MOVIE URBAN LEGEND: Marvel risked losing the film rights to some surprising comic book properties if their attempt to launch Marvel Studios had failed.
Reader Sal P. wrote in to ask if I could write about what, exactly, Marvel risked when they launched Marvel Studios, as he was unsure. As you all likely know by now, Marvel took a huge risk back in 2005 when they launched Marvel Studios with their first film, Iron Man, which was released in 2008.
Up until this point, Marvel would license their characters out to other film studios who would produce and then distribute the films for Marvel, with Marvel getting a cut (quite often it was just a flat licensing fee). An agent had come to them in the early 2000s and said that they were being foolish and that they should just produce the movies themselves so that they would get all the money. Since they were a small studio, they obviously did not have the distribution network needed to release major motion pictures, so they cut a deal with Universal and Paramount where those studios would distribute the Marvel Studios films (years later, this would cause a major problem when Disney bought Marvel and wanted to distribute the films themselves, as noted in this old Movie Legends Revealed).
However, before they could even get the point of distributing the films, they would need to be able to produce their films. They had some operating capital, but not enough to do the series of movies that they envisioned, so they cut a deal with the financial servides company, Merril Lynch, where Merril Lynch would put up $525 million dollars over seven years to fund the production of Marvel Studios' films.
In order for Marvel to get that money, though, they had to put up something for collateral. So they offered up the film rights to 10 of their comic book characters that they had not already licensed away. So if Marvel Studios failed and they could not pay Merril Lynch back, Merril Lynch would get the rights to these 10 comic book properties and then could sell or license them to other film companies.
So which 10 properties DID they risk losing?
Captain America and the Avengers were the two biggest ones.
Then Nick Fury, Black Panther, Doctor Strange and Ant-Man.
Then some surprising ones - Hawkeye's film rights were included, as were Cloak and Dagger, Power Pack and Shang-Chi.
Yes, Shang-Chi was considered a valuable enough property that he was included in the 10 properties that Marvel put up to get their production budget.
You might have noticed, however, that a certain name was conspiciously missing from that list. Iron Man!
Yes, when they cut the deal with Merril Lynch, they did not yet have the rights to make an Iron Man movie! They had licensed the character's film rights to New Line Cinema, whose option on the character was set to expire in a couple of months. Obviously, Marvel could not then put up the rights of a character that they did not actually own just yet. They knew that they were getting it back, though.
Here's the rub, though - since Iron Man wasn't part of the deal, Marvel technically wasn't allowed to finance the film with the money that they got from Merril Lynch! So despite just securing $525 million in financing, they then had to use their own capital to produce the first Iron Man film!
Luckily, things worked out for them anyways.
I am waiting for that Power Pack movie, Marvel!
The legend is...
Thanks to Sal P. for the question!
Feel free (heck, I implore you!) to write in with your suggestions for future installments! My e-mail address is firstname.lastname@example.org.