by Sean Howe
A few weeks later, after Icahn heard that Toy Biz had bought some of Marvel’s debt—to have a say when the banks voted on reorganization plans—Calamari finally got the green light to fire Arad from his position as head of Marvel Films.
In a quest to lure up-and-coming talent to Marvel, Joe Calamari turned to Wizard, the comics magazine whose ascent was, for many, synonymous with the rise of the speculator mania that had swallowed the industry. Wizard publisher Gareb Shamus recommended that Calamari talk to Joe Quesada and Jimmy Palmiotti, two former Valiant Comics artists who’d formed their own fledgling company. “Gareb recommended us,” Palmiotti said, “because we’d done Wizard covers and we were throwing a lot of parties in New York, you know? We would invite every comic company. We didn’t play the DC versus Marvel game. We just thought, as the comics community, we should all be drinking, partying, celebrating the books we do.” But there were two other qualifications that attracted Joe Calamari to them: one, they were also drinking and partying with Hollywood, and had sold a property to DreamWorks. Calamari figured that Quesada and Palmiotti’s movie industry contacts might be of help. Two, they had made a name for themselves on a low budget.
“Make me and Jimmy co-editors-in-chief of Marvel Comics,” the baby-faced, spiky-haired, and earringed Quesada told Calamari, “and we’ll fix your whole company.” For starters, they would deliver movie director Kevin Smith to write the Daredevil comic, which was then on the cusp of cancellation.
They settled on revamping four titles, just as “Heroes Reborn” had—and Marvel ponied up the money for overhauls of Daredevil, The Inhumans, Black Panther, and Punisher. Not Lee and Liefeld dollars, but enough that Palmiotti and Quesada could pay for state-of-the-art digital coloring processes and attract top talent. The titles would get their own imprint, “Marvel Knights.”
“We wanted to show Marvel that we could do their characters better,” Palmiotti said. “It’s an arrogant thing, but it was our goal, to do the best we can and show them how it should be done.” Rhoades set them up in the penthouse floor of the building, to keep them within reach—but out of sight from the rest of the editorial staff. Sure enough, the resentment from Marvel veterans was instant. “They were looking at a map of the Marvel offices,” remembered one editor. “It was editorial on the 10th floor, executives on the 11th floor, and then the penthouse. They were talking about how they were going to refurbish the penthouse, and Quesada made some comment like, ‘At this point, all you really need is the penthouse and the 11th floor.’ ” Bob Harras started getting letters from his staff complaining that the playing field was not level, that Quesada and Palmiotti could use their budget to outbid the rest of Marvel for talent. “Everybody in editorial had gone through two or three consecutive years of layoffs, and a very real concern that everything would just be outsourced, and the offices would be closed down,” said Tom Brevoort. “One complaint was that it was unfair in that if you gave Marvel editorial access to those same resources, we could produce the same results. But we were often handcuffed—saddled with outdated printing systems, not up to date, whereas they could use more sophisticated processes to make their books look better.” Quesada made sure to visit Bob Harras’s office as often as he could, to show that he was a team player. But Harras never came up to visit the penthouse.
Meanwhile, for the second time in just over a year, relaunched versions of Captain America, The Avengers, Fantastic Four, and Iron Man hit the stands. This time, a more back-to-basics approach was embraced, with traditionalists like Kurt Busiek and Mark Waid writing, and superstar artist George Perez returning to Marvel for the first time in twenty years.
The strategy was called “Heroes Return,” and if it was easy to confuse it with “Heroes Reborn,” which it replaced—well, everyone was starting to get whiplash. The executives who’d signed off on the latest relaunches weren’t even at Marvel anymore. “It was like being in a war zone,” recalled one senior employee. “You didn’t know from day to day whether you were reporting to Scott Sassa, or Calamari, or Icahn, or the bankruptcy court, or who.”
On the eleventh floor, Harras was attempting the Herculean task of keeping everyone on the same page. “A new person would come in at the top,” said Tom Brevoort, “and they’d declare, ‘We’re marching left.’ Bob would turn everything around, only for somebody new to come in a week later and say, ‘Why the fuck are you marching left? You should be marching right.’ And then he’d have to run around and do that. It was absolutely crazy. He had to deal with a company that didn’t necessarily know if it was going to make its payroll. Yet it was still the best-selling comic book company in existence, and he needed to keep that machine running.”
Some of the staff, though, were starting to lose faith. Harras had never been known for his directness, and now coworkers complained that he was retreating behind the closed door of his office, waiting for cues from each succeeding executive. “A real leader,” said one editor, “would have seized the opportunity to say, ‘There’s a revolving door at the top; nobody’s looking at what we’re doing. Here’s my opportunity to put my stamp on the entire line, and give everybody the kind of leadership they need for as long as it lasts. This house of cards may fall tomorrow, but at least let’s go down doing our best.’ He was paralyzed.”
“Heroes Return” gave Marvel a brief sales spike, but sales were dropping for Marvel, along with the rest of the industry, at a rate of about 20 percent a year. And the problems went beyond publishing. “The licensing dried up,” said Rhoades, “because nobody wanted to pay a lot of money to make a Spider-Man bed sheet if Marvel was going to go out of business. All of the revenue streams were drying up in the middle of this huge public battle.”
Just before Christmas 1997, the bankruptcy court—sensing that Carl Icahn’s team was failing to put together a workable strategy—named a trustee, John Gibbons, to oversee Marvel. Gibbons, looking to retain some continuity at the company, told Joe Calamari he could stay and run things while he focused on showing Marvel’s paperwork to prospective buyers in a conference room in his Newark office. (Meanwhile, according to Rhoades, Calamari and Marvel CFO Augie Liguori “got it in their heads that they could snatch the company out of the bankruptcy judge’s hands, and were playing their own game against Icahn, and against Avi and Ike Perlmutter.”)
Jim Shooter, who’d already been part of a team that made a bid for Marvel back in 1988, found backing from yet another group of bankers, and enlisted comics retailer Chuck Rozanski to sort through the hundreds of cartons of files. “By the time I was done reading the licensing contracts,” Rozanski recalled, “I came to realize that there was nothing of value left to buy in that area. Ronald O. Perelman’s staff, either through ignorance, or by design, had completely ruined the prospects for Marvel to earn any substantial licensing revenues. The Toy Biz deal totally screwed up the toy rights, the lawyers had created a tangle of conflicting rights in other areas, and whatever remained had been sold cheaply in exchange for upfront cash payments.”
MGM, Sony, and Warner Bros. (which owned DC Comics) each trekked out to Newark, but they didn’t like what they saw, either. According to Rozanski, “It would take years before the income streams could be restored to cover even the $20 million per year in interest that a $200 million bid would entail. For Icahn and Perlmutter to be talking numbers over $400 million was simply irrational except within the context of their own fears. Icahn was terrified he would lose the $200 million he invested, and Perlmutter feared losing Toy Biz.”
Perlmutter’s patience eventually paid off. By February 1998, Toy Biz had put together another reorganization plan; the court finally approved it in July, over Icahn’s objections. To clear the final hurdles, Toy Biz paid $3.5 million of Icahn’s legal costs and granted him general release from litigation; in turn, Icahn promised not to take legal action against Toy Biz. On September 27, 1998, Toy Biz and Marvel Entertainment Group merged into Marvel Enterprises. The two-year bankruptcy was over, and Isaac Perlmutter and Avi Arad
were back on top.
Toy Biz’s seizure of Marvel could not have come at a more opportune moment. In early August, New Line Cinema released Blade; although the vampire slayer from Tomb of Dracula never had more than a cult following in the comics, the Wesley Snipes vehicle quickly earned $70 million, four times the intake of the much higher-budget Howard the Duck. Blade had been in development for a decade, and now, although Marvel only saw $25,000 of the profits, suddenly there was proof that Marvel Comics characters were viable as film franchises. “Blade was the least likely to succeed,” said Avi Arad. “That was the first time it seemed clear to Hollywood that the Marvel franchise was something special.”
Weeks later, more serendipity: the Marvel Knights line launched with Kevin Smith’s Daredevil, garnering attention from the mainstream media attention—and development executives. Joe Quesada and Jimmy Palmiotti had both worked in advertising, and now they put their marketing skills into a grassroots full-court press. They traveled the country, pumped hands at conventions, signed at galleries, and showed up on MTV. “Joe and I would drive up to Wizard magazine,” said Palmiotti, “and outline the press we wanted to do for the next six months. We’d trade favors, do art for the magazines, chatrooms, all that stuff.” Before long, their own sunglasses-wearing faces were featured in the advertisements, trading on a cult of personality not seen since the early Marvel days.
“We made some good money and we threw big parties in New York,” said Palmiotti. “We’d have guys coming and saying, ‘I’d love to do a book for you guys.’ And we’d get our next talent there.” They also started meeting comic-reading filmmakers, like John Singleton and Robert Rodriguez, and going to their parties. “All of a sudden, there was a switch that went off. People were looking at superheroes differently. We had the door open for people to start thinking about comic books as films.”
Many of the veterans argued that they’d already been thinking about films for a while—they just couldn’t get anyone else to listen. There was still tension between the rest of the editorial staff and the shiny penny that was Marvel Knights. If Kevin Smith missed a deadline, he didn’t get fired; the book just came out later. If a Punisher series failed, Quesada and Palmiotti could just launch another. “No one would have gotten that many swings of the bat, but they did,” complained one editor. “It seemed as if Marvel Knights got to use more money, have more time, with less restrictions, all so that they could look good in relation to the standard editorial row.”
But the penthouse lights burned until one or two in the morning most nights. “I used to come in every Saturday,” said another editor, “and they were always there.”
Quesada and Palmiotti restored luster to Daredevil, The Inhumans, Black Panther, and Punisher, each of which had diminished since they’d first read them as children in the 1970s. Even more notable was Marvel Boy, by Scottish enfant terrible Grant Morrison, who in his work at DC had revived Steve Englehart’s neglected legacy of absurd metatextualism and political commentary. Although Marvel Boy was a new character, the name borrowed from a handful of short-lived heroes who’d flitted in and out of existence since the 1940s, and his violent tantrums (Morrison called them the “ultimate adolescent power fantasy”) were an intentional throwback to Bill Everett’s early, angry Sub-Mariner tales. An alien Kree traveler whose spaceship was shot down by a maniac industrialist, Marvel Boy trashed New York City in revenge—spelling out profanities with fifty-foot flames—and fought a “living corporation” called Brand Hex. (There was even a winking acknowledgment that Marvel itself was part of the creeping globalization: subway dwellers wore Punisher jackets and Fantastic Four T-shirts.) “I wanted my hero to be an outcast,” Morrison said, “a fiery rebel with an appetite for righteous mass destruction.” In another couple of years, it would be unthinkable to show such behavior in a comic-book satire, but in that tiny window at the turn of the century, playing out against the real-life backdrop of No Logo, the Seattle WTO riots, and Bush v. Gore, Grant Morrison’s Marvel Boy revived the dual thrills of danger and relevance. Marvel hadn’t taken chances like this in years.
But the company was still broke, surviving on a $200 million bridge loan that would have to be paid back soon. Perlmutter’s first order of business was to terminate the expensive contracts with executives that dragged on the company’s finances. Stan Lee wasn’t worried when he heard the news. His $500,000 per year lifetime deal was a special case—after all, he was the face of Marvel Comics. Nor did he worry when Perlmutter summoned him to New York. “Ike greeted me like a long-lost brother,” Lee recalled, “telling me how important I was to him and the company and assuring me that I’d be making more money than ever from now on. I thought to myself, Gee, why did people tell me he’s such a cold fish?” Then Perlmutter presented him with a two-year contract at half his previous salary. Lee was astonished. After the royal treatment by Bill Bevins, he thought, this was like Martin Goodman all over again.
But Perlmutter had underestimated just what Stan Lee’s loyalty meant to the company. Lee’s lawyer began negotiating. Without a contract, Lee might contest the ownership of some of those characters for which Marvel had, on innumerable occasions over three decades, credited him as the creator. And even if Lee didn’t have much of a case, the damage to Marvel’s public image would be devastating. The two parties eventually settled on a salary raise to $810,000 (with generous annual increases), plus a $500,000 yearly pension for his wife, plus $125,000 for writing the Spider-Man comic strip, and a whopping 10 percent of any movie and television profits that Marvel enjoyed. Furthermore, the new contract was nonexclusive, which meant that Lee could supplement his income in other ways—in fact, by the time he re-signed with Marvel, he’d already lined up an Internet start-up called Stan Lee Media.
While Lee’s lawyer played hardball, Perlmutter saved money by sacking executives. He removed Joe Calamari (who only a year earlier had personally fired Avi Arad), Shirrel Rhoades, and a half dozen others. Then he rehired former president Jerry Calabrese to put editors out on the street. In a matter of weeks, most of the staff was gone; the number of editors was reduced from thirty to six. More titles were canceled. Every Friday, members of the dwindling staff wondered which side of the going-away parties they’d be on.* Once fired, an employee was told to leave his personal belongings in a box for inspection and leave the building. If the box contained comic books on which the employee had worked, they would be removed—they were company property, Perlmutter insisted.
Speculation that Marvel would soon simply hire its competitors to produce its line of comics, entirely eliminating the need for an editorial staff, ran rampant. Smoked-glass conference room doors, etched with Spider-Man logos, had been special-ordered five years ago, at the height of success; now they were among the items the company auctioned off and shipped away.
The joke everyone muttered was that, if Ike Perlmutter had his way, Marvel would consist of one guy in an office with a phone, licensing the characters. Why waste money on anything else? Memos demanded that paper clips not be thrown away, that lights be turned off if an office was vacated for more than five minutes. “Ike was an absolute tyrant, plain and simple,” said one longtime employee. “There was no negotiation, there was no meeting of the minds, If Ike said, ‘Turn the computers off at 5 pm,’ you turned the computers off at 5 pm. If you crossed Ike, you were gone.” (Fueling the fear was the rumor that the Six-Day War veteran still carried a pistol on his ankle.) After the coffee machine and bottles of water were removed from the Bullpen, word got around that Perlmutter was pushing for a policy of urinalysis for all employees. President Jerry Calabrese, for one, couldn’t take it. “After only a little less than two months,” he wrote in November, “it’s clear to me that it would be impossible for me to make the kind of positive impact and difference I believed possible when I accepted the task.”
Meanwhile, Perlmutter had begun to suspect that his longtime Toy Biz ally Joseph Ahearn, who was now chief executive at Marvel, was about to make a bid fo
r power. Against the advice of his inner circle, Perlmutter called for Ahearn’s ouster. Eric Ellenbogen, formerly of Lorne Michaels’s Broadway Video, was announced as the replacement. In his first days on the new job, Ellenbogen suggested that a Christmas party would help the Marvel staff’s morale.
No, said Perlmutter. That was a waste of twelve hundred dollars.
Weeks later, a number of freelancers began receiving letters claiming overpayment and demanding that money be returned to the company. Steve Gerber opened his mail to find a bill for fifty-three dollars.
In a strategy that was now tradition for Marvel ownership—but ironic nonetheless, given recent history—Toy Biz repaid its bridge loan with money raised through the sale of junk bonds. In February, the dumping of Fleer and Skybox, those dual albatrosses from the Perelman years, brought in another $26 million. They were sold at a fraction of what they’d cost, but Perlmutter was glad to take the money.
