Come into my lair, said the fox to the spider...
Spiders are usually creepy things, but not this time. Fox (NYSE:FOX) has secured broadcasting rights to Sony's (NYSE:SNE) Spider-Man 2, which opened yesterday. I don't need eight eyes to see that it's going to be a blockbuster of gigantic proportions, so I have to applaud this quick move on the part of Rupert Murdoch's company.
According to Hollywood Reporter, the TV rights were estimated to have a purchase price of $50 million and should most likely encompass a time frame of a decade. The trade paper made a very interesting point: This seems to be a static price, and it will not rise or fall no matter what the movie version of the Marvel Enterprises (NYSE:MVL) property does box office-wise.
These contracts can become very complex, of course, full of codicils the way Swiss cheese is full of holes, but a general rule of thumb that has been mentioned in the past is that TV rights often fetch 15% of the domestic theatrical cumulative take. So, while the static price theoretically limits the upside potential on the part of Sony, it also limits the downside in case -- and look, this just isn't going to happen, but -- the movie makes less than expected. Besides, 15% of $300 million (a fair guess at this point concerning the sequel's ultimate gross) is still less than $50 million, so Sony is hardly taking a risk here.
There is also leeway in the deal, in that Sony can still shop the movie around the cable universe while it is in the hands of the Fox network and the F/X platforms. This non-exclusivity aspect is crucial these days, since there are just so many channels out there. Nevertheless, competitors such as Disney (NYSE:DIS) and Viacom (NYSE:VIA) were certainly beaten to the punch.
It will be interesting to see how Marvel's stock reacts as the summer goes along, especially considering the company recently took care of its debt problem. (Speaking of debt, be sure to check out Tim Beyers' incredible tale concerning his own battle with high-interest obligations.)
And well, as for me, I think I'll check out some more of Activision's (NASDAQ:ATVI) video-game version of the film. I was playing it this morning, and I have to say, it looks like fans flocking to the theaters will enjoy extending the experience of the Sam Raimi film as much as Marvel/Sony will enjoy extending the brand.
David Gardner has recommended both Marvel and Activision for Motley Fool Stock Advisor subscribers. Want to see what else is in his lineup? Sign up today and get a six-month, money-back guarantee.
Fool contributor Steven Mallas owns shares of Disney.
