I did forget to cover one chapter of the Orlando theme park wars. I often see the question, why hasn’t Disney added Marvel characters to Disney’s Hollywood Studios yet? Disney has said they’re actively looking at ways to involve Marvel characters in the parks. They even opened a Stark Enterprises exhibit at Disneyland to promote Iron Man 3. But there’s a big roadblock to using Marvel in Orlando.
That’s because Universal owns the theme park rights to about 8 of the core Marvel superheroes within a 250 mile radius of Orlando. Marvel gave Universal these rights when they opened Islands of Adventure in renewable in perpetuity as long as they paid a reasonable licensing fee every year. That agreement is still in effect and, unless Disney pays Universal a significant sum, it’s not going to change. I’m told that Disney’s lawyers threw everything they had at the contract before they finalized the purchase of Marvel, but Universal controls nearly every option. Disney couldn’t even run the Avengers or Iron Man monorails on the EPCOT look for fear or raising the ire of Universal.
My guess is that Universal would be happy to sell Disney back those rights for the right price. That price would have to include enough money to totally relaunch that corner of Islands of Adventure plus a reasonable sum to cover expected profits from the Marvel characters for probably a decade or so. For Disney to want to pay that amount (most likely in the neighborhood of a half a billion dollars) they would have to be able to convince the Walt Disney Company board of directors that the cost could be recouped with whatever Marvel expansion they decide to build. The leading contenders there are either A) re-theme Streets of America in DHS into a Superhero land (think roller coasters flying by overhead, a stunt show, a dark ride or two, and a Marvel makeover experience for the kids) or B) a fifth gate thrill park with a villains vs hero theme. (combining Marvel, Star Wars, and Disney heroes and villains). Option B) is at least 8 years off, so if that’s what Disney is leaning toward, they probably don’t feel in a rush to make an offer to Universal.
The themepark division as it stands now is earning The Walt Disney Company an estimated $300 million in net profit each year. So any move on Marvel in Orlando would have to raise that significantly to pay for the cost of the payoff to Universal and the new construction. Are there enough Marvel fans that would want to add a day to a vacation to make it worth it? Would the extra guests fill or expand the existing rooms at Disney’s hotels? Would the merchandise sales be profitable?
Even if Disney decides not to buy out Universal, all hope is not lost. It might be possible for Disney to build a Marvel themed hotel at WDW and not violate the ‘theme park’ rule… but if Disney wants to try and recover the rights to Marvel’s characters in Orlando, it will have to play nice for a while.
What do you think Disney should do?
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From what I see they could still use Iron Man and Thor to promote the MCU movies since neither of those characters appear in any fashion as IOA unless the contract says that no other theme park can use any Marvel character.
Another things Disney can consider doing is just breaking the exclusivity portion of the contract. That way they can bring in Marvel characters and Universal can keep their Marvel area to the park. If this happens, a long term idea for Universal is that they could consider contacting Warner Bros and DC for access to their characters unless Six Flags has a similar lockdown on them throughout their parks.
The contract gives Uni exclusive rights to the characters they are currently using AND any character in the same family. So since the have a Hulk ride and a Captain America resturant this gives them the rights to all the Avengers characters so that gives them Iron Man and Thor. Based on this Uni has the exclusive rights to all of the Avengers, X-Men, Fantastic 4 and Spidreman characters and the associated villians which cover pretty much every well know Marvel character.
Here’s what I can’t quite understand in the terms of the deal…
It says way back when, that Marvel sold Universal rights to use the characters exclusively in their parks, and are “renewable in perpetuity as long as they paid a reasonable licensing fee every year.” Does this not mean now that Disney owns Marvel, Universal is now required to pay that “reasonable licensing fee” very year to Disney? And if so, what is to keep Disney – as the new owner of the property – to either cancel its end of the deal, or to raise the rate of renewal in such a way that it redefines what it feels is a “reasonable licensing fee”? After all, the value of the characters to Disney has grown exponentially, as such the fee Universal should pay would seem able to be increased to the point where they would have no choice but to drop the licensing.
What am I missing in this legalese?
There is a formula that sets how much it can be increased
This is a legal contract so Disney cannot legally just decide to cancel the deal.
The amount Uni pays to Marvel/Disney is spelled out in the contract and it states that it increases based on the US Consumer Price Index, so Disney cannot arbitrarily change it.
Considering how much box office Avengers and Iron Man 3 did, Disney would be crazy not to eventually get these rights back. Plus they really need more stuff to interest the teen market at the WDW parks, if they want to really compete with Universal.
could this keep them from building a Marvel themed resort?
Thought provoking.. A Great Story John!
The more money Disney invests into its parks, the more money I’d be willing to spend on/in said parks.
Half a billion? Pay the money and put Marvel in Hollywood Studios. Personally…that’s where it belongs. Not at the Magic Kingdom or Epcot or Animal Kingdom. Avatar doesn’t belong at Animal Kingdom either, but that’s besides the point.
While we all have big plans for what Disney could do with the Marvel characters in Disney World, seeing how they spend very little money on expansions of this magnatude in their Orlando parks, I can’t imagine Disney being eager to give Universal a large sum of money and then have to fork out even more than that figure to build a proper Marvel expansion in DHS. I think Disney would like to have the rights for monorail promotions and maybe some meet & greets, but I can’t imagine that they’re itching to plunk down a billion to make a proper Marvel land — especially when they’re poised to expand DHS with additional Star Wars theming. My guess is that Disney will not reclaim these rights any time soon and they will instead do something with Marvel in California.
At some point the math will add up, but I agree I don’t see it happening right away.
I’ve been saying since Disney got the marvel rights that they need to change streets of America into the Marvel streets of New York. With a Spider-man themed coaster, meet and greets and an interactive Avengers Mansion.
Universal’s superhero Island is great and a lot of fun but I just think Disney could do a much better job.
If you have been to IOA recently maybe you have noticed the upkeep has not been all that great.
Nothing is better than the free market economy. Disney should build that long awaited tbird gate at DLR and do such a bang-up job that when the public thinks of Marvel theme parks, Universal becomes a second bananna! If they do a job similar to thier work at Tokyo Disney Sea…just the competition will make Universal nothing more than a reminder of what awaits visitors in California!
Then will be the time to negociate with Universal on price.
I never understood why Disney would buy Marvel; Walt is probably rolling over in his grave over that. Spider-Man and the Incredible Hulk are not Disney characters, but corporate greed overtook what Walt would do. Disney World does have at least one resort bus painted with Marvel characters – sacrilege.
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