So Disney spent some four billion with a capital â€œBâ€ Billion dollars on Marvel, who cares? Well, for one, I care. I work in comics (if you can call what I do â€œworkâ€), and well, some other folks do as well. According to one observer:
Take a look at Disneyâ€™s biggest hits over the last few years. Hannah Montana, High School Musical, Disney Princesses. Notice a trend. Thereâ€™s not one property that boys want to watch. On top of Disneyâ€™s failure to attract boys, everybody else seems to excel at serving that market. Nickelodeon, Universal, Cartoon Network, and others have all been beating Disney like a drum when it comes to the male demographic. Marvel bring a lot to the table. Where Disney has nothing that appeals to males, Marvel has nothing that appeals to females.
…and, of course, the (Marvel) stockholders are a tad happy:
Under the agreement, Marvel holders will receive $30 a share in cash plus about 0.745 Disney share for each Marvel share. Based on Friday’s closing prices, the deal is valued at $50 per Marvel share, about a 29% premium.
So, yeah, there is a little something to this deal.
Actually, the Wall Street Journal seems to agree with Mr. Lopkin (the fellow quoted above):
By bringing in macho types such as Iron Man, Thor and Captain America, the Marvel deal would expand Disney’s audience, adding properties that appeal to boys from their preteen years into young adulthood. That demographic group hasn’t been swept up by Disney’s recent hot properties, such as “High School Musical” and the Jonas Brothers.
Further, The Journal goes on to report that the deal is the biggest deal that Disneyâ€™s has brokered since its landed Pixar, (the folks who developed “Toy Story”) for $7.4 billion in stock (another acquisition that was considered to be a bit pricey). Still, while its acquisition Marvel is far less, the deal itself comes with some additional baggage. Apparently, Marvel is tied up with almost every movie studio in town, and unraveling those ties for Disney, is going to become something of a long-term commitment.
Still, with the sales of DVD dropping Marvel does bring along the possibility for new revenue streams with toys, and the possibility of the addittion of Marvelâ€™s characters to Disneyâ€™s various theme parks.
About 7% of Marvel’s $676 million of revenue last year came from toys, down from more than 70% in 2000. The company’s business model has shifted rapidly in recent years. Last year was the first year the company financed its own movies, which brought in $255 million during 2008 alone — more than the company’s entire revenue in 2000, which was about $232 million. Licensing has grown for Marvel, from 8% of revenue in 2000 to 43% last year.
Even though the Broadway Spider-Man musical has shuttered its dors (before even opening) licensing fees for Spider-Man alone has generated around $188 million in revenue. To be sure, the company does shares that with Sony, but analysts have estimated Sonyâ€™s share of those agreements is only around 25% of the total take, leaving a nice piece of the pie for Marvel (now Disney).
Still, when Disney starts cross-pollinating the two sets of characters (Hulk on Ice! Iron Duck! The Bugle being bought by Scrooge McDuck! Brrrr! the truly terrible permutations are limitless), Thatâ€™s when I go back to drinking heavy, and blowing stuff up (and no, Walt, I still drink heavy, I just cut down on the blowing stuff up).