Disney buys Marvel Comics for $4 Billion

[Chip R]

http://finance.yahoo.com/news/Disney...17139.html?x=0


Disney catches comics giant Marvel in a $4B web

Pow! Disney captures Spider-Man, Iron Man and other Marvel characters in $4 billion deal

By Ryan Nakashima, AP Business Writer

On Monday August 31, 2009, 5:24 pm EDT

LOS ANGELES (AP) -- The Walt Disney Co. is punching its way into the universe of superheroes and their male fans with a deal announced Monday to acquire Marvel Entertainment Inc. for $4 billion, bringing characters such as Iron Man and Spider-Man into the family of Mickey Mouse and "Toy Story."

The surprise cash-and-stock deal sent Spidey senses tingling in the comic book world. It could lead to new rides, movies, action figures and other outlets for Marvel's 5,000 characters, although Marvel already was aggressively licensing its properties for such uses.

The deal won't have benefits right away, and Disney stock sank on the news. Disney expects a short-term profit hit, and Marvel characters from X-Men to Daredevil are locked up in deals with other movie studios and theme parks. But Disney's CEO, Robert Iger, promised an action-packed future.

"'Sparks will fly' is the expression that comes to mind," Iger told analysts.

Stan Lee, the 86-year-old co-creator of "Spider-Man" and many more of Marvel's most famous characters, said he was thrilled to be informed of the marriage Monday morning.

"I love both companies," he said. "From every point of view, this is a great match."

The deal is expected to close by the end of the year and marks Disney's biggest acquisition since it purchased Pixar Animation Studios Inc., the maker of "Up" and "Cars," for $7.4 billion in stock in 2006.

Marvel would follow another storied comic book publisher into the arms of a media conglomerate. DC Comics, the home of Superman, Batman and Wonder Woman, was bought by Warner Bros. -- now part of Time Warner Inc. -- in 1969.

Buying Marvel is meant to improve Disney's following among men and boys. Disney acknowledges it lost some of its footing with guys as it poured resources into female favorites such as "Hannah Montana" and the Jonas Brothers.

"Disney will have something guys grew up with and can experience with their kids, especially their sons," said Gareb Shamus, whose company Wizard Entertainment Group runs several of the Comic-Con conventions around the nation.

Marvel TV shows already account for 20 hours per week of programming on Disney's recently rebranded, boy-focused cable network, Disney XD, and that looks likely to increase, Iger said. The shows are "right in the wheelhouse for boys," he said.

There will be some lag before Marvel's trove of characters are fully developed at Disney, because of licensing deals Marvel has with other studios.

For example, Sony Corp.'s Columbia Pictures is developing the next three "Spider-Man" sequels, starting with "Spider-Man 4" set for a May 2011 release. News Corp.'s 20th Century Fox has the long-term movie rights to the "X-Men," "Fantastic Four," "Silver Surfer" and "Daredevil" franchises.

Both studios maintain those rights in perpetuity unless they fail to make more movies.

Separately, Viacom Inc.'s Paramount Pictures has a five-picture distribution deal for Marvel-made movies, the first of which will be "Iron Man 2," set for release next May. Paramount said it expects to continue working with Marvel and Disney.

General Electric Co.'s Universal Studios has an attraction called Marvel Super Hero Island in Orlando, Florida, that will stay in existence as long as Universal wants to keep it there and follows the contract terms, Universal said.

Disney said it will honor and re-examine Marvel's licensing deals upon expiration and may extend the profitable ones. Iger noted that when it bought Pixar, that company also had third-party licensing agreements that eventually expired, allowing the companies to move forward together.

Despite beginning to make its own movies, starting with "Iron Man" last year, licensing remained a key driver of Marvel's $206 million and in profit and $676 million in revenue last year. Iger said Disney could give Marvel broader global distribution and better relationships with retailers to sell Marvel products.

However, analyst David Joyce of Miller Tabak & Co. noted that the $4 billion offer was at "full price."

Marvel shareholders will receive $30 per share in cash, plus 0.745 Disney shares for every Marvel share they own. That values each Marvel share at $50, a 29 percent premium over Friday's closing stock price. The final ratio of cash and stock will be adjusted to ensure Disney stock makes up at least 40 percent of the final offer.

Marvel shares shot up $9.72, or 25 percent, to close at $48.37 on Monday. Disney shares fell 80 cents, or 3 percent, to $26.04.

Disney investors were probably unhappy that the deal will reduce earnings per share in the short term and might not turn positive until its 2012 fiscal year. Disney's earnings per share will drop partly because the company will issue 59 million new shares, and partly because Marvel plans to release two costly blockbusters, "Thor" and "The First Avenger: Captain America" in 2011. DVD sales of those films likely won't roll in until fiscal 2012.

Disney said the boards of both companies have approved the transaction, but it will require an antitrust review and the approval of Marvel shareholders.

If it works out, Marvel's chief executive, Isaac "Ike" Perlmutter, will pocket a hefty payday. He snatched Marvel assets out of bankruptcy in 1998, outmaneuvering investors Carl Icahn and Ronald Perelman. His 37 percent stake in Marvel is now worth about $1.5 billion.

AP Entertainment Writer Jake Coyle in New York contributed to this report.

[jmcclain19]

Huge news from a retailing standpoint. A visit to Walmart or Toys R Us shows countless toys, clothes and other branded apparal with Spiderman, Buzz & Mickey. All under one roof now.

And I can't imagine Disney is stupid enough to mess with the comic book brands to make the books themselves more family friendly. Miramax proved that out.

Definitely a long term play for them. Most of their video game, theme park & movie licenses are tied up, but they certainly won't be in the future.

I bet you'll slowly start seeing Iron Man pop up at Disneyland & California Adventure in the near future.

[Degenerate39]

I don't know if this is a good thing or not. Will this affect the movies or comic books?

[JaxRed]

I'd have loved to sit through the briefing where they analyzed how the were going to get more than 4 billion in profits because of this.

[GAC]

So? Does Buzz Lightyear become an Avenger?

Transforming comic book superheroes into big-production movies has become a huge success, even bigger then previously, over the last several years, and big money makers.

I was a huge comic book aficionado growing up of the 50's/60's genre. So when I go to a lot of today's "remakes", the changes and evolution in the characters and story lines, to make them more current and to fit today's times, kind of ruin it for me. That's not to say though that they haven't made some good ones.

I thoroughly enjoyed the first couple of Spidermans, Dare Devil, Ironman, the and the last Hulk movie. Also the last two Batman installments.

Fantastic Four really bummed me out. Especially the Dr Doom character.

I hope they do a good job with Captain America, but I am ready to be disappointed. Will Bucky be in it? But I'm sure they'll make it current, where he's fighting Al Qaeda or terrorism.

And I'm still waiting for a good movie on Superman. He was it for me growing up. I never cared for the Christopher Reeve's portrayals (too cornball). When you start casting Richard Pryor, then that's it for me. And I wasn't that impressed with Superman Returns.

Thor? That could be interesting.

Marvel is leading three of its upcoming movies (Iron Man 2, Thor, and Captain America) into The Avengers movie in July of 2011. Natalie Portman is cast as Jane Foster opposite Chris Hemsworth, who will play Thor, and Tom Hiddleston who will play the villain Loki. Kenneth Branagh will direct the film.

[Unassisted]

Transforming comic book superheroes into big-production movies has become a huge success, even bigger then previously, over the last several years, and big money makers.

It could mean that more of the Marvel properties will be turned into animated features, rather than live action.

[Eric_the_Red]

This is mostly about television, and branding the Marvel universe to young boys on the Disney XD channel. The Marvel toy rights are owned by another company, and Universal has the rights to theme park attractions east of the Mississippi. There are a few movies on the horizon that already have agreements with other studios, so the deal won't affect those either.

[RedsBaron]

GAC: I liked Christopher Reeve's first two outings as Superman, but, yeah, the third one was lame, and Teri Hatcher made a much better Lois Lane than did Margot Kidder.
The Wall Street Journal has an article today on this acquisition and the questions surrounding Disney's chances to turn a profit, given how the rights to so many of Marvel's characters are already tied up.

[Caveat Emperor]

I'll be very curious to see how a lot of the comic movies in the pipe end up doing -- most of them are featuring characters not nearly as well known to the general public as the Batman / Joker / Hulk / Superman / Wolverine types that have had great box office success.

I'm not a comic fan, but I know who all those characters were just because I'm a nerd. Thor? Couldn't tell you the first thing about him or who he fights, etc. Ditto Captain America.

Comic movies like Iron Man and The Dark Knight weren't mega-hits because they were comic book movies -- they worked because they were good movies with good scripts, good directors and good casting. Owning the rights is just one step into profiting from the property.

[TRF]

I'm looking forward to the Green Lantern movie myself.

That said, I think this could be very good for Marvel properties, but possibly bad for the comic book industry. Disney will market animated serial on Disney XD. I expect we'll likely see the new Avengers cartoon there, plus a new, better Fantastic Four cartoon. Maybe a Daredevil, and of course Spider-Man. But kids with short attention spans will want those weekly shows. waiting a month for a comic that costs $3.95, even for Marvel Adventures, their kid friendly line, seems unlikely.

And that's too bad, because the best crossover event in comics over the last 5 years was put out by Marvel, and had almost nothing to do with any X-Men. It was Annihillation. I wonder if stories like that will even have a chance with Disney's dollar bottom line.

[sonny]

We'll see Stupid Disney references in all the movies from now on. Bank on it.

[Caveat Emperor]

We'll see Stupid Disney references in all the movies from now on. Bank on it.

I think that's fairly premature to suggest -- Disney owns a wide range of properties that are completely separate from the Mouse & Magic Kingdom aspect of the business. To say that just because Disney owns it that it must get a Disney-branding is pretty silly, IMO.

And, even if there is the odd mention or two it wouldn't be the end of the world -- "Batman: The Animated Series" is widely regarded as one of the best comic-to-television crossovers of all time, and even that show had the occasional WB refrence (people reading 'Tiny Toons' comic books, etc.).

[Eric_the_Red]

Disney owns ESPN. Do you see a lot of Mickey Mouse of Sportscenter? Aside from ESPN: The Weekend held each year at Walt Disney World, and some ESPN Clubs at the Disney parks, there isn't much mixing between the two brands.

[savafan]

Disney owns ESPN. Do you see a lot of Mickey Mouse of Sportscenter? Aside from ESPN: The Weekend held each year at Walt Disney World, and some ESPN Clubs at the Disney parks, there isn't much mixing between the two brands.

Unless you count Mickey Mouse programming

[Raisor]

Marvel was on the edge of going bankrupt about 10 years ago, now this.

Big turnaround.