A moment of silence please…
Walt Disney Co said on Monday it plans to buy Marvel Entertainment Inc for $4 billion in a deal that would add characters like Iron Man, Spider-Man and the Fantastic Four to its entertainment empire.
Disney is striking the biggest media deal of the year so far — one that will unite the Incredible Hulk and Mickey Mouse — at a time when the media business is struggling to cope with spending cutbacks by both consumers and advertisers.
Marvel, however, has a stable of wildly popular characters that it has brought to the big screen in home-run films like “Iron Man.” A sequel, “Iron Man 2” is due to hit the theaters next year, while “Thor,” “Spider-Man 4” and the first “Avenger” movie are slated for a 2011 release.
For Disney, movies like those should help address a key area of concern among investors: How it can better reach more young males.
Indeed, Disney has long been a blockbuster brand with girls thanks to characters like “Hannah Montana,” “Cinderella” and “Snow White,” but has struggled to achieve the same kind of success with boys.
To do so, Disney agreed to pay $50 per share in cash and stock for Marvel, a premium of 29 percent to Marvel’s closing stock price of $38.65 on Friday. The deal has been approved by the boards of both companies.
Marvel’s shares shot up to $48.85 in early trade.
On a sheer business decision, this is the smartest thing both companies could do. Marvel is often still seen as “Just a Comic Book Company” while rival DC Comics is part of the Time Warner empire. So, looking at it that way, Marvel would have been stupid to turn this deal down. They get to keep their characters, continue doing what they’re doing, and can consolidate a mess of overlapping entities with the Walt Disney Company.
Marvel over the past three years has evolved into “a comic book company which sells its characters for movie rights,” into “a film company that makes comics” as it has done a spectacular job with not just the Spider-Man and X-Men franchises, but made hits out of ‘lower tier’ characters like Iron Man, The Punisher (at least the one with Thomas Jane), Ghost Rider, and the Hulk films. Many people may not know this, but “Iron Man” was the first film done by the company’s newest division, Marvel Studios and was a hit beyond all expectations.
With the Marvel acquisition, Disney gains a built-in infrastructure it can now use to cancel and consolidate their still (though barely) operating comic books and adds a stable of characters for movies which have a proven track record of success at the Box Office in demographics they have a hard time with. Marvel gains a built-in animation studio at their disposal, a well-known movie studio with its own infrastructure, a series of TV channels to use their characters in programs for, and enough synergy to make you hurl.
This deal is as win-win as you’re going to get when it comes to media marriages.
IGN.com, the video game and comics news website, posts part of the press release on the news of the marriage. Nobody in the corporate structure seems to be unhappy with what’s going on.
Disney President and CEO Robert A. Iger explains:
“This transaction combines Marvel’s strong global brand and world-renowned library of characters including Iron Man, Spider-Man, X-Men, Captain America, Fantastic Four and Thor with Disney’s creative skills, unparalleled global portfolio of entertainment properties, and a business structure that maximizes the value of creative properties across multiple platforms and territories. Ike Perlmutter and his team have done an impressive job of nurturing these properties and have created significant value. We are pleased to bring this talent and these great assets to Disney.”
Ike Perlmutter, CEO of Marvel, adds:
“Disney is the perfect home for Marvel’s fantastic library of characters given its proven ability to expand content creation and licensing businesses. 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.”
Early indications are Disney will allow Marvel Entertainment to maintain its current leadership in both corporate and creative and use them expand Marvel properties across the global Disney empire.