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Marvel Enterprises Sick?
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By DCWD40
May 8, 2007

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Sick...and tired of all the talk about how risky the movie business is. Don't buy Marvel because they could lose their shirt on a movie. Yet the same analysts will turn around and say to buy Sony, or News Corp, or Viacom because movie profits are a wild card that could lead to outstanding profitability. Sony has 1 billion shares outstanding; News Corp 3.1 billion; Viacom 690 million; Marvel 85 million and falling. I would like to ask the analysts if they had a movie that was going to do $395 million in business (the Marvel average), for a cost of $165 million (the max. Marvel says their movies will cost), which share divisor would they want to use... Where is the American sense of adventure (and risk taking) in these articles?

Sick...that the press has spent so much of today talking about how little money Marvel will get from Spider-Man 3. It has been known for years that Sony was the one that had the financial risk/reward on this movie. This was a day that press just wanted to find the black lining in the silver (really gold!) cloud.

Sick...that people just can't do math. Look at Slide 21 (of 72) on this Marvel presentation:

http://www.marvel.com/company/pdf/marvel_studio_present.pdf

A movie that grosses $100 million at the domestic box office will end up doing $292 million in gross revenue. You can get these kinds of results because these are not R-rated movies that you can't show your kids and need to highly modify to get them on an airline flight. There are toys and other add-ons that make this model far different from the typical Hollywood movie studio menu that includes a lot of unknown characters and a history of more misses than Marvel has ever had.

Sick...that everyone remembers Electra (which I liked and have on DVD) that earned $56.6 at the box office. What was #2 from the bottom? It was Daredevil and it hauled in $179.2 million. It made $102.5 million domestically so the example I just gave above, with $292 million in total revenue, fits the second worst grossing movie in Marvel history (which I also liked and own the DVD). I can understand why the press doesn't want to compute what would happen if The Hulk (my pick for top gross because of its cast) or some other Marvel movie did $500 million or more. You just might be able to pay off the entire loan with one movie.

I am happy that I own Marvel. I understand what I own (read the PDF link, all 72 slides) and you too will understand that sick minds can keep you from understanding a real investment winner.

W.D.


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