Why Disney Bought Marvel

Finally, Snow White can ditch those seven dwarfs for some tough guys--Spider-Man, Iron Man and the X-Men. Dopey, Grumpy, Doc, Happy, Bashful, Sneezy, and Sleepy got some new competition today as Disney announced a $4 billion deal to acquire Marvel Comics. But Disney's princesses can live on in their fantasy world without fear of any of Marvel's 5,000 tough characters. There's a simple reason they'll coexist peacefully: Bob Iger, who began his tenure as Disney CEO with the acquisition of Pixar, knows his way around the world of animation. "We believe that adding Marvel to Disney's unique portfolio of brands provides significant opportunities for long-term growth and value creation," he said in announcing the transaction.

You may not recognize his name, and Iger, who began his showbiz career as a TV weatherman, isn't a very animated guy. Unlike some of his counterparts--Viacom's Sumner Redstone and News Corp.'s Rupert Murdoch--he gets along with his colleagues and makes a point of delegating authority. And in sharp contrast to his predecessor, Michael Eisner, the undisputed Lion King during his Disney reign, Iger has kept a low profile. Yet he has reaffirmed Disney's legacy in animation with some of the boldest dealmaking in Hollywood in the past decade.

Drawing Pixar into the Walt Disney Co. required rewriting the Disney management script. Disney had been distributor for Pixar's productions, including such classics as Toy Story and Finding Nemo. But Eisner and Pixar founder Steve Jobs clashed like superheroes with super egos over the riches that both companies earned from their mutually rewarding arrangement. Similarly, after Disney acquired independent film studio Miramax in 1993, there were epic showdowns between Eisner and Harvey Weinstein, the fiery cofounder of the studio.

But in 2006, barely in his new job a year, Iger put an end to the child's play. He orchestrated the $7.4 billion purchase of Pixar, which had quickly developed into the hottest hand in animation. Hollywood sounded a collective gasp, then fled en mass to Las Vegas to place bets on how long Iger would hold onto his job in a management structure that now included Jobs, who landed a 7 percent stake in Disney and a seat on the company's board.

So far, it's all been a Hollywood ending. Iger's first smart post-Pixar move was to install animator John Lasseter, the creative maestro behind the surging animation studio, as the chief creative of the combined Disney/Pixar studios. The four Pixar releases since the Disney deal--Cars, Ratatouille, WALL-E and Up--have grossed $2 billion in worldwide ticket sales. In addition to the box-office bonanza, the acquisition also bolstered Disney's massive merchandise and theme-park businesses. Pixar's Cars is a big attraction in the expansion of Disney's California Adventure Park in Anaheim, and the Pixar creative team has a major hand in the highly anticipated upcoming Disney animation Princess and the Frog. Iger has developed a harmonious relationship with Jobs, which has helped burnish his credentials as a leader in new media. Disney's ABC television network was the first to make hit shows available via Apple's iTunes store.

Analysts are already gushing over Iger's acquisition of Marvel Comics. "Overall, we think Marvel's library and brands are a solid strategic fit for Disney," Anthony J. DiClemente, of Barclays Capital. "Disney should be able to leverage its global reach, execution, and distribution capabilities to grow Marvel's brands and business opportunities." Does that mean Captain America will soon be greeting visitors at Disneyland? "This is absolutely historic, as it merges the long-standing but now fast-growing Marvel heros with Disney's icons," says Anthony Sabino, a St. John's University business-law professor who rushed to put out a statement.

This afternoon, Iger ventured over to Marvel Studios to meet the superheroes for himself, and apparently he wouldn't dare dis them by taking time out for a NEWSWEEK interview. After all, they are more manly crowd. "We both have properties with broad appeal, but they skew more toward boys," says Tom Staggs, Disney's chief financial officer and Iger's supersidekick. If Iger can work his Disney magic again, you'll soon see Iron Man and Sleeping Beauty together in the same playhouse.