Disney to pay $115M to distribute 2 Marvel movies

AP News
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Posted: Oct 18, 2010 5:10 PM
Disney to pay $115M to distribute 2 Marvel movies

The Walt Disney Co. said Monday it will pay Viacom Inc.'s Paramount Pictures $115 million to take over the marketing and distribution of "The Avengers" and "Iron Man 3," a move that will better integrate Disney's acquisition of Marvel Entertainment.

The $115 million, to be paid on the theatrical release dates, equals the minimum distribution fee Paramount was guaranteed and allows Disney to capture more profits if the films do well. The deal also lets Disney take over merchandising and licensing for the films.

Before Disney purchased Marvel last year for $4.2 billion in cash and stock, Marvel had cut a movie distribution deal with Paramount.

The newest deal does not cover distribution of upcoming Marvel releases "Thor," set for release in May, and "Captain America: The First Avenger," set for release in July, because Paramount had already done significant work preparing to promote and distribute both films.

Rich Ross, chairman of The Walt Disney Studios, said in a statement that Disney's marketing will "leverage these two highly-anticipated films across the multiple global platforms of The Walt Disney Co."

The arrangement allows Paramount to earn revenue from the films without having to promote and distribute them. The studio also will continue to earn home video revenue from the first two "Iron Man" movies as well as "Thor" and "Captain America."

"The Avengers," planned for release in May 2012, will also be played on Epix, the pay TV channel that Paramount co-owns with Metro-Goldwyn-Mayer Inc. and Lions Gate Entertainment Corp.

Shares of Disney rose 2 cents to $34.77 in after-hours trading after closing down 13 cents at $34.75. Viacom's widely traded Class B shares rose 4 cents to $37.68 after hours, following a drop of 23 cents to $37.64 in the regular session.