“Captain Finance”: The Secret Hero Behind Marvel Studios

Here on the eve of the domestic release of Marvel Studio’s biggest triumph to date, Captain America: Civil War, a producer most people have never heard of before is stepping forward to reclaim the credit history has apparently robbed from him. It begs the question of whether it truly matters anymore who created Marvel Studios, but for David Maisel it sure as heck does. He has a new project to promote, and if we believe he was the brains behind the dealmaking which gave us The Avengers maybe we’d be more inclined to check out his Angry Birds Movie later this month.

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Who do we generally think of as being responsible for creating the version of Marvel Studios we know and love? Let’s just say Kevin Feige. Yeah, he probably did it. That sounds right. In Feige we trust. Stan Lee tried but failed for decades. Avi Arad came along in the 90s and got the ball rolling on some quality movies, but eventually went away to exclusively oversee the Spider-Man movies at Sony. Then Kevin Feige rode in on a white horse, bathed in angelic light no doubt, and said, “Listen, here’s how this is going to happen.” This the word of Feige, thanks be to…

Not so fast. We’re missing a crucial step between Avi Arad and Kevin Feige, and that’s where David Maisel comes in.

The year was 2004…

Hold on. Are you someone who already knows your Marvel Studios history? If so, then jump down to the next big, black text headline in the article. If not, a history lesson is in order before we get to Maisel:

Marvel Studios is actually older than most people realize. It began its life as Marvel Films in 1993 after Marvel made a deal granting toy manufacturer Toy Biz the exclusive, master license for all its characters, royalty-free and in perpetuity. Toy Biz’s co-owner Avi Arad became the President and CEO of the newly-created Marvel Films.

His goal?: Get another animated series off the ground (which he did with Spider-Man), and stop Marvel from making so many shitty movies.

How?: Gain more control over the scripts, and convince more reputable studios to make the films.

That last part was supposed to be Stan Lee’s job.

So when Marvel agreed to send Arad to Los Angeles he was only ever supposed to assist Lee as Marvel’s Hollywood ambassador. Instead, as Lee told Fortune, “Avi insinuated himself into the job.” Still, Avi butted heads with the Marvel higher-ups who preferred to simply license the characters and count the easy money, thinking the popularity of a hit movie would trigger a surge in comic book and merchandise/toy sales. That didn’t always work out the way they thought it would, though.

When Marvel declared bankruptcy in 1996, Marvel Films ultimately became Marvel Studios, and Arad was finally authorized to move from simply licensing characters to creating package deals. He now had the authority to commission scripts and recruit talent so that when a film studio licensed a character from Marvel they were actually buying a package deal with a Marvel-approved script and often a director, lead actor or producer.

However, the bankruptcy dragged on longer than expected. Carl Icahn, a corporate raider who simply wanted to quickly fix Marvel and flip it, was given control of the company while the banks searched for a new permanent owner. This arrangement threatened Toy Biz’ contract with the company as well as Arad’s vision for Marvel Studios. At a meeting with the banks, Arad reportedly made the following impassioned argument:

“We live in one of the most creative countries in the world. But look around you and see how few characters have been introduced and survived. You have Star Wars, maybe Star Trek, and you’ll be hard-pressed to name any other characters that survived that long. I feel certain that Spider-Man alone is worth a billion dollars. But now, at this crazy hour, at this juncture, you’re going to take $380m for the whole thing? One thing is worth a billion! We have the X-Men. We have the Fantastic Four. They can call be movies!”

Shortly thereafter, Icahn fired Arad, but he wasn’t gone for long. In early 1998, Toy Biz merged with Marvel thus ending the bankruptcy and removing Icahn from power. Toy Biz’s Ike Perlmutter now called the shots at Marvel, and Arad was back in charge of Marvel Studios, just in time for a project he’d overseen back during the Marvel Films days to make it to the screen:

1998’s Blade kicked off a run of Marvel movies turning into progressively bigger hits for different studios. However, Marvel saw precious little in return:

Film(s)	Studio	Combined Worldwide Gross	Marvel’s Cut
Spider-Man 1-2	Sony	$1.6 billion	$62m
X-Men 1-3	Fox	$2 billion	$26m
Fantastic Four (2005)	Fox	$624m	$13m
Blade (1998)	New Line	$131m	$25,000

For some, that was acceptable. As Fortune pointed out, “Marvel’s box-office take wasn’t much when Spider-Man opened in 2002, but the company sold so much merchandise that net sales rose from $181 million in 2001 to $299 million in 2002. Profits soared from $1 million to $80 million over the same period. Soon after Spider-Man 2 opened in 2004, though, the stock dropped more than a third. Wall Street thought Marvel was all Spider-Man.”

Even with X-Men and Fantastic Four set up at Fox and The Hulk at Universal, Marvel was going to have to live and die on Spider-Man, leaving them overly dependent on whatever Sony wanted to do with its movies. Something had to change.

So, as I was saying earlier, the year was 2004…

Spider-Man 2 was setting box office records in theaters, but Marvel still lost a third of its value on Wall Street. Arad and Perlmutter met David Maisel, a Harvard business graduate who’d worked at CAA and Disney. Maisel had an ambitious new idea “to fund movies with borrowed money backed by superhero movie rights. Perlmutter liked the idea and hired Maisel as COO of Marvel Studios.”

The way Maisel tells it now (in a new THR profile) he’d long since pondered the potential financial rewards if Marvel could make its own movies and set up its own cinematic universe, citing George Lucas’ Star Wars strategy as a key inspiration, “If we could do movies similar to the box-office average of the [Marvel films] that had been released or even a haircut to those, significantly, Marvel could be worth in the billions.”

Arad thought the same thing back during the bankruptcy period, and now he had a partner who agreed and could get the necessary deals done in a way which satisfied the legendarily tight-fisted Perlmutter.

By early 2005, Maisel and Arad secured $525m in revolving funding from Merrill Lynch to make ten movies with budgets no lower than $45m and no higher than $165m. They put up the movie rights to the 10 characters as collateral (e.g. Iron Man, Captain America, Ant-Man, Black Panther, Hawkeye, and, really, the Avengers), and negotiated a distribution agreement with Paramount Pictures (after Universal dragged its feet for too long).

This was Arad’s dream, the realization of what he optimistically told Variety in 1996 would be Marvel’s “bar mitzvah year.” But, just like that, he was gone.

Wait, what? Why would Arad suddenly leave? Fortune explained:

[Arad] had played a key role in setting up the new studio, personally calling Brad Grey, CEO of Paramount Pictures, to arrange distribution. He helped sell the idea to Wall Street. Michael Blum, head of global structured finance for Merrill Lynch, who worked on the Marvel deal, says, “Nobody can pitch those characters like Avi can.” But Arad feared Maisel wanted to produce too many movies too fast. He also worried that Marvel was putting too many weak characters into the lineup. Arad and Maisel were soon fighting. Maisel, though, had won the backing of Perlmutter. “Ike was a supporter – not just of the deal, but of my role,” says Maisel.

Arad quit and cashed out his stock in 2006, continuing to serve as a producer on the Marvel movies he’d help set up, like Ghost Rider, while also starting his own production studio. Maisel replaced him as CEO, and Kevin Feige, a junior level executive, was promoted to President of Production.

But it’s not as simple as “And then they made Iron Man and The Incredible Hulk, and all was well in the world.” Heck, it’s not even quite as simple as “They negotiated deals with a bank and a studio and made their movies.”

According to Maisel, there was much wheeling and dealing required to get them there in the first place. When he was hired, Marvel Studios had deals in place to license Captain America to Warner Bros. and Thor to Sony. That would have killed his whole idea to eventually put these characters together in one big movie. He had to convince Perlmutter why it would be better for the company in the long term to hold on to those film rights instead of getting a short-term cash infusion from a licensing agreement. Eventually, Perlmutter agreed, and the deals were killed.

However, Perlmutter and the Marvel board would not come off this one point: Marvel could only make its own movies if they didn’t actually pay for them. That might seem counterintuitive, but film financing is so complicated it’s not that uncommon for a studio to produce and release a movie it didn’t actually pay for. That’s what a film financier or production company is for, and that’s what Perlmutter wanted Marvel Studios to find. To make the movies, someone else would have to cover the budgets, distribution, and marketing.

To prove that was even possible, Maisel went to Lionsgate and talked them into completely financing several direct-to-video animated movies but splitting the profits 50/50. The first two movies in this deal (Ultimate Avengers 1 & 2) came out in 2006, and six more would follow by 2011.

“It allowed me to say to people: ‘Look at the value of our IP. Here’s someone paying all the money, and we have creative control and get half the profits,’ ” says Maisel.

He thought he’d pulled it off again with the Merrill Lynch deal. The bank would pay for the budgets, and Paramount would cover the distribution and marketing, taking a relatively modest percentage of the box office gross in return. But in the spring of 2005 Merrill Lynch re-considered the terms and demanded Marvel put up a third of the film budgets.

Dealbreaker.

So, Maisel did as any indie film producer would: He sold pre-distribution rights in five foreign territories not covered by Paramount, and used that money to cover Marvel’s part of the budget.

With Iron Man selected to be the first movie out of the gate, Maisel approached Universal about The Hulk. From THR:

Maisel called Universal chief Ron Meyer and asked whether he had plans to make another Hulk. When Meyer said no, Maisel says he proposed that if Marvel could have rights back, he would make at least one more Hulk movie, spending $100 million-plus, and pay Universal to distribute. It was found money for Universal. The catch was that Universal could distribute the films only if Hulk were the central char­acter. Marvel owed Universal nothing if Hulk appeared in, say, an Avengers movie — which is, of course, exactly what later happened.

However, Arad says he was the one who contacted Universal. In fact, how do we really know who truly negotiated all of these deals? In 2014, when Business Week declared Kevin Feige “The Man Who Saved Marvel” Avi Arad angrily claimed, “It will sound arrogant to you, but I single-handedly (sic) put together the Marvel slate.” Now that Maisel is attempting to reclaim his position in the grand Marvel Studios narrative Arad offered a simple retort, “Success has many parents. I respect David’s interesting mind.”

If Maisel really was the true architect of this or at least co-architect with Arad then why is he completely missing from the I Am Iron Man: 7-Part “Making Of” Documentary on the special edition of the Iron Man DVD? Peter Billingsley (exec. producer), Kevin Feige (producer), Victoria Alonso (visual effects producer) and none other than Avi Arad (exec. producer) are all interviewed and identified on screen, but Maisel is nowhere to be found, even though the documentary covers every stage of the production.

Being left out of a documentary like that isn’t necessarily damning, but it speaks to our general lack of awareness as to who the heck Maisel is. Maybe it’s easier to focus on Avi Arad and Kevin Feige, both of whom are passionate promoters of the involved characters. Maisel is more of a money man, the type of figure who might be most directly responsible for a film getting made but is not generally credited with actually contributing to the quality of the finished product. When he was interviewed by Fortune in 2007, here’s how they described him:

In the comics, no one but Thor can lift the magic mallet. The new studio head doesn’t come off like the kind of guy who would know this. Maisel has none of the playfulness you’d expect from someone whose job is to make movies about guys in tights. Instead he talks endlessly about Marvel’s business plans. Think of him as Captain Finance.

For example, he was emphatic Marvel Studios’ decision to become independent would work because it would allow them to determine their own release dates, thus making it easier to sell action figures and other merchandise, as well as allow them to make more licensing deals based on the buzz generated by each new movie. Kevin Feige could tell you all about a character’s history and the steps they took to maintain their core identity in transition from page to screen; Maisel could tell you about the deal they just signed with Coca-Cola, although as of 2007 he was at least trying to catch up by reading Thor graphic novels to better understand the problems they were having with the script.

Maisel eventually cashed out after the Disney deal, and probably never has to worry about money for the rest of his life. However, he claims he is the one who actually initiated the merger, calling upon his past working relationships built up during his prior stint with Disney to arrange a meeting between Disney CEO Bog Iger and Perlmutter.

Of all this, Marvel and Kevin Feige declined to comment. Maisel is officially credited as an Executive Producer on all Phase 1 Marvel Studios movies, but has no credits beyond that point other than a brief mention in the acknowledgments section of the Age of Ultron credits.

It’s impossible to know for sure who actually did what along the way. In a very real sense, if not for Avi Arad Marvel Studios would have died in its infancy back in the late 90s. However, if not for Maisel they may never have been able to secure the proper financial structure to get off the ground as an independent unit.

Kevin Feige is now singularly associated with Marvel Studios, especially after his grand coup which left him answerable to only Bob Iger and not Ike Perlmutter. This is all in the past, and Civil War and Doctor Strange are in the immediate future. In Feige we trust and all that, but as it turns out Marvel Studios’ origin story was probably more complicated than we previously realized.

Sources: THR, Sean Howe’s Marvel Comics: The Untold Story, Fortune