it gives to Pixar? Marvel has operated with a fierce mission: to protect their characters over time. They have not played by short-term Hollywood rules. They haven't paid out major Hollywood salaries to top stars. They made Robert Downey Jr. into a star with Iron Man, and demanded a level of quality that paid off at the box office. Reaction to the sequel was strong at Comic-Con in July.

Thompson on Hollywood

For the Disney/Marvel match to work, the studio will want to hang on to current Marvel management and grant them a long creative leash. One can imagine that Pixar and Disney producer Jerry Bruckheimer would be eager to get their hands on some of this material. (UPDATE: In fact, Pixar and Marvel have already met and Pixar can't wait to get their hands on some of these properties.) "I can't imagine that Marvel will defer creatively to another corporate entity," says producer Gale Anne Hurd of Valhalla Motion Pictures (Marvel's The Punisher). "It's too important to protect a successful brand. Fans will have the same concerns. It's important for Disney to say, 'We're not going to interfere.'"

Here's the official press release.

While other studios from Sony and Paramount to Twentieth Century Fox and Universal have already licensed many of the best-known Marvel characters--Spider-Man, Fantastic Four, Iron Man, X-Men and The Hulk among them--the licenses will eventually expire and revert to Marvel. What's left for Disney and Marvel to play with? When the movie Iron Man was first announced, that title was considered second-tier, but Iron Man was a great character, and Marvel production chief Kevin Feige and director Jon Favreau made it work. "It's more important to control unique and interesting characters," says Hurd.

Clearly, Pixar went to Disney because the global marketing, distribution, licensing and merchandising and theme park opportunities were vast and powerful. So too, the combination of the Marvel and Disney brands will be a mighty one. But it's sad to see yet another independent bite the dust.

UPDATE: WSJ live-blogged this morning's Disney/Marvel investor call. Marvel stock has gone up on the news; Disney's has gone down. At least one lawsuit clouds the Disney Marvel deal.

In Monday morning's conference call with investors, Iger said that Pixar and Marvel would not co-brand, but they will collaborate. When we put these two creative groups together, he said, "sparks will fly." While he said that Paramount "anticipates five more pictures," he also suggested that it would be in Disney's interest to extricate some of the existing license deals. For now, Fox still hangs onto the X-Men franchise and its Wolverine and Magneto offshoots. Sony is prepping Spider-Man 4, 5 and 6. Where do Universal and Marvel sit with another Hulk?

Clearly, financially beleaguered Viacom/Paramount was not in a position to match what Disney could offer. But one can argue that Paramount has cherry-picked some of the prime Marvel properties going forward. The five Paramount movies are Iron Man 2 (due in 2010) and 3, and Thor, Captain America and the multiple character The Avengers, which are at various stages of development. The Wrap lists the status of Marvel's upcoming projects. Slashfilm reads the fan universe tea leaves.

3 Comments

  • GS | August 31, 2009 7:37 AMReply

    I don't really get it. I thought all of Marvel's good properties, like Spiderman and FF4, had all be sold off already to various studios. I guess Disney gets Marvel's cut of those, but what's left?

  • RJ | August 31, 2009 7:19 AMReply

    Marvel is clearly cashing in their chips while they're up. And they're smart to do it -- the other franchises in their pocket just aren't very sexy. Thor, Captain America and The Avengers are even more inside geek baseball than Iron Man and Hulk. Heck, Elektra and The Punisher have more marketability than those first two titles.

    It could all work out for the best (Justin Timberlake would make an ingenious Disney-fied Cappie) but creatively Feige and Co. had their backs against a big wall. And, unlike so many in town, they're smart enough to know it.

  • Sergio | August 31, 2009 7:16 AMReply

    I posted this item this morning on my blog Shadow and Act as soon as Variety reported it. I was stunned that Marvel would sell and of all the studios Disney, which seems to me the LEAST likely buyer, would acquire it

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