Tuesday, 1 July 2008

Comic Book Confidential: It's a Lawsuit True Believers!

Oh what a tangled web we weave kiddies, when our brains pack up and leave.

A tip of my winged Norse battle helmet and a wave of my Mjolnir to conservative film site Libertas for the link to this story from Barron's about a lawsuit hitting the Marvel comics/movie empire.
(aged Marvel heroes poached from artist Donald Soffritti)

Here's a video from Barron's business magazine that summarizes the case, and then you can read my blog which will them bowdlerize the whole thing.

I guess I should start with a little history.

Marvel wasn't always Marvel. It started out as Timely Publications and published a handful of superhero titles during the 1940s like Captain America, Namor the Sub-Mariner, and the android original Human Torch. During the 1950s superheroes were out, sci-fi, cowboys, and angsty teens were in, and the Timely company changed it's name to Atlas Comics.

In the late 1950s & early 1960s DC comics had successfully revived the superhero genre with updated characters, and a new team comic called the Justice League of America. The recently re-branded Marvel Comics company (the name coming from a popular adventure anthology title) and its long serving editor Stan Lee jumped back into superheroes, but with a twist.

Where DC's heroes lived in an fictionalized version of the world with cities named Gotham, Metropolis, or Keystone, Marvel's new heroes lived in real cities, mostly New York, and had personal problems, bickered among themselves, and some "heroes" were just plain monstrous. This new "fantasy in the real world" attitude wasn't the only Stan Lee innovation. The other was continuity.

Where most rival companies had their heroes living mostly in isolated little worlds of their own, with only the occasional special edition crossover to boost sales, Marvel characters knew the other Marvel characters and what happened in one title could affect events in another title.

This heralded the Silver Age of comics, and Marvel and DC became the driving force of the industry, often trading the top spot on the comics food chain through the 1970s through to the 1990s.

During this time Marvel changed owners, several times, expanded into movie and TV ventures and was eventually taken public in time for the comic boom of the 1990s. The one constant during this whole period was editor/publisher emeritus Stan Lee.

And this is where things get complicated, or constipated.

Stan Lee had a lifetime contract with Marvel for over a million dollars a year to act as a creator-emeritus. During the bankruptcy of the 1990s Marvel's then owners tore up that contract, Lee claims that the ending of the contract means that he now owns a piece of the characters he created, while Marvel claims that it was simply "work for hire" and that they own it all kit and kaboodle.

Now during this time Lee fell in with an ex-lawyer and businessman Peter Paul (but no Mary) to start a new company, a dot-com called Stan Lee Media (SLM). Peter Paul got busted for manipulating the stock price, Stan Lee moved on, and even Bill and Hillary Clinton got involved.

Now Peter Paul and other* SLM investors say that they now own a piece of that piece that Stan Lee claimed of Marvel's characters and their now booming movie franchises.

Now while Marvel's lawyers use Peter Paul's criminal convictions as their defence, the man might actually have a case. It seems that Lee's own sworn statements and asset shuffling in the various and sundry lawsuits give contradictory accounts of who owns what, when, and where.

Which brings me to the lesson in this whole boondoggle.


Keep It Simple Stupid.

When in business, any business, be it movies, comic books, or manufacturing aluminum widgets for electric flangeflingers you have to keep things simple.


Because when you start complicating things you end up with litigious boondoggles like this situation, which profit no one except the lawyers. So the basic business plan, especially in intellectual property rich fields like comics and media, is to make sure all ownership rights are settled and satisfactory (which means everyone walks away happy) long before the litigators get their hands on it. Because that scheme cooked up to squeeze a few extra pennies, will probably cost major dollars in the end.

Just look at this post to see the true cost of complicating things.

(BTW- Too bad ex-New Line Robert Shaye tried to short sell Marvel stock on the eve of Iron Man and Hulk's positive performances, if he tried it when this case eventually goes to the jury, he might have had a chance.)

*I stand corrected about Peter Paul status in the lawsuit, though it does show how convoluted the situation is and the need for simplicity.


  1. Peter Paul is not a plaintiff in the lawsuit. The investor group led by Wall Street whistleblower Jim Nesfield is. Marvel's attack on a Paul is a diversion. Stan certainly does not have clean hands in this. He signed two contracts that were virtually identical -- one with SLM in Oct. 1998 and the other with Marvel in Nov. 1998. He also, without knowledge or approval of the court, had insiders pull properties out of the bankruptcy and transfer them to a subsidiary of his new company, POW! Entertainment. He used those looted assets to make a deal with Vidiator while still in bankruptcy. Where is the Justice Department and the SEC?

  2. I think that proves my point about keeping things simple.

  3. Marvel's karma was blown when they decided to pull their books from the established distributors in the mid 90s to goose the bottom line and blew the entire comics industry out of the water in the process. It still hasn't recovered and the bad vibes continue to reverberate through the board rooms.

  4. This YouTube will explain the story.