Disney Runs Circles Around Marvel

Disney is the complete company. 

Rick Munarriz
Rick Munarriz
Jun 8, 2009 at 12:00AM

As far as Marvel (NYSE:MVL) villains go, I'm pretty weak. I have admired the company for several years. However, now that it's pitted against Disney (NYSE:DIS) in a Dueling Fools faceoff, I have to go with the family-entertainment giant. Anything else would just be -- wait for it, before you groan -- Goofy.

Tim Beyers laid out a convincing argument for Marvel, but it didn't sway me one bit.

"Disney's licensing operation is 5.3 times bigger than Marvel's -- but its market cap is 16.6 times bigger," he argued over the weekend.

That's just silly math. Disney isn't primarily a licensing company. When it has a hit, it milks that hit mostly through its own handiwork. When High School Musical became a monster smash, Disney was able to release the soundtrack on its own label, add themed stage shows to its theme parks, and fill up its Disney Store with wares.

Speaking of those stores, Disney bought them back from Children's Place (NASDAQ:PLCE). Can you fathom a Marvel retail store? Sure. I can, too. However, can you picture hundreds of Marvel stores dotting the shopping malls of suburbia? Me neither.

I think it's great that Marvel can snap its fingers and have Hasbro (NYSE:HAS) take over its toy lines, but are we going to penalize Disney because it doesn't outsource its moneymakers as voraciously?

If Tim wants to live off comparative ratios, why not point out how Disney sells for just 1.3 times trailing revenue, while Marvel is bulking up at 3.7 times its top-line showing? Licensing is a feast for margins -- and a sweet gem for return on capital -- but Disney is still the more complete company.

If Tim insists that we fight on the same turf -- even if it means bidding adieu to Disney's huge cable, network, and theme-park businesses -- I'll still take Disney. Pirates of the Caribbean: Dead Man's Chest outgrossed any single Marvel character flick. Yes, it even topped Spider-Man, which reminds me that it has to be disheartening to see every subsequent Spider-Man sequel that Sony (NYSE:SNE) puts out earning less than the one that came before.

Did you even know that Marvel doesn't have the most successful superhero movie of all time in this country? That honor belongs to Time Warner's (NYSE:TWX) The Dark Knight last year. Disney, on the other hand, is the undisputed family-entertainment giant. Who else is even close? Nickelodeon parent Viacom (NYSE:VIA) is a worthy rival, but it's not even close.

If you have to choose between superhero action flicks and family entertainment when deciding which one has the stronger legs, are you really still going to stand by Peter Parker? Your Spidey sense should be telling you to stick with the House of Mouse.

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