Mickey Mouse, meet Spider-Man. Walt Disney's dis $4 billion acquisition of Marvel Entertainment, mvl the biggest in the media market this year, creates an eclectic stable of Iron Man, Mickey Mouse, Wall-E and Spider-Man at a time when the media industry is coping with cutbacks by advertisers and consumers.
But Disney CEO Robert Iger sees the union of superheroes, villains and lovable characters as a golden opportunity for the Magic Kingdom to aggressively expand its audience — especially males — through movies, TV, the Internet, comic books and other merchandise.
Under the deal, announced Monday and expected to close by the end of the year, Disney will acquire the rights to 5,000 Marvel characters. "It gives us a treasure trove of content," Iger said.
Disney approached Marvel a few months ago "to get to know them," Disney Chief Financial Officer Tom Staggs said. Discussions quickly escalated into acquisition talks between Iger and Marvel CEO Ike Perlmutter, Staggs said.
Marvel shares soared 25% to $48.37 in trading Monday. Disney shares slipped 3% to $26.04.
The accord is "doubly smart" for Disney because it picks up world-class intellectual property and eliminates one of its chief rivals, says Michael Uslan, executive producer of The Dark Knight and a comic book historian.
"It's the greatest thing that could happen to both companies," said comics icon Stan Lee, who co-created Spider-Man, the Fantastic Four, the Incredible Hulk and scores of other do-gooders. "For Disney to now have the entire catalog of Marvel characters is a dream come true."
The deal doesn't come without challenges. Declines in ad spending and DVD sales, coupled with rising production costs, have forced movie and TV studios to shed thousands of jobs the past two years. "Iger has generally done a good job in meeting the economic challenges," says Harold Vogel, an independent media analyst. "People will closely watch this deal, but it doesn't put him under the same type of pressure as the Pixar deal."
Iger says the deal will benefit Disney in many of the ways its $7.4 billion acquisition of Pixar Animation Studios in 2006 did. The studio, co-founded by Steve Jobs, has created the critically and commercially successful Toy Story, Wall-E and Up.
"The case of Pixar was a crying need for us to strengthen our animation," Iger said in a phone interview. "The acquisition of Marvel offers us an opportunity to distribute a complementary set of characters" via movies, TV and the Internet.
The agreement raises the reach of Marvel via Disney's massive global distribution network and its relationships with retailers. Disney generated $30 billion in worldwide retail sales last year, from which Disney earns licensing fees.
Another aim of the deal is to help Disney appeal to young men who have flocked to theaters in recent years to see Marvel superheroes such as Iron Man and X-Men on the big screen. Among young women, Disney's recent successes have come through light-hearted fare such as High School Musical, Hannah Montana and the Jonas Brothers, says Michael Morris, an analyst at UBS Securities.
Disney has already taken steps. This year, it rebranded cable network Toon Disney into the boy-focused Disney XD. Marvel television shows already account for 20 hours per week of programming on XD, and that is likely to increase, Iger said.
Besides bolstering Disney's standing among young males, the deal could help its movie, amusement park and merchandising properties: