Marvel Legalities Explained!

Ever since Disney purchased Marvel in 2009, lots and lots of questions have arisen among fans. Unlike purchasing, say, Pixar, Marvel had dealings with a lot of other companies over the past sixty years, and that makes things tricky. Particularly the movie, theme park, and television rights. And it all starts with the most magical of intros, “once upon a bankruptcy…”

The Movies

During the 1990’s, you might think Marvel was doing great. You might be thinking of the X-Men animated series, or the Spider-Man series. Iron Man, Hulk, and Fantastic Four did, too. But there were much, much bigger problems behind the veneer of successful Saturday morning cartoons. The first big issue came in what’s often referred to as the Speculator Boom: a period since the eighties where fans were more interested in collecting comics for their potential monetary value rather than the stories and characters they held. At first, the comic sales were impressive, and sales shot up. In 1989, a savvy investor by the name of Ron Perelman took interest and bought out Marvel to the tune of $82.5 million.

Perelman was a business guy, however, not a creative guy. He latched onto the speculator trend and dialed it up to a hundred. Before long, he went ahead and had Marvel print multiple #1 issues, introduce new characters, enclose trading cards, and issue comics with variant covers, which oversaturated the market and soon drove away readers. That’s not including spending $700 million of Marvel’s money on business acquisitions that yielded almost nothing. When sales started to sour in 1993, he decided to raise prices, which backfired tremendously, with sales plummeting by about 70 percent. By 1996, Marvel filed for chapter 11 bankruptcy.

Perelman held firm and urged the board to start a new enterprise: movies. Marvel Studios (Then Marvel Films) was founded in 1993, though their purpose was not about making films, but having ToyBiz CEO Avi Arad (ToyBiz was one of the companies Perelman bought) shop the Marvel characters around to various studios and get them to make the movies for them. This meant having to sell the rights of various characters to the studios, like Blade to New Line Cinema, the X-Men, Deadpool, Fantastic Four, Silver Surfer, and Daredevil to 20th Century Fox, and Spider-Man and Ghost Rider to Sony. After the success of these movies, more rights were farmed out to Artisan Entertainment (The Punisher), and Universal Studios (The Hulk). Marvel had to forfeit the rights to use these characters in movies because Perelman’s terrible business practices sunk them that far into debt. Perelman, by the way, was ousted in 1996.

Blade, starring Wesley Snipes, came out in 1998 and was a hit. 2000’s X-Men started a massive franchise. 2002 gave us Sam Raimi’s Spider-Man. At last, the stink of bad superhero movies had been washed away (After the Tim Burton Batman movies ten years earlier, the follow-up Joel Schumacher films, Batman Forever and Batman and Robin left a foul taste in Hollywood’s mouth, say nothing of 1997’s Spawn or Shaq’s Steel.). But even then, Marvel only saw a small percentage of the profits. It was a bitter pill to swallow. Marvel saved itself from doom, but that was about it.

In 2003, the notion was struck to turn Marvel Films from a division to invest in movies to one that made their own movies. This way, the company could have complete and total control over their own product and characters, maybe even do crossovers. The idea (as we know now with 100% certainty) sounded promising. Except…moviemaking requires money and a lot of it. True, they were no longer in financial trouble, but…c’mon. But nonetheless, Marvel struck a deal with Merrill Lynch in 2005: a $525 million loan over the course of seven years to fund ten movies, with only their characters as collateral. It was then obvious they had to get back their characters from the studios they sold the rights to. Iron Man was sold to Universal Studios in 1990, but when they, Fox, and New Line couldn’t make a script work, the rights reverted back to Marvel in 2006. And since he was their biggest superhero that hadn’t been depicted in live action yet, Marvel figured he should be the first movie to kick off the Marvel Cinematic Universe. Jon Favreau, who worked with Arad in 2003’s Daredevil, was hired to direct, and employed several comic writers to ensure accuracy of the character in adapting him to the big screen. Lionsgate returned the rights to Black Widow in 2006, Thor and Captain America were returned from Paramount, though they would still distribute the movies. Hulk was essentially leased back to Marvel…sort of. If the Hulk appears in his own movie, Universal has the rights to it, so since 2008’s The Incredible Hulk, all of Hulk’s live action appearances have been him teaming up with the Avengers team as a whole, or just Thor in 2017’s Thor: Ragnarok.

Kevin Feige worked in producing since the late nineties, and was hired by Arad in 2000 to produce Marvel films. Feige proved himself as a fan first and a skillful producer second, and was named president of production in 2007. It’s Feige who has been largely responsible for plotting out the MCU and ensuring its evolution leading up to 2012’s The Avengers and beyond.

Remember that $585 million Merrill Lynch loaned back in ’05? After the first five MCU movies – Iron Man, The Incredible Hulk, Iron Man 2, Thor, and Captain America: the First Avenger – their total grosses came to about $2.3 billion. Now, I don’t know about you, but that sounds a lot like their risky loan paid off in dividends, and that was before The Avengers, which alone grossed $1.5 billion. The following film, Iron Man 3, was the last film to be distributed by Paramount, ending their contract. Of course, by that point, they didn’t need one. Especially since they had a new distributor with two giant ears and deep pockets.

In August of 2009, Disney announced their bid to buy Marvel to the tune of $4.24 billion. Why? In all likelihood, it probably has to do with Disney’s eternal desire to hit that fine demographic, the elusive male ages 12 to 35. It’s easy to market to girls with princesses and older crowds with their classic movies, but teen and young adult males were always a tricky target, even when you own ESPN. After the Marvel acquisition and the Lucasfilm buyout in 2012, it must be not that hard anymore. But because of all of Marvel’s business dealings, it wasn’t so cut and dry. At least with the movie rights, most all of the characters they sold off were either bought back or the contracts expired. Asterix.

After the successes of the X-Men and Spider-Man trilogies, neither 20th Century Fox nor Sony were willing to part with their cash cows. More still, as long as they keep making their respective movies, they can keep the rights to them. Hence why there have been ten movies starring Xavier’s mutants and Spider-Man getting rebooted after only ten years with Andrew Garfield. But it’s not as though Marvel (Or Disney, for that matter) were going to just continue without using the biggest superhero names they ever created. Especially since fans made it clear they wanted Wolverine and Spidey getting the MCU treatment. In 2015, Disney finally worked out a deal with Sony that allowed Marvel to use Spider-Man, but it basically amounts to shared custody. Tom Holland became the third rebooted webslinger, and made his first appearance in the MCU in Captain America: Civil War In 2016. But for the solo Spider-Man movies, Sony retains control, working in conjunction with Marvel movies, but still able to make their own offshoot projects like Venom and Spider-Man: Into the Spiderverse (both 2018).

In Avengers: Age of Ultron (2015), Marvel introduced us to Wanda and Pietro Maximoff, better known in the comics as Scarlet Witch and Quicksilver, children of the X-Men’s greatest villain, Magneto. Writer/director Joss Whedon himself wanted their powers to use in the movie, plus their backstory provided interesting conflict for the heroes, as well as their published history with the Avengers. However, because of their ties to the X-Men franchise, Whedon was forced to excise any reference to their father, and avoid referring to them as “mutants”. Because Fox still owned the characters, they created their own Quicksilver character in Evan Peters’ character, Peter, in X-Men: Days of Future Past in 2014.

The last major sticking point was Fox, who was not giving in. Aside from the X-Men, they also had the rights to Deadpool and the Fantastic Four. The former was a side character used poorly in X-Men Origins: Wolverine (2009), yet a solo film true to his rated R character remained in development hell for years. Even with its super successful release in 2014, the idea of a hyper violent, foul mouthed, pansexual superhero owned by Mickey Mouse seemed wholly abhorrent. However, the biggest question mark was the Fantastic Four. By this time, three films about them were released, but only the first one was received only moderately well. Its sequel was panned and its 2015 reboot suffered numerous issues, resulting in becoming a massive box office bomb. Why didn’t they just sign them back to Marvel? Maybe they didn’t want to give up on something they spent so much time and money on. In any case, all three properties were not going anywhere…until 2017, when Disney announced their purchase of 21st Century Fox, which also allowed them to own Aliens, The Simpsons, Ice Age, Anastasia, and yes, the rights to the X-Men, Deadpool, and the Fantastic Four. The merger concluded in March of 2019, but as of now, all we know is Disney won’t reboot Deadpool, they’ll let Fox release X-Men: Dark Phoenix on June 6th, and not much else. As of this writing, Marvel has remained mute on their plans post-Spider-Man: Far From Home.

The only character that still has legal issues to sort out is Namor, the Sub-Mariner. His rights were sent to Universal alongside the Hulk, but Feige and Marvel CCO Joe Quesada cannot seem to agree on whether or not he’s back at Marvel.

The Theme Parks

Confused? Caught up? Well, we aren’t done yet. That was all just the movies. Things are even more fun when you stop and realize you can meet Captain America in Disneyland, ride a Guardians of the Galaxy roller coaster in Disney World’s Epcot, and yet visit Marvel Superhero Island at Universal Orlando.

Let’s go back to the nineties again. After Universal Orlando opened its gates in 1990, they soon developed plans for a second gate to feature even more properties, like Dr. Seuss, Jay Ward, King Features Syndicate, Jurassic Park, and…DC comics!

Yes, DC. Universal had made some serious plans to build a Gotham City section in their upcoming Islands of Adventure theme park, complete with a Batman/Penguin overhead track, intertwining roller coaster. However, the plan fell through. Up until 1998, Warner Brothers (Who own Batman, Superman, Wonder Woman, et al) owned Six Flags, hence the superhero-themed rides and the Looney Tunes characters. According to the contract held with the two, should Six Flags be bought out by a competitor, the rights to Bugs Bunny and Superman, etc., would be forfeit. So unless WB voluntarily gave the rights to Universal, and risk losing business at their own parks, there was no way we’d see the Dark Knight at Universal. Or until the deal expires around 2027.

So having DC at Universal was a bust. Well, thankfully, DC’s rival with a similarly vast catalogue of popular characters was looking for some capital to pay off their debts, and could probably bought for real cheap, too. So in 1994, Marvel signed a deal with Universal Studios to use the Marvel properties in perpetuity (That’s legalese for “forever”). Five years later, Islands of Adventure opened to the public, featuring The Incredible Hulk Coaster, Doctor Doom’s Fear Fall, Storm Force Accelatron, and The Amazing Adventures of Spider-Man. The area also was made to look like a comic book in its aesthetic, from its simple, colorful building designs to its establishments called “Cafe” and “Store”. The deal also allowed use at Universal’s other parks, like a restaurant called Marvel Mania and the Spider-Man Rocks! musical, both at Universal Studios Hollywood, and another Spider-Man ride (similar to the one in Florida) at Universal Studios Japan.

So when Disney bought The House of Ideas, you can imagine some serious questions came up about theme park use in relation to their deal with Universal. It got interesting very quickly.

The Marvel Mania restaurant closed in 1999 after being open less than two years, and Spider-Man Rocks! show didn’t fare much better, opening in May of 2002 and closing in August of 2004. After that, Marvel had no presence in Universal Studios Hollywood. The contract was divided up between east and west of the Mississippi River, allowing some flexibility for the parks to work out their different ideas in development. Because Universal gave up what they had in California, they essentially lost the rights to use them. So when Disney acquired Marvel in ’09, they had license to use any Marvel character however they wanted in Disneyland. And because there are no Universal Studios in China and France, Disney can use Marvel in Disneyland Paris, Hong Kong Disneyland, and Shanghai Disneyland. However, due to the use of the Spider-Man ride in Japan, Disney cannot use any Marvel characters in the Tokyo Disneyland park. But no matter where they have their Marvel, all across the board, what’s universal (ha!) is Disney can’t use the name “Marvel”, nor can they use the heroes in any advertising. Since the deal went through, we have Guardians of the Galaxy: Mission Breakout in Disney California Adventure and the Iron Man Experience in Hong Kong Disneyland, with whole lands being added in DCA, and Walt Disney Studios, Hong Kong.

But what about Walt Disney World? Ah, here’s where it gets even funner. Marvel Superhero island uses a plethora of characters from the Marvel pantheon, so any and all characters featured there are barred from being used at Disney. Even if Disney wanted to use Cable or Bishop – two X-Men characters not portrayed at Universal – they can’t by virtue of being affiliated with the X-Men. There are, however, two clear exceptions: Guardians of the Galaxy and Big Hero 6. Both superhero teams of these D-list titles are so overlooked there was no reason why Universal would have included them. But then Disney just had to go and make both hit franchises. So if you’re wondering why there’s a Guardians coaster in Epcot and Hiro and Baymax are doing meet-and-greets in the same park, that’s why. It’s fine line, but it’s not as though Disney is flirting with litigation from Universal, right?

Well, in 2012 and 2013, Disney set a skin on one of their monorails, advertising The Avengers and Iron Man 3. The skinned monorail ran only on the Magic Kingdom tracks because if it ran on the Epcot track, it would breach the agreement. The Epcot monorail swoops through the park’s Future World before it parks in the station outside the gates, where the Magic Kingdom one just parks outside the entrance. This way, the characters never actually are in the parks. Clever, huh?

Television and Streaming

The only other legal issue that’s worth discussing is the Marvel Netflix shows. You know, Daredevil, Jessica Jones, Luke Cage, Iron Fist, The Defenders, and The Punisher. The shows have been a huge draw for Netflix and now a lot of confusion hangs in the air as to what’s going on with their recent cancellations and Disney’s new streaming service, Disney+. Finding information on these has been considerably harder than finding stuff for the movies and the parks. From what I’ve found, not only will the shows not be relocated to Disney+, but a contract stipulates the characters cannot be used again for two years since their cancellation. Daredevil, Iron Fist, and Luke Cage were cancelled back in late 2018, with Punisher and Jessica Jones (Which is still due one last season) had ended earlier this year in 2019. So until at least 2020 and 2021, we won’t see these characters again from Disney. Why two years? I’m guessing it was a contract with Netflix, ensuring the service would continue to maximize viewership and avoid competition. It’s bad enough one of the biggest studios is packing up and leaving, and taking all its cartoons, Star Wars, and Marvel, but they don’t need Disney teasing a continuation of Daredevil or Jones while fans are still hooked. However, Disney is making more MCU-based shows such as WandaVision , the one about Falcon and Bucky, and one based on Tom Hiddleston’s Loki purely for Disney+. This isn’t unlike their runs of Agents of S.H.I.E.L.D. and Agent Carter on ABC. Furthermore, now that Disney gained full control of Hulu, they have also added a slew of new adult animated shows based on characters MODOK, Hit-Monkey, Tigra, Dazzler, and Howard the Duck, which, not unlike The Defenders or The Avengers, will lead up to a crossover known as The Offenders.

I’ve also found their catalogue of shows from Marvel Animation, which opened in 2008, and includes Spectacular Spider-Man, Wolverine and the X-Men, Super Hero Squad Show, Iron Man: Armored Adventures and (My personal favorite) Avengers: Earth’s Mightiest Heroes. I’ve noticed in these shows, the whole Marvel catalogue is in play, but later shows like Avengers Assemble, Spider-Man, and Hulk and the Agents of S.M.A.S.H. don’t feature the non-MCU characters from Fox. Meanwhile, Fox has made the live action shows The Legion and Gifted on FX, which take place in the X-Men universe while not featuring any of the famous characters. At the same time, Agents of S.H.I.E.L.D. dealt with a season-long story arc not unlike those seen for X-Men stories, with the inclusion of the Inhumans, a sect of super powered humans Marvel has tried to make work as their stand-in for the X-Men, which, to say the least, has not worked. I imagine Disney just doesn’t want to promote the rival studio, because from what I can understand, they can still use the X-Men, etc., on television, just not exclusively. Hopefully that will change, because this has been a headache to constantly dance around. And to explain.

Conclusion

Well, there you have it. An abridged summation of why Wolverine isn’t an Avenger, why you can visit Marvel land at some parks but not others, and why the Defenders didn’t help kick Thanos’ ass. I’m sure I got some details incorrect, but if anyone wants to correct me, feel free to do so.

So what do you think? Ready to see everyone unite under the Marvel-Disney banner? Or has all this legal mumbo-jumbo just made things too complicated? Fire off a comment, leave me a like, and ASSEMBLE!

Author: TAP-G

Writer, former podcaster, entertainment enthusiast. Movies and media have the power to shape our world and vice versa. Let’s take a deeper look at them.

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