Disney’s Deal Leaves Paramount Worried
August 31, 2009 by Mark Ellis
Filed under Business
Disney’s recent decision to purchase Marvel Entertainment certainly was not meant to cause harm to Paramount Pictures, which is owned by Viacom, but the deal may end up posing a significant problem for Paramount. The worry stems from a one-year film distribution deal that Paramount formed with Marvel, one that Disney does not plan to extend.
The deal gave Paramount the right to distribute Marvel’s next five films, which includes “Iron Man 2,” “The First Avenger: Captain America,” and “The Avengers.” While the deal will not end prematurely, it will leave Paramount vulnerable at the end of the one-year period by stripping it of an important source of revenue.
In addition to Marvel, Paramount had, in the last few years, become reliant on Steven Spielberg’s DreamWorks SKG studio and the separate DreamWorks Animation SKG to produce their movies for profit, but DreamWorks SKG was eventually able to find independent financial backing. The dissolution of the deal with Marvel at the end of a year may leave Paramount Studios with only DreamWorks Animation SKG to rely upon.
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