WHAT'S THE DISNEY/SONY SPIDER-MAN DEAL?

As we have all heard, Disney and Sony will no longer co-produce any further Spider-Man films due to an inability to renegotiate a new contract to give Disney a higher co-financing stake going forward [1].

Mike Fleming Jr - one of Sony's go-to reporters [2] - broke the story on August 20, 2019, that Spider-Man left the Marvel Cinematic Universe (M.C.U.) due to month-long negotiations breaking down, with "Disney [asking] that future Spider-Man films be a 50/50 co-financing arrangement between the studios, [as well as] discussions that this might extend to other films in the Spider-Man universe," which Sony didn't agree with [1].

Disney gaining a 50/50 co-financing arrangement would grant them a 50% stake In all Sony Spider-Man films, in which Sony houses over 900 Spider-Man associated characters. While Disney would pay half the budget for all Sony's Spider-Man related films, they would also earn 50% of the revenue for IP Sony 100% legally owns. Moving forward, this would include Venom and Morbius sequels, and other future films in the works, such as rumoured Black Cat, Silver Sable, and Kraven The Hunter.

Disney's move to take 50% stake in Sony's Spider-Man franchise looks to be an attempt to eventually steal the Spider-Man property without buying the rights from Sony. It is well in Sony's right to turn down an unfair, controlling, take-over deal. In saying that, I do think Marvel should see a higher cut than their current 5% first-dollar gross. I would argue 10% total Box Office earnings is plenty, and fair. Sony did bring Far From Home forward to a Tuesday, where Box Office earnings are starting to rise; which gave Disney higher earnings.

Sony head, Tom Rothman and Sony CEO Tony Vinciquerra, offered Disney alternate configurations in which got rejected. Fleming's Source (most likely Sony), stated Disney wasn't interested in continuing its current arrangement where Marvel receives around 5% of First-Dollar Gross. Though earlier reports from WSJ on June 30, 2017, from "people with knowledge of the arrangement" mention: "No money changed hands under the deal. The only tweak to the prior arrangement was that in exchange for its producing services, Marvel gets to reduce the $35 million it would owe on 'Homecoming' if the movie grosses more than $750 million" [3].

While the attempt by Marvel Studios to negotiate higher returns for their input is understandable - Sony held the lead creative role, distributing, directing, financing, marketing, and mostly writing [4]. Kevin Feige is one of Sony's Creative Executives for the Spider-Man films [5] and unlike those, he had more influence over the 'M.C.U.' Spider-Man films under Sony's control. Feige most likely helped with the outline, as well as making sure the film operated within his guidelines and vision.

Lead Up To Current Spider-Man Licensing Agreement

To breakdown this down further, we are going to have to recount some old information.

With the crash of the comic industry, Marvel Entertainment Group took a considerable blow, filing for Chapter 11 bankruptcy protection in 1996. Toy Biz bought Marvel Entertainment Group in 1997 ending its bankruptcy, forming a new corporation, Marvel Enterprises. Marvel went through multiple reorganizations, with Toy Biz owners, Ike Perlmutter and Avi Arad selling off Marvel character film rights for quick influxes of cash.

In 1998 Sony Pictures struck a $7 million deal for the Spider-Man rights giving Marvel Enterprises 5% film revenue and the two companies split revenue from related Spider-Man merchandise. And on September 15, 2011, Marvel renegotiated the Spider-Man license agreement. Marvel gave up its 5% of film revenue, as well as making a one-time payment of $175 million and up to $35 million for each future film for Sony's merchandising share [6].

What The Sony Leaked Emails Shine Light On

According to Sony leaked emails, Rachel O'Connor had been in off the books talks with the Russo's about Spider-Man joining the 'M.C.U.' [7]. O'Connor spoke to Amy Pascal, in which she reached out on October 15, 2014, for a meeting with Joe [8]. Amy Pascal officially met with Kevin Feige on October 30, 2014; emails later that night between Sony Pictures Entertainment President Doug Belgrad and Co-Chairman Amy Pascal, confirm Feige's proposition. The arrangement was Sony's trilogy, and for Marvel Studios, Captain America: Civil War and two Avengers films [9]. In 2015, the Russo brothers confirmed they were in a position to reconcile the two companies [10].

The Disney and Sony deal, partially brokered through the Russo brothers was for five Spider-Man related films; three cameo appearances and two solo films; while Sony retains "creative control, marketing, and distribution" [9] over the solo movies, with Kevin Feige and Amy Pascal co-producing. Sony's planned trilogy from the emails didn't make it to the Disney contract, but as per the Far From Home end-credit-scene, there were plans. Nearing the end of this contract, Disney and Sony would need to renegotiate for a new deal. Tom Holland was locked in a six-movie contract under Sony [11] which Holland would still owe Sony a film and potential to crossover with the Venom-Verse if Disney negotiations ever broke down.

In an email from October 22, 2014, Drew Shearer mentions, "if we do this, it should be a two-picture 'crossover' arrangement. They produce Captain America/Avengers with Spider-Man appearing, and we own at least 25% of the film under a co-financing arrangement. [Any] Marvel character(s) [that] appear in our next Spider-Man movie, and they own 25% under a co-financing arrangement." Conflicting reports from Variety suggest Marvel and Sony wouldn't receive a cut from eaches films in 2015 [12], and a recent one that regurgitates information from Flemings Deadline report [13].

Official Statements

Over the last two weeks, only a few official statements have released. On August 21, 2019, Sony Pictures Entertainment gave their official reply on the matter with the following:

Sony's official statement is very diplomatic, not laying blame at anyone's feet. They frame it as Kevin Feige is too busy doing great things at Marvel Studios for him to have time to work on IP they do not own. The statement may be misleading but shines Feige in a somewhat good light still. He organized all of Phase four before Endgame even hit the screens. It's an understatement that he would be too busy, and Feige is a huge Spider-Man fan, and I am sure he would have made time for it.
The professionalism in Sony's statement doesn't slander one side or the other; it allows the studio potential to one day work with Marvel Studios again. Amy Pascal has stated many times she loves Kevin and wants to continue working with him. When the potential split of the companies is brought up, she says: "I think about crying," while elaborating more on their past [15].

And on August 26, 2019, Kevin  Feige and Tom Holland were interviewed by People in conjunction with Entertainment Weekly at the D23 Expo. Kevin Feige had the following to say:

"It was a dream I never thought would happen. It was never meant to last forever - we knew there was a finite amount of time we would be able to do this, and we told the story we wanted to tell." [16]

Tom Holland reaffirms Sony is still moving forward with his incarnation of the character saying:

"Basically, we have made five great movies. It's been five amazing years - I've had the time of my life. Who knows what the future holds. All I know is I'm going to continue playing Spider-Man - having the time of my life - and it's going to be so fun however we choose to do it. The future for Spider-Man will be different, but it will be equally as awesome and amazing, and we will find new ways to make it even cooler somehow." [16]

My Thoughts

The Disney/Sony deal all comes down to greed. Disney being greedy wants more money for Sony's Spider-Man films, as much control over Spider-Man as possible, and to get out of their current arrangement.

While Sony has had missteps with the Spider-Man franchise, the 'M.C.U.' Spider-man is a contractual shadow of his comic counterpart. The most accurate representation of Spider-Man lies with Sony, If they creatively tried. The proof they can make good Spider-Man films is Into The Spider-Verse - that was one of my favourites - it is my favourite Spider-Man movie. And internally at Sony, Venom proved the company can produce Spider-Man films without the aid of Marvel Studios. Thanks to the newfound reinvigoration of the Spider-Man IP through Marvel Studios at Sony's financial low point. In no way was Venom an outstanding Box Office success, coming in just under Spider-Man 3 and Homecoming. But Venom coming in just shy of Spider-Man 3 is enough incentive for Sony to go back to their old ways to start the cycle over again. Sony did put themselves in the hard spot with the corporate Amazing Spider-Man franchise and firing of Anderew Garfield on Amazing Spider-Man 2 by Kaz Hirai. Either way, rebooting or recasting would leave a sour taste in peoples mouths; Sony had no choice but to sign a deal with Marvel Studios.

As I do defend Sony in the Disney/Sony split, it does not mean I think they are perfect - at least Kevin Feige went to the set, unlike any Amy Pascal or any other high Sony figures. Sony does misunderstand why things are successful and learn the wrong lessons, as can be seen by Amy Pascal's interviews talking about the 'M.C.U.' and Venom. Amy talks about how she likes that each film in the 'M.C.U.' feels like a chapter you HAVE to see and that its something Sony would want to emulate. In this same interview, Amy spins Venom is in the 'M.C.U.' when it is not. Amy tried to manipulate Spider-Man fans into seeing Venom to ensure its Box Office success. Disney and Sony's rights sharing agreement did not affect the previous contract Sony had with Marvel. For Sony to retain the Spider-Man IP, a film (outside the 'M.C.U.') had to be in development within three years and nine months of the last films release.

Let me know what you think down below or on Twitter @AfterHoursMedYT