Earlier this week, a story in Deadline sent shockwaves throughout fandom when it declared that the agreement between Disney and Sony regarding the cinematic use of Spider-Man had ended. According to their sources, Disney had sought to renegotiate the terms of the agreement which saw the Mouse House taking a paltry 5% of first run box office receipts, instead opting for a 50/50 split. The story stated that Sony had balked at this and had walked away, ending the partnership.

The actual agreement as it stands, is a bit more complex. As every true believer knows, Sony bought the theatrical rights to use Spider-Man and the villains and characters from his comics in movies in 1998 when Marvel Studios was looking for an influx of cash. In one of the biggest missteps in retrospect, they passed on also acquiring the rights to nearly every other Marvel character for a paltry $25 million.

I’m Not Feeling So-ny Well, Mr. Stark

Sony’s stewardship of Spider-Man has bobbed up and down like Spidey swinging through Manhattan. The first Spider-Man, starring Tobey Maguire in 2002 grossed $821.7 million in worldwide sales. Spider-Man 2 came in lower at $783.7 million. After production and marketing costs were subtracted, the two films brought in $200 million and $100 million in net profits, respectively. Spider-Man 3 brought in the highest box office to-date for the franchise, earning $890.8 million in 2007 which, thanks to Hollywood bookkeeping, back-end points and other costs, saw the studio pocket between $50-$100 million. While Spider-Man 3 was a commercial success, it was not a critical success and was not as popular with the fans as had been the first two. Studio interference and Spider-Man fatigue on the part of director Sam Raimi led to a cancellation of a planned Spider-Man 4.

Five years later, Sony decided to reboot the franchise with Andrew Garfield taking on the role. The Amazing Spider-Man once again rocketed to box office success in 2012 with a gross of $757 million, doing better than Brave, Wreck-It Ralph, The Hunger Games and Les Miserables, being bested by two other superhero films: The Avengers and The Dark Knight Rises. The sequel, The Amazing Spider-Man 2 took in $709 million, which was a disappointment, and while Sony netted about $100 million from the first, it broke even at best on the second.

With both versions of the franchise, Sony executives’ meddling in the production was cited as reasons for decreasing quality in the stories. In total, Sony invested a combined $1.5 billion to produce the five Spider-Man movies only to actually earn $500 million or so in final profits.

Spider-Man: Into the MCU

In 2015, the two studios renegotiated the agreement and this time, the roles were reversed. Marvel was in the middle of its successful Phase 2 slate of films, and Sony had just cancelled any follow-ons to The Amazing Spider-Man amid accusations that it had squandered the character – again. The resulting agreement allowed Marvel to bring Spider-Man into the MCU just in time for Captain America: Civil War, with Tom Holland donning the red and blue tights. He reprised his role as the Web Slinger in Sony’s Spider-Man: Homecoming which picked up shortly after the events in the previous movie. Not only were the Spider-Man films now integrated into the MCU, Marvel was making the films for Sony with Kevin Feige providing his producing services essentially for free on Homecoming as well as serving as co-producer on the next movie. Sony was covering the costs, and while Sony had sold Spider-Man’s merchandising licensing rights back to Disney for $175 million, Disney was making royalty payments to Sony for around $30 million a year. Reportedly, Disney tied the success of the Feige-produced movies to the amount of the royalty, with the royalty decreasing if the films performed well.

Homecoming grossed $880 million – second only to 2007’s Spider-Man 3. While the latest movie, Spider-Man: Far from Home is still playing, it has topped $1.11 billion and counting, making it Sony’s best all-time box office results, surpassing the studio’s previous record holder, Skyfall.

What’s the Real Deal?

Soon after the news of the split broke, Sony’s stock dropped rather noticeably, losing about half a percent on the day.

In the days following the announcement, Sony’s share price has continued so slide, down to $54 as of this writing.

Sony also issued a statement noting the mischaracterization in the Deadline article and elsewhere and blaming not Disney’s offer, but rather citing Kevin Feige’s busy schedule as a result of taking over X-men as not allowing him time to co-produce the two planned Spider-Man movies – with Tom Holland starring.

Much of today’s news about Spider-Man has mischaracterized recent discussions about Kevin Feige’s involvement in the franchise. We are disappointed, but respect Disney’s decision not to have him continue as a lead producer of our next live action Spider-Man film. We hope this might change in the future, but understand that the many new responsibilities that Disney has given him – including all their newly added Marvel properties – do not allow time for him to work on IP (intellectual property) they do not own. Kevin is terrific and we are grateful for his help and guidance and appreciate the path he has helped put us on, which we will continue.

Sony’s official statement on Disney’s involvement with future Spider-Man projects

What has since emerged is far different than the “greedy Disney” narrative. According to multiple sources, Disney wanted between 30% to 50% of the receipts, but it was also willing to co-finance for a similar amount of the costs. And, Feige would continue to be involved, continuing a partnership that has greatly benefited all involved.

It is believed that Sony is the party that released the news of the split as a way to control the narrative before Disney could respond. Sony’s success with Venom as well as Into the Spider-Verse has allegely led Sony senior management to believe that they can go it alone with their Sony’s Marvel Universe. If Sony has not truly learned everything they need to know from Feige, as is alleged, then they may be setting themselves for another collapse of the franchise.

Or, this could all be part of the bare-knuckles, high-pressure negotiation between two powerful studios over how much of the big bucks each gets. Sony Pictures chief Tom Rothman is known as a hard-driving negotiator and this may be part of an effort to have Disney make concessions. Absent Feige, it falls on producer Amy Pascal to produce Spider-Man films with the same energy and impact as those overseen by Feige.

It takes 15-18 months to get a movie from pre-production through scriptwriting, filming and post production before it hits the big screens. Sony will be spending a lot of money during that time and desperately needs to ensure that they can repeat the success of Homecoming and Far from Home on their next movies or risk losing the goodwill and cachet that has come from being part of the MCU.

At present, Spider-Man is Sony’s most valuable IP and with the Web Slinger comes his rogues gallery of villains, who, like Venom, can be the center of their own films. Among the Big Five of Hollywood Studios, Sony’s revenue is the smallest, leading only money-losing Viacom/Paramount, which has recently announced that it will be folded into ViacomCBS. In 2018, its numbers were weaker than those of 21st Century Fox which, of course, was taken over by Disney this past March. Sony is even more vulnerable to the same forces that saw Rupert Murdoch leave the film industry. Netflix, Amazon, or even Apple could find Sony’s library and assets worth acquiring. If so, the rights to Spider-Man will revert back to Marvel. If MCU-less Spider-Man films underperform, that will have a deep impact on any sale price, let alone the current price of the stock.

Both studios have a lot of incentive to continue the partnership. While this may truly be a divorce, it also possible that this is just a move in a larger gambit.

Stay tuned, true believers, for the next exciting episode!

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