It's hard to rebuild trust even in good times. It's much harder after you've gone bankrupt. Investors have to believe your new plan. Suppliers have to believe you'll actually pay them. Customers have to decide, all over again, whether to believe in you. And everyone who said you'd fail is still watching.
Marvel Entertainment had a harder version of this problem. They didn't just need people to believe they were solvent again. They needed a stranger to believe they could become something they'd never been: a movie studio. Saying so wasn't enough. Marvel needed something real behind the claim, something the company could actually lose. You have to put your money where your mouth is. And so Marvel did exactly that. In 13 years, they went from a bankrupt comic book publisher to an independent film studio and a $4 billion sale to Disney.
Marvel filed for Chapter 11 in December 1996; their stock had fallen from $35.75 to $2.38. A two-year fight between chairman Ronald Perelman and investor Carl Icahn ended in 1998 with both ousted, and Marvel emerged as Marvel Enterprises under Toy Biz executives Isaac Perlmutter and Avi Arad. They were solvent again, but they still weren't a business a bank wanted to lend to: no film-making record and few conventional assets a bank could easily lend against.
By the early 2000s, Marvel had already proven their characters could fill a cinema, just never on their own account. Sony's first two Spider-Man films took in a combined $1.6 billion worldwide. A Lehman Brothers analysis reported by Fortune put Marvel's take at just $62 million. X-Men and Blade followed the same basic model. David Maisel, hired as chief operating officer in 2004, pitched something different: Marvel would stop just licensing its characters to other studios and would start making its own films, connecting them into one story. Marvel's conservative board took convincing.
Before the Avengers saved the world, Marvel put them up as collateral
Believing the plan was one thing; backing it was another. In September 2005, Merrill Lynch agreed to lend Marvel $525 million to make its own films. Marvel used the film rights to 10 characters as security for the loan. If the financing failed, the lenders could take control of those film rights.
Of the 10 characters pledged, the Avengers name looked like the biggest loss on paper. But other studios already held the rights to most of its best-known members, including Iron Man, Thor, Black Widow and the Hulk. Sean Howe, who reported the deal for Slate, called it 'a nice little sleight of hand'. The other characters were hardly proven either. Captain America was the only one who had headlined a film, and his 1990 outing went straight to video in America. Marvel was asking a lender to back a studio with no track record, using characters that had barely been tested at the box office. By 2019, that same Avengers name sat above a film that made $2.8 billion worldwide.
Marvel still didn't know which film would prove the idea. Iron Man wasn't even theirs to make when the loan closed; New Line's rights expired at the end of 2005. Marvel got them back and used the financing to make Iron Man their first film, even though he wasn't one of the 10 characters pledged as collateral. It came out in May 2008 with no previous Marvel Studios films behind it and Robert Downey Jr. as a risky choice for the lead, and made nearly $585 million worldwide, launching the connected universe Maisel pitched. The money didn't make the film good; RDJ and Jon Favreau still had to make something people wanted to watch. It gave Marvel the chance to prove they could be the studio they said they were.
It's hard to imagine now, but there was a time when Robert Downey Jr. wasn't a safe bet, Iron Man wasn't a household name, and Marvel Studios had never made a film of its own. The $4 billion Disney sale is the obvious ending to that story. We think the more useful moment came in 2005, when Marvel decided to become something else and found someone willing to bet real money on that new identity before they had made a single film to prove it. That's the work underneath every repositioning: deciding what a company is going to be, then finding something real enough to back the claim, long before the market has proof it's true.