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Disney Buys Marvel

Posted by GoreMaster Special Effects on August 31, 2009

Spiderman and Mickey Mouse

By NAT WORDEN – Wall Street Journal

Walt Disney Co. agreed to acquire Marvel Entertainment Inc., the creator of Spider-Man and thousands of other characters, for about $4 billion.

The deal marks one of the largest acquisitions in Disney’s history and the first big media deal since companies began hoarding cash last fall during the global financial crisis.

The move fits with Disney’s stated strategy of driving revenue from popular content over time across multiple platforms. It also gives the company a boost with young male audiences, where Marvel’s characters like Iron Man, Spider-Man, X-Men, Captain America, Fantastic Four and Thor are particularly popular. Disney has shown more strength with females from its properties like Hannah Montana.

Miller Tabak analyst David Joyce said Disney is paying a steep valuation for Marvel but he views the deal as a “good long-term strategic move” for the company. “This is another sign that confidence is returning to the marketplace,” he said.

Marvel has long-term production and distribution deals in place with Disney competitors, including Sony Corp.’s Sony Entertainment, News Corp.’s 20th Century Fox Films and Viacom Inc.’s Paramount Pictures, which complicate the company’s strategic position. News Corp. is the parent of Dow Jones & Co., publisher of The Wall Street Journal.

In many cases, it will take years before Disney can garner anything more than licensing fees from some key Marvel characters, but Disney Chief Financial Officer Tom Staggs said those revenue are attractive and the company will have the option to produce and distribute Marvel’s content on its own when those deals expire.

“Marvel is worth more inside Disney than outside Disney,” Mr. Staggs said.

Marvel Chief Executive Ike Perlmutter, who will continue to oversee the Marvel properties, called Disney “the perfect home for Marvel’s fantastic library of characters given its proven ability to expand content creation and licensing businesses.”

The comic book maker has been boosting awareness of its characters by continuing to branch out into animated television series and live-action films. However, the company in the spring pushed back its film schedule through 2012 as it looked to build anticipation for its coming slate of films.

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