Disney's wonderful world of Marvel

Disney's deal for the comic book giant is a surprising plot twist.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Richard Siklos, Editor at large

bob_iger.03.jpg
Bob Iger: "This is not going to be about Disney sanitizing Marvel in any way."
16 portraits: The players of tech
These tech-world luminaries - photographed during our recent Brainstorm Tech conference - aren't just changing the game; they've defined it. Photographs by Robyn Twomey.
Should the $8,000 first-time homebuyer tax credit be extended beyond Nov. 30?
  • Yes
  • No

LOS ANGELES (Fortune) -- The acquisition of Marvel Entertainment by the Walt Disney Co. is, on a surface level, a perfect, if expensive, fit. But it also represents an interesting evolution in the company's direction under CEO Bob Iger.

Under the deal, announced this morning, Disney (DIS, Fortune 500) will pay $4 billion in cash and stock for Marvel (MVL), giving the comic book giant's investors -- should they approve it and regulators give a nod -- something that is increasingly rare these says, a more then four-fold return on their investment over the past five years. That is a heroic result for an iconic company that has resuscitated itself after filing twice for bankruptcy in the 1990s.

Marvel, which began as a comic book company and whose stable of 5,000 characters includes Spider-Man, Incredible Hulk, X-Men, and Iron Man, has built itself into a kind of mini-Disney over the past few years, anchored by the outsized success of its cinematic offerings. Disney is buying the company at a moment when it has nearly finished a transition from licensing its characters to other movie studios, to becoming a studio on its own.

In addition to film, Marvel has television, digital, and merchandising arms -- not to mention a surprisingly buoyant business of still printing and selling comic books -- all of which can undoubtedly be enhanced by being funneled into Disney's far vaster platform.

In an interview with Fortune, Iger compared and contrasted the deal to Disney's acquisition three years ago of Pixar Films, and pointed out how Disney was able to take an existing strong brand and create more value for both companies by turning what used to be third-party deals in such areas as film distribution, merchandising and theme park attraction development, in house.

He even noted that Pixar chief John Lassiter had met with Marvel's top executives as part of the negotiating process, because Iger wanted them to hear from Lassiter how Pixar had thrived and remained autonomous under Disney. (The meeting with Lassiter soon turned to a broader discussion of what Pixar and Marvel night do together -- such as Marvel producing comics with Pixar characters and Lassiter throwing out some ideas for direct-to-video animated releases.) Similar to Pixar, Marvel chairman Ike Perlmutter and his management team are expected to stay in place after the deal closes.

From the perspective of Disney's strategy, Marvel is also a very different kind of acquisition from Pixar on a couple of key levels. For one, Disney needed Pixar to shore up its flagging animation business, a problem that Iger, then newly installed as CEO, concluded the company could not flourish without, given Disney's roots in cartoons. Indeed, Pixar's chiefs were also given purview over Disney's separate animation studio. And that $7 billion deal signaled a re-emphasis by Iger on the Disney brand and family entertainment in general.

Marvel does not fill a similar hole in Disney's playbook. The Disney studio has struggled of late, but Iger said that the Marvel deal and a recent agreement to distribute films from the newly-independent Dreamworks Studios were not linked to that. "There's no line to be drawn between recent performance and these moves," he said, "it's more about the state of play in the industry."

Rather, he said, Disney concluded that Marvel represents a "meaningful growth opportunity" as a standalone brand within the company that also counts ABC, ESPN and movie divisions Miramax and Touchstone among its holdings.

But one area where Marvel represents a risk for Disney is that the company has tread carefully around the burgeoning super hero genre because of concerns of how action -- read violent -- fare might muddy the Disney brand. (In comics, Marvel publishes some fairly adult fare.)

Internally, Iger says he began to think of Marvel stories using "real bullets", while Disney uses "fake bullets." His team became convinced that while there are obvious ways in which the Marvel Universe will spill into Disney's, the brands are going to remain distinct.

"Not everything we do has to be Disney-branded, although that's the priority." And while it will make sense to have Spider-man join the ranks of Mickey and Goofy among "walk around characters" at its theme parks, Iger noted, "you wouldn't have the Punisher character walking around one of your parks." At the same time, he added: "This is not going to be about Disney sanitizing Marvel in any way." To top of page

Company Price Change % Change
Advanced Micro Devic... 30.83 0.14 0.46%
Ford Motor Co 9.30 -0.15 -1.59%
General Electric Co 9.38 0.04 0.43%
Bank of America Corp... 30.13 -0.04 -0.13%
Halliburton Co 22.49 2.22 10.95%
Data as of 4:00pm ET
Index Last Change % Change
Dow 27,076.82 -142.70 -0.52%
Nasdaq 8,153.54 -23.17 -0.28%
S&P 500 2,997.96 -9.43 -0.31%
Treasuries 1.84 -0.06 -3.26%
Data as of 4:17pm ET
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.