F Andhra Entertainment : Disney's 'The Avengers' a winner for Paramount too

Disney's 'The Avengers' a winner for Paramount too

By sy on 12:56:00 PM
Walt Disney's (DIS.N) blockbuster "The Avengers" has five superheroes and record ticket sales. It also has a silent partner in Viacom's (VIAB.O) Paramount Pictures, which stands to get a healthy payday even though the studio didn't spend a cent to produce or market the film. Paramount already collected $57.5 million in April, when the film was released internationally. And it stands to collect 8 percent of the millions that the film will earn in theaters, on DVD, and when it is watched on the Internet, according to two people with knowledge of the deal. Under a 2005 distribution agreement between Paramount and Marvel, Paramount receives a distribution fee for the theatrical distribution of "The Avengers" as well as its distribution of its home video, Internet and TV rights. That agreement transferred to Disney, when Disney acquired Marvel for $4 billion in 2009. Disney and Paramount agreed in 2010 to amend that agreement, giving Disney the rights to distribute Marvel-produced "The Avengers" and "Iron Man 3," the second sequel to the 2008 film that Paramount distributes. That agreement stipulated that Disney would pay Paramount a $115 million advance against future fees that Paramount would have earned. Half of that fee was paid when Disney released "The Avengers" in international markets. Spokesmen for Disney and Paramount would not comment. Paramount does not have rights to merchandise from the Marvel movies, and Iger told investors after the deal closed that he signed the getting the movie rights allows he to rev up Disney's marketing machine. "Not only will we distribute it and market it, but we know that Marvel is working really hard with the cooperation of a number of entities at Disney to turn The Avengers into a true franchise," he said on the earnings call. Studios and theater owners generally split ticket sales 50-50, meaning that Disney has collected $320.9 million based on "The Avengers" $641.8 million in worldwide ticket sales. Paramount's $25.7 million take would be applied against the pre-paid fee from Disney. The two sides also agreed that "The Avengers" would appear on the Epix online and premium TV service that Paramount owns with Lions Gate Entertainment (LGF.N) and the MGM studio. That's a big boost for the nearly three-year-old channel. Disney is obligated to show most of its movies on the Starz pay channel. How large Paramount's take will be depends on how big a hit "The Avengers" becomes. The deal gets even better for Paramount in 2013, when Disney is scheduled to release the third Iron Man. Paramount will get 9 percent of the money that film will generate.

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