Big numbers hit an operatic limit as the gamble of a decade pays out. Fans, investors and advisors alike can’t afford to hang around for the credits scene.
Like Iron Man says, it seems like a thousand years ago when what initially looked like a normal summer action movie turned into an epic $20 billion enterprise.
Back in 2008, of course, the collapse of business as usual on Wall Street obscured the early ambition that drove the Marvel cinematic saga. The intervening decade changed a lot of assumptions about natural scale, sustainability and how human careers fit into the big picture.
Yeah, we’re just talking about comic book movies, aren’t we?
But Marvel’s ramp to the stars is worth a little pondering. After all, it’s how we live now until something even bigger and better comes along.
Institutional Power
The people who star in these movies lock in both huge per-film paychecks and long-term career visibility.
When you have even a rough map of your next decade, you don’t need to audition for every role that comes your way. You aren’t perpetually hustling.
Chris Evans knew he’d be Captain America for years to come. Hemsworth, Downey, Jackson, Johansson and everyone else were locked into series contracts that easily translated into $60 million careers.
That level of stability is extraordinary in modern Hollywood much less the broader gig economy, where jobs come and go with the wind and it’s up to us to fill our working lives.
Even pro athletes don’t get that because if they get hurt on the field, the golden contract reverts back into paperwork. No play, no pay.
The average CEO only spends five years in the chair before moving on one way or another. Admittedly, that’s often a career-ending position, but when Robert Downey Jr. wakes up and has a longer-term life plan than most corporate powerhouses, it’s extraordinary.
Of course Downey just turned 54. If he wants to, he can retire now just like any highly compensated executive and live in extreme comfort for the rest of his life.
In a real sense, he was an officer of Marvel Incorporated. Not formally, but in all the ways that matter to the bottom line.
He and his co-stars weren’t just showing up to a film shoot any more. They spent the last decade serving an institution.
And that institution got big enough that their lives took on institutional scale. There’s easily $10 million a year available for keeping Downey happy, healthy and motivated enough to go from sequel to sequel.
That’s enough to hire and, in turn, motivate a world-class support network. In fact, having the finest doctor, accountant and PR team available on call for all the Avengers would probably only cost a sliver of the overall budget.
In that scenario, the people who play the super-team on screen become a kind of ultra-high-net-worth dynasty and the studio provides something like a family office. Call it Operation: Jarvis.
It’s not a profit center for the studio. As much as these movies cost, it’s not even really a cost center. It’s a risk management tool, insurance that the franchise would achieve its ten-year goals and get to the end of the story.
Again, that’s an institutional approach. Individual stars and executives rarely think that way. Only Disney in the aggregate, all the executives coming to consensus about the best moves for the corporation as a whole, could sustain that level of focus.
Think about it. Directors on these movies came and went. Crew did great work in their departments but the series was simply too big for any of them to assert ownership or responsibility for the entire project.
Even the characters required specialist knowledge to differentiate without a scorecard. What really separates a Hulk movie from a Thor movie is the nerd nuances. From the institution’s point of view, they’re both just squares on the calendar and zeroes behind dollar signs.
At the end of the decade, only Disney could have welded together 22 movies, many inherited from other studios with different creative visions, into a single proposition: spend about $6 billion along the way and capture $22 billion in return.
The payout gives the institution the leverage to get even bigger. And along the way, it creates quasi-institutions around the top talent.
The guys who directed the Avengers installments, for example, aren’t just independently wealthy now. They’re building their own movie studio and courting $350 million in Asian seed funding.
They’ve crossed the institutional line like any UHNW founder who parlays a huge personal payday into a venture capital role, picking which outside ideas to incubate and which to ignore.
That rarely translates directly into the advisory business unless you find a way to multiply your personal capacity (automation, new delivery systems, new certifications) or simply force enough assets together to compete with the legacy networks.
We’re rarely the institution. But we can reach for smart roles within the overall franchise.
Secret Origins of the Super-Stocks
As a comic book company, Marvel was always a house built more on ideas than hard dollars.
The product was an ongoing dream sold mostly to the young at heart. It gave the people who produced that dream a way to pay the bills.
Very few people got rich. Even Stan Lee didn’t get incredibly rich by modern standards. The offices weren’t luxurious. The real thrills were all printed on cheap paper. It was enough.
Even the box office blockbusters were a lot smaller. Iron Man was considered a triumph for simply earning back double its $140 million budget domestically and then doubling that gross overseas.
A decade later, that wouldn’t even rate an Ant-Man buzz. But the numbers scaled well enough that Disney saw the potential.
The Marvel rights were scattered across multiple studios, where they largely failed to live up to what we now know is their real potential.
So Disney started buying, leveraging the balance sheet in order to build a unified bundle that culminated in the $4 billion outright purchase of Marvel itself.
Ordinarily I’d say that price was too high. It made the owners at the time happy but didn’t transform their lives.
From an immediate year-to-year perspective, it looked like a disaster. Only after a decade does the math add up: $4 billion in 2009 in order to facilitate $20 billion in revenue.
Whether that revenue ends up technically profitable on any particular timeframe is beside the point. The institution realized a unique opportunity to create cash flow, making shareholders happy year to year and making a lot of people money in the meantime.
Marvel remains the tail that wags the big Disney dog, of course. The institution took in $60 billion last year alone, so even a $2 billion blockbuster doesn’t change the game on its own.
Again, the innovation here is long-term clarity. Box office numbers vary but a Marvel movie reliably generates at least $700 million in global revenue. Two a year is around $1.5 billion.
The movies aren’t cheap but they provide a base for building quarterly results around. They’re practically an annuity with the potential for bringing in more money when they truly do well.
No Hollywood studio can count on anything like that, except in the franchises. And what Disney has done is tap that reliable cash flow to consolidate other franchises like Star Wars as well as studios like Fox.
It’s what institutions do. It’s how they evolve.
Harder, Better, Faster . . . Forever?
But every franchise and every institution ultimately hits a mathematical limit.
Harry Potter was huge a decade ago. While the property is still active, the prequels literally don’t have the same magic.
Likewise, Star Wars was revolutionary in its time and changed life for George Lucas, but the theme parks make Disney more money in 7 weeks than the last spinoff movie made in a year.
In the unlikely event that this goes viral, we’re not making an artistic judgment for or against the spinoffs or sequels. Love them or don’t. This is about the math.
When a franchise ends, the institution needs to keep going or ultimately it dies too.
The Avengers as we know them have finally played out their Endgame. The next phase will be different. Maybe it has the same magic, better or none at all.
The people inside the costumes change. Human beings and our careers have limits too. It’s going to take a lot of money to bring Chris Evans or Robert Downey back.
Sooner or later, they won’t come back. The characters can live on, but at this point, the environment they inhabit needs to work awfully hard to replace them.
If Downey didn’t work out as Iron Man a decade ago, it was no problem. The Hulk never worked out as a solo series either.
But back then, budgets were smaller and so were expectations. None of these movies needed to work as hard, fill so many seats, deliver the same percentage increments.
And the easiest and most iconic characters have already been played. Call me when they work their way to Dr. Druid.
Disney and Marvel together were a bondlike instrument over the past decade. Now the risk of default has edged a little higher.
On a human scale, the scale on which we operate, it doesn’t really matter. The bond matured and now it’s time to think about where to roll it over.
Our needs have changed over the last decade. The world has changed. We’re a long way from the 2008 crash. Surviving institutions have gotten bigger. The people with the biggest financial footprints now walk like institutions.
Bob Iger famously makes as much as 1,000 Disney employees put together. After all, they're his employees.
He earned $66 million last year. The stock created $80 billion in wealth. Bridging these dramatic shifts in scale has become a full-time job for a lot of people. Maybe Ant-Man needs more respect after all.
Where do you want to go? What ambitions are left unachieved in your career and your clients’ lives?
I think it gets better from here if you want to reach for that. You can achieve something like institutional stature — if not in your life, then in the next generation.
Or if that’s not what you want, it’s okay. Annuitize your practice and lock in clarity.
Either way, like the trailer says, the best that we can do is start over.
