Why Is Marvel Laying Off So Many People?
Over the last two weeks, Marvel has laid off lots of people, from Bullpen staffers and editors to COO Jim Sokolowski. Heidi MacDonald may have tracked down the main culprit:
The budget slashing is the work of Marvel’s CEO, Isaac Perlmutter, an executive of legendary stinginess whose fanatical devotion to saving money —an increased interest in being hands on at Marvel — has led to the layoffs and other draconian measures inside the company.
Perlmutter and his then partner Avi Arad rode in to save Marvel from bankruptcy when they ran ToyBiz back in the late 90s. Keeping an eye on the bottom line was key to turning the company around. Bold moves like setting up their own $500 million movie studio took Marvel from penniless publishing company to a Wall Street darling with numerous stock splits. And of course, it led to Disney shelling out all that cash for a ready-made, boy-friendly franchise factory.
Although he no longer owns Marvel, Ike still runs it. And rather than sit back and enjoy his sunset years—he’s 68—with his $1.7 billion fortune, he’s chosen to keep a very active hand in running the company. In recent months he’s become even more active, showing up at the office daily. And it seems the only way he knows how to run a company is by increasing profits — not by investing in new businesses, but simply squeezing the bottom line for every last penny by any means.
If Ike thinks an expenditure is unnecessary, there’s no way around it, and anyone caught doing it is in danger of losing their job.
via Marvel Layoffs: The cheapskate is coming from inside the House of Ideas! | The Beat.
From Ike’s point of view, why not? The single biggest financial contributors to Marvel’s bottom line are movies based on stories that are up to fifty years old at this point– seventy, if you count Captain America. Why should you bother creating anything new, when there’s so much to be squeezed from the old stuff?
Heidi also speculates that this may be to impress Disney and get Ike a seat on the board, now that he’s Disney’s single largest shareholder. What Ike doesn’t realize is that Disney already tried this tactic, squeezing every last drop out of their previously created works and riding on coattails. It was called “the seventies”. But Disney realized that it couldn’t go on forever, and that new properties had to be created, new stories had to be told. That required Disney to buy Pixar, which gave them access to some of the greatest visionairies on the planet, both the animators and Steve Jobs.
Jobs was an innovator. Perlmutter is an accountant.
It was Perlmutter’s tight grip on facts, figures, and accounting that got him control of the company from Ron Perelman and Carl Icahn, drag it out of bankruptcy, and build it to something that could be sold for four billion dollars. But really, you gotta spend money and get new fans sometime. DC’s new initiative and spike in sales should get Marvel worried.
It’s almost like you’re begging to be hassled by the 99%… or as we like to think of it, almost everybody else who works for Marvel.
Disney is generally pretty good about supporting the brands that support them, such as Pixar and ESPN. But if Perlmutter is keeping tight control and tighter purse strings, you have to wonder if Disney is getting the full news from the front line.
- Marvelcution 2011 – The Spinning Pennies Of Isaac Perlmutter (bleedingcool.com)
This news is less surprising than the articles I have read make up to be. It is very typical for corporations to institute cost cutting including lay-offs after they are bought out by another corporation. Perlmutter touted Marvel as a highly profitable enterprise, which inspired Disney to pay top dollar for it. To justify either the interest they are losing by taking those funds out or their cash, or the interest they are paying on money they borrowed for the purchase, they now have to increase the profit to cover their interest costs.
I'm sure everything written about Perlmutter is true, but what is left unsaid is Disney is likely putting a lot of pressure on him to make Marvel even more profitable. What he is doing is the only way he knows to achieve that end.
Whenever there is a buyout it is never good news for employees or cinsumers.
Most of Disney\’s cost cutting has been in back office areas like HR and licensing. It\’s rare to see an IP firm cut the IP creation costs, that\’s where they make the products that make their money. Compare how Disney treats Pixar, for example, and how Pixar allocates their resources.