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Jewish World Review May 14, 2002 / 3 Sivan, 5762

Martin Sieff

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The comic book wars
and the free market | The Promethean struggle between Ron Perelman and Carl Icahn for control of the Marvel Comics Group and the corporation that owned it automatically appears to lend itself to metaphors of excess, heroism and villainy as oversized as the characters in the hit movies "X-Men" and "Spiderman."

But it is also -- and more importantly -- a fascinating example of the volatile ups and downs of free-market capitalism as it was played in the heady bull boom era of the Clinton 90s. Veteran, award-winning CBS correspondent Dan Raviv recognizes the appeal of the metaphors but also wisely focuses on the financial and legal action in his fascinating page-turner, "Comics Wars".

Some reviewers have expressed disappointment that Raviv focused primarily on the legal and financial maneuvers with which Perelman, the Asset Stripping Emperor and Icahn, leader of the Bond Predator Shark Pack. This is certainly a book far more for readers of "Fortune," "Business Week" and the "Wall Street Journal" than of the "Fantastic Four", "Daredevil" and "The Incredible Hulk." But it abounds with more moral lessons than any multi-issued "X-Men" epic, and while Raviv refrains from glib judgments, he impishly slips in many highly entertaining and apt comic book metaphors by using pages from many Marvel comic books to introduce every chapter.

A business battle over a comic book and toy empire would seem at first glance a strange subject for the co-author of major, respected and influential studies on the U.S.-Israel alliance -- "Friends in Deed" -- and of the Israeli Mossad Secret Service -- "Every Spy a Prince." But it proves more convoluted and at least as dramatic as any of the political and espionage intrigues Raviv has exposed before.

The struggle brought one of the legendary entertainment corporations of the last 50 years -- a $3 billion behemoth -- to literal collapse and into the clutches of Chapter 11. It ruined or disrupted hundreds of lives. The tragic premature death of one of Marvel's most beloved writer-editors, Mark Gruenwald, in his 40s from an unexpected heart attack was widely blamed by his friends on Perelman's maneuverings and wildly disastrous cost-cutting plunges. And as it developed, the eerie sense grew among observers that what began to both Perelman and Icahn as just another asset to strip, restructure and plunder became an existential metaphor that entangled and ultimately scarred them both.

The Battle of Stalingrad started as a minor flank clearing operation for Adolf Hitler no different from hundreds of others during the three years he conquered Europe. Similarly, Perelman, the billionaire heir to the Revlon cosmetics empire, at first was convinced that his 1989 acquisition of Marvel Entertainment was just another opportunity for "business as usual."

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And business at first proved to be very good indeed. In the halcyon years of the roaring bull 90s, the financial worth of Marvel on the stock market multiplied nearly ten-fold in two years. A flood of new titles, especially spin off "X-Men" and "Spiderman" releases, broke million-sales barriers. Comic book circulation soared to levels not seen in half a century since millions of GIs devoured them every month in World War II. And the floods of money pouring in were beyond anything that the industry had known during either of its previous peaks back then and in the "Silver Age" 1960s.

Hundreds of thousands of collectors even bought multiple copies of supposed "historic" new first issues believing their prices would soar as astronomically as those of old 40s and 60s ones have. A pristine copy of "Amazing Fantasy" No 15, the now-legendary August 1962 issue that introduced "The Amazing Spiderman," sold at the time for 12 cents. It is now worth $20,000.

But of course it was a speculative bubble, as bizarre in its commodity as the Dutch Tulip craze of the early 17th century or the South Sea Bubble mania that swept England in the early 18th century. And it followed the same inexorably predictable rules. Sooner rather than later, the bubble always burst. From 1994, comic book sales plunged and Marvel Entertainment revenues plummeted with them. By the end of 1996, Marvel's stock price, which had once peaked at $35, was down to $4.50. The following year, it plunged to $1.

Perelman, all too predictably, had assumed that the good times would last forever, or at least much longer. He had gobbled up new purchases like Fleer trading cards and the Toy Biz corporation of Israeli-American entrepreneurs Avi Arad and Ike Perlmutter. But far from proving the magic financial carpets to lift Marvel and Perelman out of the gaping jaws of Business Hell, they proved extra weights to pull the company down faster.

Fleer's business crashed too when the 1994 baseball strike destroyed a generation of American kids' passion for trading cards of their no longer pristine baseball stars. It would take the sainted wings of Cal Ripkin Jr. to restore the glow of pure and youthful innocence to America's summer pastime. Toy Biz offered better prospects, but Perelman did not have the slightest idea what to do with it and drove Arad and Perlmutter mad as he plunged in ever more dubious and doomed stock manipulations instead of trying to solidly rebuild his companies.

In 1997, Icahn, the marauder who scavenged TWA, Trans World Airlines, entered the scene. He clearly saw himself as a knight on a white horse riding to the rescue of Marvel's shareholders, if not their comic book heroines. But as Raviv tells the story, Icahn and Perelman appeared all too much alike. They were not white- and black-hatted heroes from Marvel's modern day myths so much as two monstrous and even bewildered dinosaurs from a long past era transported onto the teeming and sophisticated streets of modern day Manhattan.

And like those monsters from the 1950s horror comics that Marvel -- then known as Atlas -- churned out for years, the dueling billionaires appeared simultaneously unsympathetic and doomed. If they were "Spiderman" villains, Icahn would be a cert to become the Green Goblin. Perelman would have to be Doctor Octopus.

For Perelman, Marvel was not the symbol of childish dreams or fondly remembered youthful idylls but merely another platform to manipulate his creditors and sell his junk bonds. For Icahn, Marvel was a trophy he had to have just because Perelman had it first.

In classic comic book terms, Raviv does indeed have his white-hat heroes: Arad and Perlmutter. It is difficult to believe in the innocence and idealism of anyone on Wall Street or in Hollywood, especially when they are being brashly presented as such. But the fact remains, if Perelman and Icahn represented not just the destructive but also the incompetent and wasteful face of free-market capitalism in this drama, Perlmutter and Arad represented its creative resilience.

After they finally won control of Marvel after the Perelman-Icahn wars, they rebuilt the comic book side of the business from scratch by the time-tested unfashionable old method of hiring and backing excellent creators to actually produce the comics. Sales stabilized and then recovered. Simultaneously, they patiently navigated the hideous mess that decades of Marvel executives had made of running the movie side of the business -- chasing cheap, quick bucks while entangling their most lucrative franchises in endless copyright and licensing jungles.

Their faith and perseverance paid off big time. "X-Men" a couple of years ago grossed more than $150 million in the United States alone and was Marvel's first truly big comic hero movie hit. "Spiderman" now looks set to exceed that gross within its first two weeks. If it has legs, it may bury "Star Wars: Chapter II: Attack of the Clones" and suck in more profits than any movie since "Titanic."

As Raviv pithily concludes, "Captain Marvel (is) Back from the Dead." But what a roller coaster ride he had on the way!

Martin Sieff is a UPI Senior News Analyst. Comment by clicking here.


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