Five years ago, Disney bought Marvel Entertainment for the staggering fee of $4 billion, a deal valued at $50 per Marvel share, nearly 29% higher than the shares were going for at the time. It’s all quite the remarkable turnaround for Marvel considering that the comic book giant declared bankruptcy as recently as the late ‘90s, emerging out of it in 1998 with a new owner, Toy Biz. Disney only came along for its takeover after Marvel had formed its own independent film studio, the aptly named Marvel Studios, and stunned the film industry when its first Iron Man film posted a truly unexpected $100 million opening weekend in 2008. After that, Disney clearly saw the potential to not only control the future films from the studio but also the synergistic possibilities of developing TV shows to air on Disney-owned ABC and DisneyXD. However, they weren’t the only ones intrigued by the possibilities of acquiring control of a rich roster of comic book characters at least 5,000 deep, a small handful of which could most certainly be turned into profitable films/TV shows. It turns out that nearly a full decade before Disney came a-knocking The King of Pop himself, Michael Jackson, was in serious negotiations to purchase the then-fledgling company.
However, this is a story that began long before Michael Jackson ever became involved. In fact, he’s but a bit player in the whole affair.
The Key Players
Stan Lee – Comic book legend who was no longer an active writer for Marvel by 1989, instead living off of a lifetime contract and guaranteed salary. It’s at this point in his career that he met Peter Paul.
Peter Paul – A lawyer/businessman who had served jail time in the 1970s for cocaine possession and defrauding Fidel Castro for $8.7 million in a bizarre coffee shipment scheme he later claimed was part of a CIA operation. He later worked with Hollywood legend James Stewart to lead the American Spirit Foundation, a nonprofit organization which used widely adored figures like Ronald Reagan, Bob Hope and Gene Roddenberry to raise funds for outreach projects, mentoring programs and reading initiatives. It was through this Foundation that Paul first met Stan Lee, who had no idea about Paul’s status as an ex-con.
Prince Alwaleed Bin Talal – A billionaire investor from Saudia Arabia who partnered with Michael Jackson to bank-roll the creation of Kingdom Entertainment in 1996, the idea being to establish a fully-integrated entertainment company through which they could “pursue investments and development projects in a wide range of entertainment activities including animation, theme parks, theme restaurants, character licensing, television programming, motion pictures and multimedia”
Ike Perlmutter – Owner of ToyBiz, Marvel’s former licenseeing partner which bought the company outright after it declared bankruptcy. Perlmutter had started his career as a junk dealer, and was a notorious penny-pincher.
Now Playing Thor: Fabio
Peter Paul and Stan Lee first met at an American Spirit Foundation event, but their professional relationship began the day Paul brought a client of his to Lee’s Marvel office to pitch an idea for a movie: What if they did a big budget Thor film starring Fabio in the lead role? Lee was too polite to laugh them out of the room, and Paul quickly dropped Fabio in favor of beginning a business partnership with Lee, whom he saw as a lovable, James Stewart-type who would be a hit at fundraising events. Thus Lee was made a chair of the American Spirit Foundation, and soon found himself hob-knobbing with celebrities and politicians at all sorts of fund-raisers. However, Paul realized something Lee (and Marvel) did not: “the characters Lee had had a hand in creating were an intellectual-property bonanza waiting to explode.” He wanted to use his network of investors buy Marvel outright and install Lee as the new head of the company.
Stan Lee Tries to Buy Marvel
In 1991-92, Paul put together a Japanese American investment group and approached Marvel with a $25-28 million offer to buy the company. However, the proposal also sought to take Marvel public so that the company’s then-owner, Ron Perelman, could make even more on the deal by getting a guaranteed piece of the new public company. Paul told The Comics Journal what happened next, “”Immediately thereafter, Perelman saw the merit of taking Marvel public and decided not to sell Marvel. The rest is history. He looted at least $200 million from Marvel, and left it in bankruptcy.”
Plan B – Stan Lee Media
Paul’s Plan A had always been to use Stan Lee to buy Marvel, but his Plan B was simply to create his own Marvel-like company with Lee as the public face of everything.
In 1998, Ike Perlmutter inadvertently made things much easier for them. He had just bought Marvel through is company ToyBiz, and he almost immediately voided Stan Lee’s lifetime contract, which was set to escalate up to $1 million per year by 2002. Perlmutter figured that was far too much to pay a man to simply make some public appearances and write his “Stan’s Soapbox” column, as he had been doing regularly since 1967. However, the real reason Marvel had retained Lee on such a generous lifetime contract was because that contract forbid him from ever seeking any legal claim to any of the characters he created. Plus, it prevented him from working for any of their competitors.
Paul had a law degree, and he instantly knew where to hurt Marvel, arguing that when they voided Lee’s contract they also voided the part about him not seeking a legal claim to any of his characters. As we’ve seen with the recent Jack Kirby and the Siegel/Shuster court cases, if Paul had actually taken Marvel to court over this he would have probably lost. However, the threat of a lawsuit was more powerful than an actual lawsuit at the time because Marvel was only surviving due to a $200 million bridge loan, which they feared would undergo a disastrous foreclosure should news leak out that the great Stan Lee was suing to take back all of their biggest characters.
So, much as he hated to Perlmutter was convinced by everyone at Marvel to give Lee an even better contract, re-instating his old salary and letting him pursue work outside of Marvel just so long as he continued representing Marvel at public events and agreed not to sue.
Paul and Lee quickly formed the Web-based entertainment company, Stan Lee Media (SLM), at the height of the dot-com boom. Like many dot-com era companies it wasn’t entirely clear what exactly SLM was even selling, although their basic business model, built off $300 million in investment capital, was to use Stan Lee to develop intellectual property to be further developed in all kinds of media and all over the world. They hired a staff of comic book writers, but most of Lee’s idea were simply imitations of his Marvel characters. Even though he was the public face of the company, it became clear that Lee was just along for the ride, hopelessly clueless about such basic aspects of SLM as what exactly Peter Paul’s job title even was (answer: Paul ran the company, but his actual legal role was as an independent consultant).
I Know – Let’s Try to Buy Marvel…Again
As Marvel was slowly building itself back up, Stan Lee Media was booming, worth more on the stock market than Marvel. Perlmutter was pissed. He canceled Lee’s “Stan’s Soapbox” column, campaigned to remove the “Stan Lee Presents” banner from the comics, and even scratched Lee from the select list of those who received complimentary copies of new comics. His reasoning was that Lee could afford to buy his own dang comics.
But could he afford to buy all of Marvel? According to Lee, “At that time, it looked as though our stock was high and that we had — I thought we had some money in the company, and — whether it was Peter’s idea or mine, but the point is we both discussed: ‘Gee, wouldn’t it be something if we could actually buy Marvel.’ And yes, we did. We did discuss that. I remember I said, ‘I hope it can be a friendly takeover. I hate the expression ‘a hostile takeover.'”
They couldn’t actually afford to buy Marvel on their own, though.
And That’s Where Michael Jackson Comes In…
SLM artist Aaron Sowd knew someone in the Jackson camp, and managed to arrange some meetings. According to Stan Lee, “Michael and I had met a number of times […] He wanted to do Spider-Man. I’m not sure whether he just wanted to produce it or wanted to play the role. He thought I’d be the one who could get him the rights to make a Spider-Man movie, and I told him I couldn’t. He would have to go to the Marvel company.”
That particular quote has led many to crack jokes about the notion of a Spider-Man film starring Jackson in the lead role, but a recent book on the topic, Michael Jackson, Inc., reveals this was more of a strict business proposition, author Zack O’Malley Greenburg telling KCRW’s The Business, “Michael’s idea was, ‘Let’s buy this catalog of characters of intellectual property, and turn it into blockbuster superhero movies […] I suspect he’s not the only one at Kingdom Entertainment who had that idea, but he’s certainly the first one before the latest revolution of superhero movies we’ve been seeing.’”
Jackson attended a 2-hour meeting at the SLM facilities to discuss the acquisition, turning to Lee to ask, “If I buy Marvel, you’ll help me run it, won’t you?” to which he politely replied, “Sure. I’ll be here.”
Lee has claimed it never progressed beyond that point, but, in fact, Jackson actually retained the services of an investment banking firm to begin formal negotiations with Perlmutter to purchase Marvel. Remember, though, that Perlmutter hated Stan Lee, and he was not about to let him, from behind the back Michael Jackson, take over the company. So, he refused to sell Marvel for less than $1 billion, ridiculously more than the company was worth at the time. Eventually, Jackson had to walk away.
It’s probably for the best considering that Jackson would have likely been backed up by Stan Lee and Peter Paul at this new Marvel, and that Paul was one shady sonofabitch. He manipulated the stock prices for SLM, and outspent the company’s revenue 20 to 1. Once the bubble burst he ran away to Sao Paulo, Brazil with $250,000 Lee had loaned him. He was eventually extradited back to the states, where he is currently serving a 10-year sentence for securities fraud.