Comicbook action

Marvel's Arad goes solo as slate ramps up

On its face, selling 3 million shares of a company you’re about to go into business with would seem a little like hurling yourself off a building wearing only a cape.

And leap is one way of describing what Avi Arad did last week. The ex-Marvel Studios topper sold $60 million worth of shares — about three-quarters of his stake in the company — even as he announced a production deal with Marvel via his new shingle, Avi Arad Prods.

Despite the windfall that accompanied Arad’s move (and the pounding Marvel took from some Wall Street analysts), the exec shuffle could well prove a smart strategy.

Losing the in-house expertise of Arad, whose dealmaking for “Spider-Man” and “X-Men” brought Marvel back from the brink a decade ago, won’t be easy to digest.

But with the promotion of Michael Helfant and Kevin Feige, Marvel Studios now has an experienced exec team. And the nascent studio has two tentpole pics: “Iron Man,” for which it recently signed Arthur Marcum and Matt Hollaway to write and Jon Favreau to direct, and the “Hulk” sequel. Arad, known for being a hands-on producer, will be able to devote even more energy to the pics.

It’s a good thing, too. As one board director at Marvel Entertainment noted, the two films are critical to Marvel Studios’ fortunes, so the company can’t afford to have Arad distracted.

The reason they’re so important: the company’s $525 million debt facility with Merrill Lynch.

According to the pact, investors can reclaim theatrical rights to characters as collateral if debt payments aren’t made.

When Marvel first announced the 10-film slate, it skewed toward lower-profile properties like “Ant Man” and “Cloak and Dagger” to protect higher-profile properties (drawing the skepticism of some critics in the process . But when theatrical film rights to Iron Man and Hulk reverted to Marvel within the last year, the studio added those two pics to the slate, upping the stakes: The pics greatly increased the studio’s chances to meet the $525 million goal, but by using them, they also turned rights to two iconic — and potentially lucrative — characters into collateral.

Marvel will also benefit from having Arad as a liaison and producer on Sony’s “Spider-Man 3,” due next summer. The studio will earn a percentage of the gross and Arad, who is said to consider Spidey his baby, is the right guy to protect their interest.

There are some questions about Marvel’s choice — notably, that if Arad’s pics are hits, Marvel could wind up paying him more in producer fees than it would have paid him in salary and bonuses.

And investors could start getting antsy about timing: While the first Marvel movies were expected out next year; now they won’t be out until 2008 at the earliest. But the studio needs Arad more than ever.

As the exec said last week, “My office is here. I’m not going anywhere.”

Marvel has 525 million reasons to hope he stays put.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Film News from Variety