Disney's Marvel purchase could shake up Florida theme parks

It's an epic battle of good and evil. Or rather, a storybook romance between Snow White and Iron Man, with Shamu looking a bit worried.

The Walt Disney Co. said Monday it is buying the comic book and movie company Marvel Entertainment Inc. for $4 billion in cash and stock.

Just as the deal shakes up the world of superheroes, it will also rattle the theme park landscape and could ultimately shape the fate of Universal Orlando Resort and eventually Busch Gardens in Tampa.

"It's just a grand slam deal for Disney," said Dennis Speigel, president of International Theme Park Services, a consulting group in Cincinnati that brokers theme park purchases. "It adds a great stable of characters to the already-strong business they have. ... If I were Universal, I would be very concerned right now. We're talking about more powerful direct competition to Universal right in their backyard."

In the short term, the deal is really about film and DVD revenues.

Analyst David Joyce of Miller Tabak & Co. said the acquisition will help Disney appeal to young men who have flocked to theaters to see Marvel's superhero genre in recent years. That contrasts with Disney's recent successes among young women with such fare as "Hannah Montana" and the Jonas Brothers.

Marvel television shows also already account for 20 hours per week of programming on Disney's recently rebranded, boy-focused cable network, Disney XD, and that looks likely to increase, Disney CEO Robert Iger said. The shows are "right in the wheelhouse for boys," he said.

Add to that Disney's 2006 purchase of "Toy Story" creator Pixas Animation Studios, and Disney will control some of the world's most popular characters. Disney executives say they have the financial room to make more acquisitions.

Given that Universal and Disney compete directly in theme parks as well as the movie screen, there's some delicate finesse required, Speigel said.

Universal Orlando's most successful ride is The Amazing Adventures of Spider-Man, based on a Marvel character, and it ranks among the greatest rides of all time, according to some in the industry. Such rides can become key generators of foot traffic for a theme park, especially when they first open.

Now Universal rival Disney will own the Spider-Man name.

There's little chance Disney would demand Universal take the Spider-Man name off the ride, which is in Universal's Islands of Adventure park, and some Disney executives said today that many third-party licensing deals would remain in effect.

But the future is a different story, Speigel said. Universal will have to shop elsewhere for big-name characters for their rides, outside the Disney library, limiting Universal's options.

For Busch Gardens, the deal could have other effects.

Presently, the park is owned by Belgian brewer InBev, which is trying to sell off the chain of amusement parks to focus more on beverages.

Disney has looked seriously at the property, Speigel said, and had the economy been better, the parks would have already been sold to Disney or another company.

The most likely scenario, he said, is that potential buyers will wait for the economy to improve before bidding on the property. If Disney emerges as the buyer, Speigel believes Disney will keep only the sea life parks like SeaWorld Orlando - filling in a niche Disney doesn't already have.

Given it's speculation at this point, Speigel said that could leave the Tampa park as something of an orphan. "It would not surprise me to see several groups come in and split everything up," he said.

Under the deal, which is expected to close by the end of the year, Disney will acquire the rights to 5,000 Marvel characters. Many of them, including Fantastic Four and X-Men, were co-created by comic book legend Stan Lee.

Iger said Marvel's comic books, TV shows, movies and video games amounted to "a treasure trove of content." Iger said the deal would bring benefits like the ones Disney got from buying Pixar for $7.4 billion in stock.

"The acquisition of Marvel offers us a similar opportunity to advance our strategy," Iger said, and "to build a business that is stronger than the sum of its parts."

For Marvel, Iger said being in the Disney camp would mean better global distribution and better relationships with retailers to sell its products. Another storied comic book maker, DC Comics, has been under the wings of a major studio since 1969, when Warner Bros. bought the home of Superman, Batman and Wonder Woman.

Marvel Chairman Mort Handel called Disney "a perfect home for our great collection of characters."

Joyce, of Miller Tabak & Co., noted that that the $4 billion offer was at "full price."

Marvel shareholders will receive $30 per share in cash, plus 0.745 Disney shares for every Marvel share they own. That values each Marvel share at $50 based on Friday's closing stock prices.

Marvel shares shot up $9.91, or 26 percent, to $48.56 in midday trading Monday. Disney shares fell 82 cents, or 3 percent, to $26.02.

Disney said the boards of both companies have approved the transaction, but it will require an antitrust review and the approval of Marvel shareholders.

Although it began producing its own movies, starting with "Iron Man" last year, Marvel has several deals with other movie studios that Disney said it will honor and re-examine upon expiration.

For example, "Spider-Man 4," set for release in 2011, is being made with Sony Corp.'s Columbia Pictures; "Iron Man 2" will be distributed by Viacom Inc.'s Paramount Pictures next year; and the upcoming "X-Men Origins: Magneto" and "X-Men Origins: Wolverine 2," both due in 2011, are to be distributed by News Corp.'s 20th Century Fox.

Iger said Pixar also had third-party licensing agreements that eventually expired, allowing the companies to move forward together.

Marvel earned a net profit of $206 million in its last fiscal year, up 47 percent from a year earlier, on revenue of $676 million.

Disney said the acquisition will hurt its earnings per share by a mid-single-digit percentage in fiscal 2010 but be positive in 2012. That is partly because the company will issue 59 million new shares and partly because of the timing of Marvel releases such as "Thor" and "The First Avenger: Captain America" in 2011.