Analysis: Disney continues to take bold steps with Marvel acquisition
Secrets are hard to keep in Hollywood, especially when one of the biggest media companies in the world is buying another well known entity, but the Walt Disney Company provided a major Labor Day surprise by announcing their acquisition of Marvel Entertainment today. And needless to say, in just four years CEO Bob Iger is quickly making every forget about the long run of Michael Eisner.
In 2006, Iger smoothed over relations with John Lassiter and Steve Jobs to bring Pixar permanently into the Disney fold. This year, in a difficult economy, Iger saved proven hit-makers Steven Spielberg and Stacy Snider's DreamWorks from collapse after a previously arranged deal with Universal Pictures fell through. Now, Disney has made a major strategic move in bringing Marvel into the fold. While Spider-Man and Wolverine may not be posing for pictures with the kiddies at Disney World any time soon, the long run implications for the company are well worth the $4 billion price tag.
On the feature film side, Marvel Studios independently financed films still have a five-picture distribution deal with Paramount Pictures. A deal reiterated by Iger today. However, Paramount only gets a fee based on those picture's performance, but its clear any "Avengers 2" or other sequels past "Iron Man 3" will be released and produced by Disney. And, of course, any profit on those films or their merchandise goes straight to Disney now (although could the company insist on having "iron Man 3" released by Paramount in Disney Digital 3D?). Unfortunately, this isn't good news for Viacom or Paramount CEO Brad Grey who won't see a renewal to this profitable deal when it ends. Additionally, Sony Pictures and 20th Century Fox both have long established film rights with the "Spider-Man" and "X-Men" franchises respectively. It will be intriguing to see if Disney's lawyers will be able to find any early termination clause in either agreements and trust me, they'll try. So, don't be surprised if they try to push a co-financing and distribution on some of the potential franchises. When Disney can offer up Jerry Bruckheimer's proven blockbuster team to produce a new superhero flick will Fox or Sony really look the other way?
A benefit that won't have immediate returns is incorporating Marvel characters into Walt Disney's industry leading theme parks. Currently, those heroes are integral parts of Universal Studios parks (Orlando especially) and the company issued the following curious statement to Deadline Hollywood Daily:
"Marvel Super Hero Island at Universal’s Islands of Adventure and the Marvel characters are a beloved and important part of the Universal Orlando experience. They will remain so. Our guests are going to get to meet Spider-Man and all our other Marvel characters. We believe our agreement with Marvel stands and that the Disney/Marvel deal will have no impact on our guest experience."
The curious part of the response is the use of "believe." It's hard to, um, believe Disney didn't see way to incorporate certain Marvel characters into their own theme parks before any Universal deal is set to expire. Uni has invested a lot in building those rides, so this will be a very curious legal and business situation to watch down the road.
Most importantly, this deal should be a major boon to Disney Consumer Products. No one in Hollywood knows how to create toys and increase overall brand awareness through licensed merchandise like the Mouse House. Marvel had succeeded on expanding those efforts over the last decade or so, but they've now gone to a whole other level in this department now.
What does this mean for the comic book side of Marvel? Hard to say, but Iger's administration promised to be hand off with Pixar and has reaped the creative and financial benefits. Comic books are not the lucrative business they were during the 1980s boom, but as a loss leader, the last 10 years have shown how profitable superhero and graphic novel creations can be.
While speaking to the press today, Iger noted this move should help Disney find a solid footing with young boys. They have helped corner the market on girls (thank you Miley Cyrus), but Marvel can be a major attraction to the Disney Channel and Disney XD (perhaps putting a chink in competitor Nickelodeon's armor) online and in all sorts of different aspects of the company (as noted above).
Marvel's move along with the DreamWorks partnership and Iger's comments, is also a major signal Disney is going to make major inroads into live action filmmaking without the Disney brand (ie Touchstone). A full fledged reversal from the end of the Eisner era. The same studio that may release Spielberg's next Oscar winner and Bruckheimer's next action franchise will soon have annual summer and winter tent-poles featuring (insert Marvel superhero here). That's pretty amazing for a company that was only in the "family-friendly" movie biz a few years ago.
And for those who say Disney overpaid for Marvel, let's not forget those are the same criticisms the naysayers said regarding the Pixar acquisition. Time will tell, but that didn't turn out too badly did it?
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