marvel comics turnaround - Turnaround Management Association

Marvel Comics Turnaround Team 2
PART IV: PROSPECTS FOR THE FUTURE
What Could They Have Done Better/Differently?
The company clearly did a skillful job of turning itself into a cash cow. What is less certain
however is the long-term viability of this licensing model, upon which the entire business of
Marvel depends.
The Risk: Marvel’s current success is largely driven by a handful of blockbuster films that
have licensed their characters – Spiderman, the X-Men franchise and Daredevil to a certain extent.
This means that Marvel’s fortunes are intimately tied with Hollywood’s fortunes. Hollywood is a
hit driven industry – one big hit offsets a string of break-even or loss-making ventures. For Marvel,
a movie’s box office revenue drives not only its movie licensing revenues but also all of its
downstream revenues except for the core comics business. Thus if movies based on Marvel
characters produce less than stellar box office returns, all of Marvel’s revenue streams will be
adversely affected.
The question then becomes – will Marvel characters continue to produce hits? The answer is
still up in the air. The Hulk, which was supposed to bring in blockbuster revenues flopped at the
box office. As Marvel works its way down its list of marketable characters, it will increasingly be
left with lesser known ones that will reduce the likelihood of a blockbuster. Further, the box office
success of earlier movies like Spiderman will determine how interested the studios will be in the
future, which will determine the amount of negotiating leverage that Marvel will bring to the table
for licensing contracts. The pipeline for movies, DVDs and video games looks good for 2004-
2005, but what if there are no more hits? And if Marvel decides to flood the market with as many
of their superhero movies as they can, will audiences tire of them in the same way that comics
readers grew tired of the oversaturation of comics books under Perelman? Given this huge
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