Despite this venture making a whole lot of ``Spidey sense,'' shares of Marvel were virtually unchanged last week.

On Wednesday, both Marvel and Sony Pictures held a kick-off presentation in California, an event including more than 400 potential licensees, agents, promotional partners and retailers. The two companies will share the revenues and have divided responsibilities by category; Marvel manages among other things, master toys, apparel, accessories, and collectibles, while Sony manages back-to-school, food and beverage, party and sporting goods, ancillary toys and video games.

The joint venture came on the heels of two other key licensing announcements. On April 20, Marvel entered into a multi-year international licensing agreement with Leisure Concepts, a subsidiary of 4Kids Entertainment, to develop licensing opportunities for several of Marvel's superhero franchises and to awaken Marvel's international presence. Leisure Concepts is best known for its success with Pokemon.

Subsequently, Marvel and 20th Century Fox announced a partnership with Toysrus.com to launch an official online store for X-Men licensed products, including collectible action figures from Marvel's Toy Biz division. What's more, the site will offer movie trailers (Fox releases the movie on July 14), and exclusive content including character biographies and cyber comics.

Now with the Marvel-Sony joint venture, Marvel's licensing momentum should really build over the next several months. Marvel Chief Executive Peter Cuneo told individualinvestor.com that he expects Spider-Man's licensing revenue to be triple that of X-Men (expected to be as much as $10 million) and the majority will be reaped this year.

In addition, Cuneo thinks the X-Men movie could generate as much as $75 million in related toy sales. And Marvel is expected to generate revenues from a separate set of licensing deals relating to its upcoming X-Men animated television show on the Warner Brothers Kids Network.

But investors who have pinned their hopes of a higher share price solely on the X-Men movie buzz are missing the bigger picture. Marvel has a new look. It's not just about comic books anymore. Management, through a focus on turning Marvel's characters into feature films, is working to develop some real synergies among all the company's businesses including licensing, toys, publishing, and most recently, the Internet.

By the time that the rest of the Street realizes the value to be unlocked in Marvel's shares, we expect they will be trading much higher. With a Spider-Man movie on the horizon for 2001 and several related licensing deals expected for it this year, there are just too many catalysts to ignore.

Marvel is expected to report its first quarter results on May 10

Source: Individual Investor Online

[Posted 5/08/2000]