What Marvel’s History and Success Taught Us About Personal Finance
When we think of Marvel Cinematic Universe today, we associate it with one of Hollywood’s biggest brand, a multi-billion-dollar business and our favourite superheroes.
TL;DR: Marvel’s journey from bankruptcy to billions and personal finance
Editor’s Note: There will be NO SPOILERS for AVENGERS: Infinity War in this article. I promise!
If you have yet to catch Infinity War, here’s the Movie Ticket Price Guide.
How much does Marvel Cinematic Universe profit from each movie?
Out of curiosity, here’s how much Marvel Cinematic Universe Movies are profiting from their movies.
|Release Date||Movie||Cost of Production||Worldwide Box Office Income|
|May 2008||Iron Man||$186,000,000||$585,171,547|
|June 2008||The Incredible Hulk||$137,500,000||$265,573,859|
|May 2010||Iron Man 2||$170,000,000||$621,156,389|
|July 2011||Captain America: The First Avenger||$140,000,000||$370,569,776|
|May 2012||The Avengers||$225,000,000||$1,519,479,547|
|May 2013||Iron Man 3||$200,000,000||$1,215,392,272|
|November 2013||Thor: The Dark World||$150,000,000||$644,602,516|
|April 2014||Captain America: The Winter Soldier||$170,000,000||$714,401,889|
|August 2014||Guardian of the Galaxy||$170,000,000||$771,051,335|
|May 2015||Avengers: Age of Ultron||$330,600,000||$1,408,218,722|
|May 2016||Captain America: Civil War||$250,000,000||$1,153,304,495|
|November 2016||Doctor Strange||$165,000,000||$677,541,920|
|May 2017||Guardians of the Galaxy Vol 2||$200,000,000||$863,197,744|
|July 2017||Spider-man: Homecoming||$175,000,000||$880,210,429|
|November 2017||Thor: Ragnarok||$180,000,000||$850,653,412|
|February 2018||Black Panther||$200,000,000||$1,333,631,525|
|April 2018||Avengers: Infinity War||To be confirmed||$725,538,300|
- Take note that data is reflected in USD.
To sum the numbers up,
- Marvel Cinematic Universe spent $3,329,100,000 on production in total.
(this is excluding the cost of production for Avengers: Infinity war)
- From these movies, Marvel Cinematic Universe made $15,568,260,343 and counting.
” Money. The best superpower of all.”
History of Marvel
With the crazy success that we are looking at now, it is hard to believe that the Marvel almost ceased to exist years back.
Very much like most of their superhero movies, there is usually a phase where it all seems lost. The heroes are losing the war, the city that they are trying to protect is in ruins. Ultimately, they managed to overcome those difficulties to emerge victoriously.
Below is a break down of Marvel’s story.
Marvel filed for bankruptcy in the year 1996
The year 1996 is probably the darkest day for Marvel.
With the company losing money after a series of financial bubbles and bad decisions, Marvel
- Filed for bankruptcy on December 27, 1996.
- Was so buried in debt
- Laid off one-third of their employees
Marvel sold cinematic rights to survive
Desperate to stay afloat, Marvel sold the cinematic rights of their characters to whoever willing to put some money into their pocket. Given the circumstances, most of these deals were not in favour of Marvel.
A few examples of such deals include:
- Blade to New Line Cinema
- X-Men and the Fantastic Four to 20th Century Fox
- Spider-Man to Sony Pictures
- Hulk to Universal Pictures
While most of these movies went on to bag in good profits, while Marvel earned “peanuts” from the success.
- Blade earned $70 million at the U.S. box office. Marvel only pocketed $25,000 from the rights.
- Spider-Man 1 and 2 brought in $3 billion for Sony Pictures, but Marvel only got $62 million.
Marvel launched Marvel Studios in the year 2005
It is definitely painful to watch, with other filmmakers milking profit out of Marvel’s characters except for themselves.
Marvel at this point in time, is left with characters that might have been popular with comics fans but not so popular when it comes to households.
source: T-Shirt Terrorist
Editor’s note: Back then, most people assume Iron Man was a robot.
Marvel’s last resort was to put up the remaining of their character rights as collateral for the $525 million loan which they were about to take up to form Marvel Studios.
The collateral includes the rights to these characters:
- Nick Fury
- Black Panther
- Captain America
- The Avengers
- Cloak & Dagger
- Doctor Strange
- Power Pack
Marvel kicked off the risk with Iron Man and Hulk.
- Hulk was an A-list Marvel character and was expected to do well.
- Plus, Hulk already had an exposure to live-action.
- Iron Man, on the other hand, was a bigger risk.
- Iron Man has never been in live-action.
- Both the Iron Man and Incredible Hulk movie will include parts of the bigger Marvel Universe, as part of the plan to build up to the Avengers.
Marvel’s gamble paid off
The risk they took paid off. Iron Man made $585.2 million. It kick-started a whole chain of successful movies after, under Marvel Cinematic Universe.
The success ultimately caught Disney’s attention and they eventually acquired Marvel for $4 billion in the year 2009. Which, as of today, has reaped more than 300% of whatever they paid for.
Avengers is like your portfolio
- Not all of them is a success (eg. Hulk was bad, Black Panther broke the cinematic records etc)
After-Credits: What Marvel’s success taught us about personal finance
The need to look out for market changes and stay relevant (Investments)
Marvel was not poor, to begin with.
- Marvel Comics was a big name and created some of the world most recognised superheroes, and enjoyed great success in the 60s, 70s and 80s when comics were particularly popular.
- As the world transit into the 90s, and more advanced technology were made available.
- Comic books became a dying medium. While they always had the idea of movies, they did not put much emphasis on it.
- Hence, when the comic bubble of the 90s burst, Marvel went broke.
- Marvel’s competitor DC Comics was owned by parent company Warner Bros. With this, it withstood the crash and went on to make movies such as Batman and Superman that bags in good profit.
Personal Finance Takeaways:
- With technology advancement and globalisation, the pace at which business model gets obsoleted increases.
- As investors, there is an increasing need to monitor the progress and business model of a company before deciding to invest in it.
- Investors today will have to be more reactive to market changes to prevent losses in the stocks market.
An example being:
- No offence, but the first company that came into my mind was Singapore Press Holdings (SPH).
- Singapore Press Holdings suffered another quarter of earnings loss, with revenue declining 4 years in a row.
- While nobody would have expected this years back, their failure to keep up with the changing market needs, resulted in their decline.
The need to look out for market changes and stay relevant (Career)
From a career perspective, it is important for employees to constantly upgrade ourselves. Very much like business models, the demand for a specific skill set can decrease too.
There is probably no career that can grant you true stability, which makes constant self-upgrading especially important.
Diversification in your investment portfolio
Well, Marvel could have gone all out on Iron Man’s success and just produce Iron Man series, but they didn’t.
If we go down the list of all the movies they did over the years, they all bring in different percentages of profit when compared to their cost of production.
- Think of Avengers as your investment portfolio
- Each individual superhero in the Avengers will be your individual stocks.
- While each stock brings in a different return, there was a combination of safer stocks and risky ones.
(Iron Man was considered a risky investment back then, and Hulk the safer investment)
- Fast forward to today, ultimately the diversity paid off and made money.
We once interviewed an investment blogger who is surviving on a portfolio he took years to build.
Here’s a breakdown of his portfolio:
|Accordia Golf T||6.9%||First REIT||6.9%|
|Keppel Corp||6.7%||Frasers Comm||6.4%|
|Global Inv||2.5%||Croesus RT||2.4%|
|Singtel||2.2%||Frasers H Trust - FHT||2.0%|
|Viva Ind T||2.0%||Hotung Inv||1.9%|
|DBS||1.6%||Frasers L&I Trust||1.6%|
|Far East H Trust||1.3%||ComfortDelGro||1.2%|
|Mapletree GCC||1.0%||TTJ Holding||0.9%|
|Manulife REIT (USD)||0.8%||Asian Pay TV||0.8%|
|Thai Bev||0.8%||BHG R REIT||0.7%|
|I REIT Global||0.6%||SPH||0.6%|