Contributor Tim Beyers sits down with The Motley Fool's Rick Engdahl to talk comics, TV, movies, tech, and related geekery. Beyers is a member of the Motley Fool Rule Breakers stock-picking team, as well as the real-money Motley Fool Supernova Odyssey I growth portfolio.
In this video segment, Beyers explains how Walt Disney (NYSE:DIS) and Sony (NYSE:SNE) split the rights to Spider-Man. Could the overlap in the comic book world explain why he sees potential in many different companies and isn't able to single out a favorite comic-related stock?
A full transcript follows the video.
Richard Engdahl: It gets complicated, because those comic book families are very incestuous.
Tim Beyers: They really are, and it becomes...
Engdahl: Even Spider-Man and the X-Men have been in each other's spaces.
Beyers: Or Spider-Man and the Avengers.
Engdahl: That's Sony and Fox, not even Marvel at that point.
Beyers: Right. In this case, the Sony situation is somewhat different, insofar as [Walt] Disney and Sony brokered a deal whereby [Walt] Disney gets all of the merchandising rights to any toys out of, say, a Spider-Man film.
When The Amazing Spider-Man 2 comes out next year, Sony doesn't have to share any of that film revenue with [Walt] Disney, but [Walt] Disney doesn't have to share any of the toy sales with Sony.
Engdahl: Who makes out better on that?
Beyers: [Walt] Disney gets the upper hand on that, by far.
Engdahl: They certainly invest a lot less in the movie, right? They don't have to do anything, they just get the spinoff.
Beyers: They just get... and, you know, they're not even going to make the toys. They're just going to get those... basically they're just going to be collecting revenue for a film that Sony makes, and which generates a huge amount of kickoff toys they can put in [Walt] Disney stores. It's such a huge win for [Walt] Disney and Marvel.
But it's not necessarily a huge loss for Sony. I'm not a big bull on Sony as a stock, but that franchise -- the kickoff of that franchise, The Amazing Spider-Man -- did pretty well. They have commissioned four pictures from Sony and Columbia, so it goes out on a two-year cadence, to 2018.
Sony wouldn't make those films if they weren't profitable, but [Walt] Disney will get a small producer fee, and that's pretty much it.
Engdahl: If you could only pick one comic-related stock starting today, going forward, which one would it be?
Beyers: Man, that's such a hard question. My initial reaction was [Walt] Disney, because I own Disney and I think that property is so well established and so well diversified and so well run, that I think [Walt] Disney is going to be a great stock for decades.
But I love the potential of Time Warner and AMC Networks because I think AMC is smartly investing in these fringe comic book properties that nobody else wants, and is treating them very well.
Meanwhile, Time Warner, and once they spin off from Time Warner and have a Warner Brothers stock, the potential of DC Entertainment is so massive that I plan to hold my Time Warner stock for decades. I'd love to have it there for my kids.
It's a very bad answer because you asked me for one, but I think there's so much potential here that there are multiple businesses you can safely invest in.
Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Walt Disney and Time Warner at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
The Motley Fool recommends AMC Networks and Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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