Note: A previous version of this article inaccurately reported a planned film release that combined both X-Men and Fantastic Four. The Fool regrets the error.
Back in 2009, Walt Disney (NYSE:DIS) shelled out $4 billion to acquire comic book company Marvel Entertainment. The acquisition brought a huge library of characters and a rising film studio to Disney. Since the acquisition, Disney has taken over the big screen with movies starring Iron Man and The Avengers. Disney has plans for more Marvel related movies down the road, but it will be missing some of the comic book company's biggest characters while Sony Corp's (NYSE:SNE) Columbia Pictures and Twenty-First Century Fox (NASDAQ:FOXA) are set to benefit as well.
Marvel, which went through financial struggles that included a bankruptcy, has sold off the film rights to several of its characters including Spider-Man, X-Men, and the Fantastic Four. The bad news is that now Disney can not include these characters in its newest movies. The good news for investors is that they can profit from the comic book craze and Marvel's past just by investing in Disney shares.
Spider-Man villains head to the big screen
The Spider-Man franchise has been a major cash cow since it hit the big screen in 2002 with "Spider-Man". The problem for Marvel is that it hasn't seen the majority of the revenue from this franchise, since the web-slinger was one of the first characters it licensed out. The rights to Spider-Man floated around from studio to studio before ending up at Columbia Pictures, a subsidiary of Sony(NYSE:SNE). The huge Japanese company is now set to further milk the revenue from this Marvel brand through a continued reboot and new villain-themed movies.
In May of 2014, Sony will release "The Amazing Spider-Man 2", the newest movie in the next Spider-Man trilogy. The 2012 reintroduction starring Andrew Garfield grossed $262 million in North America, which fell shy of the $300 million-plus posted by all three previous Spider-Man movies. However, due to the increase in the number of international theaters, the movie's international gross of $490.2 million was the second-highest foreign grossing total in the franchise. The movie's total of $750.2 million was the smallest in the franchise, but this remains an impressive number. Sony plans a third Amazing Spider-Man movie which will come out in 2016.
The four Spider-Man movies have grossed more than $1.4 billion in North America and $3.3 billion worldwide. All four Spider-Man movies rank among the top 11 comic book adaptations. The four movies also all rank among the top eight "Marvel brand" movies, trailing only "The Avengers" and several Iron Man movies. It appears that Sony will now realize the full potential of the Spider-Man brand by focusing on the villain side.
Sony has announced plans for Venom and Sinister Six movies. Venom, played by Topher Grace, appeared in "Spider-Man 3", which was the highest-grossing movie worldwide of all the Spider-Man movies. The villain will now be the star of his own movie, with no announcement on whether Grace will reprise his role. Sinister Six will be a movie about multiple villains who team up to fight Spider-Man.
While these new villain movies may not be as successful as stand-alone Spider-Man movies, they are incredibly important to Sony. The biggest reason is that Sony's ability to produce Spider-Man related movies every couple of years prevents the rights to the web-slinger from reverting back to Marvel.
Disney of course would love to be able to put Spider-Man in an Avengers movie, but it can't without paying Sony a huge amount of money. The other reason the announcement was important is that it should help Sony's struggling movie-studio segment. Sony's movie segment saw revenue fall 17% in the last fiscal year. With additional Spider-Man hits, Sony will be more than just the Playstation 4.
Fox Brings Two Comic Book Teams Together
Twenty-First Century Fox is a huge media company that continues to perform well against competition in film and television. The company also benefits from early character licenses from Marvel. Fox owns the rights to the Fantastic Four and the X-Men characters, who are among the most well-known comic book heroes of all time. After multiple movies in their respective franchises, Fox may decide to combine the Fantastic Four and the X-Men for an "Avengers"-style movie that could pay off huge for shareholders.
The X-Men franchise continues to perform exceptionally well and it has grossed over $1 billion in North America and a total of $2.3 billion worldwide. Two new X-Men movies are already scheduled: "Days of Future Past" for May 23, 2014 and "Apocalypse" for May 27, 2016.
This should continue to pay off for Twenty-First Century Fox shareholders. In 2013, Fox currently ranks as the fifth-highest grossing studio with a 9.8% market share. In fiscal 2013, Twenty-First Century Fox reported a 10% increase in annual revenue to $27.7 billion. A total of 31% of revenue came from the filmed entertainment division. Filmed entertainment also made up 21% of operating income.
Disney has an impressive slate of movies coming soon. In 2015, the media giant will release two huge anticipated blockbuster movies in "The Avengers 2" and "Star Wars VII." Disney was the big winner with the acquisition and it will continue to profit from Marvel. "The Avengers" remains the highest-grossing comic book movie and the third-highest grossing movie of all time. The anticipation for the sequel will heat up and the movie could put up similar numbers in the summer of 2015.
Phase III of Disney's Marvel plans also calls for "Captain America: The Winter Soldier" and "Guardians of the Galaxy" in 2014 and "Ant-Man" in 2015. Disney remains a solid pick for capitalizing on comic books hitting the big screen. Marvel's integration will continue to hit other areas of Disney's revenue as well, including consumer products, television, and interactive.