From "The Avengers" to "Shangqi", what is the value of Marvel Studios to Walt Disney?

Text/Dawn Chmielewski

Image source: Visual China

For Disney CEO Bob Chapek, this weekend's premiere of "Shang-Chi and the Legend of the Ten Rings" was a desperate gamble. It was Marvel Studios' first film to be released on Labor Day weekend in the United States, and its core role was a kung fu master modeled after the martial arts icon Bruce Lee of the 70s, but it was little known. The film was released exclusively in theaters, which Chapek himself called an "interesting experiment" and came at a time when COVID-19 cases continued to soar.

The Chinese government has yet to approve the release of the film in China, the world's largest film market, which increases Chapek's risk. But Disney has bought itself considerable leeway through its control of the 80-year-old comic book publisher. Writer Stan Lee and illustrator Jack Kirby made the publisher famous: In 2009, Disney bought the company for $4 billion. Forbes estimates that the company's current market capitalization is close to $53 billion, about 16 percent of Disney's market capitalization.

It's a good return for an investment that few people say will pay off.

"People don't fully understand and appreciate the franchise potential of this genre as much as we do," said Tom Staggs, a former Disney chief financial officer who helped lead the acquisition. "We were able to buy it because the industry didn't fully understand it either."

Maintaining this value is probably one of Chapek's biggest challenges. Chapek, a former theme park and consumer goods executive, took over as CEO last year. His battle with scarlet Johansson, one of Marvel's superstars, over the issue of black widow's simultaneous release in theaters and streaming has already angered Hollywood, including the controversial decision to disclose Scarlett Johansson's $20 million salary. The strategy also reportedly annoyed Marvel Chief Creative Officer Kevin Feige, who doesn't want to see the film downgraded to home streaming.

Shangqi presents filmmakers with a different set of challenges — breaking the problematic Asian stereotypes of comics, which may explain why China has yet to set a release date. The performance of "Shangqi" will affect how Disney allocates the next Marvel movie, Eternals, which will be released on November 5. That could determine whether the company can stick to its carefully choreographed Schedule of Marvel Stories, which plans to be released in theaters first and then expanded on television.

It was this careful control that turned an independent production company operating upstairs from a Mercedes-Benz dealership in Beverly Hills into the heart of the world's largest entertainment company. The 24 Marvel movies grossed a total of $21.9 billion in Disney's hands, making it more powerful than 007, more influential than Harry Potter, and bigger than Fast and Furious.

It's also much better than Disney's $4 billion acquisition of Lucasfilm's Star Wars in 2012, when five of its films grossed just $6 billion at the box office. In 2006, Disney bought Pixar for $7.4 billion, dwarfing the $14.4 billion box office revenue of 21 of its films. Paul Dergarabedian, a media analyst at Comscore, said Marvel is undoubtedly the most successful film franchise in history.

Here's marvel data.

Movies – nearly $6 billion

Marvel Movie No. 1: Avengers: Endgame, $2.8 billion

Marvel superheroes have been a key factor in Walt Disney's dominance of the box office in recent years, giving the company two of the highest-grossing movies of 2018 — Avengers: Infinity War and Black Panther — and one of the highest-grossing films of all time — Avengers 4: Endgame, released a year later. According to Comscore, Disney has released seven Marvel movies since 2018, with a total box office of more than $9.4 billion. This dominance pushes up the price the company gets from cable networks like Starz or streaming services like Netflix, pushing up the value of all other movies. Media analyst Richard Greenfield estimates that Disney's 2012 deal with Netflix will bring in $450 million in revenue in the first year. The agreement allows streaming users to watch newly released movies starting in 2016.

Streaming – $400+ billion

Highest-rated Marvel TV series: Loki

WandaVision. The Falcon and the Winter Soldier. "Rocky". From April to June, Marvel's TV series helped the Disney+ streaming service attract 12.4 million new users, bringing the total number of users to 116 million as of July. In the premiere of "Wanda's Vision," the show made it into the top 10 hits, and it grew in ratings as nine episodes aired — Nielsen estimated 30.5 million people watched the show. According to Nielsen, "The Falcon and the Winter Soldier" attracted 28.3 million viewers, while "Rocky," which premiered three months later, attracted 35 million viewers. There are no doubt that there are ten More Marvel series coming soon, including the first American Muslim superhero, Ms. Marvel; Hawkeye, starring actor Jeremy Renner as the Sharpshooter in The Avengers; and She-Hulk, played by Emmy winner Tatiana Maslany. "Adding Marvel content ... Is a huge catalyst for our growth," Chapek told investors in May, noting that it builds on the success of the Star Wars-inspired original series, The Mandalorian. Marvel's "Black Widow" grossed more than $125 million on Disney+, and the film premiered on Disney+ the same day it was released in theaters, sparking a fierce battle with movie star Scarlett Johansson over profits that could set a precedent for artist salaries in the streaming era.

Consumer goods – about $3 billion

The #1 selling Marvel product: the Superhero Avengers Iron Man Armor Hall Statue, priced at $45

According to Forbes, since 2010, licensed sales of all of Disney's Marvel products — Spider-Man swim trunks, female Hulk bedding, Winter Soldier and Captain America action dolls — have reached nearly $10 billion. Marvel Chairman Ike Perlmutter initially saw toy sales as a profit driver for the company, with movies playing a marketing role. Today, it's making a lot of money on both. Disney did not disclose Marvel's share of revenue, but two people familiar with the matter said that Marvel is second only to Disney's classic characters (Mickey, Minnie, Donald and Goofy) in revenue.

Theme parks – to be determined

The first Marvel attraction: The Iron Man Flight Tour, Hong Kong Disneyland

Although Disney has owned it for more than a decade, it's too early to estimate its value to Disney — its 6-acre Avengers park, which opened at Disneyland in June, has already attracted a flood of visitors who come to interact with characters like Iron Man, Thor, Captain Marvel or Black Panther. One of the most intriguing projects is the Spider-Man Web Slingers tour, which will allow visitors to perform a 3D mission at headquarters to battle the massive invasion of Spider-Man robots. The project is not far from the 2017 remake of The Tower of Terror inspired by the New Twilight Zone, now titled Guardians of the Galaxy: Breakout Dark Journey. "They did it right," said Dennis Speigel, CEO of International Theme Park Services Consulting. "There are a lot of people waiting to get in." Marvel is growing around the world. In 2019, ant-man and The Wasp attractions opened at Hong Kong Disneyland. Upcoming projects include The Guardians of the Galaxy: Cosmic Rewind indoor roller coaster at Disney World of the Future and the Avengers park concept at Disneyland Paris.

Chart making method:

Disney doesn't disclose Marvel's valuation, and analysts who study the company don't do so independently, so Forbes consulted former company insiders, industry watchers, and Wall Street analysts in evaluating Marvel's current valuation. We used revenue from the Film and Consumer Goods division to estimate Marvel's contribution at 22 percent — its share of the company's total box office over the past decade. A multiple of 15 times is used. Moffett Nathanson's Michael Nathanson is valuing Disney+ at $200 billion.

Translated by Stephen