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Don't look for surge of deals in wake of Disney-Marvel

August 31, 2009 |  1:04 pm

The ink isn't even on dry on Walt Disney Co.'s just-announced $4-billion stock and cash deal to acquire Marvel Entertainment, and speculation is already starting as to whether a new round of consolidation is about to start. 

The usual suspects are being tossed about. The Wall Street Journal mentions MGM and Dreamworks Animation as takeover candidates, and don't be surprised if Lions Gate also is discussed.

But this may be wishful thinking on the part of the street. Marvel makes sense for Disney in that it can exploit its properties across the company -- theme parks, movie studios, cable networks, etc. While many of Marvel's franchise characters are locked up elsewhere, there is a library that will generate license fees and provide content for Disney. Even if other studios have some of the bigger properties locked up, some of that money will trickle back to Disney while it waits for those deals to expire.

There is some talk that the company is overpaying (see our Tom Petruno's take here; after all Marvel stock was trading below $25 last year and this deal puts a value of $50 per share on the company, an almost 30% premium. Of course, every time Disney does a deal (ABC, Pixar) people say they overpaid. Does anything think they overpaid for Pixar now? Even the $5 billion the company spent to buy the Family Channel doesn't look so outrageous now.

As for a new round of consolidation, there isn't a whole lot left to consolidate and not a lot of buyers with deep pockets right now. Sure, an MGM might be gobbled up at some point, but it isn't the sexy strategic play that a Marvel is for Disney. More likely is a series of smaller deals such as the sale of the Travel Channel and the handful of remaining independent cable networks and smaller production companies.

-- Joe Flint