Acquired - Marvel

0:00All right listeners, to start the show today, we are going to play a little game of two truths and a lie. Today's episode will be covering the Marvel acquisition by Disney, and we are going to throw out the two truths and a lie right now, and we will tell you which one is a lie at the end of acquisition history and facts, so get ready to predict. Number one.

0:22For a brief stretch ending in an internal time Warner investigation, the president of DC Comics acquired a large position in Marvel stock. Number two, famed corporate writer and comic book villain Carl Icon once made a play to gain control of Marvel from bankruptcy. Number three, Marvel owned Fleer, the baseball card company, and was affected in a huge way by the 1994 Major League Baseball Strike, which is the lie you be the judge. Welcome back to episode 26 of Acquired, the podcast about technology acquisitions. I'm Ben Gilbert, and we are your hosts. Today's episode is Disney's 2009 acquisition of Marvel.

1:26It really completes the saga for us here at Acquired, where our first episode was the Disney acquisition of Pixar, then our sixth episode was Disney's acquisition of Lucasfilm. And all three of these, I believe, will have pretty similar tech themes, and David, I think, will really be able to kind of understand Disney's strategy and what their portfolio looks like these days. Yeah, this is...

1:49I feel like I always say this, but this will be a fun one. Yeah, okay. And kind of a fun one here going into the holidays. It's a nice one to tie up the year. Totally. And speaking of Disney's triumvirate of IP acquisitions, I am pretty excited about Rogue One. Yeah, I thought you'd bring that up. So I re-watched the trailer right before we started recording. Awesome. Awesome. I can't wait. I mean, neither.

2:18For listeners who, if you're wondering, I'm not sure if it actually will sound any different, but this is the first time David and I are recording remotely. David's in California right now. In the heart of Silicon Valley. Indeed. All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired. LaGora, the agentic operating system that is redefining how the world's best legal teams work.

2:45Yup, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Legora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry? So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm.

3:11for months. They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts, and it pulls every key term into a grid a lawyer can actually work with. Lagores Bed here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

3:40And they recently launched LaGora agent offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And LaGora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early LaGora numbers essentially.

4:08speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months. Truly insane numbers. And that is the real test.

4:33Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in house at a company, you can learn more at logora.com slash acquired and just tell them that Ben and David sent you. All right. Well, we don't really have too much before the show. Do you want to dive right in? Yeah. Let's jump in. So I can't remember, we've done so many of these episodes now, but this might be the earliest back in time that we're starting our acquisition history in facts. Oh, yeah, I think so. Yeah, I think it is. We are going back to 1939, almost, what was it, almost 80 years ago, when a fellow named Martin Goodman founded a company that he called

5:29Timely publications in New York City very timely Goodman was a pulp magazine publisher and he wanted to get on the gravy train of the fast burgeoning comic book industry That was starting to take off and so he started timely publications as part of his publishing empire and the first comic book that Timely published was called Marvel Comics number one which came out in October 1939 and it included The Human Torch and the Submariner which would be Marvel comic book heroes for a long time to come And yeah, the Submariner is a little a little bit more of a deep one. Yeah, that's that's That's got to see what you're doing there. It's pretty cool that it's that the very first issue was called Marvel Comics. Yeah, I think that, you know, through a, you know, the crazy history that we're about to hear of all sorts of different ownership structures and consolidations and unbundling and re-bundling keeps the same name. Yeah. Well, interesting though, they didn't actually change the name of the company to Marvel Comics until 1961. Right.

6:52So, 22 years later. But the very first comic book that they published was called Marvel Comics. And apparently it was a big success. It sold almost a million copies, which I think is a lot for a comic book, probably especially a lot for a comic book in 1939. But the company Timely would go on to do quite well, create You know, many of the iconic comic book superheroes and villains that we all know and think of today, Captain America was the first really big one that they created in 1941, which was, I guess World War II was going on at that point in time, but the US either hadn't entered yet or was just about to enter World War II. The Fantastic Four, Spider-Man,

7:51the X-Men, Iron Man, Thor, the whole, many, many others. Lots of, basically, as a, I love superheroes, but not a, I'm not a huge comic book aficionado. So as a, like, casual comic book fan, like, everybody I know kind of except Superman and Batman came from Marvel. And who are, like, Wonder Woman? Yeah, Wonder Woman too. Yep. That was also DC Comics. It's pretty much the whole crew. Yeah, it's like DC had, you know, the big Superman, Batman, Wonder Woman, and then everything else is Marvel. And so they go on, they create many of these characters. And then in 1961, like we said, they actually changed the name of the company to Marvel Comics. Also, in 1961, the editor of Marvel, who was a man named Stan Lee,

8:48who actually started at the company as an office assistant. He was apparently Martin Goodman's wife's cousin and started at the company in the early days of the office assistant and became sort of the spiritual head of the direction of marble in the comics. He had very briefly actually the president of the studio, right? Yep. Yep. Like one or two years in there. Yeah.

9:18a towering figure in Marvel history. He decided to kind of push the company in a new direction in 1961. And that was to make comics that were aimed at slightly older audiences, so not just young children. And the first of those was the Fantastic Four, which they launched in November 1961. And was the first time that comic book heroes were sort of You know, they've always been like the Superman sort of like perfect image of, you know, masculinity often and, you know, heroism and the Fantastic Four were sort of like they squabble with each other and they were kind of, you know, anti-heroes in a way. Right, more human. Even though they had superhuman powers, much more human than the Superman of the DC franchise.

10:17And that really kind of set the tone. And Marvel became much more really expanded the market for what they were doing and what comic books as a whole as an industry was. And that was their namesake. And so, you know, Spider-Man was sort of like the quintessential like teenaged angsty, you know, teenaged angsty superhero. We ever see that in Spider-Man too. Oh man, yeah.

10:44the Sam Raimi one with Toby McGuire. I should remember that one scene where he's like emo. He's got his hair dyed black and it's like over one eye and he's just almost felt like jumping the shark already even though I didn't really think it jumped the shark till Spider-Man 3, but yeah. Totally. He was ahead of his time.

11:14That's a big success for Marvel and then later in the 60s, in 1968, the first Marvel acquisition change of control happens when Goodman decides to sell out and he sells the company to the perfect film and chemical corporation, which was later renamed Cadence Industries. And Marvel then became one of their subsidiaries, or underneath one of their subsidiaries called the magazine management company. Very...

11:42I'm very generic. Yeah, very generic. Honestly, when I was reading through some of this, it felt like a laundry list of incredible generic, elaborate names. Well, I guess that's the thing when you're looking at a company that goes back almost 80 years. Right. And in a fun twist of foreshadowing in the 1970s, when Marvel's owned by Cadence, they actually strike a licensing deal with Lucasfilm.

12:10And they published the Star Wars comic books in the 70s and 80s. Wow, that's wild. Because to me, we've got a trilogy going on here. And Pixar was actually owned by Lucasfilm in the early days. And Lucasfilm and Marvel had a licensing agreement in the early days. It's like, it's kind of amazing. They all ended up under one roof and had this joint history along the way. Yeah. If only Steve Jobs were somehow involved. That's sort of been our lie.

12:40That's right. That would have been fun. So listeners, you know that Steve Jobs was not involved in Marvel. And so in 1986, Marvel changed his hands again and Cadence sells the company to a new world entertainment media company. And then New World undergoes some struggles and ends up selling it again shortly later to the billionaire Ronald Pearlman.

13:09in 1989 for 82.5 million. And another fun bit of foreshadowing of what's to come. Pearlman gives a quote at the time he says, it being Marvel is a quote, many Disney in terms of intellectual property. Disney's got much more highly recognized characters and softer characters, whereas our characters are termed action heroes.

13:35But at Marvel, we are now in the business of the creation and marketing of characters. Boy, does that sound familiar? Sounds super familiar. So Pearlman's pretty ambitious, and shortly thereafter, where it actually ends up taking Marvel public, and it becomes a public company, and then he starts expanding. And so he took it public in 1991.

14:03And then in 1992, they actually buy the sports trading card company Fleer in 1992. And then in 1993, Marvel requires slightly less than half of a company called Toy Biz, which was a toy company that they also had a licensing deal with to create action figures for for all the marble super heroes and villains and that kind of it's really interesting they keep like vertically integrating and then unbundling and vertically integrating and then unbundling and it's interesting how like they kind of fluidly move throughout partnerships and ownership of You know, their core asset being the characters and then moving it out of publishing and distribution and merchandising and all those different different things. Jason, or in the case of baseball cards, not so adjacent businesses. Yeah, I would love to see the prospectus on that, on that pickup. Yeah, what they're asking out, well, now is in the middle of the baseball card bubble, which we will come back to again in one sec. But toy biz also will be important in the future.

15:14So they don't buy all of Toy Biz, they just buy slightly less than half a share of the company. And so things go along in a couple of years later in kind of 95, 96-tamp timeframe. Things aren't looking so good for Marvel, so they've expanded a lot. The core comic book business, actually, there was a big bubble in comic books in the mid-90s which, doing the research for the show, I kind of like vaguely remembered.

15:42But even more so in 1994, Major League Baseball went on strike. And this was like a huge thing. People thought this was the death of baseball, but it wasn't happily for baseball, but it was definitely the beginning of the death of the baseball card industry. And Flair suffered huge losses when this happened.

16:12Yeah, I mean, I remember that that was the so I'm Indians fan group and Cleveland. That was the first first year Jacobs field was open and they didn't get a full season in there. Oh, wow, I didn't realize that man. Yeah, I remember that strike so vividly and wasn't I remember you know and obviously being you know a Seattle podcast that was huge even though I didn't live in Seattle at the time huge kangaroo junior fan and He I think I remember he was on pace to like shatter the home run record that year and then the strike was I'm pretty sure you're right because I think I remember that the Indians were really good too and we were in the World Series the next year and sort of growing up I was thought like well it's weird that like the Indians had this new ballpark in 94 and I think we actually played 95 in the ALCS so the division series is when we played the Mariners and and Griffey was obviously instrumental in that but I remember thinking like how did we have a new ballpark in 94 but

17:07getting to the World Series in 95 and it didn't really occur to me until I was later, you know, later in the 90s, like, oh, duh, there was no playoffs in 94. Yeah. Can you imagine like, if that happened with the NFL now, like, oh, yeah, there's no super ball. Yeah. It was, uh, it was terrible and like, uh, I was such a huge baseball fan growing up and it was, um, it was, it was really a black mark on the, on the sport. Um, yeah. So, uh, Marvel's not doing so good people are speculating you know the company's in trouble. Maybe it'll end up filing for bankruptcy Do you know why there was a comic book bubble? Like what were the other than the whole like fleer thing? What were the externalities and creating the struggle for Marvel? I don't know I Didn't do enough research on this I wonder if it was related to just the whole you know the baseball card bubble

18:01which is probably even bigger of a bubble. I mean, I was a huge baseball card collector as were so many of my friends at that point in time and still in my parents' basement and boxes and boxes full of baseball cards that are now worthless. Yep, me too. That the market just got flooded. And I wonder if a similar dynamic was playing out in the comic book industry. And I can see that. Yeah. So there's all this speculation about the future of Marvel.

18:30and comic book villain as Ben referred to him in the intro Carl Eiken takes notice and he and his firm start buying up some of the debt that that marble had with public company even with private companies if you have debt that often trades other people not the people who loaned you the money can then sell the debt to other people and folks like Carl like and this was this is a big part of their playbook is they buy debt in companies that they think are troubled and with the hopes that they're hoping that the company ends up filing for bankruptcy and then in court as debtors they can end up taking control of the company the not so charitable term for this in the industry is loan to own or comic book villain yeah or or being a comic book villain

19:26So this all starts playing out in the press. And then at the end of 1996 in December, Marvel does end up filing for bankruptcy. And so this all goes to court. And in early 1997, the court rules that Carl Ikin can indeed take control of the company and he does. So Carl Ikin, comic book villain, is now head of Marvel.

19:54It honestly sounds like a Lex Luthor move. It totally does. The only thing that would make this better is if Carlik and we're also CEO of DC Comics. That's true. But alas, this is probably a good time to, our listeners are, I'm sure they figured out by now.

20:17Carl Icon is true. The flair thing is true. The CEO of DC owning a large number of shares in Marvel is false. That is false. So Carl Icon now has control of Marvel but there's just one problem. Carl Icon didn't own all the debt. There are actually big Wall Street banks that had also loaned Marvel a lot of money and they still wanted their money back.

20:44So the court case wasn't over, and the company still needed to officially reorganize an exit bankruptcy. So this is where Toybiz ends up coming back into the picture, this toy action figure company, and turns out it was owned by this guy named Isaac Pearlmutter, who was an Israeli American, and he ends up proposing a new plan to the creditors of Marvel that involves Toybiz putting up money and paying back the creditors and then taking control of the company away from Carl Ike and the creditors and the courts actually decide to go along with this plan so control of Marvel gets rested away from from the villain it's like it's like the comic book you know happy ending and the superhero Isaac Pearlmother comes in to save the day and Isaac actually still to this day is CEO of Marvel

21:43That's great. Even post acquisition. All right, so what happens to Toybiz then? How does that? So Toybiz gets folded into Marvel, I believe, and becomes part of the combined company. So then at this point, Marvel owns the IP to the characters, and has a merchandising division to actually sell the toys themselves. Yep. I believe that's right, but it's still not like a...

22:13You know, it's not a Disney scale consumer products division. So in the meantime something even more important for the future of Marvel happens and that's that I believe for a long time they've been making different various types of films and movies about the franchises but films based on Marvel franchises actually start to kind of catch on with the public and become pretty big movies. And it actually starts. I did not realize this in 1997 that year when men in black comes out, men in black apparently was a Marvel franchise. I had no idea. Oh, no way. Because I knew there were comic books, but I always assumed it was one of those like after the movie comics. No, it was a Marvel franchise and then the

23:05I watched the movie so many times when I was a kid. Yeah. Will Smith and Tommy Lee Jones was great. Absolutely. Heroes. So Men and Black comes out and the first Men and Black comes out in 1997. And this was before Marvel Studios, right? This was Marvel IT. Yeah, so this was exactly. Marvel was licensing their IP to big movie studios, you know, to Fox, to Sony, to Time Warner.

23:33who were making these movies, big budget movies, Blade 1998, and then the first really big one, X-Men, in the year 2000. Spider-Man in 2002. So again, Marvel's not making these movies themselves, but...

23:49Obviously is noticing that you know collectively these movies are making billions of dollars Really starting to take off. Yeah, and it was it's interesting to think about like there had been superhero movies for decades, right? I mean like we had a whole franchise of Batman movies. It's it's not like superman movies That's right. Yeah. Oh, yeah, Christopher reef who can forget it's it's not like we were new to this but you know like in in the world today of like You know the even two thousand nine iron man gross five hundred and eighty million dollars in marvel studios like what it wasn't that scale yet it wasn't like every single blockbuster at the box office is going to be a superhero film so it's interesting to think about like what what changed that that like all of a sudden cause these uh superhero movies to become more more of a sure thing for the studios to make. Yeah i don't know and it also kind of coincided well i think the the superman and the batman.

24:42movies were always at least I remember kind of growing up thinking about like oh yeah, like I remember the Batman movies What I did but I think it was just those two were like the big franchises the DC franchises and DC I believe not always but for certainly through all of these decades was owned by Time Warner and still is so they were part of a big major media company and had the resources to make these You know big-budget movies whereas Marvel I don't think ever did until until until this era. And so you see these superhero franchises that had been obviously in huge followings, but weren't like the mainstream, you know, to the extent that Superman and Batman were. Now get these big film slates. I think the other thing that was happening is this is sort of the dawn, and I don't know how much one led to the other, sort of the dawn of like the sequelitis in Hollywood.

25:41And Superhero movies, of course, franchises lend themselves so well to sequels. Yep. Yep, very true. I mean, as ever since, you know, 1939, every single one of these comic book franchises has issue after issue after issue. They're cereals. Yep. So it's perfect for, you know, in a world where Hollywood needs dependable franchises to make sequels, you know, what better place to look to in comic books.

26:10So in 2005 after you know a few of these Huge successful movies based on Marvel IP have come out from other studios Marvel actually takes a really ambitious step To start Marvel studios to make movies themselves and so they raise 525 million in debt and a credit facility from Merrill Lynch ironically right before Merrill Lynch went bankrupt in the recession, but they get a film financing vehicle from Merrill and create the really the first kind of major independent Hollywood studio since the Dreamworks era. This was a pretty big deal. Yeah, and it's interesting to think that you know, this was something they just sort of started and ultimately became very quickly the largest part of their business. Absolutely, yeah. And also interesting, you know, they sort of, when they announced this, this was in 2005, 2006 when they were getting this set up. They announced that the plan was that they were going to release individual films of, you know, individual franchises, Iron Man and the whole, which were the first two movies that they end up.

27:32releasing, create these franchises, and then they were going to tie them all together into a crossover film. So which obviously they did. Yeah, exactly. But that was the plan all along. And interesting that Disney really has been hands off and let them operate that plan. Yeah. And thinking about so in making this move and starting the studio, they'd already licensed out so many of their characters to other studios for uh to make films and distribute and so when you think they're really their top tier characters right right so let i'll list the um the characters that were no longer eligible for marvel to make their own films around spider-man the fantastic four silver surfer wolverine the rest of the x-men yeah deadpool uh yeah there's others but when you think about like wow okay so all those are off limits and what they've got is

28:31Sort of like the second tier at the time like we don't think of them now because they're huge, you know gigantic Blockbuster wins, but like Thor whole Iron Man like that's who they're left to work with and then that's what they create the studio around Yep, totally and Iron Man was really that was really the best that they had available and that was the first film That they made and it came out in early 2008 and it ended up being Robert tour to Forrest from Robert Downey, Jr., I remember seeing it in theaters such a great movie, The Original Iron Man. Absolutely. And actually the year before, I think that was 09 and in 2008, they had the Hulk, which was about half of what that film grows. They actually both came out in 2008. They made them concurrently. Iron Man actually came out a couple months before Hulk, I believe, at least according to Wikipedia.

29:29and which is always right. Iron Man made $585 million at the box office, so almost $600 million which is compared to films like The Avengers and Iron Man 3 and Sprozen and other Disney movies and certainly the Force Awakens that make a billion or even close to two billion that doesn't sound like a lot but at the time that was a huge amount even though it was only a few years ago. It's a beginning of an era.

29:59Beginning really beginning of the superhero blockbuster era That's right and and it sort of signals to like any potential buyer of Marvel stock like there's a new way to value this company and it's based on these numbers and does nothing to do with any of the other lines of business they're in Yep So as as you mentioned the whole comes out shortly thereafter and isn't the huge success that Iron Man is but it's it's a pretty pretty successful movie makes just under 300 million and is very successful and kind of proves that audiences are Interested in this kind of content and will come out even for you know non top-tier characters if you can make good movies So the next year in 2009 before I believe there were I believe they were intended to be five films on the slate that

30:56that Marvel did with Merrill Lynch but before any of the following ones can come out August 31st 2009 Blockbuster deal Bob Eiger and Walt and Walt Disney company announced that they're going to acquire Marvel for 4.2 billion dollars Which was kind of a lot when you think back to when Pearlman bought Disney granted it was in in the late 80s, but it was a bankruptcy court. No, no problem. I know. Proman bought it from in the late 80s from New World Entertainment. It was less than 100 million. So, you know, here we are sort of 20 years later and we're talking 4.2 billion. Yep. Yep. And it's interesting that like, it's, there was not a single new piece of intellectual property that mattered.

31:49between those years yeah like all those characters had already been created and it was really all about a new way of leverage that same intellectual property that made it what 40 times 40 plus times more valuable over that span of time yeah super interesting I mean it really was it really was the films yeah yeah and to put to place a I'm to kind of like For listeners out there, a 29% premium was what was paid for Marvel above what it was currently trading at. So while there was some scrutiny, like, oh my god, that's a huge 4.24 billion, that's a huge ridiculous acquisition, it's not that much more than what the public markets were valuing it at. And it actually is pretty much in line with other public company acquisitions that we've covered on this show.

32:45important to think about about this deal that I think other folks who've written about it now and talked about it, it kind of leaves context of a little bit. This was in the middle of the recession and so this was like perfect timing by by Iger and Disney to buy Marvel because people were worried at this point like you know our and we were talking about box office numbers a minute ago.

33:09they were certainly depressed by the fact that we were in the middle of the recession and like people didn't have nearly as much disposable income as they were used to having earlier in the decade. That's right and for even more perspective it was just over half the price that they paid three years before for Pixar so if you kind of look at this trend they hadn't yet acquired Lucasfilm but let's let's simplify Disney to a Content and distribution company and they're basically out buying content You know the part part two of their the second big pickup that they made here You know that they signaled that they were going to do this before this was Iger's strategy and It clearly had been working with Pixar. Yeah, and I mean the the Pixar you know famously Bob Iger's first board meeting a CEO which was like his like second day on the job He proposed to the board that he wanted to wanted to buy Pixar

34:04And this was clearly how we kind of set the tone for his 10 years CEO and he's You know certainly hard to argue with his execution across the three of these companies Right right, and it's it's if you're disney and you're looking around and it's you know 2005 like all the valuable content that you don't own That's like some of it's in universal and some of it's like there's a little pieces and pockets elsewhere, but the three other big powerhouses are Lucasfilm picks are and Marvel and you know when and over what how many years 2006 is 2012 so over six years rolled them all up well and you know also you know in keeping with the theme of the show or half of the theme of the show now in in acquisitions you know I grew took over as CEO of Disney right after there had been this this hostile takeover attempt of Disney that actually calm cast

35:01right before Iger became CEO, launched a hostile takeover attempt to try and buy a Disney. And of course later, you know, five or six years later, they would end up acquiring NBC. But this was like, I have to imagine that living through that, the Disney board and Bob Iger and kind of entering his tenure, thinking about seeing consolidation in the media industry coming and deciding very Actively deciding to be a consolidate tour as opposed to a consolidate T and looking around to see what they could buy. Yeah, and you look at the what that aggressive strategy helped them do I mean who was competing with Disney and in 2005 and who's even close to competing with them now and I think that that that just totally worked. Yeah, and interestingly I actually said in kind of the press

35:59quote, at the time of the Marvel deal, you said Marvel's brand and its treasure trove of content will now benefit from our extraordinary reach. We paid a price that reflects the value they've created and the value we can create as one company. It's a full price but a fair price. And absolutely, we talked about this in the Pixar episode and especially in the Lucasfilm episode, but Disney's core confidence in What they have that the other media companies don't have is that Flywheel that Walt Disney drew back in the early days of the company which is the ability to take great IP franchises like Star Wars, like Pixar, like Marvel and pump them through the Flywheel and realize much more value out of it than they could on their own.

36:50That's right, and old school Disney was creating it, but new school Disney has pretty efficiently figured out how to bring in content they don't create into that flywheel too. And I think the fourth piece of this tool that we've even talked about yet, because it wasn't an acquisition, it's the tremendous growth of the ESPN business inside of Disney, and I think the four of those businesses together really account for a lot of the growth and the dramatic change in share price between then and today. Yeah, and it's interesting too.

37:18I hadn't thought about ESPN in this context, but you're bringing it up in the context of the flywheel. Well, I guess actually Disney was an acquisition. It was just a long time ago. Or ESPN, yep. It was through a pretty complicated history. That might be a fun show to do sometime. ESPN is a super interesting corporate history. But the core ESPN business, I mean, it was totally the golden egg for many, many years for Disney, but I think it's much more challenged today than it was a few years ago with cord cutting and linear television watching, being much less of a thing. And obviously, sports centers still popular among many people. But I used to watch sports center every day, probably multiple times a day, and I haven't watched it in years now, even though I still watch clips on Snapchat.

38:15But you see this strategy, and especially around film with ESPN 2 now with 30 for 30. And some of the investments they're making there. I think about the OJ documentary and how great Nambish is. That was. You're totally getting into my tech themes. All right. Well, we'll stop now. All right, listeners. Now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture.

38:45It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would not, and you're done. But in an AI first world, that doesn't hold up anymore. Yep, your risk surface changes every week now. A vendor turns on an AI feature or someone writes in a new model without telling IT, and your posture is different than it was last week, let alone at your last audit.

39:07Vanta's own research found that around 70% of companies have this, quote unquote, shadow AI running with no security review at all. Right. And that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta agent.

39:26Think of it as a GRC engineer, that's governance, risk, and compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes and cuts the time that you'd spend on vendor assessments in half. In half, which is exactly why more than 16,000 companies today run on Vanta. Companies like ramp, cursor, and snowflake all stay audit-ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment. And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance, and the work to earn and prove trust. We're huge fans of Vanta over here and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at Vanta.com slash acquired. That's V-A-N-T-A dot com slash acquired for $1,000 off and just tell them that Ben and David sent you.

40:24You want to move on to acquisition category? Yeah, let's do but first just to wrap up quickly on on the the aftermath of the acquisition so as we mentioned Pearlmutter remains the CEO of the company the company stays in New York So it's a fully autonomous subsidiary within Disney And like we said basically they've just continued to execute on the plan that they drew up in 2005 when they launched Marvel Studios and producing dramatically more like they're their scale now I mean they had like five or six in the pipeline when they were acquired when I think you look at the the pace of new Marvel movies coming out a new Marvel movies plan through the next few few years like they're they're not letting up yep and and even you know so there's much more value to be realized from the company in the future but even since the acquisition in 2009 the Marvel movies have generated

41:21almost nine billion dollars in revenue in box office revenue which is crazy now That doesn't necessarily equal certainly doesn't equal profits and and profits for movies are harder to get to Then then pure revenue we can we can get that data Yeah, I think I think Marvel estimated profit margins at least in the first eight films released actually pulled the stat Under Disney were about a 23% profit margin Okay, so You know you call roughly sort of two billion ish slightly more than two billion in profit So far from the movie so that's half the purchase price right there, and that's just the box office You know not the not the home video not the merchandising not the theme parks, you know all that stuff so Totally and I even I grabbed another stat. I think this is um

42:17Think this is from yeah fortune article in 2015 one analyst said that by the time it was finished with the Avengers Iron Man 3 and Captain America and Thor sequels Disney probably paid for the acquisition of the entire company So I think it's it's a pretty quick payback period there and I think looking at that that 22% profit margin and you look at the price tag of production now on these films Pretty expensive to make these huge blockbusters. Yeah Well, you need the two hundred million one hundred fifty million. Yeah, you need well, well, we said we should delay some of this discussion till we until we render our final grade, but all right, all right. Let's let's jump into category. So as a reminder, we Pixar, which was our very first episode on this show, we actually we said it was a business line. And then Lucasfilm, we said it was a product. So what is what is Marvel? Yeah, so I am going to foreshadow my

43:13My tech themes and my conclusion a little bit here, but I think it was two things. One is a business line. They bought the business line of making the films. They were able to scale that. We talked about kind of our paying back the acquisition and a shortish amount of time. The studio itself, but ultimately, they have this asset in perpetuity of the characters.

43:40unlike in my opinion the reason why we didn't call well we didn't have asset yet in this this categorization for for Pixar but Pixar sequels don't hold up as well as the serialization that comic book characters lend themselves to so unlike a lot of sequels which fatigue very often there's there's these like few in the world the James bonds of the world that don't get tired because they're able to kind of keep reinventing it, or the stories are okay being formulaic. So you kind of can keep experiencing the same tight plot line over and over again. Superheroes let themselves do that. And the intellectual property that I'm calling separate from the business line, the intellectual property that is these characters are a true asset in perpetuity. Yeah, interesting.

44:33Unfortunately, I don't think one of my tech teams is a little bit too, but I was going to be lazy on this one and say, oh yeah, totally a product. Just like Lucasfilm and being, I think we called Lucasfilm the sort of juice that gets pumped through the pipeline of the flywheel. And I thought that this is too. And I still think it is. But it's an interesting insight on the serial eyes ability.

45:03of superheroes and the assets of superheroes versus a Pixar which as great as Pixar is I'm not excited for another toy story yeah exactly like there's it's kind of a harder business in a lot of ways because you're you're betting on the capability of the team to keep producing new original great stuff right it's like your assets depreciate faster yeah yeah well there is no I mean they do do sequels at Pixar but but that's not the core of what it is. You have to keep generating new, keep pushing the rock up the hill each time. Right, and actually it's funny if you look at the, I was about to make the point that it is more expensive to create a Pixar film because you don't have the same reusability that you do from the end superhero film.

45:54It actually is, the profit margin on Pixar films are higher. So to kind of combat the point I just made, 23% profit margins for Marvel, 27% profit margins for Pixar. And, you know, render farms and illustrators are expensive, but not as expensive as flying helicopters into buildings. Yeah. And, well, now that Pixar pays actors a lot too for their voice, but... Yeah.

46:24I would imagine probably in aggregate in terms of money paid to actors, Pixar movies, I would have to imagine a less than a Marvel movie. Yeah, I would think. Interesting. Yeah, I like the asset categorization. I mean, I think it is definitely also juice to pump through Disney's flywheel. Totally. But it is a different kind of asset than certainly Pixar.

46:51And then I think in a lot of ways Star Wars 2, Star Wars is kind of like, or it is Star Wars, telling me, I called it Star Wars, Lucasfilm, but it's Star Wars. Yeah, but it is Star Wars, right? Whereas Marvel is many of these franchises. Right, right, right. Oh yeah, I mean that's a great point. It's like if you look at the $4 billion price tag for Lucasfilm and the $4.2 billion price tag for for Marvel, like I think how many more characters it's like 800 plus characters are I think 500 plus at the time of acquisition in the Marvel universe and maybe 50 of which are recognizable by the American public and you look at look at Star Wars and I don't think Lucasfilm

47:36was sort of looking, valuing themselves based on all those deep characters, and what we're seeing with the Disney powerhouses, they're sort of trying to make the Star Wars universe more serializable and more kind of disparate with all these different...

47:54Stories that they're trying to tell that aren't with our our favorite characters and I'll be really interested to see not not how Rogue One does because I think that that's gonna be there's so much pent up demand for Star Wars that like I want to see how the third or fourth non-core Star Wars story does and if Disney will be successful in kind of creating This sort of serial blockbuster out of Lucasfilm characters the same way they've been able to with with Marvel characters. Yeah, it's interesting to think about To think about these three acquisitions, which are obviously all fall within the same broad theme for Disney, but on a spectrum from Pixar, where it's so much about the people and the creative process and creating individual new creative works, to then Lucasfilm in the middle where it's about

48:51the franchise of Star Wars. And the cadence around that is, well, before the acquisition was very long cycles between any sort of new Star Wars content that would come out and it's much faster. Right, right, right. That's what decades. Yep. And Lucasfilm is sort of about the people, you know, obviously there's George Lucas and some great leadership at Lucasfilm.

49:21but also about the franchise, and then you've got Marvel at the other end of the spectrum, which has had great business leadership, especially under Isaac Promo, but all of the talent that comes into the making the movies, and even the artists of the comic books, it's all third parties.

49:48It's not like, it's kind of very different from Pixar. Yeah, great point. All right, should we move on to what would happen otherwise? Yeah, so I think Marvel was getting acquired. We were in an era of consolidation where distribution was buying content. And I don't know who else it would have been, 20th century Fox, Sony.

50:18It seems like actually there's a lot of places they could have landed. It's kind of shocking to me that with the Pixar pickup in 2006 that someone else didn't see this coming and try to make a play for it sooner. Maybe other people, other studios, or I guess- Well, especially the other- Well, I wonder if the other studios maybe were a little bit lazy in their thinking because they were kind of having their cake and eating it too, right?

50:48In that they were getting marvel movies in spider man and in x-men without having to actually buy the company And and it was only when when marvel started making movies on their own that it became a really valuable company as itself Yeah, that's true, and it really hadn't been long since since marvel studios was around the shocking thing is like How did no one else?

51:17I mean, oh, actually, here's kind of an interesting question. If you're 20th century Fox, or if you are Sony Pictures, and you see, let's say you can see the future and know that Disney was going to do this, do you try to do it sooner? Like did people A not think Disney was going to do it or B not care that Disney was going to do it? Yeah. Well, here's an interesting thing that we haven't talked about yet so far, but on the surface, This actually wasn't the most natural fit with Disney. Which actually I think is one of the reasons why Bob Eiger and Disney really wanted to do this acquisition. But Disney was always kind of like princesses and animated movies and Pixar, which definitely fit into that mold. And in terms of their strategy with children, you know, super

52:12Gender stereotypes here, but I think this is the way a lot of at least historically a lot of people at Disney have thought about this and in the immediate industry that Disney like owned a little girl, you know But they didn't you know and little boys too, but like they didn't have as much lesser extent much to a much lesser extent and that this was Disney's play for For little boys too. I mean what's what's more attractive to little boys than superheroes?

52:39in total, you know, old-school gender stereotype ways. Speaking as a massive frozen fan myself. Right, right. You know, I still haven't seen it. Oh, you got to change that. It's so good. I know. I know. As a admitted Pixar fanboy, I really should. Not that it's Pixar, but like, you know, to see how that's entered the rest of the Disney umbrella. Yeah. And it's interesting to think too.

53:08I can't imagine this had that much impact on Pearl Mudder and Marvel because they were much more business executives than sort of founder creative types. But Iger and Disney have developed this reputation now with these three acquisitions as like excellent stewards of franchises. They're kind of like the Warren Buffets of creative content and businesses. Right, right.

53:36in the Pixar animation, I think it was the Pixar. No, in the Lucasfilm acquisition, we compared it to Facebook that Disney was really good at leaving their sort of disparate. Leaving creative direction on the run. Which again, a little bit was why it didn't on the surface, it was like, wow, Disney buying Marvel's much edgier than Disney, but they've let it be totally separate. But in the Lucasfilm acquisition, You know George Lucas said to Bob Eiger before he saw like if I'm gonna sell it I would only sell this to you into Disney and and Steve Jobs too right like it's hard to imagine Picks are in jobs selling to anybody except Disney Right, right yeah, so two other questions here then for you that I would pose one

54:29Is there a fourth like will we see Disney make a play for another large piece of content and I've been sort of racking my brain to think who that could be Or who is the content that we don't think of as the big content yet as the up-and-comer and then two while you're you're sort of kneeling on that I Generalize this to distribution Combine distribution content company buying more content and pumping it through their distribution do we see that in other verticals like are we seeing that in tech outside of entertainment or any other forms of content being bought by distribution plus content companies interesting questions well on the second i mean to a certain extent i think we see it a little bit with facebook and

55:20Instagram I mean it's very different like I think Instagram would have grown hugely on its own but no question that on the ad sales side of the house being able to just plug in Facebook ad sales into Instagram was hugely valuable there on the first question you know I'm not close enough to have a super informed opinion on on that front but One thing that just popped into my mind, especially because the company is struggling a bit now, what about Nintendo? Boy, that's like the, you're right, that that is like another huge treasure trove of IP, that as we saw with Pokemon Go, I mean, you take an existing piece of technology, you're relatively existing with the meantic and slap highly valuable IP, like Nintendo's on top of it, and you can create something.

56:17you know that that the world goes crazy for that we can have debate on how lasting that is but yep but certainly the IP that Nintendo has in in Mario and Zelda and so you know even I mean there in a lot of ways like the parallels to Marvel are very similar you know you've got lesser known stuff like Kid Icarus and you know and then you've got Pokemon obviously which is super well known man what would if all of that IP were liberated from the challenged business model of gaming console hardware sales. What could you do with it? This is interesting. Almost all of this, probably excluding Pixar, but at this point Pixar is kind of an older company too.

57:07is super valuable and a major part of the American consciousness and new because all this is like, you know, buying the Star Wars stuff from 77 and buying the Marvel stuff from the 40s and 50s and buying Nintendo from the 80s, like, where is, you know, like where's 2010s Mario and like does that exist in the era of the internet and short attention spans and social media where Individuals are their own content creators and content is short-lived Yeah, well, uh, maybe it lives on Facebook Yeah, and it's like it's funny like one you know and all the rumors have to have maybe Disney buying Twitter. Yeah And then that sort of fell through probably because of pricing issues like None of these platforms own the IP. There's like shared licenses between the

58:00and the between Twitter and the originator of the content. But it's hard to think of new intellectual property that everyone cares about. Like everyone cares about their little filter bubble of content. Or like Twitch too, right? Like all the big entertainment franchises.

58:28of the last five years, certainly. I think they're apps, right? They're not IP themselves, they're platforms. Yeah, yeah, exactly. All the major value in the recent stuff is the platform on which massively democratized IP is created and distributed, not actually being content powerhouse.

58:53Other than, actually, we are seeing this with Netflix, right? Netflix, Amazon, they have the distribution, and we're previously licensing the content, and now we're creating content in-house, and that's a pretty good allegory for sort of question number two there of who else is doing this these days outside of Disney. And I guess Netflix isn't necessarily buying up other companies that have content, but we are seeing heavy investment by the people that have the pipes in creating their own content.

59:23Yep. Well, actually, you know, there are plenty of IP franchises out there being created and great ones. I should have thought of this, Jenny and I with my parents over Thanksgiving weekend went to see fantastic beasts and where to find them. We loved Harry Potter, of course.

59:45Another yeah totally and that's last couple decades or decade or at least younger than some of these other franchises that right that Disney's been buying Yeah, yeah, maybe that's not a fair But also, you know, that was really created Not pre-social media internet, but certainly pre-social media and You know the first Harry Potter. I don't think JK Rowling or Harry could have you know peered into the future and seen the world that we'd live in today Yeah, absolutely not. In fact, I've been and I both got iPhone 7s recently, and I don't use a ton, but just one of the sort of delightful features on it that I enjoyed discovering is the live photos. You know, the Harry Potter photos. Yeah, right. It's kind of for those of us who are on the off cycle, I guess the on cycle and didn't have the six. I just discovered live photos too and you're like, whoa.

1:00:42These are, uh, these are weird when I send them to people and they give me too much context. Yeah. Totally. Yeah. All right. Listeners. Now is a great time to thank our longtime friend of the show. Service now. If you are running a large enterprise, AI agents are likely spread across every team and deploying them is no longer the hard part. Yeah. The hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making.

1:01:10AI security for an enterprise at scale is not a small concern. Like, the risks are real. Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI Control Tower. Yep. AI Control Tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with any AI, not just theirs.

1:01:37Every device on your network, every permission across every system, every AI agent, visible and secure in one place. And service now can do this because they've spent more than 20 years building the operational backbone of the enterprise, the workflows, governance, approval, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security. Service now already runs more than 100.

1:02:03billion workflows annually, and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates. And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

1:02:26So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, go check out servicenow.com slash acquired and tell them that Ben and David sent you. All right. Should we move into tech names? Yeah, totally. So the one, I've got one that's based on a stat. So of the top 10 grossing films in 1981, seven of them were original content, Raiders of the Lost Ark.

1:02:56Arthur Stripes cannonball run chariots of fire forces time bandits You've got one that's an adaptation on golden pond and then you have two sequels Superman 2 and four your eyes only Mm-hmm fast-forward to 2011 so um three decades later I'll read you the the top 10 grossing films Harry Potter 8 Transformers 3 Twilight saga four, hangover part two, Pirates of the Caribbean four, fast five, cars two, rise of the planet of the apes, Thor, Captain America. So that is eight sequels, two adaptations and zero original pieces of content. Yeah, all of them franchises. Yeah. And it's fascinating to see the shift of...

1:03:50The the playground that is the movie studio the movie theater that the whole all of Hollywood as a feature film production the creativity and originality is is it's not happening there anymore is happening elsewhere and we're in this era right now simultaneously of a great TV renaissance there's every every season there's like brilliant dramas on with you know Hollywood acclaimed actors and best in class writing and You know there was madman there was the sopranos like we're leading up to this and I'll I'll save there's one I'm watching that's my car about that. I don't want to mention yet, but like All of the experimentation has moved to cheaper things TV or you know YouTube or social media and I'll and the the Hollywood is the way to go and make a billion dollars off of Sure things because if you're gonna go poor a couple hundred million and you want to get

1:04:49big, big money out and you're not willing to take a chance. Yep. It's interesting. I think that the question for me that that begs is that I've been thinking about, he was starting to do the research and as we've been doing the episode, for all the justifiable admiration, deserved admiration that I think we're keeping on Marvel and Disney here, I think there is one really key existential risk.

1:05:19and that's, you know, if and when the pushback to this dynamic comes from the public, you know, how many sequels, and people have been asking this for years, and so maybe it'll never come, but how many sequels can we take? You know, how long our superhero movie is going to be in Vogue? You know, is this just a...

1:05:43very extended fan cycle that we've been living in like in in 10 20 30 years when we look back on this and feel like man That was like leisure suits like remember the superhero movie days, you know And I just wonder you know like I don't know. I don't have a good answer to it. Well, yeah, and if it's I guess it's interesting to like if If this is like a permanent thing what changed in the world that Like what piece of technology or what societal norm shift or something changed that made it so that Well, maybe it's this maybe it's we're actually capable of of creating something that resonates so strongly with with people's nostalgia and We're actually capable of creating multiple billions of dollars of revenue on a single film

1:06:35Therefore we're going to spend all the money to produce that thing therefore we're not going to take chances Yeah producing those films costs hundreds of millions of dollars Right, so it's like maybe the technology got good enough both in distribution and production where it was possible to spend that much money on making a film and it was possible to spend Or to earn that much from instant global distribution that we actually are seeing it come to fruition, and it was only technology limited before. Yeah, and the flywheel like Disney of consumer products and theme parks, and when you're investing in an IP as something as an entity like Disney, that is a huge investment. You really can't, and they do take risks and have failed on stuff like, what was that one?

1:07:28they had a couple live action movies that were total flops, like right around the time that they bought Marvel. Which is interesting, and they're taking big risks, but they're flopping. Yeah, right. But you can't afford to have too many of those flops. Right, and I wonder if like, you know, you get a few of those that are big risks that are flopping, and then you just get scared away from doing it. Yep. And you start pushing all your effectively prototyping down into cheaper distribution mediums.

1:07:58Yeah, it's interesting though. I mean, like, where, you know, as you said, there's so much innovation in a Renaissance going on in the television format right now. Is there or will there be something similar in the, you know, film format? I mean, obviously there's independent film and there's lots of innovation going on. But not at the, not at the, you know, kind of mass audience scale that something like Netflix and Amazon has allowed risk to be taken in television and still have the ability to a channel to distribute that to a mass audience. Yeah, it's interesting. I think sort of the same thing has happened with music where there's like a psychological thing where we love the things that other people love and we all love having the same darling and the same heroes and like the same sort of music feels good to us that feels good to the other people around us.

1:08:57and with global distribution happening so quickly and so cheaply, you have the ability to achieve much more sameness and have much more people agree on what the best thing is. And we like to think that we have independent tastes, but a lot of the time we're sort of just like looking to hear from people like, oh, what's the best? Who's the Taylor Swift right now? And that's why we're getting so many fewer It's like, there didn't, except for like the Beatles, like there was never like the Beyonce, the Taylor Swift, they were much more distributed and there were many more people that could make it big. And now there's like this echelon of people that you can count on one hand who are like these super phenomenon, and I think the same thing sort of happening in movies. Yep. And this totally leads super well into my tech theme, which is,

1:09:56Something I've been thinking about. I've been reading this great book. It came out last year, I think, or a couple of years ago called Sapiens. By this guy, you all know a horary. And it's in great book, and it's about, it's sort of a biological time history of homo sapiens, and how, you know, our Species came to take over the world basically even though there were there are no longer but there were other Species of the genus Homo Neanderthals and many others But Homo sapiens sort of quote-unquote won and you know you could argue now are destroying the planet, but certainly have taken over the planet What like actually differentiates us from other Homo species and from the rest of

1:10:55the animal kingdom and he argues that the primary thing is our ability to believe and create and believe in fictions because of which are like, you know, a reality is like there is a lion over there run, you know, but a fiction is like there is a company and there is a story and, you know, this We are you know the internet is a fiction right but like it's not that it's not real. It's very real But it's not something that any other species could comprehend and so that that kind of makes me think about like IP and Exactly what we were just talking about like as the internet has spread communication instantly and globally You know

1:11:47Are we seeing these major blockbuster franchises just continue to consolidate because of the power of these fictions? Yeah, yeah, it's a great point. Heady stuff for Marvel. I highly recommend the book, not my carve out for the week, but because I'm not done with it yet, but great book. Cool, cool. You want to grade it? Let's do it. So an interesting stat that I found when I was looking through all this.

1:12:15If you look at the first eight films from Marvel post-acquisition and the first eight from Pixar post-acquisition, Marvel made about $6 billion gross. Pixar made about four and a half costs of creating them are fairly similar. The box office profit from Marvel is about $1.2 billion versus $600 million. So it's like this interesting thing where Marvel does phenomenally better at the box office. But over the long term, Marvel's home video sales are about 400 million and Pixar's are 1.6 billion and For there's an interesting thing that happens where it with Pixar films like people get attached to that one character in that one storyline and they just continue to watch and buy that film forever and When you look at the Marvel movies like even just me thinking about like what would I rather watch?

1:13:10Toy Story 3, which even though that's a sequel that has its own storyline that I can remember, and I'm emotionally attached to, or do I care about owning or even buying and watching again on a streaming service or from Amazon Iron Man 2? And you can sort of see that these serialization films don't have lasting value.

1:13:34or nearly as much as the Pixar ones do. And so I went back and listened and I've an A, not an A plus for Pixar. And I think that it's fair for me to say Disney, a great acquisition, almost a necessary one. We'd be sitting here saying, like, you were fools not to buy Marvel, but it's an A minus to me. It's not as good as the Pixar acquisition.

1:14:03I think the characters are brilliant IP for a long time. I think they've basically already recouped the cost of that $4 billion outlay and we'll see what they can do with the character intellectual property because unlike Pixar that those already created assets on a shelf will just keep creating value for them with the assets that they have from Marvel, from these characters and this intellectual property, they're going to have to keep pouring cash in to get cash out.

1:14:33Yep, I think we found that same infographic that I was I had it copied in my notes and I was looking at it too Yeah, it's interesting too to think about our grading benchmark throughout this throughout the life of this show Yeah, well, we start well, no, I was going to not take the evolution of our benchmark. Oh, yeah. You know, I think Instagram is still one of if not the top on the benchmark, but I keep thinking about to next and. I don't think you can argue that that's not the greatest acquisition of all time. You know, when you create a trillion dollars of value at the top that. But also makes me think a little bit about like the.

1:15:19As cool as as much as we love you know IP and these fictions of what we're what I was just talking about and in Media and movies and these franchises the value that you can create in technology is so much more like the leverage is so much higher than yeah, you can get from the media industry or really any other industry You know, this is why technology companies are so valuable you know 13 people at Instagram can create many, many billions of value. You can't make Iron Man 3 with 13 people or the Iron Man theme park. And reiterating something we talked about last episode. Last quarter, Facebook's operating margin went from 32% to 45% on the incredibly large revenues that they have as a mature company, like technology. That is why technology companies are worth so much. And you just can't pull a lever to make

1:16:11the 23% profit margin from from these Marvel films into something, you know, 1.5X that. Yep. Yep. And of course there's a dark side to that too, as we also talked about the Facebook, you know, episode, like, you know, you don't create nearly as many jobs when you're pulling that technology lever. But anyway, we're getting off track here. I agree on A- and I think about it in terms of lasting impact to Disney and sustainable value creation within Disney and thinking about these three franchise if these three companies that they acquired picks are you know Marvel Lucasfilm I think in a lot of ways there is the most risks to the future value of Marvel and it's it's in you know will

1:17:07superhero because it's a portfolio of superhero franchises Will superhero franchises continue to be as popular You know, I think so they've been popular for a hundred years, but how popular will they be? You're totally indexed to that Lucasfilm is all about Star Wars You know and Star Wars You could argue you have even more risk index to that however You could probably also argue it is one of if not the single most beloved franchise in the entire world of all time. So they were buying something very specific there. But then Pixar really was, you know, they were buying a process and a, you know, both a people and a process that they've applied to their whole film and creative business. So I think for...

1:18:02both the reasons you said Ben and those reasons, I think Pixar needs to be rated higher than Marvel in this Disney trilogy. So I'm going to go, I'm going to go A- for Marvel. Cool. Cool. Cool. All right. Follow-ups. Follow-ups. Follow-ups. One real quick follow-up. Spectacles have launched and people think they're cool. People do. Snapping. We'd love Fannie listeners.

1:18:33Have them would love love to hear your your comments and slack or email us at acquired FM at gmail.com We haven't made it to a vending machine yet. No, no and my god Evan Spiegel is a product marketing genius. I think Launching them what in a custom vending machine in LA and then that going away and of course selling out immediately and having a huge line and then popping one up Where was the one in the kind of like great plains area like Tulsa I think and then on the grand canyon and then once people are saying where is it gonna be next then having a store in New York City that just has the vending machine in the back of the store and like I just wonder what's next and I maybe will maybe there's even something before this this show goes live but

1:19:27Spectacles in space. Yeah, like doing everything right. Like you could totally see other companies being like, okay, we have to work with retailers to make sure there's enough of these things available and it's it's totally just like Demand generation At its finest and brand building and also the fact that like from all accounts the product is right and has like a good use case and people like enjoy using it and say it's good like Talk about controlling the message and really giving people confidence that they're onto something when they're about to go on this IPO Roach show. Yeah Super cool. I can't wait to try them All right hot takes this is less of a hot take and more of a more of a congratulation to friends, but high tower announced Very very recently if not today as we're recording this

1:20:23which is a start-up in New York with lots of Seattle roots that they're emerging with VTS in a deal valued at 300 million. Yeah, huge congratulations to Donald DeSantis and that whole team. Really, like...

1:20:40Really cool story startup weekend guys got together actually to jell as a team at a startup weekend moved to New York when it was very clear that To be in commercial real estate, they should they should be in New York really just nailed product market fit quickly built a great team and You know, this is not the end. It's that it's a reported estimated 300 million dollar merger with Their competitor and the the Wall Street Journal article that will link to likens it kind of to um To the Zillow truly I'm really yeah, but awesome awesome awesome to see you see it happen for that company. Yeah, and great to have a startup weekend in the lungs of startup weekends played as an organization and and events such a huge role in bending my lives and careers and Whether it's rover.com getting started at startup weekend or Ben Ben media well leading

1:21:39uh, indirectly to us meeting and uh, uh, uh, I mean, in the PCL and, yeah, yeah. I've got a really, uh, gushing blog post about how much, how awesome startup weekend is on my blog at some point, if anybody actually wants to check that out. But, yeah. Should we move on to carve outs? All right, carve outs. Cool. So.

1:22:00There's gonna be some people who are like I knew this is what he was gonna say Earlier on when I was hinting at this, but I am so into Westworld. It's a HBO show based on a Michael Creighton book which then got turned into a movie in the 70s with the old Brenner as a cowboy And I don't want to say too much about it now, but if you If you like the concept of where is AI and robotics going and you like really high production value entertainment it's it's created by J.J. Abrams and Jonathan Nolan who of course worked on all the the recent Batman films and the prestige and yeah a bunch of great films you gotta watch it it's so good and I just signed up for HBO now and it's like trivially cheap and you get a month free so I highly recommend it

1:22:53technology technology and super heroes all in one Yep My car about for the week real quick I Don't think I've done this before on this show, but I should have because I love it super cool app called overdrive which is which is a way to digitally through an app and through your Kindle connect with your local library and Barrow books Barrow ebooks and audio books from your local library and then read them on your Kindle or on your smartphone and listen to the audiobooks for free with your library membership and I actually had started using this a few years ago kind of forgot about it and picked it up again earlier this year and it's just like removing that little bit of friction to you know not that e-books are very expensive but audio books are yeah I'm reading like four or five times as many books as I used to because of it so

1:23:51highly recommend it, go sign up at your local library, support your libraries and use Overdrive. True that. All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig. Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale. Yep, in the...

1:24:17crazy speed of today's AI world. Shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers, and how fast you can use that signal to guide what you shipped next. This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved.

1:24:48So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com slash acquired to get started. All right, that's all we've got. If you aren't subscribed and you want to hear more, you can subscribe from your favorite podcast client now. If you're a longtime listener, or even if you've just picked us up and you really like us, We don't ask for much but we would really really love if you'd share about us on Twitter, share about us on Facebook, leave a review. It's how we grow the show and it's how we can reach more people and do more things. So thank you so much for being a listener and we will hear you next time. We'll see you next time.