Marvel in control of own universe

Marvel-ous position

Paul Bond
The home to such superheroes as Spider-Man and The Hulk has tweaked its name and raised the $525 million it needs to become a producer of movies based on some of its 5,000 characters.

Marvel Entertainment -- previously Marvel Enterprises -- is set to announce Tuesday its name change and completion of its loan package, and also will divulge that superheroes Captain America, the Avengers, Nick Fury, Black Panther, Ant-Man, Cloak & Dagger, Dr. Strange, Hawkeye, Power Pack and Shang-Chi will get the feature-film treatment.

Paramount Pictures, under a deal announced in April shortly after Brad Grey took the helm of the studio, will distribute and market the films, the first of which will be released in 2008 or possibly sooner.

Marvel chairman and CEO Avi Arad said he officially will begin attaching scriptwriters to all 10 projects beginning Wednesday and that, though he has a wish list, he's unsure which movie will be released first.

"No character before its time. The scripts will dictate which is first," Arad said, adding, "I cannot wait to tell Captain America's story. It's a doozy of a story."

In April, Marvel said it would budget each film in the range of $45 million-$180 million, though Arad since has narrowed that to $50 million-$165 million.

"These movies are tentpoles for either summer or the holidays," Arad said.

Paramount will participate domestically and in most countries, though not in Japan, Germany, Australia, New Zealand, Spain and France, where Marvel will sell its films directly.

The seven-year, $525 million debt facility was arranged by Merrill Lynch and Pierce, Fenner & Smith and will be loaned to MVL Film Finance, an indirect Marvel subsidiary set up to protect the lenders' investment should Marvel ever declare bankruptcy.

Marvel also has pledged the theatrical film rights to the 10 characters as collateral. Although rights to some characters could transfer to the lenders in as soon as five years if Marvel's film plans go awry, Arad said he is confident that won't be the case.

"Trust me," he said. "I've protected this universe with my life."

Under the conditions of the deal it has with its lenders and Paramount, Marvel will fund the early development -- including scriptwriting -- of each film and then be reimbursed from the $525 million film-slate facility as each movie is greenlighted by Marvel Studios.

Marvel's trade-off for assuming so much more risk than it has in the past is that it now will get the lion's share of cash generated from movies based on its stable of characters. Previously, Marvel profited relatively mildly from licensing the likes of Spider-Man, X-Men and Fantastic Four to various movie studios.

After film costs, distribution and marketing fees and interest, Marvel gets the profits from boxoffice receipts, home video sales, television rights, soundtrack sales and merchandise.

Although Marvel did all right with such partners as Sony, Fox and Universal, "it was nothing like being at the top of the food chain, like we are now," Arad said.

"Marvel has emerged as one of the strongest, most successful entertainment brands around the globe, with an enviable track record in feature films," Paramount's Grey said.