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Disney, Sony Ink Deal, Spider-Man Still in Marvel Universe

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Disney (DIS - Free Report) recently announced a renewed deal with Sony for the third Spider-Man film to be produced under Marvel, which is slated to hit theaters on Jul 16, 2021.

Additionally, per Reuters report, the popular Spider-Man character will appear in future Marvel Studios films. However, the terms of the deal were not disclosed.

Currently, Sony has the rights to the web-slinging superhero character.

Per a Variety report, Disney proposed to co-finance 25% of the above Spider-Man film in return for 25% of the film’s profits.

Notably, the companies fell apart following the tremendous global success of the previous cross-studio partnership of Spider-man series. Per a Deadline report, Sony declined Disney’s proposal in August for a 50-50 co-financing deal to split production costs and profits equally.

 

Intensifying Competition Concerns  

With increasing competition from the likes of Netflix (NFLX - Free Report) , Apple (AAPL - Free Report) and other Silicon Valley players, traditional media companies like Disney, Comcast (CMCSA - Free Report) and CBS are strengthening partnerships with peers to strengthen their content portfolios.

Disney continues to increase viewership with its ongoing effort to bring as many Marvel characters into its fold. Per a CNBC report, the company gained control of X-Men catalog of heroes and villains, Deadpool and The Fantastic Four by acquiring Fox for $71 billion in March.

Sony’s deal comes at a crucial time for Disney. Marvel’s Phase Four follows up on the end of the Infinity Saga. It is also expected to heavily rely on Spider-Man as portrayed in the storyline so far.

Additionally, Disney’s fan base has been tremendously impacted as Marvel bade goodbye to its most popular characters like Iron Man and Captain America in Avengers: Endgame, which earned $2.79 billion and became the highest-grossing film of all time. Newly introduced super-heroes such as Captain Marvel and Black Panther will gain popularity among fans only in due time.

Moreover, a previous win-win deal between the two studios, which brought Spider-Man to the Marvel Cinematic Universe (MCU), resulted in two successful Spider-Man movies starring Tom Holland.

Notably, Spider-Man: Homecoming, released in 2017, brought in Marvel character Iron Man played by Tony Stark and grossed $880M globally. Additionally, per a Fox Business report, Spider-Man: Far From Home released in 2019 has become Sony's highest-grossing film and generated revenues of $376.7 million domestically and $730 million internationally, totaling $1.109 billion globally.

Disney’s Marvel Lineup to Rescue

Disney has produced and distributed 16 of the 23 MCU movies to date. Per another CNBC report, the company has earned more than $18.2 billion on the films at the global box office since the first Disney-produced Marvel movie in 2012.

Marvel’s confirmed movies until 2021 include The Eternals, Shang Chi, Doctor Strange in the Multiverse of Madness, Black Widow and Thor: Love and Thunder to name a few.

However, Disney’s bottom line is expected to decline in the near team as it continues to spend heavily on its streaming TV future in face of competition from Amazon, Netflix, and Apple TV+.

Marvel’s television series lineup for Disney’s streaming service Disney+, which is scheduled to be launched in November, includes titles like The Falcon & Winter Soldier, WandaVision, Loki, Hawkeye and What If?, is an animated series featuring characters from MCU.

Currently, Disney has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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