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Somewhere, Jack Kirby is Laughing
Excerpt from ¡Journalista! for March 19, 2007
(Note: Red text indicates a dead link.)


"PICK OF THE WEAK is Civil War: The Confession, which was just unnecessary -- I was listening to one of Brian Bendis's Wordballoon podcasts the other day, and he was talking about the misconception in his eyes that Marvel has contempt for the their audience. He said that the opposite was true, and that everyone involved in the company is really trying their hardest on what they work on, because they're very conscious that people are paying money for things that have their names on them... If only that was obvious in the books themselves, you know?"
- Graeme McMillan


A spectre is not haunting Marvel Entertainment: the prospect that "Stan Lee Media" will successfully exercise a 1999 agreement with Stan Lee transferring "rights" to such characters created for Marvel as Spider-Man and the Incredible Hulk. You need not even be a laymen to realize that the facts of the case -- such facts as are available and not contradicted by credible allegations -- simply don't allow for the possibility. It's simply not going to happen.

Not that you'd know it from the barely researched news stories floating around, mind you. Take, for example, David B. Caruso's widely disseminated Associated Press report:

The suit was filed Thursday by Stan Lee Media, an Internet publishing firm co-founded by Lee that went belly up seven years ago amid a stock manipulation scandal.

Now emerged from bankruptcy under new ownership, the company claims Lee signed away the rights to his creations in 1998 in exchange for salary and company stock, then valued at $100 million.

The company claims the agreement entitles it to 50 percent of the many millions of dollars Marvel made licensing comic book characters for blockbuster movies.

Sounds legit, right? But it isn't; there are several gaping holes in this story, not the least of which being that Stan Lee almost certainly didn't have possession of said rights when Stan Lee Media was formed.

To understand what's going on, let's go back to late 1998, when Isaac Perlmutter. owner of both Toybiz and Marvel (which the former acquired during the latter's Chapter 11 reorganization), voided Stan Lee's contract with the company and offered him one that was considerably less lucrative, cutting Lee's $1 million/year salary in half and changing the duration of his contract from "lifetime" to two years. Not happy with this turn of events for obvious reasons, Stan Lee renegotiated the contract, acknowledging on paper that the work he did for the company was work for hire and, in exchange, gaining 10% of residual profits from the use of said characters in other media, excluding licensing fees. Investigating the events for a report in The Comics Journal #269, then-news editor Michael Dean wrote:

Though Lee has publicly acknowledged that his Marvel characters were created (with various artists) as work for hire and therefore owned by Marvel, a challenge to that ownership would have seriously undermined the company's standing in financial circles. For that reason, [Peter] Paul argued that Lee's post-1998 contract guaranteeing him a 10 percent share in Marvel's movie profits should be seen as a form of royalty payment on Lee's share of the Marvel conceptual universe.

That passage is as close as we shall ever again come to the concept of Stan Lee "owning" part of the Marvel universe, and it's obvious that this stretches the truth even as a metaphor. The whole purpose of Marvel signing the agreement, after all, was to once and for all nail down even the slightest perception that Lee's work in creating said conceptual universe was anything other than work for hire. In exchange, Lee gained what looked fairly dubious at the time -- 10% of the profits from derivitave uses of said characters in other media -- but would later prove to be potentially quite lucrative indeed.


I have no idea where I found this photo, or who took it, but I've got a bunch like this. (Be glad I didn't use the one where the Flash is giving Spider-Man head...)


Give the devil his due: According to a news report by Michael Dean in The Comics Journal #267, the agreement between Lee and Marvel was finalized on November 17, 1998. "Stan Lee Media" actually has several founding dates: According to an SEC filing recorded in a private EDGAR database maintained by a San Francisco firm, "Stan Lee Entertainment" was first incorporated in Delaware on October 13, 1998; it was merged with "Stan Lee Media" on April 14, 1999; and on July 23, 1999 the resulting company merged with Boulder Capital Opportunities. (It's here that the words "Stan Lee Media" first appear in the actual record of SEC filings for the company; all filings prior to that in ther official EDGAR database refer only to Boulder Capital.) Since Stan Lee Entertainment predates the Lee/Marvel agreement by several weeks, it is possible that Lee's "intellectual property" had already been invested in the company prior to said agreement, but it's just as likely that the original incorporation was little more than a placeholder meant to establish the bare bones of the corporation to come. In his report for TCJ #269, Michael Dean quoted Arthur Lieberman, the attorney instrumental in negotiating Stan Lee's contracts with both Marvel and SLM:

The "intellectual property" refered to in Lee's SLM agreement, Lieberman said, are the rights to Lee's name, image and signature slogans, as well as any characters or concepts created by Lee independently of Marvel.

Those signature slogans included "Stan Lee Presents," "Excelsior!" and "Stan's Soap Box," all of which Lee had negotiated with Marvel for ownership. Since these are the elements of intellectual property that Lee brought to Stan Lee Media for promotional purposes, and since he had to sign the deal with Marvel in order to get clear and unfettered ownership of them, it stands to reason that the ownership of Spider-Man was probably nailed down at the same time... all of which suggests that the agreement with Marvel came before the agreement with SLM, does it not?

Even if this isn't true, and Lee had assigned all of his available intellectual property to "Stan Lee Entertainment" prior to his November 1998 agreement with Marvel, would this have transfered partial ownership in Spider-Man over to the current-day company calling itself "Stan Lee Media"? As we shall see, there's a great deal of doubt and disputed fact between here and there, but even assuming the current "SLM" has God and the facts on its side, the answer is still, "Not bloody likely." Lee had already acknowledged that Marvel, not he, was the owner of his work for the company, after all. Even if that weren't true, precedent is not kind here -- Josie and the Pussycats creator Dan DeCarlo, for example, tried to regain the rights to his work-for-hire creation from Archie Comics several years back, and failed despite being its acknowledged creator and possessing a photo of his wife Josie in the Pussycat costume taken before the character ever debuted in print. "SLM," by contrast, will be facing Stan Lee stating, "Nope, my work for Marvel was all work-for-hire" in a court of law, assuming it isn't thrown out in summary judgement before then. Even with Stan Lee on your side and the 1998 Marvel/Lee agreement nullified, the odds of re-establishing Lee's partial ownership of the characters he created back in the 1960s are remote at best. With Lee testifying against the plaintiffs, the odds shift to somewhere between none, nil and "Have you been smoking crack?"

But the case for "Stan Lee Media" may even be weaker than that. They may not even be Stan Lee Media to begin with. Lee, as noted in the Associated Press report, is suing "Stan Lee Media"... and so is Stan Lee Media, if documents posted to this website are accurate. The linked documents are purported to be the actual lawsuit filed against James Nesfield, A.F. Galloway, Douglas C. Cogan and John Does 1-10 -- A.K.A. "Stan Lee Media" -- by QED Productions LLC, Pow! Entertainment, Stan Lee... and Stan Lee Media. They make for fascinating reading:

Plaintiffs are informed or believe that in or about November 2006, while the Bankruptcy case was pending, Defendents falsely claimed that they had revived SLMI, conducted a special shareholders meeting, given notice of another shareholders meeting, and installed themselves as controlling officers of SLMI, and began attempting to appropriate and exploit for themselves assets and property rights of SLMI, all in violation of the federal bankruptcy laws and applicable state laws regarding corporate governance. Defendents purported to take such actions on behalf of SLMI without the consent of the Bankruptcy Court, the Trustee, the debtor-in-possession or the unsecured creditors committee in the Bankruptcy Case, without providing any notification to SLMI's shareholders, including its largest shareholder, Plaintiff Stan Lee, without having been elected by SLMI's Board of Directors to serve as officers of SLMI, and contrary to the decision of SLMI's Board of Directors appointing Junko Kobayashi as the authorized representative of SLMI during the Bankruptcy Case.

According to the proffered court documents, Lee is essentially claiming that the "Stan Lee Media" currently suing Marvel are little more than a pack of cheap swindlers who illegally appropriated the Stan Lee Media name in order to do business under false pretenses. These are heavy allegations, and I don't have enough documentation to make sense of their veracity one way or the other, but still, sounds like it'd be a fun court case to cover, doesn't it? (Oh, and before I forget: Link to alleged court documents via Neilalien.)

What's weird about all this is that there could well be a case to be made that Lee hid the potential assets behind his 10% share in Marvel's film profits, which could in fact have been worth many tens of millions of dollars had Lee chosen to stick to his guns rather than settle out of court. If these assets had been included in Lee's deal with SLM -- and as Michael Dean's report in TCJ #269 makes clear, that's a pretty big "if" -- an investor's suit in that regard might well be worth taking up, providing that one can determine the specifics of Lee's 1998 agreement with Marvel, and perhaps find evidence that Lee planned to pursue suit against Marvel once he'd disentangled himself from his contractual agreements to Stan Lee Media. That would certainly make more sense than the lawsuit being reported in the media.


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