Why Disney Must Wait For Marvel Synergy

According to Rich Greenfield at Pali Research, here are the deals which Marvel currently has, prompting this savvy media analyst to ask this morning, “While we do not doubt the acquisition will ultimately prove successful, it appears that Disney investors may have to wait quite awhile to see the bulk of the synergies that the Marvel acquisition may ultimately yield.” Here’s why:

“Across film, theme parks, video games and toys, Marvel has already committed to many long-term deals, leaving only Disney’s ability to boost Marvel’s international consumer products business and to leverage Marvel characters on the Disney XD network, as the more significant nearer term initiatives (in terms of synergies, above and beyond Marvel’s organic earnings power). In terms of Marvel’s various licensing agreements, [Pali Research was] able to pull together some of the more notable examples, as shown below:

Marvel’s current distribution deal with Paramount (Viacom-owned) covers the next five Marvel pictures including Iron Man 2 (2010), Thor (2011), Captain America (2011), The Avengers (2012) and Iron Man 3 (2012/2013). Paramount confirmed the films to be produced under their Marvel agreement. These films would all flow thru to Paramount’s new pay TV network EPIX, however, all new properties beyond these would likely flow through Disney’s output partner (currently Starz).

X-Men property has been licensed to 20th Century Fox (News Corp. owned) while Spider-Man has been licensed to Sony, which seems to have plans for the next three installments. [NF: While the Spider-Man film is only licensed to Sony, Sony is actually half owner of the company that handles all the Spider-Man merchandise. It was put together with Marvel in 2000.]

Theme Parks
It appears that Universal Studios maintains geographical rights to Marvel IP for as long as they have Marvel-related rides/attractions at the park (unclear if this also includes merchandise that exists within its parks today). In other words, Walt Disney World in Orlando is unlikely to see a Spiderman/Hulk themed attraction for the foreseeable future. The following excerpt comes from Universal City Development Partners’ (owner of Universal Studios Orlando) 10-K: “We have geographical exclusivity east of the Mississippi River with regard to the specific Marvel characters we utilize. The license for the Marvel properties does not prohibit its assignment and is for the duration of our use of attractions themed around Marvel characters.”

Video Games
THQ: Multi-year deal signed in May 2008 for Marvel Super Hero Squad.
Activision: Deal signed Nov 2005 and goes through 2017 for Spider Man and X-Men
Sega: Multi-year deal signed in April 2007 for Captain America, Hulk, Thor and Iron Man

Hasbro 10K: “Subsequent to December 28, 2008, the Company entered into an agreement with Marvel that resulted in the extension of the current agreement from the end of 2011 through the end of 2017.”

This article was printed from https://deadline.com/2009/09/why-disney-has-to-wait-for-marvel-synergy-14929/