by Ben Fritz
The Happiest Comic Book Company on Earth
Marvel set an earnings record in 2008, with profits up almost 50 percent. By the end of the year, its stock was trading at more than $30 per share, up from less than $1 in the dark days of 2001.
But still, Perlmutter was nervous. He was no expert on Hollywood, but he knew a smash success out of the gate, which Marvel had with Iron Man, was a rarity. Maybe, he thought, they had just gotten lucky, and their experience with The Incredible Hulk would be the norm. Perhaps, with the stock at an all-time high, they should consider getting out while the getting was good.
After years of concentrating on building the company, Perlmutter was open to discussions about a sale or a merger. Maisel pitched the idea of a combination with DreamWorks, the company behind Shrek and Madagascar, arguing that their animation assets could pair nicely with Marvel’s live-action business. But it never went beyond the idea stage.
Following the success of Iron Man, many at Marvel expected offers to flood in, particularly from Paramount’s owner, Viacom, which would seemingly want to double down on the success it was enjoying through releasing Marvel films. Or perhaps Sony would make another offer, this time without Hasbro, as some within that studio were eager to do. But Sony didn’t.
Maisel figured that Marvel would be the best fit for, and thus get the best price from, his former employer, Disney. Under Bob Iger, who became CEO in 2005, Disney was focusing on brands and franchises above all else, and Marvel was fast becoming one of the most distinct in the entertainment business. Disney had paid a huge premium to acquire the biggest brand in animation, Pixar, in 2006, and now Iger and his team were considering Marvel as their next target.
Maisel and Iger finally met in February 2009. For Iger, it was a chance to find out what Marvel had to offer and whom he should be talking to. The ultra-secretive Perlmutter never even spoke to the investment community, and Iger was unsure who at Marvel actually had the authority to make a deal.
It took another four months for the pair to meet again, but that June, Iger told Maisel he might be interested in a deal. Maisel left behind a copy of The Marvel Encyclopedia, with information on every one of the company’s characters, numbering more than five thousand. In the parking lot outside the Team Disney building, where executives run the world’s largest media company behind a façade featuring seven twenty-foot-tall dwarves, Maisel called Perlmutter to let him know they officially had a suitor. Maisel knew that if his boss didn’t like the idea of a combination with Disney, he could fire his subordinate for approaching Iger without permission. Instead, an intrigued Perlmutter told Maisel to come to New York and discuss the possibility further.
Perlmutter wanted the money that would come from a sale, as well as the security of not having to worry how far back a few box-office flops would set his company. But although he was sixty-seven, he was definitely not ready to retire. Ike still wanted to keep leading the company that he had resurrected from the grave over the past decade. Once again, he wanted all of the upside possible in a deal, with none of the downside.
A few weeks later, Iger began a charm offensive to prove that was possible. He flew to New York and met with Perlmutter at his office. “I like this man, I really like this man,” the Marvel CEO told an associate afterward. That night, Perlmutter and his wife, Laurie, had dinner with Iger and his wife, the journalist Willow Bay. The next morning, Perlmutter was feeling even better. “I trust this man,” he told the colleague.
There was no way of guaranteeing in a sale document that Iger would leave Perlmutter in charge and allow him to preserve the unique, and uniquely cheap, Marvel corporate culture. So Perlmutter began talking to people who had worked closely with Iger, including Steve Jobs, who sold Pixar to Disney in 2005 and was now the company’s biggest independent shareholder. “He’s great. Everything he said he was going to do, he’s done,” Jobs told Perlmutter.
With Iger’s encouragement, Feige and other Marvel Studios executives flew to Pixar headquarters outside San Francisco to confirm for themselves that a distinct creative culture was possible within the Walt Disney Company behemoth. On August 31, Disney announced it would buy Marvel for $4 billion. Perlmutter personally made about $1.5 billion. Maisel, who left following the sale, made more than $20 million.
For years, the deal worked out exactly as both sides had hoped. Perlmutter was allowed to run the company his way, continuing to split his time between New York and Palm Beach. Working out of a dingy office in the L.A. suburb of Manhattan Beach, with none of the trappings of a Hollywood lot, Marvel Studios continued to be famously cheap.
Stars were signed to multi-movie contracts and paid tiny salaries, by Hollywood standards, with rewards in the form of bonuses for box-office performance, not gross points. The virtual newcomer Chris Hemsworth was paid $150,000 to star in the first Thor movie, and Chris Evans received $1 million for Captain America: The First Avenger. The only star to make huge money was Downey, because his contract ended after three films and he was able to renegotiate with leverage on his side. He earned more than $50 million for 2012’s Avengers alone.
As pugnacious and controlling as ever, Perlmutter threw his weight around at his new company. He even successfully pressured Iger to replace the chairman of Disney’s consumer products business. Executives became used to screaming phone calls from Palm Beach while the sun was still rising in California.
Disney, meanwhile, got the most consistently successful live-action movie brand in Hollywood history. Post–Incredible Hulk, everything worked. Iron Man 2 grossed $624 million, and Iron Man 3 grossed $1.2 billion. Avengers, teaming all of Marvel’s superheroes together, grossed $1.5 billion. Guardians of the Galaxy grossed $773 million. Even the widely mocked Ant-Man sold $519 million in tickets. Maisel and Feige’s bet proved exactly correct: for fans, movies set in the same “cinematic universe” would feel like sequels, and they would show up for all of them if the films had the same lighthearted, fun tone.
By 2015, Feige was chafing under Perlmutter’s scrutiny. He was now one of the most powerful moguls in Hollywood and, like Arad a decade earlier, he hated having to justify his every decision to an obsessively cheap executive on the other side of the country. Their clashes became increasingly intense as the movies got bigger, more expensive, and more complex, with characters regularly showing up in each other’s sequels and budgets exceeding $200 million.
Feige demanded his freedom and Iger granted it, allowing the Marvel chief to report to Disney’s more laid-back movie studio chairman, Alan Horn. Marvel Studios moved to a new home on the Disney lot that was nothing like the dumpy, no-frills offices, with old carpets and bare walls, that Marvel Studios used to operate out of in Manhattan Beach. The new digs were decorated with superhero wallpapers, statues, and props. Feige bragged about the track lighting Disney installed in Feige’s conference rooms, to spotlight marketing concept art that hung on the walls. Perlmutter, who jammed three comic book editors into each office at Marvel’s office in New York, would have never sprung for such an unnecessary feature. Perlmutter remained with Disney, overseeing Marvel television, toys, and comic books, but this change was an undeniable insult.
It was other studios, however, that were most damaged by Feige’s success. Why, their corporate bosses wanted to know, couldn’t they be as successful as Marvel? Of course other studios had hits, but nobody was pumping out two surefire blockbusters per year (soon to be three) like Marvel, with nary a flop in the bunch. Even the movies that clearly weren’t as good as the rest, like the second Avengers film, seemed to get a pass from audiences and critics, engendering no small amount of bitterness throughout the rest of Hollywood. “Marvel could have made a movie about someone picking his nose and it would have been 98 on Rotten Tomatoes,” complained Arad, who as a producer of Sony’s Spider-Man films now competed with his former employer.
It wasn’t as easy as Marvel made it look. Though its films weren’t all perfect, they shared a consistent tone that balanced old-fashioned advent
ure, The Office–style workplace comedy, and a perfectly sized dollop of contemporary characterization and political concerns—enough to engage adults but never so much as to turn off a ten-year-old anywhere in the world.
Warner Bros. had arguably better-known superheroes in its DC Comics library, but 2013’s Man of Steel and 2016’s Batman v Superman were widely disliked by fans and not as successful at the box office, in large part because they were too serious and somber. Suicide Squad was a hit in 2016, but a barely competent piece of filmmaking despised by critics, fanboys, and even executives within Warner. It wasn’t until 2017, with the fresher and more optimistic Wonder Woman, that Warner finally found its footing with DC.
Everyone now had cinematic universes on the agenda. Paramount was turning Transformers into one, Universal did so with its monsters Frankenstein and the Wolfman, and Warner with King Kong and Godzilla. Nobody, however, was as much affected by Marvel’s ascendancy as Sony Pictures.
5
Spider-Man: Homecoming
Why Sony Gave Up Its Most Valuable Asset
“I am sure you are getting this,” Michael Lynton wrote to Amy Pascal in July 2014, his sigh almost audible within an e-mail. “[I’ve] gotten these for the past 12 years,” Pascal wrote back.
“This” was an Internet petition, forwarded to the Sony Pictures CEO, urging him to give the movie rights to Spider-Man back to Marvel. There were, in fact, a number of them circulating online. “With The Amazing Spider-Man 1 and 2 not being ‘Amazing’ and you (Sony) not having a plan for the franchise, the character Spider-Man is dying,” read one. “Because Sony can’t make a good spider man movie,” read another. “Sony has had their chance with the property and failed, we the people want spiderman back with marvel,” pleaded a third.
What the fans didn’t know was that in the wake of the failure of The Amazing Spider-Man 2, Sony was considering just that.
It was a long time coming. Sony had been struggling with Spidey since 2007’s Spider-Man 3. Though it grossed more than any other film with the character, thanks to growth in international markets and residual goodwill from Spider-Man 2, the threequel was a mess. Raimi appeared to have lost his touch, turning Peter Parker at one point into an emo buffoon who literally dances in the street. And Maguire, now in his thirties, was getting too old to play the character as a teenager or even a young adult.
Worst for the studio, because the costs of talent and visual effects were getting so high, the profits from Spider-Man 3 were $159 million—nothing to sneeze at, but down 35 percent from Spider-Man 2 and 64 percent from the original.
As Sony executives started planning the fourth Spider-Man movie, they realized that they had financial problems along with creative problems. In order to bring back Maguire and Raimi and spend the more than $200 million now necessary for a large-scale “event” film, they’d be giving away all their profits. Projections showed that the best Sony could do with a Spider-Man 4 was break even. And after multiple rewrites from big-name screenwriters, Raimi had lost his passion. One night he called Pascal at home to inform her that he was done with the web-slinger.
So in 2010, Sony decided to “reboot,” a term that originated in the computer industry. Decades ago, comic book creators adopted the word to refer to their occasional practice of pretending prior stories had never happened and retelling a character’s origins from scratch. As she had for the first Spider-Man movie, Pascal identified a promising young director (Marc Webb, coming off the indie romantic comedy 500 Days of Summer) and a sensitive, talented young star, the little-known British actor Andrew Garfield. They would once again tell the tale of a teenage Peter Parker, granted amazing powers when he’s bitten by a radioactive spider.
But as Marvel had discovered with The Incredible Hulk, audiences don’t get excited about retellings of stories that they’ve recently seen. In 2012, The Amazing Spider-Man was shockingly similar to the original Spider-Man of 2002. With $758 million, it grossed less than any of the first three Spider-Man films—a bad sign, particularly in the same year that Marvel’s Avengers made twice as much.
If at First You Don’t Succeed . . .
With no other hit global franchises and with pressure mounting from the staggering success of Marvel Studios, Sony had to up the ante for the next go-round in 2014. Not only did it spend a hefty $260 million to make The Amazing Spider-Man 2 as big an event as possible, but it also announced plans to give Spidey his own cinematic universe. In addition to sequels featuring the superhero every other year going forward, the studio was developing spinoffs featuring the Sinister Six team of villains and the web-slinger’s most vicious foe, Venom.
Publicly, Sony executives boasted that they had a “rich universe” that could stand up to the competition. Privately, they knew it was a stretch to build a cinematic universe off a single superhero and his supporting players. “I only have the spider universe not the marvel universe,” Pascal complained. “And in it are only his villains and relatives and girlfriend. No superhero team up here.”
Among The Amazing Spider-Man 2‘s flaws were the too-obvious attempts to build out a cinematic universe, introducing superfluous characters and story elements clearly meant as seeds for spinoffs. Marvel was able to accomplish this with a light touch in its movies, but Sony couldn’t seem to do so without using neon-red arrows.
Marvel had helped promote The Amazing Spider-Man 2, as was its responsibility and in its interest, if the company wanted to sell more toys. Perlmutter, in fact, had been laying off Sony for years, since a deal in 2011, by which Sony gave up its participations in Spider-Man merchandise and Marvel, in return, gave up its 5 percent share of the movie revenue. It also paid cash-strapped Sony $175 million, plus $35 million for each future film released.
Lynton thought it was a smart way to end the acrimony, but as with his prior Marvel settlement, a number of senior executives were opposed to it. The studio had made a total of $245 million from its share of Spider-Man merchandise through 2010, and the detractors thought Sony should be fighting to grow that business, rather than give it up.
But the deal, not publicly disclosed except in the broadest of terms, went ahead. Whether smart or not, it stopped Perlmutter’s incessant complaints from Palm Beach. Combined with the success of Marvel Studios, now part of the Disney empire, and the struggles of Sony’s motion picture business, it also flipped the power dynamic in their relationship. Though they were ostensibly partners, Pascal now feared that executives at Disney and Marvel didn’t think her Spider-Man movies were that good anymore.
“It s weird im geting great reaction to film from everyone except the disney folk,” she wrote to a colleague as Sony was screening The Amazing Spider-Man 2 before its release.
Soon after the movie opened, the Sony executive Rachel O’Connor, who oversaw the Spidey movies most closely, e-mailed Feige, asking for his help on the next sequels and spinoffs. Ten days later, he hadn’t replied.
The affable Feige would never admit it to Pascal’s face, but he and his team at Marvel had for years disliked what Sony had been doing with the character. He thought that restarting with The Amazing Spider-Man, rather than moving on from Raimi’s mistakes in Spider-Man 3, had been a big mistake.
“In a million years I would never advocate rebooting . . . Iron Man,” Feige wrote to Marvel Entertainment’s president, Alan Fine, and its vice president of production, Tom Cohen. “To me it’s James Bond and we can keep telling new stories for decades even with different actors.”
Fine concurred: “I think that it is a mistake to deny the original trilogy its place in the canon of the Spider-Man cinematic universe. What are you telling the audience? That the original trilogy is a mistake, a total false-hood?”
He had even harsher words for the script of The Amazing Spider-Man 2 that the Marvel trio had recently read: “I found this draft tedious, boring, and had to force myself to read it through . . . This story is way too dark, way too depressing. I wanted to burn the draft after I read it never mind thinking ab
out buying the DVD.”
The Hunt Begins
It hurt the hearts of Feige and many on his team that Sony was doing such a poor job with Marvel’s most beloved character. Perlmutter, meanwhile, was hurt where he felt it most: in the wallet. Sales of Spider-Man toys were slowing, and he attributed that in part to audiences’ dissatisfaction with the movies.
Marvel Studios, he and his team felt, could do a better job with the character. But he had no way to make that happen. Under the 1998 deal, as long as Sony released a Spider-Man movie every five years and nine months, it could retain rights to the character forever.
Perlmutter needed to convince Sony that it would benefit from giving the character back. He targeted Lynton, an old acquaintance who had briefly served on Marvel’s board of directors in the late 1990s, in a series of e-mails and phone calls in the months after The Amazing Spider-Man 2 opened.
Feige, meanwhile, targeted Pascal. At lunch on a patio outside her office, in the summer after The Amazing Spider-Man 2, he pitched his fellow creative executive on the benefits of having Marvel Studios produce the next film, so that Peter Parker could join the same cinematic universe as Iron Man, Captain America, and Thor. “I love Spider-Man and I want to help,” he told her.
Pascal was so offended, she threw her sandwich at Feige and told him, playfully but truthfully, to “get the fuck out of here.” Turning the character over would be an insult, she felt, not just to her but to the entire studio.
But Marvel didn’t relent. At the Sun Valley conference for media moguls in 2014, Perlmutter’s boss, the Disney CEO Bob Iger, brought up the issue to Lynton’s boss, Kaz Hirai, Sony’s CEO. He approached Hirai at the luxury Idaho resort and urged him to consider that the recent run of bad Spider-Man movies was hurting both their companies and that Marvel could do a better job. But Hirai was cool to the idea, in part because he was surprised to hear that fans hadn’t been pleased with the Amazing Spider-Man reboots. Apparently this was news to him.
