Par’s percentage adds up on Marvel pics, but the deal it made with Disney will soon expire
When Paramount Pictures negotiated a deal with Disney in October 2010 to retain a portion of revenue from Marvel’s “The Avengers” and ‘Iron Man 3,” the brass on Melrose Ave. had no way of knowing just how big a payday it would see.
It’s been a marvel, for sure.
To date, Paramount has collected around $100 million from “The Avengers” alone from all distribution platforms (including theatrical, homevid, VOD and television). Now, with” Iron Man 3″ grossing nearly $800 million at the worldwide box office to date, Par will add significantly to its overall take (so far collecting approximately $40 million and counting) — all without having to lift a finger, other than to sign on the dotted line.
How did Par finagle such a sweet deal? In short, the studio — which already owned rights to those films under a pre-existing distribution deal with Marvel — pounded out an agreement with Disney after the Burbank giant acquired the comicbook company for $4 billion.
Under terms of the buyout, it was determined that Paramount would receive either a flat fee of $115 million for both films or an 8% and 9% cut of global distribution revenues from “Avengers” and “Iron Man 3,” respectively, whichever was higher. Already, it’s the latter, but the deal ends with “Iron Man 3.” That means “Thor: The Dark World,” which bows Nov. 8, will be the first Marvel property to be released solely by Disney without any outside studio participation.
In addition to its Thor sequel, Disney has four other Marvel films slated for release through 2015:” Captain America: The Winter Soldier” (April 4, 2014), “Guardians of the Galaxy” (Aug. 1), “The Avengers” sequel (May 1, 2015) and “Ant-Man” (Nov. 6).
But with “Avengers” and “Iron Man 3,” the Par-Disney coupling was evident even onscreen.
As a contractual obligation, Par’s logo appears on “Avengers” and “Iron Man 3,” while Disney’s iconic magic castle is usurped by the Marvel brand. That’s done purposefully, according to Disney, since the studio considers the two brands synonymous with one another. Still, it’s worth noting that Disney displays its logo alongside toon studios Pixar and Disney Animation.
Disney isn’t lamenting its current position, however.
On “Avengers,” the studio’s theatrical share (after theater owners and Par had taken their cut of the pic’s $1.5 billion global box office receipts) came to roughly $690 million. And with “Iron Man 3,” Disney’s cut is approaching $400 million.
Even though Disney had to pony up hundreds of millions of dollars in marketing and distribution coin to release both films, the studio was able to control the marketing message — an important fact, since that has a significant impact on merchandising (to which Disney owns the rights).
Prior to the Mouse’s acquisition of Marvel Studios in 2009, Paramount released “Iron Man” in 2008 for a 10% distribution fee, paid for by Marvel, including theatrical grosses, homevid and television. The other Par-Marvel releases — “Thor,” “Captain America: The First Avenger” and “Iron Man 2” — were distributed for an 8% fee. Par had worldwide rights for the latter three pics but lacked rights for the original “Iron Man” in France, Germany, Japan and Spain.
“Iron Man” earned $585 million worldwide, which translated to approximately $27 million for Par, its highest theatrical take for distributing a Marvel pic. ‘Iron Man 2,” meanwhile, grossed $623 million globally, of which Paramount saw roughly $25 million; “Thor” made $449 million; and “Captain America” took in $368 million worldwide.
Ultimately, though, the runaway success of “Avengers” and” Iron Man 3″ magnifies for Paramount the biggest downside of the Marvel deal: Saying good-bye to a cash cow.