Yesterday was a gloomy day for the comics industry, as 15 Marvel staffers — including several popular editors and a couple of legendary Bullpenners — were laid off. This followed the recent layoff of COO Jim “Ski” Sokolowski. We all know the economy sucks, and that comics sales are down this year. But was that the reason for the cost cutting?
Or was it Disney? The Mouse purchased Marvel for $5 billion two years, two months ago and they are well known for being very budget conscious. Did some Disney suit look at revenue, say it wasn’t enough and order some budget cuts?
While both these scenarios sound plausible, according to Marvel insiders contacted by The Beat, neither seems to be the case. The budget slashing is the work of Marvel’s CEO, Isaac Perlmutter, an executive of legendary stinginess whose fanatical devotion to saving money —an increased interest in being hands on at Marvel — has led to the layoffs and other draconian measures inside the company.
Perlmutter and his then partner Avi Arad rode in to save Marvel from bankruptcy when they ran ToyBiz back in the late 90s. Keeping an eye on the bottom line was key to turning the company around. Bold moves like setting up their own $500 million movie studio took Marvel from penniless publishing company to a Wall Street darling with numerous stock splits. And of course, it led to Disney shelling out all that cash for a ready-made, boy-friendly franchise factory.
Although he no longer owns Marvel, Ike still runs it. And rather than sit back and enjoy his sunset years—he’s 68—with his $1.7 billion fortune, he’s chosen to keep a very active hand in running the company. In recent months he’s become even more active, showing up at the office daily. And it seems the only way he knows how to run a company is by increasing profits — not by investing in new businesses, but simply squeezing the bottom line for every last penny by any means.
If Ike thinks an expenditure is unnecessary, there’s no way around it, and anyone caught doing it is in danger of losing their job. Why did Marvel not have a booth at conventions for years? Ike wouldn’t allow it. Marvel got around this in various ways — one year at San Diego, a cookie giveaway was used to mask a barebones signing table. In other years, Marvel exhibited with its video game partner, Activision. Since becoming a movie studio, Marvel has been able to spring for more lavish and spectacular booths — remember Thor’s throne? But promoting comics isn’t in the budget.
The current problem seems to stem from a publishing forecast that didn’t get hit when the actual numbers came in. It doesn’t matter that Marvel is still a very profitable company. This is not a matter of losing money. It just wasn’t as profitable as it thought it might be. The shortfall in the margins wasn’t huge — it was less than 5% in an economy where that’s practically considered stable. But whatever the shortfall was, instead of looking at ways to build the business or bolster areas with huge potential — books, anyone? — Ike’s only reaction is to slash, slash, slash.
It’s also led to arcane practices within Marvel to keep the budget low. Reportedly, Ike gives new Marvel execs a book that says the best way to make money is to spend as few resources possible while keeping the same pace—or doubling it. Marvel employees are kind of like the rats in those caloric restriction experiments. They’re given the lowest possible amount of resources to get the job done. When something absolutely positively has to be purchased, it’s half of what was asked for.
It gets downright messy. Marvel’s new offices have only one restroom for each gender. In a company of hundreds of people. The post-lunch hour piddle line is said to be especially long and people actually stagger their lunches so as not to wait in it. There’s a human resources staff of one for the whole company. Review copies? You’ve got to be kidding. Editors have to purchase copies of the books they worked on. The precious archives of assets have dwindled over the years due to not spending any money to save them.
(We’ve heard things are even worse at Marvel’s West Coast studios operations, where some employees have surveillance cameras trained on them to make sure they don’t play solitaire.)
And we haven’t even mentioned the people. The real heart and soul of Marvel. People loves their jobs, and love the characters. Despite all the weird annoying stuff that only Marvel practices, the staff gets down to business and remains professional and dedicated. But this latest round of layoffs has, understandably, sapped morale.
And where is Disney in all of this? Reportedly, very hands off. As long as Marvel stays profitable, they let Ike run the show. That publishing is the part of the company that creates all the IP that Disney is making millions off of hasn’t yet entered the equation. At least Warner Bros. understand that DC needs to be involved in boosting their characters on the world stage.
So why? Why is Ike still micromanaging the company he made incredibly profitable and part of the biggest entertainment company on earth? Maybe Ike was just born that way. After a lifetime of success that leaves him America’s 234th richest person, maybe he just wants to stay busy and productive?
Or maybe there’s even more to it.
As we’ve mentioned here a few times, with the death of Steve Jobs, Perlmutter is now Disney’s single largest shareholder. There’s one theory floating around that goes like this: Ike wants to get more involved in Disney’s board of directors. He wants to be the showcase division. He wants to hand out that book about saving money to everyone at Disney, and spread Ike’s Way to more of the company.
When Disney bought Marvel, there was some hope that it would become another Pixar, another separate and eccentric IP farm. The reality is the exact opposite. Pixar has ping pong tables and free lunch for its imagineers. Marvel has one bathroom.
Ironies abound. Ike’s ban on carrying inventory means that Marvel’s book division has a fraction of the success it should have. To show how shortsighted this is, having a strong backlist hit is like being able to print your own money. You print more WATCHMEN, current kerfuffle aside, you sell more WATCHMEN. You print more DARK KNIGHT, you sell more DARK KNIGHT. With Marvel’s incredible backlog of timeless classics by Stan, Jack, Steve, Roy, Chris, and so on — and modern stories like CIVIL WAR and SECRET INVASION — can you imagine how much money Marvel would make if they could really invest in their bookstore program or develop NEW stories for the book trade?
So that’s the lay of the land. Ike’s deal with Disney is supposed to run five years. Reportedly, people are hoping to hang on until he’s gone to get to some kind of promised land where people can buy paper clips. Meanwhile, because they love what Marvel can be, and because they are professionals, employees carry on. And of course, up until the latest New 52 jumpstart, Marvel really had no reason to question their business model. They were #1 month in and month out. And remain a very profitable company. Marvel still has an extremely talented executive roster — publisher Dan Buckley, CCO Joe Quesada, studio head Kevin Feige, and until recently, Ski. They’ve adapted to Ike’s Way and allowed the company to even have a little bit of creative latitude.
But meanwhile, something else is happening. What IS Disney doing? They’ve hired a bunch of ex-DC editors — Nachie Castro, Mike Siglain, Janelle Asselin, Jann (Jones) Robinson — and several other ex-DC employees to do…what? Asselin was hired to package Disney comics for foreign magazine markets, where they sell in huge numbers. (You can sell Disney comics everywhere but in Disney’s home country, it seems.) Although putting out comics with Disney-branded characters from Marvel seems like a no-brainer, the Disney-Marvel synergies have been a haphazard lot. The Richard Castle tie-in graphic novel is actually selling very well, but original graphic novels remain verboten for all the reasons we’ve just enumerated. The Crossgen initiative may just have been a way to recoup Disney’s huge (and unwise) investment in CrossGen’s IP.
The problem with Ike’s Way is that it doesn’t have a plan for the future beyond squeezing other people’s ideas to the bone. The publishing world changes every day, and you have to move fast. Marvel is under pressure to respond to the New 52’s success — a Marvel reboot has been discussed, of course, but it’s still a no go for now. With fewer and fewer people left to meet the challenge of the future, the pressure will be even greater.
Marvel will get through this. It has too many great people and great characters not to. On a personal note, I just wish the people who worked there were given the resources to do their jobs. That’s all it would take.