Iron Man Spawns a Marvel of a Movie Studio

(page 2 of 2)

Will that happen? Who knows? The box office gods are fickle. Anyone remember the Incredible Hulk, the 2003 film that Universal licensed from Marvel that went on to gross a very un-super $132 million? (More on that later.) That kind of number will send Marvel shareholders running for their Rolaids. The good news: Marvel is paying a lower-than-industry-average distribution fee to Paramount to get the films to theaters. According to its 2005 distribution agreement with Paramount, Marvel also gets to hang onto the merchandise, video game, and even network TV rights for its movie characters. That adds up: Spider-man alone accounted for some $132 million in merchandise revenue last year, according to Marvel's financials, although Marvel had to split that with Sony.

Marvel Has a Lot Riding on This

Marvel isn't sharing this time around. That's why Marvel's stock, now around $29, has been climbing—up by 8% in April alone—in anticipation of the Iron One making his big-screen debut. Having it all in-house changes everything for Marvel. "We have significant upside now," says Maisel. "We don't share the benefits and we don't have any material cash exposure." Better yet, Maisel pointed out during a recent lunch, he gets to greenlight his own films, a big deal for a company that waited through lawsuits and bankruptcies by various studios before getting Spider-man to the screen.

Paramount has done a great job making sure we all know Iron Man is coming. Anyone catch the Super Bowl spot? The studio also sent Downey off to Comic-con, the annual geekfest for comic buffs, and even down to Austin, Tex. to make nice to internet film critic Harry Knowles, the god of all things cinema to fan-boys. Marvel worked the comic-book faithful, creating a special issue that pitted the Iron Man against Captain America. Heck, there was ol' Robert, Jr. ringing the opening bell at the New York Stock Exchange three days before the flick opened.

Marvel has a lot riding on the next few weeks. Even after Iron Man has cooled his jets after what the company hopes will be a rocking great box office ride, the studio is onto its second flick, The Incredible Hulk. The big Green Guy hits movie screens in June. Yes, that's right, the Hulk, the same muscle-bound goof who fouled the air in theaters back in 2003. Maisel says this time a revamped Hulk will capture America. If it does, a new studio may take off in Hollywood like some web-spinning super hero with an overactive bug bite.

Grover is Los Angeles bureau chief for BusinessWeek.