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Disney racks up a surplus of superheroes

Disney's US$4 billion acquisition of Marvel Entertainment may well have been one as the biggest surprises of the year. Tweets were flying, Spider-Mouse mashups were aplenty and outside of the investor call that took place the morning of the announcement, the upper brass have been keeping relatively tight-lipped on further comments.
October 1, 2009

Disney’s US$4 billion acquisition of Marvel Entertainment may well have been one as the biggest surprises of the year. Tweets were flying, Spider-Mouse mashups were aplenty and outside of the investor call that took place the morning of the announcement, the upper brass have been keeping relatively tight-lipped on further comments.

Senior EVP and CFO Tom Staggs’ commented during an investor call that the House of Mouse has been watching Marvel for a while, which ‘for some time have viewed as being complementary to our own.’ To that, media & entertainment analyst Tuna Amobi, weighed in that ‘[Disney] did a pretty darn good job to keep that to themselves.’

Given the company’s purchase of Pixar Animation Studios three years prior, Amobi, the senior associate director at New York-based investment ratings firm Standard & Poor’s, told KidScreen that the acquisition’s timing was unexpected, but not out of character. ‘There’s something to be said about Disney’s ability to capitalize on well-known franchises,’ he states. ‘They’re able to leverage those characters and franchises across multiple platforms and I think that’s probably what Marvel was unable to do on its own, as successful as Marvel has been.’

Folding into Disney’s portfolio will be Marvel’s 5,000-plus characters, including Spider-Man, X-Men and Iron Man, to name a few. Marvel CEO Isaac Perlmutter will oversee the superhero IPs, working directly with Disney to build and integrate the properties globally. Meanwhile, Marvel deals currently in place with other third-parties (consumer products, film and DVD distribution) will remain as-is until they expire.

Gerrick Johnson, an analyst at BMO Capital Markets who covers the toy industry, believes the move was a smart one in terms of taking aim at the boys market, where Marvel really flexes its target strength. ‘It makes a whole lot of sense to get into an area you’re not necessarily strong in, because that was the one hole in Disney’s portfolio.’ The recently rebranded boy-targeted channel Disney XD has been pegged as an area for further boy brand-building.

However, he also feels that the normal-people-with-superpowers-fighting-evil genre may have soared past its prime. Disney may have the vault of Marvel characters at the ready, but Johnson is skeptical about dipping into the lesser-known superheroes. ‘There’s an intrigue of what certain characters would look like in real-life format, so I think that’ll generate some interest even though the whole genre of superheroes might be waning.’

Standard & Poor’s Amobi, on the other hand, takes the opposite stance and feels that Disney’s door is wide open to explore the opportunities presented by its newly acquired portfolio. ‘They can really look into the 5,000 other characters that have not been monetized as much as the mega franchises. There could be some diamonds in the rough there,’ he notes. ‘I think they need to dig deeper into Marvel’s library to be able to identify the next Spider-Man, Iron Man or X-Men. I would argue that Disney does this as well as anybody.’

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