Comic Fodder

Disney Buys Marvel!!!!

The news has hit like Thor’s hammer, landing unexpectedly on Goofy’s head. It’s official, the Walt Disney Company will acquire Marvel Entertainment, Inc.

So if you already hold Marvel stock, here’s what you’ll get: $30 in cash for every share of Marvel, plus about 0.745 shares of Disney stock. Based on those details, the overall value of the deal is about $50 per Marvel share, or $4 billion total.

The statement released by Robert A. Iger, President and Chief Executive Officer of The Walt Disney Company, was pretty normal for this sort of thing, talking about Marvel’s brand, the properties, the talent, etc. One interesting thing is the order in which he listed the characters: Iron Man, Spider-Man, X-Men, Captain America, Fantastic Four and Thor. Notice that Iron Man is first on the list? Most people would choose Spidey, Wolverine, or the X-Men. When we converted from the comics to the big screen, though, Iron Man surprised a lot of people and took over first place. These people all look at box office gross, and that tells you where the focus will continue to be placed, for good or ill. So don’t get upset by the different rankings coming your way for your favorite Marvel characters. This is the way the business world works, and publishing stats or popularity of characters don’t count anymore. If a Black Widow movie pulls in more than Iron Man did, her name would be in the front for any business announcements. Just be aware that every article on the net will mention Iron Man first.

The deal dovetails quite nicely with Marvel’s long-term goals. They were already making some international moves and attempting to translate their characters into other countries. The treatment of Spider-Man in India might have looked a little different to Americans. This new deal means Marvel will have access to Disney’s existing international marketing infrastructure, making connections easier and cutting some costs.

The one aspect that Disney can’t capitalize on right away is in the theme park area. As Nikke Finke points out, Universal has a long-term deal with Marvel, and uses Marvel characters in theme rides and such. I went through the Marvel store at Universal Studios Hollywood in Los Angeles just a few months ago, and I doubt that place is going anywhere anytime soon. The one misleading part from Finke is that she suggests that Marvel CEO Ike Perlmutter is the man behind the scenes, about to make $1.5 billion off the deal. However, it is Iger who has been gobbling companies up like crazy the last few years, and per the Wall Street Journal blog, Disney "reached out to Marvel."

Since I hold Marvel stock, I am obligated to reveal a potential bias each time I write about it. I’ve got 90 shares I bought a few months ago, and I think 18 shares in a retirement IRA somewhere. There was no whisper of this deal in any of the circles I travel, but when I woke up this morning to check the stock market, I went to a list of stocks that I track. There was one outlier: Marvel was up ten bucks! Since the overall market is down, and almost every other stock on my chart was too, I thought it was a mistake. Then I checked the trading volume: +3628.90%! That change is gigantic, and meant huge news.

In pure stock market terms, this is all good for any Marvel shareholders. Comic fans will have mixed feelings about the deal, because many do not like Disney’s direction, and will be wary about what effect the takeover will have on Marvel. The jokes are already abounding on the net, with titles like Snow White and the Seven Avengers being proposed. Some of those worries may be unfounded. Disney has had separate movie studios like Miramax, Touchstone, and Hollywood Pictures in the past, allowing them to put out more adult movies without losing any reputation for their main kiddie-friendly line of products. The same will happen here, as long as the Disney suits are kept at arms length. There are already plenty of examples showing the problems with a big corporate entity interfering with comic book development deals, as shown by Warner Brothers stutter-stop problems making DC movies on a timely basis. Marvel will have a media conglomerate head honcho now too, but hopefully they will keep their manic intensity and fun. Pixar still puts out good stuff despite their relationship with Disney, so I think Marvel can do it too.

The last time I wrote about Marvel’s stock, I listed a bunch of reasons why the company should do well in the future and increase in price. The technical chart formation showed some tight trading, and I was just waiting for a high-volume price breakout to confirm that I had made the right move. But nowhere in any of this, either in my own personal analysis or in the financial publications did anyone suggest something like this would happen. Now I'm in uncharted territory. The one complication from all of this is that future examinations of the company's financials will have to be parsed from Disney's quarterly reporting, which will be a bear. Ah well, it will be interesting to see if they have Iron Man side by side with Mickey Mouse at the top of their financial reports...

Tpull is Travis Pullen. He started reading comics at 5 years old, and he can't seem to stop.