Disney buys rights to release 'Avengers,' 'Iron Man 3' from Paramount
Resolving a long-standing question since Walt Disney Co. bought Marvel Entertainment last year for $4 billion, the Burbank studio has signed a deal to take over marketing and distribution of "The Avengers" and "Iron Man 3" from Paramount Pictures.
Disney will pay Paramount a minimum guarantee of $115 million for the rights against a percentage of revenue that the Viacom Inc.-owned studio would have received for releasing the pictures under an existing distribution deal.
Though Paramount will still receive the 8% of "Avengers" revenue that it had been guaranteed, the studio will get 9% of revenue on "Iron Man 3" as part of the new arrangement with Disney, a person familiar with the matter said. Disney plans to release "Avengers" in May 2012 and "Iron Man 3" the following May.
Not only will Paramount receive more money without doing any of the marketing and distribution work, but the $115-million minimum payment provides downside protection in case the films flop.
“For them to coordinate distribution and marketing and us to still get the economic benefit while focusing exclusively on our own tentpoles is a win for both sides," said Paramount Vice Chairman Rob Moore.
Paramount earned close to $60 million in distribution fees for each of the first two "Iron Man" movies.
For Disney, the deal enables the studio to exploit "The Avengers" and "Iron Man 3" across all of its entertainment businesses including movies, television, consumer products and theme parks. Capitalizing on the Marvel properties in such a way was the primary reason Disney cited for its acquisition of the comic company.
"In completing this agreement, Disney will leverage these two highly anticipated films across the multiple global platforms of the Walt Disney Co.," studio Chairman Rich Ross said in a statement.
Paramount will release Marvel's two 2011 films "Thor" and "Captain America" as planned, in May and July, respectively, since the studio has already begun marketing efforts for both.
Under the agreement, "The Avengers" will go through Paramount's pay cable deal with Epix, the network it co-owns with Lions Gate and MGM, rather than Disney's deal with Starz.
-- Ben Fritz
Photo: A scene from "Iron Man 2." Credit: Marvel Entertainment