SCROOGE BUYS THE MARVEL UNIVERSE

Courtesy of the New York Times
By BROOKS BARNES
Published: August 31, 2009

Spider-Man and his Marvel Entertainment cohorts will join the Walt Disney Company in a $4 billion deal announced early Monday.

Disney said in a statement that it would pay a combination of about 60 percent cash and 40 percent stock to acquire Marvel, which has a stable of some 5,000 characters that includes the X-Men, Fantastic Four, Iron Man, Captain America and Thor.

Marvel has aggressively exploited its most popular characters through motion pictures and consumer products, and has a thicket of deals with various studios that will stay in place. Twentieth Century Fox will continue with the “X-Men” franchise, for instance, while Sony Pictures Entertainment will keep “Spider-Man.”

And Paramount Pictures will continue to release Marvel’s “Iron Man” films — at least until that deal expires. So essentially Disney is in business with a trio of rival studios.

Disney sees a deep opportunity to immediately patch the Marvel characters into its other businesses, however. Marvel characters will be added to Disney’s theme parks, while consumer products will be a huge component, particularly internationally where Marvel has made fewer inroads.

Marvel’s intellectual property tends to be more popular with boys — an area where Disney could use the help. While the likes of “Hannah Montana” and the blockbuster Princesses merchandising line have solidified Disney’s hold on little girls, franchises for boys have recently been harder to come by. Disney XD, a new cable channel aimed at boys, could be an immediate home for Marvel characters.

The acquisition, which has been approved by the boards of both companies but still must be approved by Marvel shareholders, started to come together several months ago when Disney’s chief executive, Robert A. Iger, reached out to Marvel’s chief executive, Ike Perlmutter. Talks heated up in the last two weeks, with Disney agreeing to one of Marvel’s top demands: that stock be part of the deal.

Under the deal, Marvel shareholders will receive $30 a share in cash plus about 0.745 Disney shares for each Marvel share. The deal is valued at $50 a share, a 29 percent premium on Marvel stock.

“We believe that adding Marvel to Disney’s unique portfolio of brands provides significant opportunities for long-term growth and value creation,” Mr. Iger said in a statement.

Mr. Perlmutter said: “Disney is the perfect home for Marvel’s fantastic library of characters given its proven ability to expand content creation and licensing businesses.”

He will continue to oversee the Marvel properties, and will work directly with Disney’s global lines of business to build and further integrate Marvel’s properties.

The acquisition comes as Disney, with its vast theme park operations and television advertising business, has been struggling because of a lack of hit DVDs, soft advertising sales at ABC and drooping consumer spending at theme parks. Disney’s profit in the third quarter, which ended June 27, dropped 26 percent.

Over all, Disney’s net income fell to $954 million, or 51 cents a share, from $1.28 billion, or 66 cents a share, in the year-ago period. Revenue fell 7 percent, to $8.6 billion. Earnings per share for the current quarter included a one-cent restructuring charge related to an accounting gain.