Disney Buys Marvel-GREEDY FAT EVIL FUCKERS

(What chief Bob Iger does--and doesn't--get for $4 billion)--- LOS ANGELES -- The Walt Disney Company's announcement today that it will buy Marvel Entertainment for $4 billion caught Hollywood off guard. Marvel, home to such comic book heroes as Spider-Man, The Incredible Hulk and Iron Man, just recently embarked on a strategy to produce its own movies instead of just licensing their characters to other studios. The result: last year's Iron Man, which earned $585 million at the worldwide box office on an estimated budget of $140 million. Marvel only had to pay Paramount (the studio that distributed Iron Man) an estimated 10% distribution fee and was able to keep the rest of the profits for itself But it was Iron Man's performance that likely inspired Disney ( DIS - news - people ) Chief Executive Robert Iger to go after Marvel in the first place. Until recently Iron Man had been one of Marvel's lesser-known heroes. But thanks to a smart script and a career-reviving performance by Robert Downey Jr., Iron Man is now one of the hottest franchises in Hollywood, right up there with Batman and Spider-Man. The question is: Was Iron Man a sign of things to come at Marvel or a lucky fluke? Iger is betting Disney's $4 billion on the former. He hopes that with the help of Disney's massive marketing and distribution arms Marvel will be able to turn many more of its lesser-known heroes into bona fide franchises complete with multiple films, videogames, dolls and lunch box tie-ins and spinoff television shows. Iger has to hope Marvel can replicate the success of Iron Man because the comic book company's biggest stars, Spider-Man, X-Men and The Incredible Hulk, are tied up at other studios. News Corp.'s ( NWS - news - people ) Fox Studio has the right to produce X-Men and X-Men spin off movies (like this summer's Wolverine, which grossed $363 million at the worldwide box office) in perpetuity. Sony ( SNE - news - people ) is already developing the next three Spider-Man films and has the right to develop many more into the future. Only Paramount stands to lose out from the deal. The studio has the right to distribute five more of Marvel's films. After that it will likely lose out on the distribution fee it currently collects from Marvel turning Iron Man over to Disney. But is that worth $4 billion? Iger isn't getting Marvel cheap. The price tag accounts for a 30% premium on Marvel's stock price. Iger only paid a 4% premium on Pixar shares when it bought the animation company in 2006 for $7.4 billion when prices were much higher than in today's depressed market. And while Iron Man was a hit, other attempts to exploit lesser-known Marvel heroes haven't performed as well. Daredevil, which Fox released in 2003, earned only $180 million at the worldwide box office. An Elektra spinoff, staring Jennifer Garner, did even worse earning just $57 million. Lionsgate's The Punisher earned $54 million at the box office and its follow-up, last year's Punisher: War Zone, didn't even come close to earning back its estimated $35 million budget. The film brought in just $10 million at theaters. In today's conference call, Disney executives played up the opportunities for Disney to exploit Marvel's characters on the company's new boy-focused cable channel, XD. The station currently airs 20 hours per week of shows based on Marvel characters. Disney is also the best company in the world at merchandising its characters using its television channels around the world to promote everyone from Wall-E to Hannah Montana and sell millions of T-shirts, lunch boxes and toys. And the one thing that gives Disney a fighting chance of turning some of those smaller heroes into big screen superstars is John Lasseter, the chief creative officer at Pixar and Disney. Lasseter has shown an uncanny ability to turn out good, unconventional stories in ways that many studio suits would have rejected. His latest triumph is Up, a cartoon about a crotchety old man who loses his wife and embarks on an adventure with a pudgy boy scout. Analysts predicted the tough-sell premise would hurt at the box office, but the movie has gone on to earn $415 million so far. During today's call Iger said Lasseter had met with Marvel's creative executives and that he expects when they get together once the deal closes at the end of the year, "sparks will fly." For $4 billion, they'd better. But is that worth $4 billion? Iger isn't getting Marvel cheap. The price tag accounts for a 30% premium on Marvel's stock price. Iger only paid a 4% premium on Pixar shares when it bought the animation company in 2006 for $7.4 billion when prices were much higher than in today's depressed market. And while Iron Man was a hit, other attempts to exploit lesser-known Marvel heroes haven't performed as well. Daredevil, which Fox released in 2003, earned only $180 million at the worldwide box office. An Elektra spinoff, staring Jennifer Garner, did even worse earning just $57 million. Lionsgate's The Punisher earned $54 million at the box office and its follow-up, last year's Punisher: War Zone, didn't even come close to earning back its estimated $35 million budget. The film brought in just $10 million at theaters. In today's conference call, Disney executives played up the opportunities for Disney to exploit Marvel's characters on the company's new boy-focused cable channel, XD. The station currently airs 20 hours per week of shows based on Marvel characters. Disney is also the best company in the world at merchandising its characters using its television channels around the world to promote everyone from Wall-E to Hannah Montana and sell millions of T-shirts, lunch boxes and toys. And the one thing that gives Disney a fighting chance of turning some of those smaller heroes into big screen superstars is John Lasseter, the chief creative officer at Pixar and Disney. Lasseter has shown an uncanny ability to turn out good, unconventional stories in ways that many studio suits would have rejected. His latest triumph is Up, a cartoon about a crotchety old man who loses his wife and embarks on an adventure with a pudgy boy scout. Analysts predicted the tough-sell premise would hurt at the box office, but the movie has gone on to earn $415 million so far. During today's call Iger said Lasseter had met with Marvel's creative executives and that he expects when they get together once the deal closes at the end of the year, "sparks will fly." For $4 billion, they'd better. But is that worth $4 billion? Iger isn't getting Marvel cheap. The price tag accounts for a 30% premium on Marvel's stock price. Iger only paid a 4% premium on Pixar shares when it bought the animation company in 2006 for $7.4 billion when prices were much higher than in today's depressed market. And while Iron Man was a hit, other attempts to exploit lesser-known Marvel heroes haven't performed as well. Daredevil, which Fox released in 2003, earned only $180 million at the worldwide box office. An Elektra spinoff, staring Jennifer Garner, did even worse earning just $57 million. Lionsgate's The Punisher earned $54 million at the box office and its follow-up, last year's Punisher: War Zone, didn't even come close to earning back its estimated $35 million budget. The film brought in just $10 million at theaters. In today's conference call, Disney executives played up the opportunities for Disney to exploit Marvel's characters on the company's new boy-focused cable channel, XD. The station currently airs 20 hours per week of shows based on Marvel characters. Disney is also the best company in the world at merchandising its characters using its television channels around the world to promote everyone from Wall-E to Hannah Montana and sell millions of T-shirts, lunch boxes and toys. And the one thing that gives Disney a fighting chance of turning some of those smaller heroes into big screen superstars is John Lasseter, the chief creative officer at Pixar and Disney. Lasseter has shown an uncanny ability to turn out good, unconventional stories in ways that many studio suits would have rejected. His latest triumph is Up, a cartoon about a crotchety old man who loses his wife and embarks on an adventure with a pudgy boy scout. Analysts predicted the tough-sell premise would hurt at the box office, but the movie has gone on to earn $415 million so far. During today's call Iger said Lasseter had met with Marvel's creative executives and that he expects when they get together once the deal closes at the end of the year, "sparks will fly." For $4 billion, they'd better. But is that worth $4 billion? Iger isn't getting Marvel cheap. The price tag accounts for a 30% premium on Marvel's stock price. Iger only paid a 4% premium on Pixar shares when it bought the animation company in 2006 for $7.4 billion when prices were much higher than in today's depressed market. And while Iron Man was a hit, other attempts to exploit lesser-known Marvel heroes haven't performed as well. Daredevil, which Fox released in 2003, earned only $180 million at the worldwide box office. An Elektra spinoff, staring Jennifer Garner, did even worse earning just $57 million. Lionsgate's The Punisher earned $54 million at the box office and its follow-up, last year's Punisher: War Zone, didn't even come close to earning back its estimated $35 million budget. The film brought in just $10 million at theaters. In today's conference call, Disney executives played up the opportunities for Disney to exploit Marvel's characters on the company's new boy-focused cable channel, XD. The station currently airs 20 hours per week of shows based on Marvel characters. Disney is also the best company in the world at merchandising its characters using its television channels around the world to promote everyone from Wall-E to Hannah Montana and sell millions of T-shirts, lunch boxes and toys. And the one thing that gives Disney a fighting chance of turning some of those smaller heroes into big screen superstars is John Lasseter, the chief creative officer at Pixar and Disney. Lasseter has shown an uncanny ability to turn out good, unconventional stories in ways that many studio suits would have rejected. His latest triumph is Up, a cartoon about a crotchety old man who loses his wife and embarks on an adventure with a pudgy boy scout. Analysts predicted the tough-sell premise would hurt at the box office, but the movie has gone on to earn $415 million so far. During today's call Iger said Lasseter had met with Marvel's creative executives and that he expects when they get together once the deal closes at the end of the year, "sparks will fly." For $4 billion, they'd better.