Note from JayJay: Part 2 of a book proposal Jim wrote.
Chapter One: “Days of Future Past”
People have been using sequences of pictures in combination with written or spoken words to tell stories since Paleolithic painters chronicled hunting expeditions on cave wall. It wasnʼt until the late nineteenth century, however, that the medium of comics began to develop in earnest, when American newspapers and magazines started carrying single panel cartoons and comic strips.
The first comics were drawn from one fixed point of view, as if the scenes shown were taking place on a stage, and the readers were seeing them from an orchestra seat. Cartoonists soon realized, though, that angles could be varied, close ups could be used to convey emotion, medium-depth shots to show action and long shots to introduce locales.
Thus, the choice of shots and the sequence of shots could relieve the words of much of the burden of exposition. The result was the evolution of an entirely new way of conveying ideas—a fusion of word-bites with information-rich images to form highcontent, easily assimilated info-packets that could be presented alone or in a sequential stream.
Comics quickly gained acceptance as a legitimate medium all around the world—except in the United States. Elsewhere, the comics medium is used to convey entertainment and information of all kinds to all ages. Here, in its birthplace, the comics medium has been stigmatized as a rather lowbrow amusement for children thatʼs probably bad for them. Comic books, especially, have always suffered from, and largely lived up to their reputation as junk for kids (and somewhat pathetic adults).
The first American comic books, published in the 1920ʼs, were reprints of newspaper strips, often use as giveaway premiums by soap companies and movie houses. Comic books were generally published by small, fast-buck publishers who thought they were cashing in on a fad. When, in the mid-1930ʼs, comic booksʼ popularity had failed to fade, some publishers began publishing original material—but kept their schlock mentality.
In his book The Great Comic Book Heroes, Jules Feiffer, who like many talented people started out in the comic book business, tells of virtual sweatshop conditions—of comic book creators working in cramped bullpens, sleeping on the floor, living on cigarettes and coffee and cranking out pages. Often, two artists would work on the same page at once, one drawing upside down. Writers churned out scripts page by page as the artists were drawing them. Creators often used pseudonyms to avoid having their real names sullied by association with comic books. For instance, Stan Lee, the creative force behind Marvel Comics, was born Stanley Leiber, a name he hoped to save for when he wrote the Great American Novel, or for when he broke into writing newspaper comics, which, by comparison, were respectable.
Artists and writers often had to hound publishers for payment. Many publishers simply flew by night.
The tawdry history of the business, rife with low self-esteem, greed and cheesiness, set the stage for disaster. Somehow, though, comic books survived wartime paper shortages, investigation by the U.S. Senate Subcommittee on Juvenile Delinquency, and a steep decline in available retail outlets. Not only did the business stubbornly refuse to die—a testament to the innate vitality of the medium—but three times in my lifetime it enjoyed tremendous boom periods and nearly established itself as a major, mainstream, legitimate medium.
That may be hard to imagine for many people—but consider that Japan, with one third the population of the U.S., buys three times as many comic books at price points that are relatively higher. There are Japanese comics devoted to such diverse things as romance, knitting and tennis. There are cute “funny animal” comics for young children and pornographic comics for adults—often bound together in the same volume, oddly enough.
Success isnʼt limited to Japan. Scandinavia has the highest per capita consumption of comics in the world, and throughout Europe, the variety of comics, and the respect given comics as a medium is amazing.
Chapter One will briefly explain the history of comic books in America—how they earned their status as third class citizens of the arts, how the industry self-destructively avoided big-time success and how it became ideal prey for financial predators and Super Villains.
Itʼs a litany of short-sightedness, stupidity and greed, leading to the near- moribund state of the business now. Itʼs tragic, really. We couldʼa been a contenda.
Chapter Two: “What Price Power”
In 1983, corporate raider Mario Gabelli began buying up shares of Cadence Industries, Inc., setting off a bitterly contested battle for control against chairman Shelly Feinberg and the board of directors. The real prize was Marvel Comics, a division of Cadence. Shelly and his henchweasels had made Marvel a division, rather than a subsidiary, like every other Cadence unit, so that Marvelʼs earnings could be buried under Cadenceʼs bloated corporate overhead. With the crown jewel carefully hidden, Shelly planned to deliberately depress the stock/price, take Cadence private for a relative pittance, then sell off the pieces—especially Marvel—at their true worth. Gabelli, however, had seen through Shellyʼs scheme and was trying to usurp it.
Chapter two tells the tale of Marvelʼs rise from the brink of oblivion in the late 1970ʼs to prosperity in the 80ʼs, and of the Super Villain war it touched off. Downstairs on the creative floor we were saving the company! Saving the industry! Building the foundation for the future—the companyʼs and ours! Upstairs, the top cheeses were planning to use the opportunity we were presenting them to make themselves richer with reckless disregard for how we might suffer in the short term, or how the company and our future might be damaged in the long term. Too bad for them that Marvelʼs prosperity was so well publicized. Too bad for them that a sharp cookie like Gabelli could make some reasonable estimates, do some simple math and deduce that Marvel was worth more than three times the market cap of Cadence.
Too bad for us downstairs, too. Pressure from upstairs to publish more with less money and fewer people to fund Feinbergʼs expensive defense against Gabelli was intense. We succeeded because I managed to squeeze more work out of an already overworked staff (which did nothing for my popularity). We created new series, came up with a bunch of promotional one-shots and invented new ways to repackage old material. We put millions more in the war chest. It was the best of times and the worst of times—we were marching from victory to victory, but it was a double-time forced march.
Comics creators, not normally the most well-balanced of humans, become even weirder under pressure. The relieve stress in strange ways—and I began to believe that my main jobs were inmate control and suicide watch.
When the Shelly/Gabelli war for control began, I was cheerfully unenlightened about such things, but I got a battlefield education.
As it all unfolded, because I was among the top five Marvel execs, I was privy to a lot of the machinations of the Feinberg gang. I was their fair-haired boy, after all, the one filling the coffers and pulling profitable publishing miracles out of my butt daily—a loyal lieutenant to be well rewarded after victory had been achieved.
I also was among the rank and file workers every day. They didnʼt understand what was going on, and for the most part didnʼt want to. They preferred to keep their heads in the sand and hope that everything would come out all right, or, perhaps, that I would look after their—our—interests. I saw the effects the takeover war was having on them, and it became increasingly clear to me that no one upstairs—unless I was there, attending a staff meeting—gave a damn about them or their future. As my stupendous naiveté slowly wore away, and I understood that what I thought was doing my job well was actually serving the selfish interests of a few greedy bastards.
Then, rather suddenly, it was over. Feinberg and his partners in Cadence Management, Inc. bought off Gabelli and succeeded in taking Cadence private at a cost of $27 million. Shareholders received $17 per share. In a fairly short time, CMI succeeded in selling Marvel to New World Pictures for $46.5 million, and the rest of the Cadence companies for $30 or so million more. The way I see it, the shareholders were bilked by the board of directors to the tune of $50 million. And my troops? Just when I thought the crisis had passed and things couldnʼt get worse, they did.
Chapter Two will tell the story of the first big battle for Marvel, of the downstairs crazies who suffered through it, and my own consciousness-raising.
Chapter Three: “New World Aʼborninʼ”
In late 1986, two years after taking Cadence Industries, Inc. private, Shelly Feinberg and his henchweasels sold the Marvel Comics division to New World Pictures. A string of potential buyers prior to New World had been scared off by Feinbergʼs strange negotiating style, which entailed starting with outrageous demands, haggling endlessly and then, at the eleventh hour, reneging on what had finally been agreed to and, in Richard Bernsteinʼs words, demanding “a nickel more.”
New World was the ideal suitor—awash in junk-bond money, on an acquisition binge, eager to close a deal before the end of 1986 to avoid adverse tax-law changes effective January 1, 1987. New World was run by Larry Kuppin and Harry Sloane, two entertainment lawyers who had bought Roger Cormanʼs B-movie company, and Bob Rehme, a former marketing exec. They did only a cursory due diligence on Marvel and the deal seemed to be zooming along until, in mid-November, something threatened to derail it.
I quit.
Iʼd become increasingly at odds with the top management during the nearly two years of the Gabelli war and the nearly two years of Marvelʼs being on the block—three-plus years during which Shelly Feinberg, Marvelʼs president, Jim Galton and their ilk had become increasingly self-serving at the expense of my troops and our future. You might expect owners to be short-sighted and niggardly while a companyʼs on the block, but Shelly and company were out to set a new record. The pressure on me and my troops had been tremendous, and worst, Iʼd become aware that Marvel hadnʼt been paying creators incentives they were due.
I discovered this after a trip to Europe to visit international publishing licensees, where Iʼd seen foreign editions of many of our contract artistsʼ works in print, that Iʼd been unaware of. I checked when I got back to see if weʼd paid those artists royalties they were due. No. “Why pay them?” the CFO told me, “theyʼll never know about those books.”
Furthermore, he told me that his orders were to “delay or not pay” any money owned to artists that he could.
My first instinct was to let the artists in question know what Marvel was doing to them. But then what? Theyʼd quit en masse, and the better ones would be received with hugs and kisses at DC Comics. That seemed drastic—scattering the team Iʼd worked so hard to build.
I decided to do everything I could to fight for justice, and if I couldnʼt get Galton to come around, then Iʼd quit. And then Iʼd tell the artists…
Once, Iʼd been CMIʼs fair-haired boy. But as the situation deteriorated, I became enemy number one. One of the moments that iced it was probably the time I stood in the intersection between Galtonʼs office, the corporate counselʼs office and the CFOʼs office screaming at the top of my lungs that if the artist and writer whoʼd created the Hobgoblin didnʼt get their $26,000 royalty for the Mattel action figure, that I was going to go to go to the Daily News with the story and launch a class action suit on behalf of the artists.
They were paid. Grudgingly.
After a number of such screaming matches over things like their idea of retroactively eliminating incentives, cutting benefits to creators and other charming ideas for saving money, it had become war between us. They must have felt very vulnerable, because none of them had ever even opened a comic book, and therefore they were extremely dependent upon me and my knowledge of the business. Executive V.P. Joe Calamari (no kidding!) once told me that they couldnʼt get rid of me because I was the only one who could tell them who could replace me.
In an attempt to fix that, they had begun to groom an ambitious young woman from the sales department, Carol Kalish, to become their new comics guru.
Still, though, at the eleventh hour of the pending New World transaction, they thought they needed me.
When Galton got my resignation letter, he called me to his office and literally begged me to stay. What did I want? he asked.
If my resignation had been a ploy, it would have been genius. A less naivé person, at this point would have called in his lawyer and had crafted a lovely contract with a splendid golden parachute. Not me.
I told Galton I wanted my people paid. He swore that the moment the deal closed, heʼd see to it. New World intended to keep Galton and several others of the owners in position as management. He couldnʼt do it now, he said, because it would be difficult to explain to New World why they were suddenly paying out all this money theyʼd never admitted owing, but after the closing, heʼd be able to engineer it.
I believed him. Yes, that is world-record, stupidity, but I had a reason. Galton had always been short-sighted and greedy, even when he didnʼt have to be. That wasnʼt so bad—Iʼd learned to work with it—by simply couching everything I ever asked of him in terms of how it would make Marvel money fast. You can work with greedy people if you know how to approach them. Other then that, heʼd always been honest, even a standup guy upon occasion. I trusted him. Stupid me.
On the morning of January 5, 1987, the deal closed. After heʼd signed, putting four or five million dollars into his personal pocket, Galton returned to his office to find me waiting for him. I had a list of artists who were owed money from foreign sales, toy royalties and other incentives. I told him it was time to settle up.
He said exactly, “Fuck you.”
Restraining the urge to toss this nasty little man out his eleventh floor window, I returned to my office to write another resignation letter.
I changed my mind, though, and wrote instead a letter to Kuppin, Sloane and Rehme telling them what they needed to know about Galton and company.
Kuppin and Sloane were very concerned. They had Rehme look into it. He quickly discovered that I was right. Then, he allowed Galton to fire me. Then, to preempt my going to the media with my story, they quickly paid all the overdue incentives—including $3,500 to me that I didnʼt know they owned me!
At my exit interview with Rehme, he said that they couldnʼt really keep me and fire, essentially, all the rest of top management. How would that look to their investors, especially since theyʼd just bought this company?
Amazingly, after spending twelve years of my life helping to build Marvel from a disaster to a winner, all I felt walking out that day was relief.
Chapter Three will tell the tale of how Marvel fell into the hands of the three stooges, Kuppin, Sloane and Rehme, and why that was bad.
Chapter Four: “If This Be My Destiny”
When I left, the Marvel editorial staff and freelances threw a “Ding, Dong, the Witch Is Dead” party. During my three-plus year war with top management, Iʼd been systematically undercut and vilified to my own troops. The same people who in 1982 would have followed me to the gates of Hell were convinced that everything that was wrong in their lives and everything that was wrong in the industry, was my fault.
Marvel faltered only a little after I left—not enough to please me—but running a comic book company is like piloting a hot air balloon. Turn up the heat and itʼll be a little while before you start to rise. Turn down the heat and youʼll coast along for a while before slowly starting to descend. It takes a while to build consumer loyalty, and it takes a while for it to erode.
I kept track of Marvel and New Worldʼs fortunes in the trades out of curiosity. What I saw in print, combined with my insider knowledge make it clear that Marvelʼs sales were slowly fading and New World was losing about a million dollars a day.
Hmm.
I figured that, at that rate, New World had under a year before their junk bond money ran out. I also figured that no one there was likely to turn it around.
New World did make some money, though, by speculating in the stock market. The three stooges were well enough connected to acquire insider information about several buy-outs in a row, most notably Murdockʼs purchase of MacMillan Books. By buying up McMillan stock just before Murdockʼs takeover attempt became publicly known, which made the stock price soar, then selling to Murdock, New World made a quick $18 million profit.
Several other similar scenarios worked in New Worldʼs favor. Buoyed by these successes, they were very heavily invested in the market when Black Monday—October, 1987 rolled around.
That did it.
At that point, having taken a near fatal beating on Wall Street, theyʼd have to sell something to stay alive, I thought. They only thing they had that was easily detachable and worth anything was Marvel.
Chapter Four tells the story of my first attempt to buy Marvel Comics and oust the Philistines.
Itʼs a story of highs and lows, a year of blood, sweat and smears. It involves intrigues, double dealings, betrayals, confrontations and trick maneuvers. Among the cast of characters were Chase, N.A., Bankers Trust, Warburg Pincus, Boston Ventures, The McFadden Group, Baker McKenzie, Weslay, Odyssey Partners, Ernst and Whinney, and more.
It ended with an eleventh hour deal hastily knit together among my management group, our advisor and senior lender, Chase N.A., and Shenkman Capital. We made a final round bid of $81 million. Ours was the only bid. We won. Shenkman signed a letter of agreement. For one glorious week, we thought weʼd done it.
Then, one morning, a small article in the Wall Street Journal announced that insider, Ronald O. Perelmanʼs Andrews Group had bought Marvel Comics for $82.5 million— enabled by an escape hatch in our letter of agreement with Kidder Peabody (who conducted the sale) and the fact that our armʼs length bid had set a value. Weʼd been used as a stalking horse.
Later, I had a meeting with Andrews Groupʼs CEO, Bill Bevins—an interview, actually.
They were considering hiring me as part of their management team. During our discussion, I found out that they would probably have one-upped any reasonable bid. Ours had been a hopeless quest.
Ultimately, Bevins didnʼt offer me a job at Marvel, though he seemed convinced that Iʼd do a good job. Though Bevins told me that their assessment of the current Marvel management, Jim Galton and cronies, was that if they all drowned in the East River one day, itʼd be a month before anyone at Marvel noticed they were gone, he planned to keep them while slowly filtering in their own people, to create the illusion of stability needed to facilitate their plans to take Marvel public in a year or so. There was no way I was going to quietly “filter in,” and that ended that.
So much for Marvel. At least, thatʼs what I thought at the time.
Next week: $UPER VILLAINS Part 3, The thrilling conclusion
