"if the money they get from licensing the publsihing out does not equal or surpass what the company already makes producing the comics itself, it's a stupid move."

As has been mentioned before, there are other financial and economic considerations that get factored into the equation.  That doesn't mean that Disney will shut down Marvel publishing, but there are reasons why someone at Disney might think it's a good idea.

Mike

Disney Nails eBay Artists Over Marvel Art Cards

Take it for what it's worth.

What other considerations factor in that have already been mentioned? Maybe I'm missing something. Most of the comics work being produced at Marvel Comics is already done by freelancers, not company employees. A few have exclusive contracts and therefore get some benefits, like insurance, but most just get a page rate for producing pages, and that's it. It's like farming out of Disney animation, but that's already being done at Marvel Comics. They're already getting most of the work done by non-employees now.

I can see Disney maybe trying to keep the original artwork, cracking down on commission and sketches, since that's something they have traditionally done, but I really don't see why they'd want to close down a publishing enterprise that makes money, and cheaply produces new intellectual properties for the company to expoilt later.

So, the operation having a cash cost of USD 600/OZ is still very profitable, BUT, is making the performance of the other mines look bad, so, my poin is, unless Marvel Publishing Business makes as much as the other revenue streams, the fact that it makes "profits" is not enough to save it.

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That's a good point Marcio, but it all comes down to resource allocation.  Your company can make more profit from allocating its resources to the most profitable mines.  If it wasn't about resource allocation, your company would extract as much as it could from ALL of its even-marginally-profitable mines.

In this case, Disney has allocated resources of approx. $4 billion for all of Marvel's segments.  Once that deal is struck, Disney's resources that have to be further allocated to Marvel Comics are nominal, as the Marvel Comics division is self-sufficient.  Now if Disney determines that the capital that exists WITHIN Marvel Comics could be more profitably used elsewhere, then Marvel Comics would definitely be at risk.  I'm not yet convinced that the capital existing within Marvel Comics is actually transferrable to some other endeavor (although the thought of Joe Q. working as a custodian at Animal Kingdom may seem an improvement).

"Do the companies that you work with that do this ALL THE TIME do it on a whim or is there some other overriding reason?  Be specific."

Gotta be quick - End of working day in the UK! I own a Management Consultancy business. Normally you see this in takeovers and mergers where there is legacy products that generate good to medium profits but with associated legacy costs. (As I saw last week) The overriding reason is normally to reduce the ratio of effort to productivity and rationalise product lines. This lean org is something shareholders and the market like.

Orgs don't like huge conglomerate style structures anymore as it risks you becoming a jack of all trades and a master of none. Look at Sony for instance, they produced rubbish steroes etc, and it took a long time to get into MP3s and instead developed lots of weak DRMed standards. All this is because they also own/owned a music arm - that they were trying not to damage.

A rule of business is "stick to what you know". 

What the company I was working with last week is doing is running down a part of a purchased portfolio of products. So they will fade out that product line in a short to medium term timeline.

So lets take this back to Disney. What do Disney do well? Movies, TV, licensing? Why did they buy Marvel? To license characters that appeal to the youth Male market 8-13.

Comics are an oddball legacy product in that portfolio. ESPECIALLY "Adult" comics.  My prediction is that they will say "nothing will change" whilst gradually winding down the comic line. This will happen with gradual lay offs, reduction in office space, selling buildings etc. Then they'll reduce the product portfolio (comics) at that point JQ will go and it will be a Disneyman will come in.

Then they'll start licensing characters out. Then they will stop all internal development of paper based product. You'll probably see a "salve" product for the market (to pretend to ease the pain - this is mainly for PR) in the comic world this could be "webcomic" concept. It doesn't matter what it is - in six months it will gone as well.

You'll have Panini etc in Europe selling licensed comics produced (and aimed at that 8-11 market) probably by someone like DC. Cheaper, easier, outsourced non core product development.

At least, that's what I'd do. You see the "overriding reason" is SHAREHOLDER VALUE, This is best generated by increasing profit and even better by reducing costs. a dollar in reduced costs is better than a dollar profit. No taxes, no effort, no financial exposure and reduced risk.

QUOTE: Disney bought Marvel for one reason, to capture a market they had little to no hold on, tween/teen boys. They make boatloads of money off girls with their princess line of products, and things like Hanna Montanna. They cash in on babies with their Winnie the Pooh stuff, and young boys with stuff like Toy Story, so there was only one market eluding them. I don't think the few aging fanboys in their 30's and 40's that are still buying Marvel comics are generating enough income for Disney to care, add to that the possible negative press that some of the crap in comics today could generate and I don't see any reason why Disney wouldn't just shut Marvel down. All the seminal work could remain in print via trade paperbacks, so why worry?

Despite being a billions upon billions dollar operation, $125 million isn't something any ciorporation wants to throw away, whether it's selling to tween or to guys in their 40's-- the money spends the same.

Also, virtually every Disney executive who has commented so far says they're not going to interfere with Marvel's operation as it is now, as it's very, very successful.

That's true. However, neither did Warner's publishing company either when they acquired DC and they kept the comic book publishing dept. to this day. The original comment was in reference to the fact that Warner was already a publsiher and Disney isn't; as far as I know, Warner never published comics in any signficant way before acquiring DC.

COMIC LEGEND: Warner Bros. bought DC Comics.

STATUS: False

"Despite being a billions upon billions dollar operation, $125 million isn't something any ciorporation wants to throw away, whether it's selling to tween or to guys in their 40's-- the money spends the same."

I can only refer back to David Teller's excellent explanation of how corporate decision making involves much more than just "is this thing making money or not".

Mike