Analysis: Disney-Marvel Deal Brings Changes

NEW YORK The news that Disney was buying Marvel for $4 billion in cash and stock elicited the reaction that acquisitions of this kind and size usually elicit: shock, followed by the (reflexive) nodding that this “makes sense for both sides.”

On one level, there’s truth to the sentiment: A conglomerate of Disney’s scale is always looking for new movie franchises, and in an era when it’s harder to create them from scratch, it’s logical that a company would want to pick up some that are ready to go.  Marvel, meanwhile, lives in a world in which it’s increasingly hard to run a public company whose core business is film or television production without investors getting antsy (just ask Carl Icahn-beset Lionsgate). So it’s subsuming its bottom line in a huge conglomerate, shielding itself from the effects of a flop (or of Wall Street’s angst over a flop), and getting some serious P&A money in the process.

But for all the appeal, an acquisition like this is never as simple as just plugging the strengths of one company into the other. Here are several areas of change to watch for in the Darvel era.

• Bring on the ladies? As The New York Times and others point out, Disney is solid with girl audiences, but needs help with boys. Properties like “Iron Man” and “Thor” do the trick, But there’s another side to the coin: getting women to like superhero movies. (If Brad Pitt could get women to watch a violent Tarantino flick…) As much as Marvel likes criss-crossing characters between movies, don’t expect Hannah Montana to show up as an Avenger. Still, Disney is expert at attracting young women to titles they may not normally be interested in (see, Johnny Depp making the ultimate young-boy fantasy, a pirate-adventure, popular with girls). For all the talk about Marvel continuing to run independently, don’t be surprised if the studio accesses Disney’s stable of talent to make some pics more girl-friendly.

• Marvel has frequently timed its development, or at least its announcements about development, to its Wall Street earnings calls, either to capitalize on goodwill from those earnings (when they’ve been strong) or insulate themselves from the fallout (when they’ve been weak). Without that Wall Street scrutiny — Marvel’s revenue is a drop in the Disney bucket — the company won’t feel pressure to announce projects simply to appease the moneymen. That could mean they continue to move at a very deliberate pace (Marvel has been going pretty slowly with production, recently opting to push two movies back). On the other hand, never underestimate the degree to which access to a new source of cash can accelerate development. And Disney will itself be under pressure to show the Marvel buy is paying dividends, which should push things forward even faster.

• On the other hand, what’s good for the goose isn’t necessarily good for the Mouse. For Disney as a whole, the cost of the acquisition could slow down other big investments. Standard & Poor’s announced this morning that it was giving the deal a Negative Watch ratings, “concerned” about the “potential issuance of debt” and “high purchase price.” For tentpoles that don’t have as much outside financing lined up, that could mean things slow down — especially if Disney uses yet more money to buy out Marvel properties with distribution deals elsewhere. Which brings us to…

• Rival studios. The “nothing’s changed” mantra has already been trotted out by other studios releasing Marvel-branded movies (Par has released a statement, and others will surely follow.) Don’t believe the line. Or at least, be very skeptical about it. It will be more than a little telling to monitor Sony, Fox and Paramount’s level of investment in their Marvel properties (Sony, in particular, has been spending a lot to develop sequels and spin-offs of Spider-Man) when those companies know the long-term upside for these properties will now go to a major rival. (Disney will already able to use those characters in theme parks and other venues right away.)