marvel comics turnaround - Turnaround Management Association

Marvel Comics Turnaround Team 2
Introduction
PART III: THE QUALITY OF THE TURNAROUND
On the whole, we believe that Marvel’s transformation from a bankrupt to a profitable
company during 1997-2000 was skillfully handled by the management team that was eventually
led by F. Peter Cuneo (the appointed CEO of Marvel from 1999-2001) and Ike Perlmutter (the
CEO of Toy Biz and a Marvel director). Our analysis of the turnaround is organized across three
time periods, which represent significant milestones in its turnaround effort: (1) the “Bankruptcy
Years” from 1997-1998, (2) the “Repositioning Years” from 1999-2000, and (3) the “Stable but
Uncertain” Years from 2001-present. Across these three time periods, we assess whether the
company’s turnaround decisions along financial, operational and managerial dimensions were
“Good” or “Poor”.
The “Bankruptcy Years” from 1997-1998
During this period, the management team spent much of its effort trying to meet its bankruptcy
covenants while trying to fix obviously broken parts of the company. We believe that during this
period, management should have:
• Shed as many unprofitable and/or all non-core businesses (ones not directly related to the
creation and marketing of Marvel superheroes) as quickly as possible to save/generate cash.
• Renegotiated all major business contracts to maximize cash-favorable terms.
• Articulated a clear, coherent vision of the company to set future investment direction.
Upper management succeeded in doing some of these things, but often did not go far enough, or
retained parts of the business that they should have ceased. As a result, the management team was
reshuffled twice in two years by the Board of Directors 16 .
16 From Marvel Enterprises, Inc. annual reports on Form 10-K for years 1997-1998, Management Sections.
26