The commentary about the recently announced $4 billion purchase by Disney of Marvel Entertainment, home of Spiderman and other popular comic book icons, has focused on a number of issues, but little on the what the deal portends for what it represents in terms of the continuing consolidation of power within the entertainment industry. For instance, Alex Dobuzinskis’ analysis for Reuters focuses on the value of the deal for Disney, which “at best going to take some time to pay off and at worst may have increased some risks for the entertainment behemoth.” (In a follow-up story, Reuters reports Marvel is liable for a $140 million termination fee “if it terminates [the] proposed merger.”)
The deal is yet one more blatant example of the concentration of intellectual property rights (and the economic power that represents) that has become all too common over the past few decades. Some stories have mentioned antitrust concerns, but, they seem to reflect the rather blasé attitude of U.S. News & World Report blogger Matthew Bandyk, who says, “I didn’t think that anyone would raise serious antitrust concerns. Most of the complaints so far have been worries from comic book fans that Disney will dilute Marvel’s content.”
Mark Mayerson pooh-poohs much of this handwringing, who sees it as “one creatively bankrupt company buying another.” He adds:
This is Robert Iger’s second major purchase for Disney. The first was Pixar at a cost of $7 billion. Marvel went for “only” $4 billion. These purchases have defined Iger’s tenure as head of Disney, but not in a way that speaks well for him. While business writers are taken with Iger’s boldness, what we have here is someone who doesn’t believe that his company is able to compete.
When Walt Disney moved into live action, he didn’t buy an existing studio. When he went into television, he didn’t buy an existing production company. When he went into distribution, he didn’t buy a distribution company. When he went into theme parks, he didn’t buy an amusement park. In each case, Walt Disney grew his own company and built its expertise in these areas until the company could compete, and in some cases lead, the particular industry. When Walt Disney was interested in accomplishing something, he did it from the ground up.
(Patrick Goldsmith’s Los Angeles Times story has similar things to say about Iger tenure.)
Though I think Mayerson’s points are well taken, one should also remember that but Disney’s post-World War II expansion beyond animation was done in an era more conducive to smaller, independent studios. After all, his expansion was mostly done in the wake of the Supreme Court’s landmark antitrust decision in United States v. Paramount Pictures, Inc., et al., which aimed at curbing the monopolistic practices of the major Hollywood studios, including block booking and the studios’ control over many of the country’s major movie theaters..
However, due to an increasingly lax regulatory climate that had been gaining steam ever since the Carter and Regan administrations, the last few decades have seen the classic Hollywood studio system essentially reconstituted. While the major studios did not start buying up movie theaters again, they did, for instance, buy up or allow themselves to be bought up by TV networks (Disney bought ABC, while NBC and Universal are both owned by General Electric). And in a bald effort to exert increasing control over intellectual property, the TV networks were able to get government regulations forcing TV networks to use independent producers rescinded; in the same spirit, the entertainment industry pushed through The Copyright Term Extension Act of 1998, which was better known as the Mickey Mouse Protection Act, due to the Disney Company’s high stakes lobbying on its behalf, lest it lose protection for a certain trademarked character.
One of Disney’s traditional strengths has been its ability to exploit its characters (many of which were animated) through merchandizing and other forms of exploitation, including theme parks. In recent years, though this acumen has been increasingly applied to non-Disney properties, including the likes of A.A. Milne’s Winnie the Pooh books, which has been one of the studio’s biggest moneymakers. I’m sure Disney feels confident it can spin additional gold from the Marvel’s legendary cast of 5,000 characters, despite the fact that many of the most prominent among them are already licensed to rival studios; if not, then it will only be out $4 billion, which it can easily write off.
When I first heard of the Disney-Marvel deal, I got to wondering about Captain Marvel, who I liked so much as a kid. Have today’s media conglomerates forgotten him, Mary Marvel and Captain Marvel Jr.? Then I realized that the reason they have not gotten the Spiderman/Superman/Batman treatment is that they are now controlled by the Time-Warner empire through its ownership of DC Comics (publishers of Superman, et al.), which in turn had bought up Fawcett Comics, home of Captain Marvel and the rest of the Shazam universe.