Is buying Marvel Disney’s latest masterstroke?

A week on from one of the biggest surprise announcements of the year, could Disney’s acquisition of Marvel be a long-term masterstroke, with a chunk of short-term pain?

The Disney-owned (nearly) Marvel logo

It’s not too long ago that Disney was facing a mountain of potential problems. In the middle of the decade, Pixar – its money making machine for the previous ten years – was threatening to go its own way. The Disney brand itself was struggling, with its film business – while enjoying successes with older audiences – finding it more difficult than it had in a long time to find a foothold in the family movie market, at least without the help of Jerry Bruckheimer (who brought along the small matter of the Pirates of the Caribbean and National Treasure franchises). In animation in particular, Pixar and DreamWorks had seized the initiative. Furthermore, those Disney films that did poke through highlighted an ongoing problem with the brand – it appealed to younger children, but in the even-more-lucrative teenage market, it simply wasn’t getting through in the way that many of its rivals did. Disney, after all, was for kids. Right?

Naturally, much of the blame for this was laid at the door of Michael Eisner, Disney’s CEO who finally left the House Of Mouse in 2005 after a 21 year stint with the company (it’s worth picking up a copy of the book DisneyWar if you’ve not come across it before – it has plenty on Eisner’s reign, and unsurprisingly, a good chunk jars with Eisner’s autobiography). In his place stepped Robert Iger, and it’s fair to say, he seems to have got people a lot more excited about the Disney brand. Under his watch, Disney has exploded into the teen market with the likes of Hannah Montana, the Jonas Brothers, Camp Rock and such like (although these are clearly female-centred productions), while shows such as Lost and Desperate Housewives (both of which Eisner was reportedly no fan of) have continued to rake in the ratings.

Yet it’s not those things that Iger will be remembered for when the next chapter of the Disney history book is written. After all, there’s an argument that the foundations of these successes were firmly planted in the Eisner era. No, where Iger has differed from his predecessor, and where he’s yanked Disney back to the forefront of popular entertainment, is in his recognition that the company is weak in various areas. And then, crucially, he’s been willing to do a really big deal to plug the gap.

Eisner, of course, was no slouch in this department, and the acquisition of the ABC television network in the US happened on his watch (although it’s fair to say that it’s not worked out quite as well as all concerned probably hoped). But Iger has now done two major transactions that are set to serve Disney for decades to come.

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Billions

The first, of course, was Pixar. Iger was, to an extent, backed into a corner on this one, given that Disney in 2005 clearly needed Pixar more than Pixar needed Disney. Just look at the animated hits that Disney has churned out since – Bolt and Meet The Robinsons, for instance – and you soon appreciate that their grosses and level of ambition are dwarfed by the money brought in by the likes of Pixar’s Cars and Up, along with critical response to them. Cars alone justified the $7.4bn of Disney cash that would be required to snap up Pixar, given that the film brought in $5bn just off merchandising and licensing sales, and thus Iger pushed ahead with the deal.

In one swoop, he averted the major crisis of Pixar heading elsewhere, and also brought John Lasseter – arguably the most influential man in Hollywood animation right now – into the Disney fold formally. The move also cemented Disney’s animated slate long term, aided in recent years by the fact that Ratatouille, Wall-E, Cars and Up all steamed over the $200m mark in the US alone. Pixar has continued to deliver Disney a blockbuster a year, and a bloody good one at that.

Marvel

However, last week, Iger took his boldest step yet, with the $4bn acquisition of Marvel. This was, appreciating we’re understating this a little, a shock move, albeit one that had been in some form of discussion for several months. The state of the world economy has arguably left Marvel vulnerable to such a deal, even though it’s enjoying far greater successes than most, particularly in movies (you can’t imagine it entertaining such a deal two or three years back). The response from hardened Marvel fans has not been rip-roaringly positive, although the continued independence of Pixar is at least a positive sign. But for Disney, it might just plug a hole in its movie business that’ll serve the company decades into the future.

And it’ll need to, as there’s little evidence that the purchase of Marvel is going to bring instant riches to Disney, nor plug gaps in its blockbuster movie output for a good while yet. Looking at the catalogue of tens of thousands of Marvel characters that will fall onto the Disney asset register, which are the real money-makers it’ll be seeking to exploit? X-Men is tied to 20th Century Fox for some time, and Spider-Man is glued to Sony for the foreseeable future. Thus, while Disney will now have slices of those pieces of pie, it’s some way off outright ownership of the lucrative movie franchises. Iron Man 2, meanwhile, is being distributed by Paramount, and the studio also has the rights to distribute Iron Man 3, Captain America, The Avengers and Thor. Those are all films, undoubtedly, that Disney would like to be releasing itself.

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Which doesn’t leave Disney with many names of the profile it’d require to get a major summer blockbuster up and running. The Punisher big screen franchise is dead, the Hulk will need another reboot, Fantastic Four is getting one, Ghost Rider may get a sequel, Daredevil was being mooted for a reboot at Fox and Blade is pretty much dormant. Of the films in production, Ant-Man, Nick Fury, Runaways and Sub-Mariner are likely to fall under the Disney banner, but none of them have the earning potential on paper of a Spider-Man sequel.

Fruits

But then Robert Iger is nobody’s fool. And the more you look at the Marvel and Disney deal, the more you suspect that the fruits of it, for Disney at least, aren’t going to be coming for a good decade or so. In the meantime, $4bn is a lot of spare change to spend (it’d easily pay for a dozen major blockbusters), and given that the fad for superhero movies might pass in the next few years (it does seem to be a cyclical thing), Disney is certainly taking a far bigger gamble here than it did when it bought Pixar.

But it might just be the Mouse’s smartest move in some time. Because what it’s just bought itself are characters engrained in decades of history and tradition, who have continued to deliver for Marvel and entertained punters for the duration of that time. Disney has also, in the process, plugged a demographic hole in its company’s offerings, and suddenly become a major player in the superhero market, an area on the big screen at least it’s struggled to get a foothold in (Sky High and The Incredibles being its best stabs. The latter, of course, being tremendous).

The hope and feeling, though, is that, to protect its investment, Iger needs to ringfence Marvel, and let it carry on doing what it does, with the minimum of interference (and perhaps it could even let Marvel breathe fresh life into Disney’s own characters in comic book form). If it does that, then it could prove to be as equally a strong move for Disney as the cementing of Pixar four years ago. If it doesn’t? More fool it. But – while the union of Disney and Marvel provokes many questions and fears – you suspect that Iger and his team are smart enough to know what they’re buying, and to work out who the experts in the equation really are.

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