The dot-com boom and bust was (at the time of writing) the most recent embarassing period of financial excess. But those of you with longer memories will certainly recall the junk-bond madness of the late 80s. As a comic fan, you'll no doubt be delighted to know that your very own Spider-Man played a role in that whole rediculous saga... a role which very nearly lead to the collapsed of Marvel.
This book by CBS News correspondant Dan Raviv tells the corporate tale of greed and arrogance which was the driving force behind the terribly misguided drop in quality and jump in quantity of Spider-Man's titles in the 90's. While Dan is primarily concerned with the corporate background than the impact on the actual comics, this book is still required reading for any serious Marvel collector.
The story centres around a handful of rediculously wealthy men, who along with a few highly talented but not quite so wealthy men came to fight a long and painful battle over our favourite comics corporation. The main players are as follows:
These guys ranked between several hundred million, to a few billion dollars, at various times. The details don't really matter. What counts is what they did, and that is this:
Ronald O. Perelman made a takeover of Marvel, paying a a fair price. He then ramped up the stock (via various means, some of which were dubious). He then quite legally (though perhaps immorally) used his over-inflated Marvel stock as collateral for raising money, via junk bonds.
Junk bonds work like this. I have something, like some dot-com shares, that are supposedly worth say $200. So, using that as collateral, I create a holding company which issues $100 worth of bonds. Now, I get to keep that money, it goes in my pocket. But the bonds work like this, I pay you nothing for two years, but then at the end of two years, I pay you $121. That's 10% per year, a great return compared to putting the money in a bank!
If I can't (or say I can't) pay you back the cash at the end, then you get my collateral, i.e. the stock. If the stock meanwhile has dropped in value, say to $50, then that's tough. Then you're out of luck, you've lost half your cash. Of course, if I've asset-stripped the company and run it into the ground, then I win both ways! Sneaky, huh?
So, Perelman bought a controlling interest in Marvel for $52.5 million in January 1989. He floated it publically, listing at $2. With a swag of mergers and buyouts, he excited the value up to $34/share, which was great collateral for his junk bonds. Marvel brought Fleer, and Skybox, and Panini. Then in the mid 90's, it all went sour.
Enter Carl Icahn. With Marvel in trouble, he brought up the bonds cheap, and also bought some of Marvel's dubious bank debt. He and Perelman then went toe-to-toe, and it became a bit of an ego thing. That would be cool, who cares if billionaires give all their money to lawyers. The only real problem was that if Marvel crashed, Spider-Man and friends might have gone down to.
The only real good guys were Ike Perlmutter and Avi Arad from Toy-Biz. Unlike Carl and Ronald, who had a pretty easy start in life, Ike was a self-made man. Avi was a kick-ass toy-sculpter, and they basically created Toy-Biz. Toy-Biz ended getting tied up with Marvel, and Ike and Avi ended up fighting to avoid (quite unfairly) losing their company to bad-boys Ronald and/or Carl.
To cut a very long story short, Ike, Avi, and their lawyer Larry Mittman won by basically outlasting everybody else. Toy-Biz acquired Marvel, and began a slow road back to recovery, greatly helped by Avi's drive to get the Marvel movies up and running.
And what about Stan? Mostly a bemused bystander... and still remains so. But if anything, you get the feeling that Stan's spirit lives on in Avi. But that's getting outside of the scope of this book.
So, what is the scope of this book? Well, basically, it talks about all of the legal and financial side of things. It covers the backgrounds of the key financial players. It follows the moves and counter-moves, discusses the takeovers, the scams, the legal ploys, and the plain arrogance of the movers and shakers that view Marvel's rich cultural heritage as nothing more than a medium for scamming some healthy margins.
All-in-all, Dan has done a pretty passable job in researching the business aspects of the whole fiasco. As a comics fan who survived that dark period in Marvel's recent past, I'm very greatful indeed that somebody with Dan's skill has documented the events of that time for the benefit of those of us who have looked for some explanation of the whole miserable affair.
But now that I've stated that Dan certainly did comic fans a great service by shining his light under the Marvel rock, there are a number of aspects of the book which maybe could have been done a little better, in my humble opinion.
Firstly, the details. There are plenty of facts and numbers in the book, dropped smoothly into the narrative, so as to keep the flow readable. But personally I think that maybe an appendix with some basic dates and numbers would have been a simple but elucidating addition. How about a chart of Marvel's stock price over that period, with annotations of key events? How about a chronology, indicating the dates at which various players became involved, and the key dates? How about some photos of the major characters!
The book is not strictly chronological, which doesn't help. The first three or four chapters introduce some characters, giving backgrounds, and jumping a little in time. Once you get into the main flow, the books is basically sequential, or at least I think it is! The problem is that there is so much "deja vu" with deals being abandoned at the last minute, and then reworked, then abandoned, it's hard to tell if we're just seeing the next version of a proposal, or if we've leapt back and are seeing an event from another character's point of view.
Perhaps I'm being a little harsh, since it is certainly a very complex story. Maybe I just need to read the story again in a year or so. It's certainly a very readable book - I read most of it on various domestic plane flights. Even so, it would have been nice if perhaps the chronological chapters clearly indicated what time period they covered, enabling me to keep the sequence of events clear in my head.
Another key omission is that the book pretty much fails to tie the happenings in corporate land back to the happenings in comics land. This is a huge shame, and basically reflects the fact that the writer, just like the corporate players (excluding Avi) knew very little about the actual business of the company they were wrecking.
I was hugely disappointed not to get any sense of how the major head-office decisions alluded to in the text actually impacted the comic-book reader. For example, when the Marvel big-wigs decided to pump-up the balance sheet by introducing three whole new Marvel universes, then did they? If so, what were they? What happened to them?
This period of Marvel's financial excess co-incided with the greatest period of comic production excess, in terms of number of comics, prices of comics, number of alternate covers. Dan just hints at these aspects, but makes no attempt to actually track or correlate the changes in the end-product with the demands of the head-office. For me, this sort of coverage would have greatly increased my interest in the book, and would also have increased the longevity of the book as a historical reference.
The third point I want to raise is a bit of a minefield, but I'm going to mention it anyhow. That's the fact that this book was basically written because all the key players were Jewish.
Quickly, before you flame me, please give me a moment to clarify. The guys running Marvel could be Tibetan Monks for all I care. I don't give a damn if Ronald, Carl and Ike were first-order priests of the Cult of Cthulhu. But Dan does care. He writes about Jews, and that's that. If you check the flyleaf for a list of Dan's earlier books, you'll see that every single one is written about interesting Jewish folks.
Is this something I should even mention? Was James Joyce criticized for writing Irish stories? Should Marvel be faulted for making so many stories take place in New York City - which they knew the best? Should Alex Haley be condemned for writing stories about Africans?
Well clearly not. It's Dan's story, and if the cultural angle is the one he choses to play up, then that's his undisputable right. My only cause for complaint is that I brought this story to read about the corporate wrangling and the impact on the comics. I have very little interest in exactly how orthodox character XYZ happens to be, or how many times they have visited the holy land.
Look, I don't want to make a big deal out of this. There are certainly points in the story where their Jewish heritage is relevant. Ike and Avi's tough Israeli background, various key holidays which affected the ebb and flow of the struggle. Certainly these need to be mentioned. However, especially towards the later parts of the book, Dan starts pushing the Jewish aspects on with a very heavy-handed style, which in my mind detracts from the main plot of the story. The whole Marvel affair comes to a bit of a messy anti-climactic conclusion, and Dan substitutes cultural color for crystal clarity, and that's what I'm complaining about.
On the other hand, it looks like Dan only writes Jewish books. It's very likely that if Dan hadn't written this book, then nobody else would have. And if it comes down to a choice between a culture-slanted book, and no book at all, then... Mazel tov!
I'm very thankful that this book got written. If you're a serious Marvel fan, then you probably should go grab yourself a copy and read this tale. Dan does a fair job with the potentially dry and complex material, so let's say three and a half webs.