Screamscape: Possible Buy Out of Universal for Marvel Theme Park Rights?

[Krack]

It really had nothing to do with the amount of offerings. Americans do not tend to vacation for more than a week. People were just not willing to break their cultural norms for Disney.

But isn't the average length of stay for domestic guests still around 4 and a half days?

 

[AEfx]

Good for them. I bet if you asked 100 people on Expedition Everest what mountain they were on during the ride, none of them would be able to tell you that they really aren't on Everest, and that they're on the Forbidden Mountain.

Details are details. It doesn't matter if people get it or not.

Uh...but if no one gets it, who cares? LOL.

I'll be honest, I've been studying theme parks and design my whole life, and it really never occurred to me that IOA was based on printed media. And, actually, as I'm thinking about it - it's kind of a stretch to say that, and they certainly have never promoted that as the branding.

Jurassic Park and Harry Potter are based on movies that were based on books, but the attractions are entirely based around the movies and imagery from them. Popeye did originate as a comic strip, but he became the most popular with the public from the animation, and Dudley-Do Right began as television animation as well.

So really, while a lot of the attractions can be traced back to printed media, I'd hardly call IOA's theme "literary"...it's Islands...you have Adventures on.

 

[AEfx]

Anyone else here overjoyed that Marvel attractions aren't coming to WDW (anytime soon)?

Nope.

I know some people have this "EW!" bias against superhero characters, but they don't fit into Disney any less than the other properties they have acquired over the years, like Pixar. Just like Pixar, eventually Disney will be distributing all of the Marvel films, just like they did with Pixar for over a decade before they actually owned them.

It's one of those things that is just so full of hyperbole it's hard to tell what people get really so offended by. "It's not Disney!" is not a reason. People can come up with all kinds of reasons to dislike them - and that's valid, if you don't like them you don't like them, skip their attractions like I do with things I don't like, like Playhouse Disney - but if you take anything but "Disney" stuff out, there goes the majority of MGM (Star Tours, GMR, RnR, ToT) right there.

I want good, fun, innovative attractions - the theme isn't nearly as important to me as that. And, to be honest, I'm sick of all the Pixar stuff myself - it's fine and all, but when 2 out of every 3 new things is based on them, it gets kind of old.

 

[AEfx]

The difference is that people extended their stays for the second and third gates. They did not for the fourth.

I think that's largely because of theme and branding. Of course, the threshold of "how long can you stay" at Disney is part of it, but AK just wasn't sold very well, and as a concept is kind of dicey.

Awareness of AK among the general public is still pretty low. I talk to a LOT of people about Disney (I'm the go-to person for trip planning, I help a lot of people I don't even know who are referred to me by other friends, etc.) and it's amazing how many people are not aware of it really, or just vaguely know there is something there that has to do with animals.

As to the actual park, you can see most of the major stuff in 1/2 day, the only thing that drags that out are FOLK and Nemo with their strategically stacked schedules (like they do at MGM) so you have to stay longer and stand in line to get in. In the time it takes to do those two shows, you can experience pretty much everything else in the park.

It's a very pretty place (though it's always hotter there, and if it's already hot in Orlando, it can be almost unbearable). But since this country is full of great zoos (yes, I know, Nahtazoo...but it is LOL), it's hard for people to want to make the trip there just to see AK.

Now, if WDW added a fifth gate with an amazing theme? That just might bring people there, just like the addition of basically one ride (WWOHP) has greatly increased the people who want to go to that resort.

(I know people want to automatically flame anyone for saying the words "fifth gate", I'm not saying financially it should be done, or that they shouldn't fix the other parks first, etc. - just pointing out that just because AK didn't bring people in, doesn't mean something else wouldn't - that's like saying if a movie bombs at the box office, people don't like movies anymore. No, they just didn't like that one very much.)

 

[flavious27]

The difference is that people extended their stays for the second and third gates. They did not for the fourth.

If tourists did not extend their stays because of AK, why does it have about the same attendance as DHS? Do you think the locals are visiting AK once a month?

 

[jt04]

The 4th gate was being planned when the 3rd gate was half finished.

And some would say the third gate is still only half finished.:lol:

A 5th gate would be a disaster unless it was something revolutionary like a Star Wars theme park or something on that scale. Marvel just is not on that scale. WDW needs to develop the existing parks to their full potential.

As for Marvel at WDW, I will say it again, I just don't believe Uni will want to market a Disney franchise in its park long term. Especially when it only adds to Disney's bottom line AND allows Disney access to Universal's financial ledgers. The downside far outweighs any advantage or sense of satisfaction Universal perceives itself as getting by holding on to the characters. Universal will fold on Marvel voluntarily IMO.

If Disney coughs up a check to buy out the contract I will find the entire transaction more than a bit suspect. :lookaroun

 

[lazyboy97o]

Once again, the issue of Disney having access to Universal's books has been resolved, and was some time ago as part of the purchase.

 

[GLaDOS]

Uh...but if no one gets it, who cares? LOL.

I'll be honest, I've been studying theme parks and design my whole life, and it really never occurred to me that IOA was based on printed media. And, actually, as I'm thinking about it - it's kind of a stretch to say that, and they certainly have never promoted that as the branding.

Jurassic Park and Harry Potter are based on movies that were based on books, but the attractions are entirely based around the movies and imagery from them. Popeye did originate as a comic strip, but he became the most popular with the public from the animation, and Dudley-Do Right began as television animation as well.

So really, while a lot of the attractions can be traced back to printed media, I'd hardly call IOA's theme "literary"...it's Islands...you have Adventures on.

I mean you can call it a stretch all you want. Doesn't change the fact that that is what the park is based off of. The only attraction in the park that isn't based off of a literary entity is Dudley Do-Right.

Literature is the underlying theme of Islands of Adventure.

 

[Mouse Detective]

Here ya go. I found it while looking at Universal info a couple months ago...

Awesome work!

....but the one thing that is clear to me after two run-throughs is that Disney isn't building anything in Florida that has anything to do with Marvel until the lease no longer exists. No themed stores, no restaurants, no entertainment complexes, no advertising of Marvel whatsoever. And the contract runs for as long as Universal wants it. Universal has Disney by the stones regarding these Marvel characters in Florida.

And THAT's what I've been saying. Universal has the upper hand in this and will happily keep paying Marvel for those rights!

 

[jt04]

Awesome work!




And THAT's what I've been saying. Universal has the upper hand in this and will happily keep paying Marvel for those rights!

Happily? Yeah right?

It is equal to Coke selling Pepsi products out of one of their Coke vending machines. My prediction stands. Uni will drop Marvel at IoA. RRemeber the deal also gives Disney access to Universal's financial accounts. I'm sure that makes Universal happy too. :lol:

 

[flavious27]

And some would say the third gate is still only half finished.:lol:

A 5th gate would be a disaster unless it was something revolutionary like a Star Wars theme park or something on that scale. Marvel just is not on that scale. WDW needs to develop the existing parks to their full potential.

As for Marvel at WDW, I will say it again, I just don't believe Uni will want to market a Disney franchise in its park long term. Especially when it only adds to Disney's bottom line AND allows Disney access to Universal's financial ledgers. The downside far outweighs any advantage or sense of satisfaction Universal perceives itself as getting by holding on to the characters. Universal will fold on Marvel voluntarily IMO.

If Disney coughs up a check to buy out the contract I will find the entire transaction more than a bit suspect. :lookaroun

I can't see a whole park dedicated to a single franchise. I can see disney trying a superheros and or animation park that blends in marvel, disney and pixar characters.

I say DHS is not finished without a monorail station, personal opinion. If Disney was one of the bidders for UA/MGM, it would signal a huge expansion of DHS and would rock management down I-4.

 

[flavious27]

Awesome work!




And THAT's what I've been saying. Universal has the upper hand in this and will happily keep paying Marvel for those rights!

So they are fine paying disney and letting part of their park stay stuck in 2000?

 

[wolf359]

I think it would be foolish to assume that Universal's use of Marvel superheroes didn't come up when Disney was looking to acquire Marvel. I'm just as sure the upfront cost of buying Marvel kept Disney from buying back Universal's rights at the time, but it's hard to believe Disney would allow anyone (especially a direct competitor) to have use of Disney characters for one day longer than is absolutely necessary.

The licensing fees are too small (and not even directly paid to Disney anyway) to make Disney ignore the long-term damage done by Universal having control of those characters. Even if Disney doesn't have anything of their own ready to go when the huge slate of Marvel movies hits in the next couple of years, it's still in Disney's best interests to make sure Universal's land is a theme-less mess just the same.

 

[Krack]

So they are fine paying disney and letting part of their park stay stuck in 2000?

That appears to be a popular misconception. I had read elsewhere, that each individual use of a Marvel character within IOA had it's own separate license and fee associated with it, but nothing in the contract alludes to this at all. The contract is for a Marvel Universe land at IOA and there is an annual fee for it's license - nothing about individual characters, or attractions, or stores, or restaurants. Universal agrees to pay the annual license fee and to sell a certain amount of a Marvel merchandise at IOA (for a percentage of the profit). The contract also requires that Universal keep the land open and reasonably perform maintenance and refurb. As far as I can tell, there's nothing in that contract that says Universal would be prohibited from "refurbing" the Hulk by turning it into an Iron Man Coaster, or maintaining the land as a whole by building a Thor ride. All they have to do is be "reasonable" in the new design.

From the contract:

In developing and implementing THE MARVEL UNIVERSE, MCA will follow and be consistent with The Official Handbook of The Marvel Universe, Marvel’s Style Guide and such other descriptive design/style materials as may be provided by Marvel. This Marvel-themed complex would be designed in coordination with Marvel, and all major elements and themes would be subject to Marvel’s reasonable approval.

Marvel could tell Universal "no you can't make an attraction based on an evil, female Wolverine", but they couldn't say they can't build a Wolverine ride at all.

I still think the endgame here is that Disney will have to buy out Universal (somewhere within 5 years or so), but it will cost a bundle - and will only become more expensive the more popular Marvel characters become (films & tv).

 

[Mouse Detective]

It is equal to Coke selling Pepsi products out of one of their Coke vending machines. My prediction stands. Uni will drop Marvel at IoA. RRemeber the deal also gives Disney access to Universal's financial accounts. I'm sure that makes Universal happy too. :lol:

This is absolutely nothing like Coke selling Pepsi products from Coke machines. This is Universal owning the theme park rights to valuable characters that they purchased the rights to for a pittance compared to what those rights are worth today. You've now read the contract. Universal has them forever and Disney can't do anything about it. Universal can certainly cancel the contract if the price was right, but that's Universal's decision, not Disney's. A few of you have agreed with me here but many of you don't get it. Universal has the upper hand. The value of this asset is tremendous and will continue to increase in value as the new films come out and the only theme park with rides based on the characters is IOA. They're is no reason to give this up and they're not going to!

(And for anti-trust reasons, Disney has very limited access to Universal financial records.)

 

[Krack]

(And for anti-trust reasons, Disney has very limited access to Universal financial records.)

I pretty much agree.

From the contract:

Merchandise Royalty Guarantee

MCA will pay an annual guaranteed merchandise advance of $*** which will be applied against merchandise royalties from any of its retail outlets calculated at a rate of ***% of wholesale cost. After the annual guaranteed advance is fully earned, the royalty on additional sales will decrease to ***% and will be paid quarterly. Such royalty will be applied to the wholesale cost of merchandise manufactured for and purchased by MCA as a direct licensee of Marvel, and to the cost of items purchased from Marvel’s licensees. (While Marvel will not require its licensees to sell items to MCA without a royalty built into the price, Marvel will not in any way prohibit or restrict MCA from being a direct licensee of Marvel or a Marvel Related Company for the purpose of producing products to be sold by MCA at Universal Theme Parks, surrounding complexes and certain airport stores as provided herein, including by means of exclusive licenses granted to parties other than Marvel Related Companies). In the event Marvel is unable to give MCA a direct license because of a conflicting license, MCA shall receive a credit for the license fees payable to Marvel by MCA hereunder, and Marvel agrees that the royalty rate paid by its Licensee in connection with each item as to which Marvel cannot grant a license to MCA will be set consistent with Marvel’s normal business practices.

1. Marvel will have reasonable audit and review rights to assure that proper payments are made and that the cost attributed to merchandise manufactured for MCA’s order is being fairly stated and, inter alia, is not being “adjusted” so as to reduce the royalties due Marvel in favor of other merchandise not covered by this agreement.

2. The parties will develop reasonable audit rights and procedures which will be consistent with industry standards. MCA will reimburse Marvel for the reasonable cost of any audit resulting in Marvel being due additional sums exceeding ***% of the sums paid by MCA.
3. Marvel will have reasonable approval of all licensed merchandise, artwork, merchandise packaging, logos, and the like utilizing the Marvel properties, which approval will be granted or withheld in a timely and reasonable manner and will not be used in a way which would frustrate the intent of this Agreement.
4. Where items of merchandise feature both the Marvel properties and other characters or elements proprietary to third parties (such as posters, T-shirts, coffee mugs and the like portraying the wide range of characters present in THE SECOND GATE) a procedure to arrive at a reasonable allocation of the royalty will be worked out.

All Disney has access to is how much Marvel merchandise Universal is selling at IOA - what is Disney going to do with that information? It's relatively valueless. The only value it has is serving as market research (Hulk stuff sells more than Thor stuff, etc), but Marvel already has its own merchandise sales information from its toy and consumer products divisions. It's not like Disney is getting complete access to Universal Orlando's books. And to make it worse, it's not even as though we're talking about unique merchandise anyway ("Hey, look ... Universal is making tons of sales on cotton candy. We should sell that, too.") - 95% of everything sold in either resort (WDW and Universal) can be found at your local WalMart nowadays.

 

[lazyboy97o]

I can't see a whole park dedicated to a single franchise. I can see disney trying a superheros and or animation park that blends in marvel, disney and pixar characters.

Marvel is not a single franchise, it is a brand, just like Disney. There are several franchises under the Marvel umbrella. The biggest problem with a Marvel park is that the general public would not be familiar with the ever growing base of stories and characters, so things would have to stay rather base, constant and recent-film based.

 

[Lee]

I still think the endgame here is that Disney will have to buy out Universal (somewhere within 5 years or so), but it will cost a bundle - and will only become more expensive the more popular Marvel characters become (films & tv).

I pretty much agree, except for the five year part.
No reason for Universal to just give the rights up voluntarily.

- It's not like the general public looks at Marvel characters as representing Disney. They don't have a Mickey ride at IoA. The GP, those who are aware of Disney's ownership of the characters at all, just see Marvel as Marvel. That doesn't hurt Uni at all.

- Why give away what you maybe can get paid for? Uni is in the driver's seat. They can sit back and rake in the increased profit that comes increased attendance and merch sales brought on by the new films. If Disney wants the rights, Uni can set their own price. Personally, if I were them, I'd ask for several hundred million. Enough to totally retheme Marvel Island, re-do all the merchandising and advertising, all the signage around the resort and a quite a few million more just because.

Disney won't be in any hurry either. Why would they be? They can just sit back and let Uni make money for them by selling merchandise. Disney has no plans to add Marvel to the Florida parks anytime soon. (As I said, that will happen overseas first.) Why pay the mega-millions it would take to buy the rights, when it would not be easy to make that money back? Say they pay $200mil to get the rights back. What do they do with them? Build a $100m E-ticket at DHS? Then they are $300mil in the hole, and it ain't easy to get that back in merch sales or increased attendance if you aren't talking Potter. Doesn't make good sense.

 

[Krack]

I pretty much agree, except for the five year part.
No reason for Universal to just give the rights up voluntarily.

Disney won't be in any hurry either. Why would they be?

The only reason I think Disney will pay whatever it takes sooner rather than later is because the buyout will only become even more expensive the longer it takes. Disney can't increase the value of their own asset (Marvel as a whole) without increasing the cost of purchasing Universal's asset (the Florida license) proportionally.

 

[flavious27]

Marvel is not a single franchise, it is a brand, just like Disney. There are several franchises under the Marvel umbrella. The biggest problem with a Marvel park is that the general public would not be familiar with the ever growing base of stories and characters, so things would have to stay rather base, constant and recent-film based.

This comment was in reference to a star wars park.