Disney and Marvel strike super deal

Valerie | 01 Sep 2009, 20:10

The Walt Disney Company announced yesterday that it is to buy comic book giant Marvel Entertainment in a $4 billion (£2.5 billion) cash and stock deal in one of the largest US corporate transactions of the summer, the Guardian reports.

In addition to giving Disney ownership of cultural icons such as Spider-Man, the X-Men and the Incredible Hulk, the deal is also expected to inspire countless films, television shows and video games.

Whilst the comic and creative possibilities are endless, it is the commercial potential of Marvel’s Intellectual Property: 70 years of stories featuring over 5,000 characters that most believe to be the real motivation behind the deal. As the Guardian points out, Disney didn’t spend all that money to get deeper into selling comics, a business which is facing the print advertising slump just like everyone else.

Patrick Goldstein at the LA Times goes further, arguing that the Disney deal isn’t simply an acquisition, but a reinvention. He paints a picture of Disney as a “venerable animation factory” that had “run out of gas” and highlights one of the studio’s biggest failures of the last few years – its inability to broaden its traditional family brand appeal as illustrated by declining box office figures: since the studio’s lucrative “Pirates of the Caribbean” series premiered in 2003, Disney hasn’t been able to launch another broad-appeal international franchise.

As Disney’s President and Chief Executive Robert A. Iger explains,  the combination is “a perfect fit” with Disney, complementing its characters and stories with narratives that reach a different demographic. Indeed, and as this article argues, Disney is betting that with Marvel it acquires the kind of brand-name recognition it gained when it bought Pixar Animation Studios in 2006, especially among teens and young adults, who are the core drivers of the box office and are an audience segment Disney has struggled to attract.

In this respect, many commentators are surprised that the tie-in didn’t happen sooner, citing the similar business models held by both companies and the deal has, on the whole been welcomed, no less by comic book legend Stan Lee:

“Nobody can produce and market franchises better than Disney, and nobody has the extensive library of characters that would make great franchises that Marvel has.”

With analysts favourably describing the acquisition from the Disney perspective, as a meaningful growth opportunity, that will strengthen high-quality branded content, and allow the combined company to build the high-margin licensing business- change can only be a good thing.