Why The Avengers Success Means A Big Payday For Paramount

By Eric Eisenberg 2012-05-07 17:22:15discussion comments
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While watching The Avengers this past weekend you might have noticed something strange: the Disney logo was nowhere to be seen. Despite the fact that the Mouse House is now the studio that distributes, markets, and owns the Marvel Studios films, the movie begins with logos only for Marvel and Paramount. While it's not too hard to figure out why Paramount was in some way involved (they previously distributed the Marvel movies and started the development on The Avengers), the real surprise is that, despite having practically nothing to do with the production, Paramount is going to be getting a taste of the box office returns.

Deadline has the details on the deal and says that it all has to do with the fact that both The Avengers and Iron Man 3 were in development when Disney purchased Marvel back in 2009. As part of the contract, Disney agreed to pay Paramount an advance of at least $115 million that would be paid out when the two aforementioned films hit theaters. But there is a reason why I said "at least." But there's a reason I said "at least." The site says that Paramount has a distribution fee on The Avengers of 8%, meaning that if the 8% ends up being more than $115 million then they will get that total instead (meaning the film would have to end up grossing $920 million at the box office, which is actually likely). For Iron Man 3 it's a slightly different deal, as it will be 9% instead of 8%.

This may seem like an excellent scenario for Paramount, but the truth is that Disney is likely more than happy to pay any price. The excitement over The Avengers isn't going to die this weekend, as movie-goers are excited for more and more superhero/comic book movies. This means that Disney is going to be getting a TON more money from the deal for Marvel that will pay off for years to come. It's the ultimate investment and it's working out perfectly.
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