Cheesiest Free Image I could find for Mergers and Acquisitions

Why No Mergers and Acquisitions?

Courtesy Wikipedia:

Mergers and acquisitions (M&A) are transactions in which the ownership of companies, other business organizations or their operating units are transferred or combined. As an aspect of strategic management, M&A can allow enterprises to grow, shrink, change the nature of their business or improve their competitive position.

Prince Namor, CEO of Oracle, Inc.

Prince Namor, CEO of Oracle, Inc.

Big Mergers In the News

The New York Times just paid $30 million for The Wirecutter.  AT&T is buying Time Warner for $80 billion.  With a “B” there.  (Pending governmental oversight and regulation…)

In the tech world, there are so many acquisitions that we often don’t hear about them until weeks or months down the line when the employees update their LinkedIn accounts.  Companies like Apple and Microsoft and Google buy companies to solve their latest problems, at a cost of tens and hundreds of millions of dollars.  Those self-driving cars aren’t going to build themselves, you know.  (Unless that Deep Learning/Machine Intelligence stuff kicks in quickly…)

And on and on it goes, in banking, pharma, tech, energy, and more.

In the comics world?  Crickets.


Why Don’t the Largest Publishers Gobble Anybody Up?

This is a meaningless bar graph.

This is a meaningless bar graph, which is appropriate for a business blog entry.

Ever notice how neither Marvel nor DC buy up smaller publishers?

If anything, only the reverse has been true. Disney bought Marvel; Warner Bros bought DC.  In fact, Marvel has been owned by a few different companies over the years.  But they don’t buy too many companies, themselves.  Notably, Marvel bought Fleer and Skybox in the early 90s and sold them a few years later after bankruptcy for $300 million less. Ouch. And then there was that whole Heroes World debacle in 1994 that landed us in the sorry distribution state we have today in the Direct Market.

Marvel and DC are small cogs in bigger wheels now.  That wheel is so big, thanks to their corporate ownership, that they don’t need a merger or acquisition for vertical integration‘s sake. (That is, merging with another company outside their direct industry, like Marvel Comics did in buying a trading card company.)  Their owners already likely own companies that do that for them, or will buy them, themselves. Marvel’s not going to buy a cable network to rebrand it “Marvel TV.”  Disney XD is already happy to run Marvel cartoons.  DC’s animated series are at home on the Time Warner-owned Cartoon Network and whatever other cable stations they air on.  DC doesn’t need to buy a cable network.  Time Warner would do that.

It’s what all the media conglomerates are doing these days.  They want to own the whole stack.

But when it comes to horizontal integration — buying another publisher to expand their line of comics — nothing is happening.


Do They Need To Merge or Acquire?

Do they really need to buy someone else?  No, not really.

Marvel and DC already dominate the Direct Market, and their IP dominate the TV and movie industries.  (Without that brand label on them, shows based on comics are just as likely to succeed as any all-original project, i.e. not very good.)

When you’re that big, do you need to get bigger?  Of course! But if you wanted to get bigger, you could just do it yourself. You have the internal resources already, namely the characters. You can hire anyone you want to work for you, likely without having to buy out their company to get them.

The state of the rest of the publishing industry is so shaky and so under-financed that people would more likely jump ship for the relatively steady and well-funded paycheck of a Marvel or DC.  It saves Marvel/DC a ton of money and legal logistics this way.

Look at what Marvel did during the go-go period of the early 90s, when they expanded their line to try to shove all the growing independent publishers off store shelves.  They could just as easily do that today.

Heck, with the alternate covers craziness going on these days, they’re achieving a similar goal: competitors aren’t on the shelves because retailers can’t afford them.  Who can afford to buy three copies of the latest first issues from Dark Horse or even Image when there’s a bill to pay for those extra hundred copies of “Avengers” coming in, to receive the rare variant cover?

Who can justify spending risky money on new creator-owned first issues when Marvel and DC are churning out first issues with big name characters on a weekly basis?

The results to Marvel and DC are the same.  They can protect their Direct Market control, without having to spend all the extra money on pesky things like creators or editors.

Talent Acquisitions

This is a meaningless pie graph, which is appropriate for a business blog entry.

This is a meaningless pie chart, which is appropriate for a business blog entry.

If they did have an interest in another company’s toys and talent, it would likely be cheaper to just wait for that other company to go out of business and buy everything in the bankruptcy fire sale.  Marvel scooped up a ton of great talent when CrossGen went under, but they didn’t have to buy the company to get them.

The last big purchase from Marvel/DC dates back to 1998, when DC bought up WildStorm.  To this day, that feels mostly like a talent grab.  They bought a future C-level executive in Jim Lee, and a bunch of artists/colorists and editors.

Oh, and Alan Moore. That worked out well.  For about a week.

And how many of them are still around?  As of 2010 (!), many had run screaming/were shown the door.

The WildStorm IP has come and gone over the years ever since, and will be coming back again in yet another form with the Warren Ellis-led line.  But even that is an alternate version of the Universe, since a few spare characters have been integrated into the DC Universe by now.

Sorry, this is a rant for another day.

DC bought WildStorm in 1998, and neither they nor Marvel have loosened their purse strings for anyone else since.


Why Smaller Publishers Merge and Acquire

Lex Luthor, CEO of LexCorp

Lex Luthor, CEO of LexCorp

With independent companies, you do have publishing outfits merging, or one becoming a subsidiary of the other. The biggest one in recent memory is likely IDW buying up Top Shelf, or Boom! merging with Archaia.  At a smaller scale, Lion Forge just took over Magnetic Press’ business.

Marvel and DC don’t do that kind of thing, though. In every other industry, these horizontal mergers (ones that happen inside the same business doing the same thing, e.g. publishing comics) are, if not regular, at least not uncommon. The book industry is down to four major publishers, and that’s mostly because the biggest ones keep getting bigger by scooping up the smaller ones.  They often don’t even bother truly merging in the smaller company.  They run the purchased company as an imprint of their own, saving a few bucks by eliminating redundancies.

Also, three of those four publishers are owned by large multimedia conglomerates: Bertelsmann, CBS, and NewsCorp.  You can see how Marvel and DC fit neatly into that same definition.

Yes, Disney bought Marvel, but that was an IP play, not a publishing one. Disney also owns CrossGen, but they scooped that up before Marvel, and again mostly for the IP, not the comics or the talent.

Marvel has never gone to Disney and said, “Hey, we could improve our business if we bought Comics Company XYZ. It would add a few points to our monthly domination of the comics industry and put DC back into second place.  Can we have an advance on our allowance?”

Maybe they should.  But who is big enough to make that kind of dent?  Image wouldn’t work because it’s completely creator-owned and controlled.

What if DC bought Dark Horse or Oni and made them the new Vertigo? I can’t see that happening. If anything, DC would wait for them to go out of business, then start a new imprint to cherry pick and reprint whatever comics they could get out of bankruptcy court. Or, more likely, they’d just hire the creators from those dead companies to work on Justice League.

The only scenario I could see is if Mike Richardson wanted to retire and Marvel offered him a big fat check to “spend more time with his family.”  Dark Horse could be Marvel’s West Coast office and give them an immediate footprint very close to the biggest hotbed of comics creators in the country.


The Natural Life Cycle of a Publishing Entity Today?

Why do mergers and acquisitions only really happen at the lower levels?  There, it is a play for survival.  It’s pure horizontal integration. Growing in size helps their standing with their major distributor, or their printer, or it helps their standings in the book market, or what’s left of it.  It gives their creators greater opportunities.  There, we get back to scale.  There are efficiencies to be had at scale that might save a smaller publisher.

Marvel and DC already have that scale, in spades.

The difference, I think, is in the life cycle of a publishing entity.  I think you saw it in the major book publishing world and likely in the newspaper and magazine world.  I think comics operate under that same cycle.

Here it is in a nutshell: Smaller publishers want to be larger publishers that publish more.  Larger publishers want to be media companies.  They don’t seek growth through the low profit margins of printing comics; they seek partnerships in the vertical markets, hoping to be a larger media company that just happens to include comics as one of its hubs.

You have to stop thinking of Marvel and DC as publishers.   Most publishers of just about any type of material are owned by a larger company that sees them as part of their strategic vision to have a tendril in every kind of publishing, with the hopes that the various branches might be able to work well together.  The newspaper feeds the website and the cable news channel.  The book publisher feeds the TV and movie studios. Etc. etc.

Those that merge and acquire do so out of survival. Marvel and DC can survive on their own, through strong ownership and a business structure that capitalizes on vertical integration.

And that is why Marvel and DC don’t buy other companies anymore.


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Lex Luthor thinks you should get bigger. Namor, CEO knows the difference between large and small publishers. Lex Luthor explains mergers and acquisitions


  • johnpannozzi November 1, 2016 at 11:52 pm

    Augie, do you think McFarlane Productions, Top Cow, and/or Skybound Entertainment will be sold off once their respective founders die/retire?

    I suppose it’s not that unlikely that someone will one day buy out Dark Horse and get the rights to the Mask, Ghost, and what have you.

    AFAIK, all of Oni Press’s titles are either creator-owned or license properties, so noone’s likely to buy them.

    And on a semi-related note, I’d imagine then when Jim Valentino dies or retires, Shadowline will be folded into Image Central (with Jim’s family retaining the rights to his creator-owned properties, of course).

    • Augie November 2, 2016 at 9:41 am

      Yeah, I think those are all pretty much right on. In the case of McFarlane, Top Cow, and Skybound, I’d imagine they’d be bought up by a movie company and not a comics company. No, let me rephrase that: They’ll be bought out by a multimedia entertainment company. MAYBE that company will license them out for some publisher to have fun with, but they’ll mostly be locked up in IP hell in Hollywood until the end of days.

      I think the same goes for Dark Horse. They already have a tight bond with one of the movie studios. Fox, is it? They’ll sell off to them.

      Oni is only attractive if Marvel or DC is looking to diversify and have an imprint of creator-owned titles that bring a new readership into their fold. (The carrot to the creators will be the tight integration into a company that already had strong movie/tv production possibilities.) And, even then, within two years the creator ownership deals would change to favor Disney/Warner Bros. and everyone will run screaming.

      Also, now that I think of it, does Eidos (now owned by Square Enix) still own part of Top Cow? So maybe a video game company buys the rest so Silvestri can retire to Hawaii and live on the beach….

      • johnpannozzi November 2, 2016 at 11:31 am

        I wanna say that Top Cow invested in Eidos, not the other way around, but I can’t easily find any info proving that.

        Since the game developer Rebellion bought 2000 AD (and they also recently bought most of the Fleetway library, anything is possible.

        I want to say Dark Horse had/has a relationship with Universal (c.f. Hellboy II and the RIPD movie). Luckily, if Dark Horse does get bought out, Sakai, Miller, Mignola, Powell, and co. can very easily take their creator-owned properties elsewhere if things got bad.

        You mention “IP Hell”. On an unrelated note, do you think there’s any hope that copyright law will be changed in anyway? We’ve got just over 2 years before copyright terms are set to begin expiring again, and I dunno if laws extending those terms could be cranked out in such short time (the copyright law revisions in the 1970s and 1990s each took a few years to be ironed out). Maybe, if the powers that be end up extending US copyright terms anymore, there could be some sort of compromise. Pre-1963 works (and maybe future works, too) could only have their copyrights manually extended, thus orphaned works could still go in the Public Domain.

  • Joshua Leto November 13, 2016 at 9:54 am

    A couple notes here.

    One, nice job on the article. Well thought out and just when I got worried you had forgotten about Marvel buying Malibu, you mentioned that Wildstorm was the last acquisition by a major publisher.

    Two, I would think that the lack of profit margin is the largest reason that Marvel or D.C. don’t acquire a smaller publisher. It seems likely that for all the whining people do about cover prices and predatory sales techniques (e.g. variants), the reason the prices of comics keep rising is because they have to for the publishing arm of these companies to remain profitable. I believe lack of profitability is a much greater reason than the one sentence it garnered here.

    Keep up the good work.

  • GNN Off The Leash Links November 16, 2016 at 8:55 am

    […] Thinkpiece about mergers and acquisitions in the comics (link) […]


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