Pow! The Punches That Left Marvel Reeling

Despite the lamp office success of superhero films and the depth of a few source material, these films emerged as shallow, mindless movies devoid of serious characterization. This assessment is not true. Superheroes could be complex characters with well-defined personalities, plus the right actors and actresses may bring these personalities our health to the big screen. As five films demonstrate, playing roles that originate in comics isn't going to diminish actors'credibility. They still take the roles and characters seriously, even facing outlandish premises. In "Watchmen," Jackie Earle Haley sincerely been a sociopathic vigilante Walter Kovacs, often called Rorschach. From the primary lines with the film, viewers get a particular peek at Rorschach's unhinged personality from his monologue around the decaying morality of New York City and, by extension, the remainder of the world. Kovacs is inwardly tortured and angry at both himself and society, and the man sizzling hot they know of to face this anger should be to hunt those he sees as criminals. The scene through which he fully discards his civilian identity as Rorschach serves for example: Haley makes Kovacs visibly shiver with anger at Blair Roche's brutal death because exacts justice to the murderer. Another scene, where Kovacs is imprisonment after being apprehended, shows how contemptuous he or she is of criminals even when he is seemingly at their mercy.

Yet today, for reasons that range from hubris to simply being outfoxed, each man in turn has been swept out of Marvel, leaving behind little of lasting value for investors, employees or comic book fans to show for their time in control.

It certainly isn't a story that either would want to see in bright colors in a comic book store.

Mr. Perelman said recently that if he were to rank his successes, Marvel would be off the list. ''Nothing comes close to this,'' he said, trademark cigar in hand.

Mr. Icahn said: ''I have framed articles of every deal I've ever done. In all honesty, this is one frame I'm considering taking down.''

Return of the Superheroes

In 1988, Marvel looked to Mr. Perelman like the kind of company he had turned around before: like Revlon, for example, which he had acquired in a hostile takeover, fueled by junk bonds, three years before. Marvel would be fun to own. Its long history suggested that the business was not just a fad. And, barely profitable, Marvel clearly had much room for improvement.

Marvel also dominated its rivals -- including DC Comics, home of Superman and Batman -- on the strength of its characters, whose everyday problems with school, jobs and relationships made them more appealing to young readers.

So in January 1989, Mr. Perelman bought Marvel for $82.5 million, putting in $10.5 million of his own money and borrowing the rest. And from the outset, the purchase looked like a master stroke. Interest in fantasy figures was building in Hollywood: The Incredible Hulk and Thor appeared together in a prime-time television movie; Warner Brothers was heavily promoting ''Batman'' for a summer release, and the Teen-Age Mutant Ninja Turtles, sprung from the pages of an obscure comic book, were as ubiquitous as fleas.

Mr. Perelman's management team, led by William C. Bevins Jr., an acquisitions ace and former chief financial officer for Turner Broadcasting, moved quickly to capitalize on the interest by giving Marvel's comics an upgrade. With better paper and slicker packaging, they raised prices from 75 cents to $1 without driving away buyers. Print runs soared to fill the orders from hundreds of new comic book stores.

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After just two years of Perelman management, Marvel's revenue was up 35 percent, to $81.1 million, and profits jumped tenfold, to $5.4 million.

With Marvel in fighting shape, Mr. Perelman decided to lock in his profits by selling shares to the public. The market did not seem to mind that none of the $82 million to be raised would stay at Marvel. Instead, about $50 million was earmarked for Marvel's Perelman-controlled parent companies -- five times Mr. Perelman's original investment -- leaving him with a 60 percent stake, and the rest would pay down bank debt. Investors lined up to buy shares, and when trading started, Spider-Man visited the floor of the New York Stock Exchange to celebrate.

In just a few months, Marvel shares more than doubled in price and then continued to ride a wave of good news about Marvel and the industry. James Cameron, known at the time for his success with ''The Terminator'' and ''Aliens,'' agreed to write and direct a Spider-Man movie. The ''Death of Superman'' issue from DC Comics became a national news event, lifting the entire business. And Marvel's flawed X-Men heroes captured the imagination of children across the country.

Marvel trumpeted in its 1992 annual report, published in comic book format, that it was ''a new kind of youth entertainment company -- ready to take the world by storm!'' And storm it did. In July 1992, Marvel bought the Fleer Corporation, a trading card company, for $286 million. The next year, Marvel teamed up with Toy Biz, a New York marketer best known for its action figures, by trading a royalty-free license to use Marvel characters for a 46 percent stake in Toy Biz. Although it was a minority ownership stake, this transaction would eventually play a much bigger role in Marvel's future.

By the end of 1993, Marvel had bulked up at a speed that would have impressed even the Incredible Hulk, earning $56 million on revenues of $415 million. Long-term debt on the operating company stood at $250.2 million. Shares that had sold initially at just over $2, adjusted for splits, traded above $35 late that year, making Mr. Perelman's stake worth about $2.7 billion; he had spent about $300 million in borrowed money to increase it to 80 percent.

''We felt very good about the business,'' Mr. Perelman said.

The Bubble Bursts

While Marvel was taking much of the credit for expanding the comic book market, there were other powerful forces at work.

One was the mothers of America, who had played a quiet but important role through the years -- pitching comic book collections as their sons grew up and left home.

That helped create a collector's market, and as interest in comics increased in the early 1990's, so did the value of rare back issues. That, in turn, fueled a speculative boom. Children and adults started buying multiple copies, particularly of special editions, betting that they might one day be worth a mint.

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Ultimately, though, the speculators figured out that if everyone was stockpiling comics, the value of the books was unlikely to rise over time. By early 1994, it was clear that the bubble that had been supporting Marvel's tremendous sales growth was bursting, creating a shaky foundation for the company's expanded infrastructure. With strikes in one professional sport after another sapping fan enthusiasm, the same thing happened to trading cards, a business that, with the acquisition of Fleer, contributed about half of Marvel's revenues.

In hindsight, Mr. Perelman, a famously hands-on manager, said that he and Marvel's top managers did not realize the degree to which speculators had been driving their businesses. There were simply no statistics available, he said, from the thousands of retailers that had sprung up so quickly.

''We couldn't get a handle on how much of the market was driven by speculators, the people buying 20 copies and reading one and keeping 19 for their nest egg,'' Mr. Perelman said.

In fact, Marvel executives were waving off warnings from industry insiders as the kind of small thinking that had held back the industry in the past. And the warnings could not have been clearer.

Neil Gaiman, creator of the popular Sandman character, gave a speech in 1993 at an industry gathering of 3,000 retailers, comparing the popularity of comics to the mania over tulips in Holland in the 17th century. He even accused his audience of acting immorally by selling cases of comics to children who thought they were buying collectors' items.

''You can sell lots of comics to the same person, especially if you tell them that you are investing money for high guaranteed returns,'' he said. ''But you're selling bubbles and tulips, and one day the bubble will burst, and the tulips will rot in the warehouse.''

Mr. Gaiman wasn't the only skeptic. Gerard E. Jones, who wrote as many as nine comics a month for Marvel and other publishers during the boom and has since written a history of comic books, said industry insiders enjoyed the boom time, as long as it lasted. ''But the people in the trenches were always just sort of shaking their heads over Perelman's big dream,'' he said. ''I don't think anybody outside of investor circles took any of this very seriously.''

But investors were indeed taking it seriously, and Marvel's management looked to deliver growth through more acquisitions even as the market for comic books was deflating quickly.

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Between mid-1994 and early 1995, Marvel bought the Panini sticker company; two smaller publishers of comics, Malibu Comics Entertainment and Welsh Publishing Group, and Skybox, another trading card company. To improve its margins and to better market its comics at the retail level, Marvel also bought Heroes World, a regional distributor in the Northeast, in December 1994. The firm stumbled in trying to expand overnight into a national distributor, and Marvel later dismantled the venture.

By late 1995, Marvel's size had become a liability. Marvel reported its first annual loss under Mr. Perelman's watch: $48.4 million on sales of $829 million. Marvel Entertainment's debt load was $581.3 million, and it was losing market share in a shrinking industry, in part because many of Marvel's best writers and artists had left to start their own publishing companies.

Amid the pressure to pump out more titles, Marvel comics had also dropped in quality, with splashy art by inexperienced artists replacing the clever plots and dialogue that had hooked so many longtime Marvel fans.

''You had a lot of high-school, study-hall scribbles showing up as published art,'' Mr. Jones said. ''For fans, it was alienating, confusing and it left many fans feeling betrayed, that their habit was being taken advantage of.''

Through 1996, the company tried to drown out the swell of bad news with upbeat announcements of new ventures. It established Marvel Studios to get the long-awaited movies, which had been tied up in legal disputes in Hollywood, onto the screen. It was going to build Marvel Mania restaurants and establish a big presence on the Internet.

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But it was too late for new strategies. Mounting losses put Marvel in violation of its bank covenants. The company needed rescuing.

And which hero volunteered to save the day? Super-Ron, wielding a plan. Mr. Perelman would merge Marvel with the healthier Toy Biz by spending $350 million for the Toy Biz shares he did not already own. In return, he would get 410 million newly issued Marvel shares, maintaining his 80 percent stake, for 85 cents a share.

Yes, that was a steep discount to the $4.625 at which the shares closed the day before his offer. But Mr. Perelman saw himself as stepping forward to rescue Marvel.

''I wanted to save the company,'' Mr. Perelman said. ''I wanted to protect the company's many constituents, including its employees and investors.''

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An Investors' Revolt

But many investors were outraged. Marvel's shares quickly sank 40 percent, and bonds in Marvel's holding company, part of Mr. Perelman's byzantine financial empire, also tumbled, selling for as little as 16 cents in mid-November after trading as high as 72 cents in early October.

Onto the page leaped Mr. Icahn, who smelled an opportunity. Just as Marvel years before had met all of Mr. Perelman's investing criteria, the company now offered the combative Mr. Icahn all the ingredients of a good and profitable fight.

He had railed in the past about executives who claimed a ''divine right of kings'' to stay in control despite their management mistakes. Buying about $40 million worth of Marvel bonds, he warmed up to an analogy that he is still using today. Mr. Perelman's handling of Marvel, he likes to say, ''was like a plumber you loan money to get him started in business; then he comes in, wrecks your house, then tells you he wants the house for nothing.''

But Mr. Icahn was picking a fight with someone who had come out of the corporate raids of the 1980's with even deeper pockets than his own.

Mr. Perelman's $6.5 billion in estimated wealth earned him the eighth spot on the Forbes list of richest Americans last year; Mr. Icahn's $2 billion ranked him at No. 69.

Mr. Icahn figured that if Mr. Perelman was willing to put $350 million into Marvel, it was no doubt worth more.

He quickly offered his own rescue package, one roughly the same size as Mr. Perelman's. But Mr. Perelman put Marvel into Chapter 11 bankruptcy, effectively silencing Mr. Icahn and other bondholders. With the promise of a new, $160 million loan and the support of bankers hoping to work their way out of a bad situation, Marvel expected a quick tour through the courts.

Mr. Icahn had other plans. Escalating his war of words, he said Mr. Perelman was trying to ''realize a windfall profit for himself at the expense of those to whom he owes a fiduciary responsibility.'' His rival's tactics, Mr. Icahn added, were ''unconscionable.''

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Mr. Icahn noticed a weak spot in Marvel's elaborate financial structure. Mr. Perelman had put up his 80 percent share of the company as collateral for Marvel bonds. If Mr. Icahn and other bondholders could get control of those shares, they would control Marvel.

In February 1997, Mr. Icahn, with the help of the bondholders' lead lawyer, David Friedman, surprised everyone by winning the bankruptcy court's approval to take control of the stock, although Mr. Icahn fell short of also taking over Marvel's board. By March, the banks recognized that Mr. Icahn was gaining the upper hand, and they scheduled a meeting with him at the law offices of Simpson, Thacher & Bartlett in midtown Manhattan.

By all accounts, the meeting was horrendous. The bankers wanted to know Mr. Icahn's intentions for Marvel. And Mr. Icahn, who is his own bank, felt little compulsion to offer any specifics. When William C. Repko, the lead banker in the room and the managing director for Chase Manhattan's restructuring and refinance group, pointed out that the banks were owed some $700 million, Mr. Icahn quickly put a chill on the gathering.

''What are you, a comedian?'' Mr. Icahn said, according to many people in the room. ''If I wanted a comedian, I would have hired one.''

The battling continued in court. In June, Mr. Icahn won the right to replace Marvel's board, effectively severing Mr. Perelman's ties to the company.

Now Mr. Icahn was chairman of the board and deeply engaged in Marvel's operating strategy. He brought a longtime Marvel executive, Joseph A. Calamari, out of retirement to run the company, and was constantly calling him to brainstorm. ''He had hundreds of ideas every week,'' Mr. Calamari said. One suggestion: that Marvel finance its own movies.

Mr. Icahn also tried to use the special voting powers of Marvel's shares in Toy Biz to take over Toy Biz's board. But to his chagrin the court ruled that, by taking over Marvel, he had triggered a change-of-control clause that evaporated the shares' clout.

Toy Biz, which had its royalty-free license to make toys based on Marvel characters and was partly owned by Marvel, also wanted to run the company. Toy Biz, the banks and Mr. Icahn, in a variety of combinations, all came close to striking a deal over a reorganization plan.

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Last October, Mr. Icahn appeared to have an agreement with the banks, but they were enticed at the last minute by a proposal from Toy Biz that offered them better terms. Specifically, its plan would give the secured creditors the Panini sticker business, plus $230 million in cash and about 40 percent of the stock in a combined Toy Biz and Marvel. Mr. Icahn sued Mr. Perelman, Chase and Toy Biz, contending that ''collusive conduct'' had hurt the company.

In December, almost a year after Marvel filed for Chapter 11, the court appointed a trustee to run the company, hurtling Mr. Icahn into a distant universe, somewhere near the one occupied by Mr. Perelman. With his purchase of some bank debt, Mr. Icahn had invested a total of about $70 million in Marvel.

In February, Toy Biz put forward a modified version of its plan supported by many of Marvel's creditors. And while court approval of that deal has been delayed by further legal wrangling, it still appears likely to win. (Marvel's trustee supports it.) Another company could put forward its own offer, but the most likely suspects -- including movie studios hungry for characters on which to build Batman-like franchises -- have so far been turned off by the uncertainty and the competing legal claims.

''It's a shame,'' Mr. Friedman said, ''how a very small number of people couldn't get along and cause a pretty decent company to fall apart.''

Signs of Battle Fatigue

After the Incredible Hulk finishes one of his shirt-ripping growth spurts, he is so sapped of energy that he has to rest quietly a while before he can rise up again.

Much the same has happened to Marvel in the last decade, and it is only recently, after courtroom battles drained it of momentum, that the company is showing signs of life.

Several Marvel rides based on its characters, including ''Dr. Doom's Fearfall'' are under construction at Universal Studios' theme park in Orlando, Fla., and are expected to open next year. The first of what the company hopes will be a chain of Marvel Mania restaurants opened in January at Universal Studios Hollywood. The Universal Studios unit of the Seagram Company owns a majority stake in the football-field sized eatery, where waiters serve, among other things, ''Mutant Chicken Wings'' and an alcoholic beverage called ''Nuclear Waste'' that comes in a laboratory beaker.

Marvel's site on the Internet (www.marvelzone.com) -- where computer users can, for example, chat on line with Stan Lee, the legendary creator of Spider-Man, the Hulk and the X-Men -- is building traffic. And movie projects based on Marvel characters are again starting to work their way through the Hollywood pipeline.

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The company's comic book business, under the guidance of Mr. Calamari and others who grew up in the industry, has trimmed the number of titles it publishes each month and is trying to improve the quality of those it does print. Plots that used to play out over 12 to 13 months, frustrating many readers, are being replaced by stories that end in just two.

In all, Marvel's core business is roughly the size it was before Mr. Perelman took over.

Spidey and the rest of Marvel's cast of heroes may have appeared beaten at times in recent years, Mr. Calamari said, but they will prove their resilience over time.

''If you think about how everybody, for the last two years, has done nothing but try to acquire the assets and not worry about operations, it's amazing how solid the company has been,'' he said. ''The Marvel Universe can't be destroyed.''

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Correction: May 31, 1998

A picture caption last Sunday with an article about the battle for control of the Marvel Entertainment Group misidentified a Marvel Comics character that visited the floor of the New York Stock Exchange in 1995. It was the Thing, not Iron Man.

We are continually improving the quality of our text archives. Please send feedback, error reports, and suggestions to [email protected]

A version of this chronology appears in print on May 24, 1998, on Page 3003001 of the National edition with the headline: Pow! The Punches That Left Marvel Reeling. Order Reprints| Today's Paper|Subscribe

In "The Mighty Thor," another superhero movie, Chris Hemsworth brings the Norse mythological god of thunder to life. Exiled from Asgard as a result of his arrogance, Thor is required to regain Odin's favor and their own powers to deal with the trickster god Loki. Hemsworth portrays Thor's difficulty in adjusting to Midgard/Earth in a very diner scene: the Asgardian custom of slamming a mug up for grabs to exhibit appreciation is humorous to the guests and in-character for Thor, yet it is off-putting for Jane Foster (played by Natalie Portman) as well as other humans. Through this as well as other scenes, viewers discover how awkward Thor is and perceive his disoriented confusion, which leads to violence after bigger first landed on Earth. Thor attacks everyone in a very rage, unable to just accept that she has temporarily become fully human. During the period of the film, Thor grows more acquainted with being among humans, a development that may be reflected in her more natural conversations with Jane Foster and Erik Selvig (Stellan Skarsgard). Inside trilogy of films that is known as for him, the half-breed vampire hunter Blade represents another demonstration of a well-played comic strip hero. Acted by Wesley Snipes, this character is gritty yet stylish, perhaps to supply a contrast for the angst-ridden literary vampires which were previously popular. Snipes participates in intense action sequences with the exact same stoicism viewers would expect of any reality-based superhero, taking time to deliver witty profanity-laced one-liners. With the X-Men and Spider-Man, Blade was the first superheroes arrive at the fundamental screen. The 1989 "Batman" film features Michael Keaton since the Caped Crusader in certainly one of his most popular adaptations. Although Christian Bale's performance in "The Dark Knight Trilogy" is widely praised, many viewers criticized the gravelly voice Bale uses when playing Batman, claiming it can make it harder to take him seriously. Keaton plays Batman more suavely, striking a blend relating to the dark, serious Bale and also the lighthearted Adam West from the 1960s movies. In short, Keaton plays the role of Batman naturally rather then to be a deliberately adopted persona.

Source : https://www.nytimes.com/1998/05/24/business/pow-the-punches-that-left-marvel-reeling.html

Finally, the most effective superhero movie performances of them all goes to a villain: the Joker in "The Dark Knight." Heath Ledger's take to the iconic Batman villain brings the Joker's menace, macabre humor, and love for chaos in one package that is most beneficial illustrated inside chilling "magic trick" scene through which he gouges out a mobster's eye which has a pencil. The Joker comes across as perpetually full of nervous energy and near violence. Small mannerisms like constantly licking his lips and nervously searching, combined with menacing voice Ledger developed, get this Joker considered one of Batman fans'favorites. These actors certainly not provide the one five degrees of nuanced acting in superhero films. "Captain America: The First Avenger" has Chris Evans as a clumsy but well-meaning superhero, "Spider-Man" has Toby MacGuire portraying by far the most well-known adaptation of Peter Parker, and "Iron Man" has got the snarky and suave Tony Stark played by Robert Downey Jr. While comic strip films might appear to be shallow entertainment, actors can participate in the roles good enough to create audiences suspend their disbelief.

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