Why Disney bought Marvel for $4 billion
Marvel Comic

Written by Bartek Bezemer

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January 8, 2022

Disney made a calculated bet with Marvel and is now making large profits. How did the Marvel franchise come to be such a success?

Chances are you’ve seen at least one Marvel movie in your movie-going history. Marvel is a well-recognized brand, which was purchased by Disney for $4 billion in 2009. The Marvel franchises have generated $18.2 billion at the box office over the span of a decade. Where did Marvel come from and what made it such a success with movie go-ers worldwide?  

A comic book history

Marvel Comics, which started out as Timely Comics, was founded by Martin Goodman in 1939. The first issue came out in October 1939 with superheroes the Human Torch and Sub-Mariner. At the time comic books were increasing in popularity. They started out as advertising premiums in 1933, growing in popularity as newspaper strips began to be reprinted as separate series in 1935 and onwards. The period 1938 and 1956, was marked as the Golden Age of comics. During the mid-1940s, during the peak of the Second World War, series such as Superman, Batman, and Captain Marvel sold over 1.5 million copies each month. Captain America, which was first published in March 1941, was a great vehicle for aiding the war effort, with him being portrayed fighting against the Nazis and the Japanese. 

Interestingly enough superheroes lost their popularity at the end of the 1940s, making Timely Comics decide to stop publishing these genre books in 1950. In 1951, Timely Comics, therefore, became Atlas Magazines which published within genres like humour, horror, war, and science fiction. Rival DC Comics had some moderate success with Superman, Batman, and Wonder Woman, although, just like DC, cancelled a lot of its superhero series to focus on other genres. Part of the decline in popularity could also be attributed to a book called The Seduction of the Innocent which was published in 1954 by psychologist Fredric Wertham who claimed there was a correlation between violent comics and juvenile delinquency. Wertham noted that Superman was the embodiment of fascism, Batman and Robin were propaganda for homosexuality, and Wonder Woman and lesbian bondage fantasy. These ideas seem outrageous today but still resulted in the Comics Code of 1955 which was a set of strict guidelines by which comic book publishers had to abide by. The Comics Code resulted in several publishers closing their doors and harming the creativity of comic book artists. Marvel started by addressing societal issues during the 60s, which lured in a university-aged audience. It would take up to 1971 when a Spider-Man story dealing with drug abuse, which finally set in motion the revising of the strict Comic Code.  

During the 80s Marvel revived Daredevil, which took a darker approach to its story, reigniting its sales, and turning it into a bestseller. The 90s and 2000s saw an emergence of new writers like Brian Michael Bendis, Ed Brubaker, Jonathan Hickman who took a more mature approach to the characters within the Marvel Universe. The Hollywood Reporter spoke to Jason Sacks, writer of the American Comic Book Chronicles about the turbulent 90s era in comic book history. According to Sacks, the changes in the industry during the 90s started to appear in the 80s. This was the time where established artists like Frank Miller and Alan Moore became recognized, but while they were long-time players in the comic book scene, the Ninja Turtles franchise proved that you could make a smash hit in a short amount of time. Todd MacFarlane’s Spider-man sold 2.35 million units in 1990, proving that young creators can reign in top dollars. 

During the 80s Marvel revived Daredevil, which took a darker approach to its story, reigniting its sales, and turning it into a bestseller.

A real gold rush started where parents wanted to sell their limited copies to help their kids go through college. Sacks said, ‘In 1993, comics were a collectible item and cultural force in and of themselves. The creation of Image Comics was covered on CNN, and the Death of Superman was front-page news when there were limited media outlets. That wave of interest was mostly dissipated by the time of the late ’90s, but by 1999, comics were seen as a budding art form in which mainstream creators could create quirky work like Planetary, The Authority, Tom Strong, Battle Chasers and Danger Girl.’ Interestingly enough, Marvel did not cash in on this success and went bankrupt in 1996. Two years later, Marvel would merge with Toy Biz who had a 28% stake in Marvel Toys, with Marvel Entertainment Group’s entire board being replaced. CNN noted that this was a substantial loss for billionaire investor Carl Icahn, who took ownership over the board in 1997 and now had lost all voting power. Toy Biz would receive five board seats, along with creditors who would also receive five seats according to CNN. As part of the merger, creditors would receive around $280 million in cash provided by Toy Biz. 

Now that the Marvel Universe was transferred to Toy Biz,CEO Avi Arad had all the licenses under its control. Whilst Hollywood was skeptical about Marvel and its franchises, he believed in the power of the portfolio of Marvel, claiming that Spider-Man alone was worth billions of dollars. Alongside X-men and Fantastic Four. To Geoff Boucher from Deadline he said, ‘Look, X-Men will always be my first love and, as you know, I did the [animated] show from ’93 to ’97 because I related to being a mutant. I really did. It was wonderful when the show did well and the best thing about it was that kids all over the world were waiting for this kind of prophecy and the toy company went crazy because everybody was collecting action figures and to me, it was, as a sign of what to do.’ Further saying, ‘Movies. It was really clear, you know, that if we have the right idea and we execute it right, it can’t miss.’ 

But his confidence in the franchises themselves didn’t prove enough to get the established parties in Hollywood involved. They did not consider comic books as source material according to Arad. Studios were reluctant to create adaptations as they were not familiar with comic books, having little to no experience with them as a medium as a whole. But he pushed through, knowing that a new generation of producers would arise who were brought up with comic books and were eager to turn them into film. One of them would be Sam Raimi, the director of Spider-man, who according to Deadline was deeply invested in the Marvel Comics lore, being the perfect catalyst for Marvel to appear at the box office. Another key figure was Michael de Luca, who was the head of New Line Cinema, who was also a firm believer in the Marvel franchise, bringing Blade to the big screen, proving that there was money to be made. The adaptation turned into a major hit, generating $70 million in revenue. 

The Marvel Appeal

Avi Arad saw something in Marvel that Marvel themselves didn’t. The question arises, what made those Marvel adaptations so successful. Harvard Business Review (HBR) dove into the mass appeal of Marvel movies in 2019. The franchise is going strong after many adaptations with ratings remaining steady, which is contrary to other franchises which have seen declining ratings when the sequels follow. To find the question Harvard analyses hundreds of interviews and movie cinematography of 20 Marvel movies. The first key factor to success they’ve found is hiring staff in which Marvel themselves have no experience. For Iron Man, Marvel commissioned indie director Favreau who was known for creating good dialogue and engaging characters. In combination with Robert Downey Jr. who never played a leading role in a blockbuster action movie, it brought an interesting dynamic to the table. They further noted that the directors maintain control over their productions so they can incorporate their own personal style, giving the movies a unique flair. This method of operations is not unique to the movie industry and is adopted by energy companies, hedge funds, and fashion designers helping them tackle industry-specific challenges in unconventional ways. 

The second factor is maintaining stability in its crew. HBR found that the crew overlaps by about 25% from movie to movie. They create a sense of community and attract fellow actors to get in when the movies are catching headlines. It enforces collaboration between members from celebrity actors to the special effects crew. Real Madrid is used as an example who abandoned the strategy of creating teams consisting only of superstars and after 2003 mixing them up with intermediate players and Zidane as their manager. This strategic change resulted in Real Madrid winning the Champions League three years consecutively. The club had a stable core that was able to conquer the odds. 

Marvel fosters communities through different channels such as social media and letters in comic books, enabling them to remain in touch with the fan base.

The third reason for the success of the Marvel franchise is the willingness to revamp its formula. They’ve analyzed the scripts of the Marvel movies saying, ‘Our script analysis reveals that Marvel movies showcase differing emotional tones (the balance between positive and negative emotion verbally expressed by the characters).’ Further saying about the visual differences between the movies, ‘The movies are also visually different. The largest variations include those from Captain America: The Winter Soldier to Guardians of the Galaxy to Avengers: Age of Ultron. The plots of the first and the third take place on Earth, whereas Guardians takes place in space and on alien planets.’

The last differentiator they’ve found is the creation of curiosity around its universe, the world, and its characters. Marvel fosters communities through different channels such as social media and letters in comic books, enabling them to remain in touch with the fan base. The studio also uses ‘Easter eggs’ in current releases to generate hype around its franchises to keep the speculation going. Those who’ve been to a Marvel movie will know the teaser after the credits reveal future productions. This raises the anticipation with fans. HBR said, ‘For dedicated fans, a host of blogs and specialised sites offer opportunities for much more engagement.’

Obviously, there are more intricate factors at play that determine the popularity of the Marvel franchise, such as the appeal of superheroes in general.  Robin Rosenberg at the Smithsonian noted that behind superhero movies, there’s an origin story that appeals to audiences. Rosenberg said, ‘Comic book writers could have chosen not to endow their characters with origin stories.’ Further saying, ‘But those writers were keen observers of human nature. And they were able to translate those observations into captivating stories reflecting aspects of psychology that were confirmed by researchers decades later.’ The stories awaken emotions of empathy with viewers, making the movies relatable. 

The Iger Era and superhero fatigue

Whilst Marvel was becoming a more valuable asset over time, with franchises pulling in hundreds of millions of dollars, another company was finding itself in heavy weather, Disney. Disney was struggling with its media franchises and was losing momentum fast. A new CEO was appointed, Bob Iger. A key figure in the recovery of Disney and under his leadership, Marvel would be acquired and Disney+ would become one of the biggest success projects for the company.  

When Iger came aboard, he inherited a company that was in shambles with low morale and a hostile management environment. To revamp the company he had to purge the management layers and create more autonomous divisions within the Disney family which were under strict supervision by the strategic planning department, depriving them of any potential creativity. Iger aimed to deliver high-quality branded content, advance technology to create more compelling products, and set out a global strategy. The acquisition of Marvel, therefore, fits the media strategy that Bob Iger was aiming for after his appointment in 2005. He had to incorporate new franchises to create appealing content for broader audiences. One of such moves was looking for new intellectual properties, with Marvel being the most viable candidate. In 2009, four years into his leadership, Disney purchased Marvel for $4 billion which included access to over 5,000 characters that could be incorporated into Disney’s media strategy. In a press release about the acquisition, Iger said, ‘This transaction combines Marvel’s strong global brand and world-renowned library of characters including Iron Man, Spider-Man, X-Men, Captain America, Fantastic Four and Thor with Disney’s creative skills, unparalleled global portfolio of entertainment properties, and a business structure that maximizes the value of creative properties across multiple platforms and territories’. Further saying, ‘‘We believe that adding Marvel to Disney’s unique portfolio of brands provides significant opportunities for long-term growth and value creation.’ 

While Disney has utilized the franchise to the max, cranking out new adaptations in rapid succession, questions started to arise with movie go-ers, whether the company was pushing it too far. Daniel van Boom at CNET proclaimed in 2018 that with the release of Deadpool 2, Superhero fatigue has finally come around. While his experience is very anecdotal, he pointed out Disney was creating such an oversupply and that comic book enthusiasts like him were skipping new releases as they were so quickly to follow-up one another. Kevin Feige, head at Marvel Studios, responded to Vulture about possible over-saturation of the market with Marvel movies. He countered the argument by saying that nobody will ever get tired of Marvel, as they themselves were infatuated with the product and that new adaptations will keep the line-up fresh. BBC raised the same over-saturation question in an interview with Bob Iger in 2019. Iger said about the Marvel franchise, ‘Marvel is just doing sensationally well.’ Further saying, ‘The last film they released had the highest global box office in the history of the motion picture business, and their pipeline is very, very rich with new stories and new characters and new adventures and new superhero exploits. So not true.’  And he was right, as the movies were still creating tonnes of revenue for the media company. Black Panther, released in 2018, during its opening week, generated $202 million domestically. In total it was able to generate $1.3 billion in box-office revenue. Avengers: Endgame, released in 2019 generated a total box office revenue of $2.79 billion. Double the amount of Black Panther. In terms of popularity, Marvel movies weren’t losing any appeal with the general public just yet. 

A much necessary bet

Marvel had a long history of comic book characters and with its ups and downs through its tumultuous history its future was unclear. But it was able to turn the tides in its favor, attract new talented artists to reboot, or kick start its franchises. Iger on the other hand inherited a company that was down on its luck. Its performance was crumbling, a far cry from its former glory, the Disney Renaissance. The Disney company needed to adjust to the digital age. And fast to prevent it from becoming a relic of the past. 

Iger saw the potential of Marvel, not only to expand its own portfolio but to draw in new types of audiences and incorporate the content expertise in the Disney family. Marvel had excellent team members on board which would bring fresh new ideas into the Disney corporation. Through Marvel, Disney would have the technical and creative expertise to prepare itself for the digital age.

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