Disney Eats Marvel!

Ted Kennedy is dead, the global financial meltdown is spinning out of control with no end in sight, it has finally dawned on Obama that if he wants healthcare reform he will have to do it without Republicans… and I am writing about a movie studio taking over a comic book company. Shows you where my head is at.

Back on my regular beat, it seems that Newsweek has temporarily lapsed back into being a news weekly. They can thank Ted Kennedy for that. Nothing like real news to spice up the whole news magazine thing. Of course Newsweek has decided that it isn’t timely enough, thus it has entitled its latest issue “Understanding Ted Kennedy.” This is in keeping with their trend of reading like the first draft of an anthropology text book, although with a commemorative edition slant ala the current commemorative edition champion Michael Jackson, who will not die. Jackson’s been dead a month and he’s still not dead. At least Ted Kennedy, a person of some substance, died and went in about a day.

Michael Jackson had been a Z list celebrity for 20 years or so. Not that you can tell that from our newsstands, which are just jammed crammed with tributes to the deceased drug addict child molester. (Alleged, but alleged repetitively and in a damn convincing manner.) There he is, permanently frozen in the late 80s, all spinning and sparkles. Even Vanity Fair and GQ (no longer Gentlemen’s Quarterly, but rather just GQ, which seems to stand for ‘For Homosexuals Only’) has gotten into the act.

I have been following Vanity Fair quite closely for the last few years. Its current editor Graydon Carter was the force behind Spy Magazine, one of my all-time, all-time faves. Having been given the keys to Conde Nast’s version of the Oldsmobile, Carter has proceeded to do nothing with it. The thing is one long product placement, reading in places like an extended version of Irv Kupicent’s old column. It does run some in depth news features, but these are hit or miss affairs. It’s gone tabloid with exhaustive coverage of the Madoff Affair. We are now on installment three. What’s next? Interviewing the Madoff’s dog’s psychic? Then there’s the feature on the Astor hearings, of note it seems because Graydon Carter HIMSELF has been called at the trial. Other than that, it, like the rest of the magazine fits the schoolhouse definition of ‘insipid’ to a T. Tom Wolfe is now writing about people who own private aircraft and Vanity Fair paid him for it. And yes, I need to know more about Farrah Fawcett, speaking of the undead. Good grief.

As I have mentioned before, magazines are something of a lost medium. Vanity Fair is quite typically lost, throwing up its manicured hands and bending over double jointed in prostration to its advertisers. Magazines have always been shills, but there usually was something more to them. Of late I noticed a magazine called Kicks, which is all about selling shoes. I suppose outright pimping product is at least as legitimate of a format as what Newsweek thinks it’s trying.

Very few magazines have been able to cope well with the coming new age. Many seem to be flailing around for relevance or in some way exploiting the advantage of being printed on paper. For example, this month’s Maxim has a picture of Milla Jovovich on its cover. From what I can tell Ms. Jovovich may very well be the prettiest woman in the universe. I haven’t read it yet. Having read my share of Maxim, I am tempted not to. Talk about insipid. Maxim makes Vanity Fair seem like a Mensa meeting—essentially Hooters Magazine without quite so many skanks or such a myopic beer focus. Maxim is always in the stage between being and becoming, but at this stage one has to ask being or becoming what. Of the current established titles of any kind, only Mad Magazine, of all things, seems to have found its way.

Thirty years after the last Underground Comix bit the dust, victims of anti-paraphernalia laws, Mad Magazine has decided to become one. They sensibly shy away from drug references, but other than that, many of their contributors are clearly under the influence of Robert Crumb or Gilbert Shelton. Actually, quite a bit of what they are currently running seems to have been culled from the old comics section of Details. In any case, it’s quite good, especially in its short features. A funny comic book which is actually funny. Go figure. Of all things to get it right, a comic book.

Comic books have been a very lost segment of the very lost magazine medium, having renamed themselves graphic novels and narrow-casted their existence away from general newsstands and into specialty stores. The entirety of the industry would hardly seem fodder for the expansion of a corporate conglomerate, but as the Disney devouring of Marvel shows, I seemingly know nothing.

Of course Marvel is more than just a comic book company. It’s also a middling movie producer and a middling animation firm, of which Disney would hardly seem to need another. Other than the licensing operation, founded on 5000 characters, there isn’t much Disney would need that it doesn’t already have. Which brings me to a dreadful prediction:

Kiss the comic books good bye.

Before going on, I certainly know nothing and very well could be wrong. What I am going to say is based entirely on the history of the two firms. (And I am a pulp magazine historian and not a business advisor.) Other than the fact that history repeats itself, there is no reason to think that history is going to repeat itself. My general contention is that when it comes to media mergers, it’s always the low hanging fruit which gets cut first. We saw this with Fawcett and Street & Smith and American Media’s handling of the Globe’s pulps and pretty much every move of this magnitude that has ever happened in the publishing industry.

As the exception which proves the rule, we have Marvel’s competitor DC Comics. DC Comics has been owned since 1969 by Time-Warner. (Technically it was first a part of Warner Books, but then became its own division after the merger with Time.) Excepting the DC Implosion of the late 1970s, Time-Warner hasn’t messed with DC Comics to any real extent. In fact, they have actually made it profitable as a stand alone business. Nothing says that Disney can’t do the same with Marvel. I have my doubts, for reasons which I will outline. It should be said, however, that Time-Warner is a PUBLISHER first and foremost. They are a publisher which owns cable TV operations and a movie studio. Other than that, the firm has no other interests. You cannot say the same with Disney. Time-Warner’s big business is in printing things people want to read and comic books, such as Mad Magazine, fit in nicely with their core competency and overall focus.

Marvel is not worth 37 times its earnings for its comic book business. Nor its animation studio or movie production house. Moreover, the movie production house has been an expensive hood ornament for Marvel. And the animation production house is essentially a Disney vendor. (Outside of Disney, Marvel Animation has no customers.) As a four billion dollar purchase (even in Disney Dollars that’s four times the sale price of the Chicago Cubs, another over-priced entity), Marvel’s only real upside potential is in the exploitation of characters Stan Lee created for it.

Disney already owns every animated character that most people can name. They even own some off brand ones, such as Bullwinkle and Rocky. They also own a publishing arm, specializing in children’s magazines. All of this would be a considerable advantage for a firm wishing to go into the comic book publishing business. And how many comic books does Disney currently publish? NOT ONE. Except for a brief flirtation in the 1980s, the firm has NEVER published comic books. And I don’t see them jumping in now.

Marvel spent most of its history as an adjunct business, a one off sideline for entities in other areas. It was started in 1936 (or so) as part of Martin Goodman’s Columbia Magazines. (Somewhere along the line Archie Comics also traces its lineage back to Columbia Magazines.) It was part of Humorama. It was part of Magazine Management. It was Martin Goodman’s side business, often contracting or evaporating entirely per its owner’s whim. In the mid 1970s, the then mostly porn publisher Goodman decided to offload Marvel from his other holdings. Marvel was doing well then, starting to rake in all sorts of licensing money and Goodman felt that having it be in anyway connected to a parent firm in the porn production business was just bad mojo. So he tried to create a firewall between it and his other holdings, selling a not quite controlling but deodorizing portion of Marvel to the ill-fated Perfect Film Corporation, later called Cadence Industries.

Goodman’s porn business was going great guns at the time, too. Perhaps fearing publicity or simply guided by the idea that producing adult films and owning a kids comic book company just don’t mix, Goodman chose to dump the rest of his interest in Marvel to Perfect Film so that he could concentrate on smut. (This is very much a long story short.) Freed of Goodman’s influence, Perfect Film ran Marvel straight into the ground and imploded with a splat. Marvel’s assets were then purchased out of bankruptcy by New World Entertainment, a big time Hollywood Movie studio, which also went splat. Its assets were then purchased again by an investment group whose sole innovation was to entirely piss off comic book specialty stores. Then Marvel went splat twice more, filing for bankruptcy twice in a ten year period.

If Disney was out to buy a business which is solvent or even good at the comic book business, then they have come to the wrong place. Marvel’s present business model has been to rake in money from movie licensing and then squander it on capital projects, specifically becoming a movie production company itself. (That’s called going into your customer’s business. Not an intuitive move.) To call it a movie producer is a bit of an overstatement: it’s more of a licensor with strings and needless kibitzing. Other than ego strokes, there is little need for what they have done. And Marvel has a highly spotty track record to show for it. (Think Ghost Rider and the THIRD attempt at making a Punisher movie, not to mention the ongoing Fantastic Four fiascos.) Their comic book line has floundered with the industry itself. The animation firm sells only to Disney. In short, Marvel isn’t very good at anything

I wonder what Martin Goodman would have done with four billion dollars? (Not that there should be a tag day for him or his son Skip, both of whom did quite nicely in their post Marvel lives.) Although he was roundly slammed in Marvel’s recent house organ history (pictured), Martin Goodman was the last person to profitably operate the firm. The now deceased Goodman would have been worth putting on Disney’s corporate board. Unlike the Pixar purchase, Disney has made it clear that this largely stock swap does not come with an integrated role for Marvel’s current management. My guess is that a cartoon neutron bomb is about to go off in the Marvel executive suites. And good riddance.

Disney can take the licensing, movie production and animation portions of Marvel and absorb them without a burp. That’s what we call portfolio material. No firm is better at these processes than Disney. Like Skip Goodman before them, the old Marvel portfolio guardians will be turning in their keys to the new bosses, who need no advice from pikers. The comic book production process is another story. And here things don’t look so good.

At one time 40% of all comic books sold in the United States featured Disney characters. Disney’s heyday on comic book stands was impressive, starting in the 1930s and spanning into the late 1970s. They were first published by an imprint of Centaur Comics, which due to a stupid distribution arrangement, didn’t do as well as they should. On the second bounce, they succeeded thanks to a deal masterminded by comic book industry founder M.C. Gaines (at one time part owner of DC Comics and the father of Mad Magazine’s founder). Gaines and his operation oversaw the art layout of the comic books, pulp publisher Dell provided the distribution and Western Printing printed them up. (Again, long story short.) It was the single most profitable comic book arrangement, ever.

The reason it took three firms to produce the comic books is that Disney charged a left nut for the licensing. This arrangement is key to understanding the way Disney looks at entities outside of their core businesses. When Dell couldn’t cough up the licensing money, Disney didn’t blink and let all of the comics go. (Western Printing came up with the money on its own and continued the Disney comics under its Gold Key line.) In the 1970s Western got out of comic books and Disney again let the line go fallow. And that has been their attitude towards comic books to this moment.

If Disney didn’t think comic books were a good enough business to go into for themselves during the Golden Age of Comics, when they were selling in the millions, I can’t see how they would think they are a good business now. Disney’s attempt to get into the market on its own fizzled horribly in recent memory. As for Disney Publishing, it’s largely a licensing firm.

Disney is a licensor. They do not produce anything other than theme parks and broadcasts. Their attempts to stray out of these businesses, such as founding a retail chain, have bit them in the nose. If you want to stick Goofy on a T shirt or comic book, you have to pay Disney up front and take all of the risks or it’s no go. Their arrangements with other comic book publishers have proven this, again and again. They have better properties than Spider-Man whom they have let drop out of the comic book universe. In short, expect them to pull the plug pronto.

Will anyone take up the actual producing of Marvel’s comics? DC Comics can’t. (Not if there is still a Federal Trade Commission.) Archie could, and that would be fine vengeance. (This issue: Black Hood kicks the ever living snot out of Spider-Man, claiming the Red Circle trademark as Archie’s forever and ever.) Given that Archie is licensing its own superheroes to DC Comics, this doesn’t seem likely.

That means no one. That means poof.

I hope I am wrong.

(Also shown, Dumbo Weekly, a comics magazine actually published by Disney a very long time ago.)

The promised Mister Fun update will be added later. Like when it's actually funny.