Ronald Perelman, the Revlon tycoon, hates to talk about
seven years with Marvel were an obvious failure, ending in
bankruptcy at the end of 1996. Yet, in fact, by cleverly timed
sales of Marvel junk bonds during his years running the company,
Perelman pocketed hundreds of millions of dollars.
The book reveals that a litigation trust representing former
shareholders and creditors is suing Perelman, alleging that
he pocketed $553.5 million in "unjust enrichment"
from the junk bonds.
suit (now in the deposition stage) declares that Perelman had Marvel
making deals meant to goose the share price (the ticker symbol was
MRV), with short-term profit promises rather than long-term gain
to the company. He took advantage of the sky-high share price, making
his stock the collateral so he could sell Marvel bonds.
does his own calculation, based on thousands of pages of court and
other documents, to conclude that -- thanks to the junk bonds --
Perelman netted a profit of $280 million from his eight years running
privately held company, MacAndrews & Forbes, denies it
did anything improper. One executive at M&F's headquarters,
known as The Townhouse, said: "This is a money-making
enterprise, not a church choir."
Carl Icahn also hates to talk about Marvel.
bought a controlling interest in the junk bonds, just before Marvel
declared bankruptcy in 1996. Then he tried to woo the banks, the
"secured lenders," to support the notion that he should
take over the company. Led by Chase Manhattan, the bank syndicate
was terrified of Icahn. He did, however, win that stage of an uproarious
and unpredictable court fight. In June 1997, Perelman's people were
forced out; and Carl Icahn became chairman of Marvel Entertainment.
Neither Perelman nor Icahn had any sense of the
Marvel Comics characters or their impact on popular culture.
Even as an affluent teenager in Philadelphia, Ron Perelman
read corporate balance sheets rather than comic books. Carl
Icahn, despite more humble beginnings in Queens, never read
comics and saw Marvel as a pure financial play -- and a way
to foil Perelman's
In the bankruptcy fight of 1997-98 and even before,
comic books fans saw the quality of the publications suffer.
Consumers deeply resented a series of gimmicks that Marvel tried,
such as creating "collectors' editions." The small businesspeople
who ran comic book stores suffered a lot, and most of them blame
Perelman for unfeelingly ruining the business.
Two obscure immigrants from Israel managed to outfox two of
New York's top tycoons.
Perelman and Icahn both lost this war. The winners were Ike
Perlmutter and Avi Arad, who ran a company called Toy Biz with an
exclusive license to make Marvel-related toys. Perlmutter is a Florida-based
investor who stays behind the scenes, but is constantly on the phone
concerning himself with every minute aspect of Marvel operations.
Arad, who became a millionaire thanks to royalties on toys he designed,
now lives in Beverly Hills -- the very active executive producer
of all the movies based on Marvel characters.
The Spider-Man movie represents an artistic and
Comic Wars tells how the cinematic rights to Marvel's
most valuable characters, Spider-Man, were tied up in a web of contract
disputes and bankruptcies. Sony Pictures paid Marvel a $10 million
advance (in 1999) and agreed to share box-office revenues: the two
Israelis, IkePerlmutter and Avi Arad, boast that "first dollar
participation" means not having to wait for Hollywood accountants
to declare a profit on this film.
Avi Arad is now busy with three projects being filmed: The Hulk
(directed by Ang Lee), Daredevil (starring Ben Affleck), and X-Men
2 (with suddenly hot stars including Halle Berry, Hugh Jackman,
and Sir Ian McKellan). His Marvel office in Los Angeles has sold
the rights for over a dozen more movies, in various stages of development,
based on comic book heroes.
Marvel (post-bankruptcy stock symbol MVL), while still publishing
the comic books, and still dabbling in toys, hopes to earn
most of its money from the low-overhead "licensing"
MVL is expected to turn a profit this year, for the first time
since 1994, and the stock price has been soaring since last summer
as the fear of another bankruptcy fades. A major revenue source
for Marvel will involve collecting license fees and royalties when
any of the 4,700 Marvel characters are used in any way -in any media
(including TV and video games) and on any product (from boxer shorts
to breakfast cereal).
Ronald Perelman did not want to make movies.
The Prologue of Comic Wars takes readers inside his high-security
corporate Townhouse on East 62nd Street, where the strategy was
to "keep up the multiple." Movie projects were frowned
upon, as being too risky and not favored by Wall Street.
Stan Lee got caught up in an alleged stock fraud.
At age 79, the greatest human dynamo in Marvel's history has
returned to cheerleading the company he loves.
As told in Comic Wars, he was Stanley Lieber, a cousin of the owner's
wife when he joined Marvel (under the corporate name Timely Comics)
more than 60 years ago. In the 1960s, his energy, charisma, and
wacky sense of humor turned Spider-Man, the Fantastic Four, the
Incredible Hulk and other characters into some of the world's most
recognized entertainment properties.
Over the years, Stan Lee was edged out of the comic-book operation
in New York. He moved to Los Angeles and helped Marvel-based cartoons
get a foothold on TV. But most of his ideas for movies were foiled,
and he uncomplainingly has collected on a lifetime contract from
His ambitious non-Marvel project in the 1990s ended in humiliation.
When Stan Lee helped set up an Internet entertainment company build
around his own name and reputation, the dot.com stock soared at
first. But the Securities and Exchange Commission alleged there
was fraud. The company (StanLee.net) shut down, and the SEC had
to track down the head of the company (controversial ex-lawyer and
promoter Peter Paul) to Brazil.
Stan Lee is among the many who worried about Marvel during the bankruptcy
battle. But, like others, he always believed that the Marvel characters
and their popularity would survive.