387 Park Avenue South
New York, New York 10016
Telephone: (212) 696-0808
Fax: (212) 576-9289
Incorporated: 1939 as Timely Publications
Sales: $415.2 million
Stock Exchange: New York
SICs: 2721 Periodicals
The Marvel Entertainment Group, Inc., is the largest American publisher of comic books. The company got its start during the Depression and grew rapidly during the 1930s and 1940s when comic books were in their heyday. Its industry suffered a setback in the 1950s, but grew stronger in the 1960s as a new crop of popular characters appealed to the children of the baby boom. After another slump in the 1970s, Marvel rebounded in the 1980s, growing even larger and more popular. The company began to diversify in the 1990s, as it sought to reap full value from its stable of enduring and beloved superheroes through licensing arrangements and other media outlets.
Marvel was founded in the late 1930s by Martin Goodman, a New York publisher of pulp magazines. In 1939, Goodman was convinced by a sales manager for Funnies, Inc., a collection of artists and writers who produced complete comic book packages to be printed and distributed by publishers, that comic books would be a good investment. Funnies, Inc., provided Goodman with material featuring a super-hero character, the Sub-Mariner, who was part man and part fish. The title of this experimental venture would eventually become the banner of a pulp empire: Marvel Comics.
In addition to the Sub-Mariner, the first issue of Marvel Comics also featured the Human Torch. Priced at ten cents, it was published in October, 1939, and reprinted the following month. Providing colorful, action-packed escapism at the Depression-era price of ten cents an issue, Marvel comic books were an instant success.
Both the Torch and the Sub-Mariner exhibited traits that many Marvel heroes would come to share. They were both flawed protagonists and angry young men. Unlike other comic heroes such as Superman, they were rebels rather than upstanding role models for the youth of America. The Torch and the Sub-Mariner spoke in slang and exhibited adolescent traits, making flip comments while they wreaked havoc.
With the success of his first issues, Goodman became his own one-man staff and formed a new company, Timely Publications. He began publishing two new lines of comics, Daring Mystery Comics, and Mystic Comics, searching endlessly for marketable superheroes who would sell comics issue after issue. In addition, as a result of Goodman's concern about the threat posed by Hitler's Germany, Timely Publications' characters began to combat the Nazis even before the United States formally entered the war. In February, 1940, for instance, the Sub-Mariner took on a Nazi U-Boat.
In March, 1941, Marvel pushed this concept one step further, introducing Captain America to fight the Nazis. With the arrival of this character, Timely's comic books sky-rocketed in popularity, as the first number sold nearly one million copies. Flush with this success, the company inaugurated four new titles in 1941. With the actual U.S. entry into the war that Timely's heroes had been fighting for over a year, much of the company's staff joined the military. Despite the general shortage of manpower, and a later shortage of paper, the comics business boomed during the war.
Around this time, Timely branched out from superheroes to humor, adding Comedy Comics, Joker Comics, and Krazy Komics. In addition, the company produced a number of lines featuring funny animals, which appealed to younger children more than the violent super-heroes comics. With this success, Timely expanded its staff and moved its offices to the Empire State Building.
In 1943, the company expanded its audience further when it discovered that teenage girls would purchase comic books directed to them. Miss America featured a female superhero in its first issue, but turned to teen beauty tips in its second, attaining lasting popularity along with Patsy Walker , a serial about dating and dances.
In the wake of the war, the super-hero franchise weakened, and the comic book industry as a whole went into a slump. In an effort to revive sales, Timely tried crime comics, cowboy comics, romance titles, and finally, cowboy romance. The old super-heroes, the Torch, the Sub-Mariner, and Captain America, were "retired" by 1950.
Despite the death of the old heroes, Timely's operations overall were still going strong. In 1950, the company was producing 82 separate titles--written and drawn by a "bullpen" of company talent--each month. At this time, with the outbreak of the Korean War, Timely also began to produce a new generation of war comics. Created by actual veterans, these issues portrayed war in a new way, showing the pain and misery experienced by the average soldier.
Early in the 1950s, Goodman decided to increase his profits by setting up his own national distribution system, which he called the Atlas News Company. To raise money for this expensive venture, he cut back on office overhead, and switched his staff of writers and artists to freelance status. By the end of 1951, Timely had been converted to Atlas Publishing, and a black and white globe logo was appearing on the front of the company's comic books. In addition to war comics, Atlas published a large number of horror issues, with titles like Adventures into Weird Worlds.
In the mid-1950s, the comic book industry came under attack from groups that saw it as a pernicious influence in society. In 1954, the U.S. Senate formed a Subcommittee to Investigate Juvenile Delinquency, which heard testimony in April of that year that comic books were causing violence in society. In a brief spasm of hysteria, customers boycotted stores, comic books were publicly burned, sales plummeted, and a number of comic book producers went out of business. Atlas saw its revenues shrink drastically, and the company moved from its offices in the Empire State Building to smaller quarters at 655 Madison Avenue.
The comic book publishers who survived this crisis, including Atlas, formed the Comics Magazine Association of America in 1955. Immediately, the association set up a censorship board, the Comics Code Authority, whose seal of approval on the front of a comic book guaranteed inoffensiveness (and, many readers believed, blandness). After attaining an all-time high in popularity in the early 1950s, sales of comic books began to drop precipitously.
By 1957, with little product to distribute, Atlas' distribution operations had become a drain on income, and they were shut down. Goodman turned instead to American News Company, another distributor, to place his products in stores and newsstands. With the overall depression in the industry, however, this company soon failed as well, and Goodman was left with no means of distributing his comic books. In desperation, he made a deal with archrival D.C. Comics, which agreed to distribute just eight of Goodman's titles a month.
The company limped along on this basis for three years, until late 1961, when a new idea for a comic book series won widespread popularity and returned the company to financial health. In November, 1961, Goodman's top writer and artist produced The Fantastic Four, which featured a superhero group and concentrated more on the complex personalities of the characters and less on the machinations of plot. Featuring The Thing, Mr. Fantastic, Human Torch, and Invisible Girl, The Fantastic Four was an immediate hit, and fan mail began to pour in.
The debut of the Fantastic Four was followed by the introduction of the Incredible Hulk and Spider-Man, in short order. By 1962, Goodman's company was once again thriving, as baby boomers discovered a new generation of comics heroes. Although the word "Marvel" was not yet appearing on comic books, the company's work bore a small "MC" insignia, and was conceptually linked by the idea that the "Marvel universe" contained all the super-heroes, who knew each other and interacted.
In May, 1963, Goodman's comic books began bearing the words "Marvel Comics Group" on the cover of its issues in a vertical box, surrounding the head of the superhero in question. Marvel had been the name on the first series of comics the company published, and it now became the focus of the company's promotional efforts.
Throughout the mid-1960s, Marvel continued to introduce new characters, such as the Avengers, the X-Men--and Daredevil, a blind attorney&mdash¯ong others. To capitalize on the popularity of its large stable of superheroes, the company began to merchandise products that featured their images, such as T-shirts, board games, and model kits. In 1966, a half-hour television show featuring "The Marvel Super Heroes" was syndicated to stations around the country. In the following year, Saturday morning cartoons featuring The Fantastic Four and Spider-Man were introduced on the ABC television network.
By 1968, Marvel was selling 50 million comic books a year. With this strong performance, the company was able to revise its distribution arrangement with D.C. Comics, which had limited production of its own comics, to put out as many different titles as demand warranted. With his valuable franchise established, Goodman sold his businesses in the fall of 1968 to the Perfect Film and Chemical Corporation, which soon changed its name to the Cadence Industries Corporation. Within the structure of Cadence, Goodman's properties were grouped together under one name, Magazine Management.
By 1969, it had become clear that the most recent boom in the comics industry was over. Marvel began to shed titles as sales weakened. In an effort to increase its flexibility, Marvel ended its distribution agreement with D.C. Comics and signed with the Curtis Circulation Company, a large magazine wholesaler, which allowed the publisher greater independence.
Marvel experienced a period of instability in the early 1970s, as the company's old guard of editors and corporate executives retired and their replacements came and went. In an effort to shuck off the outdated Comics Code restrictions, Marvel published three anti-drug theme Spider-Man issues that had been suggested by the U.S. Department of Health, Education, and Welfare. When the Comics Code board rejected the issues because rules forbade any mention of drugs at all, Marvel published the comics without the Comics Code seal of approval. This move eventually led to a loosening of restrictions--and was important because comics had begun to lose ground to television and other media.
With fewer prohibitions on subject matter, Marvel began to feature such previously forbidden characters as vampires and werewolves as heroes and villains. The company also began an affirmative action push, including more black characters and more strong female figures. In an effort to make a place for more artistic efforts, Marvel also began to offer black-and-white comics magazines, which were pitched to an older audience than its color comics.
In May, 1975, Marvel published Giant-Size X-Men, a special large-format issue that re-introduced the characters which would become the company's most popular franchise. Featuring characters from around the world, the X-Men were designed to be marketed in foreign as well as domestic markets.
Despite the success of this new line, however, Marvel had lost $2 million by the middle of 1975. The company was in bad financial shape. Although Marvel's sales remained strong, its profits had dropped. The comics industry's traditional retail outlets, small community stores, were being replaced by big chain grocery stores which did not carry comics. The number of distribution outlets was shrinking. In addition, paper prices had risen, cutting into earnings. In response to this financial crisis, Cadence installed a new company president, who pared the number of titles produced, firmed up publishing schedules, and reorganized sales and distribution. Throughout the late 1970s, Marvel cut back on expenses and new publications in an effort to remain profitable.
Among Marvel's bright spots during this time was the 1977 hit television series featuring the Incredible Hulk. This suggested that fertile ground for Marvel's future growth might lie in spin-offs from the company's core comics business. In the late 1970s, a number of television shows featuring Marvel characters were created, and Marvel also licensed characters and stories from other sources for its own comics. These moves were motivated as much by desperation as they were by expansionism, because by 1979 the market for comic books had shrunk to an all-time low.
In the early 1980s, Marvel reorganized its somewhat chaotic corporate structure in an effort to recover from this slump, and began to increase its staff and its output. The company had a steady hit with the X-Men franchise, and was also starting to benefit from a change in the way comics were distributed. In the past, comics had been sold on newsstands with a lot of other publications; but with the rise in comic book collecting, stores devoted exclusively to sales of comic books began to open. Between 1981 and 1982, this direct sales market came to account for half of Marvel's sales. Noting this increase, Marvel began to produce special issues to be sold in this market. In addition, the company continued to publish graphic novels, which provided longer and more sophisticated tales of featured heroes.
In 1985, Marvel also moved to include younger children in its market when it produced Star Comics, which featured humor, talking animals, and child characters. These comics were sold to children in mall bookstores, a new outlet for comic book distribution. By the mid-1980s, Marvel was starting to see its circulation rebound, reaching 7.2 million a month by the end of 1984. Sales were driven by the network of 3,000 comics specialty shops that had sprung up. By the end of 1985, Marvel's revenues had reached $100 million, driven in part by licensing agreements for products featuring its characters.
This success attracted the attention of members of the financial industry. In 1986, Marvel was sold to New World Pictures, a movie company that wanted the publisher's stable of characters and animation studio, for $46 million. This move touched off a series of corporate transformations for the company. In November, 1988, New World announced that a series of losses had caused it to sell Marvel to the Andrews Group, Inc., for $82.5 million. The Andrews Group was a subsidiary of a holding company called the McAndrews & Forbes Group, which was owned largely by investor Ronald Perelman.
In June, 1991, in an effort to raise $48 million, Marvel announced that it would sell stock to the public for the first time. With this money, the company planned to pay off bank debts and increase publishing, distribution, and licensing operations. As a publicly held company, Marvel also began to step up its marketing activities and diversified into a number of different fields related to its publishing empire.
In September, 1992, Marvel purchased the Fleer Corporation, a trading card company, for $265 million. In the spring of 1993, Marvel also invested $7 million to buy 46 percent of Toy Biz, Inc., a New York-based toy manufacturer. The company then hired a top toy designer to make successful action hero toys out of familiar Marvel figures. These characters demonstrated booming popularity in the early 1990s.
By late 1993, Marvel was publishing nearly twice as many titles as it had in 1989. The company's revenues had increased steadily during that time, as distribution expanded to new venues, like record stores and drug stores, and overseas markets opened up. In addition, the company stepped up its efforts to sell space in comic books for advertising, and kicked off a licensing campaign to extend its market into Europe, Africa, and the Middle East. Marvel also signed a number of movie deals to support this effort.
In 1993, Marvel declared its ambition to be among the world's top five licensors. With a stable of popular characters, and the potential to invent more when the need arose, Marvel appeared to have successfully made the transition from children's publisher to marketing monolith. Its continued success in the children's entertainment industry seemed assured.
Principal Subsidiaries: Marvel Comics, Inc.; Fleer Corporation; Toy Biz, Inc. (46 percent); Dubble Bubble Confectionery Products.
"A Marriage of Corporate Celebrities," Mergers & Acquisitions, September, 1992.
Anderson, Richard W., "BIFF! POW! Comic Books Make a Comeback," Business Week, September 2, 1985.
Cuff, Daniel F., "Publisher Expects Sale to Aid Marvel Comics," New York Times, November 28, 1986.
Daniels, Les, Marvel: Five Fabulous Decades of the World's Greatest Comics, New York: Harry N. Abrams, Inc., 1991.
Dwek, Robert, "Marvel Takes License with Spider-Man," Marketing, August 19, 1993.
Henry, Gordon M., "Bang! Pow! Zap! Heroes are Back," Time, October 6, 1986.
Kanner, Bernice, "Comics Relief," New York, October 25, 1993.
Source: International Directory of Company Histories, Vol. 10. St. James Press, 1995.