Putting Out a Fire: Is Warner Selling DC to Marvel?

As AT&T’s attempt to figure out how to run Warner grinds along, there are a great many rumors in the air, some going back as far as 2016, about the Warner monolith possibly being broken up and sold off in pieces, or some other massive restructuring for a variety of reasons. Those rumors got another boost this week from two sources: First, the garbage tabloid clickbait site CosmicBookNews (not going to link to them; they’re ComicsGaters) reported/invented the story that Warner is going to shut down DC Comics and “farm it out” to Marvel/Disney, according to professional troll Ethan Van Sciver and “somebody high up at DC” who is probably imaginary. Then Dan DiDio made a sudden and apparently involuntary departure from his position at DC, fueling endless speculation and fanboy conspiracy theories. Variations on the question “Is Warner selling DC to Marvel” have been popping up on Quora and Reddit for a few days now.

So it seems like it’s up to me to clear up a few misconceptions.

As to this notion that Warner is selling DC to Marvel. Given that even the clickbait article I mentioned earlier didn’t actually claim that, I think it’s safe to say that’s not going to happen, but first let’s nail down what that might mean. It seems a lot of people have the impression that this means DC will shut down the comics division and sell the characters to Marvel; then the Justice League will pal around with the Avengers in one big happy unified Universe. Others suggest that Warner also wants to sell off the movies and merchandising, just split off all of DC Entertainment and sell it like a used car on Craigslist.

So what are we talking about? First, some numbers: The bulk of profit DC generates does not come from the comics. In fact, the comics are a pretty minor consideration. After the movies and TV shows, the big money in superheroes comes from licensing. Batman brings in $494 million, and Superman follows behind at $277 million. If you add in the merch sales for Wonder Woman, Flash, and Harley Quinn, you’re talking about at least a billion in revenue every year, not counting the movies, TV shows, cartoons, and comics.

If you add in the revenue from movies and other media, Batman has generated over $28 Billion for DC/Warner. For context, that’s twice what Looney Toons has produced, and Looney Toons is the core of the Warner brand.

I doubt Warner or AT&T is dumb enough to casually throw away all that revenue when comics is the only part that isn’t working.

There is a second reason why Warner still publishes DC Comics, even though there have been noises about them ceasing publication since the 1970s (see Comic Book Nation: The Transformation of Youth Culture in America; there’s a section that talks about them discussing it prior to hiring Jeanette Khan as publisher); character names and concepts can’t be copyrighted. Only the actual comics published are protected by copyright; the costume designs, names, and logos are protected by trademark law. But where copyright has a fixed term, usually 95 years for comics, trademarks expire if not used in commerce for at least three years. If nobody is licensing a character, like, say, B’wana Beast, putting him into an issue of Animal Man is an easy way to keep him viable in case somebody wants to use him. Comics are basically a self-funding incubator for new I.P. and a trademark farm.

But suppose Warner decides they don’t want to publish comics anymore. They decide to shut down the DC Comics office and fire all the staff; what then?

Based on what other companies have done, there is an obvious answer: they license their characters to another comics publisher, like, for instance, IDW, Dynamite, Boom!, Ape Entertainment, Image, Dark Horse, Papercutz, etc., and give them permission to publish DC Comics. End result: There are still DC Comics on the racks, most likely still written and drawn by the same people who were doing it before, only now there’s a second logo on the cover. Warner is making money off it, and Marvel is still their competition.

That’s what will happen. The DC characters are worth millions in sales of T-shirts, bedsheets, lunch boxes, action figures, video games, Funko Pops, Fruit Rolls, and a million other licensed products. There’s no good reason for Warner to sell off those valuable properties, and if they did, I doubt they would want to sell to their major competitor. If they switched focus from generating content to licensing, their profit would increase and costs would go down. That’s why Marvel considered doing it in the ’90s.

And I seriously doubt that Disney wants them. Remember all that licensing revenue I talked about before? Yeah, Spider-Man pulls in about $1.3 billion a year to Disney’s piggy bank, and that’s with the bulk of the movie money going to Sony. The rest of the Avengers rack up lower amounts, but higher than most of the DC characters who aren’t named Batman or Superman. Disney is not in the business of buying licenses. They sell them. There is no reason they would want to publish licensed DC comics. The profit margin of being a licensee in comics publishing is too small for them to waste time on, when they can make a lot more money by repackaging their own comics in a hundred different ways. And of course Warner would never want to license their comics to Disney, not when they can get a better licensing deal from a smaller, hungrier, comics-focused company like Boom! or IDW. Disney would push for (and get) a far more favorable agreement than a small company like Ape Entertainment or Viper Comics would be able to get.

Of course, the big concern for the fanboys is not monopolies or the increasing consolidation of media in ever fewer hands. No, they just want more DC-Marvel crossovers. I have some bad news:

The days of Marvel/DC crossovers are gone.

The last time they did one, Marvel was an independent company and DC functioned with total autonomy within the Warner conglomerate. If the two wanted to do a DC vs Marvel mini-series, or Superman vs. Hulk, or whatever, all they needed to do was have one editor-in-chief get the other on the phone, they work out the details, and it’s a go.

Today, Marvel is owned by Disney, and Warner has reorganized the company to create a vertically-integrated silo called DC Entertainment, which puts the comics, TV shows, movies, animation, consumer products, licensed Merchandise, etc. under a WB executive.

What that means is, the editor-in-chief no longer gets to say “hey, let’s do a crossover!” That conversation would now happen between senior executives and entire buildings full of lawyers at Disney and Warner, and would mostly involve extensive negotiations about reprint rights, use in other media, merchandise, branding, and a hundred other topics having nothing whatsoever to do with the story. Add in a licensee trying to do it and it all gets even more complicated.

Everyone at Disney has already acknowledged that it would be impossible to make a sequel to Who Framed Roger Rabbit? because of major changes in intellectual property law, policies, licensing agreements and corporate philosophies, and Roger Rabbit does not present 1/10th the complications of a DC/Marvel crossover.

They learned from the previous crossovers. Reprints have to be negotiated and tie-in merchandise is a hassle (where are the paperback versions of the Amalgam Universe? Where are the action figures?), and the comic by itself, which can’t be recycled into a movie or TV Series, does not produce enough profit to make it worth doing.

Even if Warner outsourced their comics publication business to a licensee, all those contracts and impediments will stay in place. It’s a non-starter.

And that’s why Warner is not selling DC to Marvel.