Will wizards ultimately triumph over superheroes?
That was the question facing the theme park world last week after the Walt Disney Co. announced plans to acquire Marvel Entertainment and the Universal Orlando Resort broke two years of silence about its new Wizarding World of Harry Potter attraction, slated to open this spring.
"If Harry Potter is executed properly, [Universal has] enough intellectual property to expand that property for the next 25 years," said Dennis Spiegel, president of International Theme Park Services Inc., a Cincinnati-based theme park consulting company.
Universal Orlando does not release financial information, but Spiegel estimated that Universal is investing about $300 million in the project.
"From a creative material standpoint, I've never seen anything that fits better into a theme park," Spiegel said of author J.K. Rowling's series of Harry Potter books.
In a webcast last week, Universal Orlando, owned by NBC Universal, revealed details about the Harry Potter project for the first time since it was announced in May 2007. Wizarding World will feature more than 20 acres of attractions, shops and restaurants that re-create the fictional world of Rowling's books and Warner Bros.' movies.
Mickey, meet the Hulk
While the success of the books and movies leave little doubt about the potential for Wizarding World, Disney's Marvel acquisition could present a number of integration challenges for Disney and some licensing issues for both Disney and Universal as they jockey for theme park status and buzz in the coming years.
On Aug. 28, Disney agreed to purchase Marvel Entertainment for $4 billion. The deal included Marvel's portfolio of more than 5,000 characters, including iconic action heroes such as Iron Man, Spider-Man, the X-Men, the Hulk, Captain America and the Fantastic Four.
The Marvel deal, pending antitrust approval by U.S. and international regulatory bodies, will be Disney's largest acquisition since 2006, when it acquired Pixar Animation Studios for $7.4 billion, according to Zacks Investment Research, a Chicago-based firm. The deal is expected to close by the end of the year, Zacks reported.
And just as Disney has integrated Pixar characters into its theme parks, the company has hinted it plans to do the same with Marvel over time.
Bob Iger, Disney's president and CEO, said in an interview on CNBC following the Marvel announcement: "Marvel characters have already proven to be strong in terms of theme-park attraction, and we believe there are a lot of opportunities around the world -- not in every one of our parks, because there are some existing agreements that we obviously have to honor, but in a number of places for us to use the Marvel characters to basically help us grow our theme park business and to better entertain people."
Among the existing agreements to which he referred, one in particular could prove tricky: Universal currently holds the licensing rights to create theme park rides east of the Mississippi River based on Marvel characters. Universal Orlando's Islands of Adventure theme park (which will also be the home for Wizarding World) has an entire land called Marvel Super Hero Island, which includes the Amazing Adventures of Spider-Man 3-D ride and the Incredible Hulk Coaster, among other Marvel character-themed attractions.
In an email to Travel Weekly, Tom Schroder, a spokesman for Universal Orlando, stated: "Marvel Super Hero Island at Universal's Islands of Adventure and the Marvel characters are a beloved and important part of the Universal Orlando experience. They will remain so. Our agreement with Marvel stands. It extends for as long as we follow the terms of our existing contract and for as long as we want there to be a Marvel Super Hero Island."
As far as anyone can tell, the deal is good indefinitely.
"We've looked and looked, and we can't find a sunset on it," Spiegel said of Universal's licensing agreement with Marvel.
If none is found, Disney will collect licensing fees from rival Universal Orlando for the foreseeable future.
The Universal agreement also means that if Disney wants to integrate Marvel characters, it will likely have to do it in California, at least at first. That could mean a Disney West Coast version of a Spider-Man ride existing simultaneously with Universal's East Coast version.
"I don't think that's a game changer," said Jamie Rizzo, an analyst with New York-based investment research firm Fitch Ratings. "The Disney management has really done a good job, especially when it comes down to leveraging its characters."
While the high-adrenaline, often aggressive nature of Marvel's superheroes is a change in direction from Disney's existing cache of lovable characters such as Dumbo or Pixar's playful Toy Story characters, Rizzo said that adapting them to Disney theme parks "just comes down to execution, and do they put a Disney spin on it."
Fitch Ratings and other analysts have suggested that Marvel presents an opportunity for Disney to capitalize on the market represented by boys in their preteen and teen years.
Spiegel said that the most logical home for the Marvel characters would be Disney's California Adventure theme park, which features more fast-paced rides and into which Disney is currently pouring $1 billion in a five-year renovation and expansion project expected to be completed in 2012.
Wizards and superheroes buzz 'good for everybody'
While Spiegel described Universal's Spider-Man product as "the best ride that's been introduced for the last 25 years," he added, "You'll probably see far less emphasis [by Universal] on Marvel and much more now on Harry Potter."
At the same time, some industry observers question what kinds of opportunities Marvel actually presents for Disney.
In a research note, Michael Nathanson, an analyst at Sanford C. Bernstein & Co., said that Disney's acquisition of Marvel "raises many more questions that need to be answered in the coming months and years."
Others question the wisdom of fully integrating Marvel characters into Disney's parks.
"I personally hope Disney will maintain the Marvel universe as a separate entity," Mary Waring, founder of MouseSavers.com, a site that offers advice on Disney discounts, wrote in an email. "I don't think there is a lot of overlap between the comic book fan base and the Disney fan base, and I don't sense much interest or excitement from Disney fans regarding the recent acquisition."
Premature Marvel musings aside, Disney announced last week some very real plans for updates and renovations to its existing properties.
A revamped Star Tours attraction, which launched in 1987 as a 3-D-effect simulation ride based on the Star Wars films, will debut at the Disneyland Resort and Disney's Hollywood Studios in 2011, and by 2013, Fantasyland will have undergone the largest expansion in the history of Walt Disney World's Magic Kingdom.
After a slow, challenging year for theme parks, one that saw Six Flags Inc., the world's largest regional theme park company, file for Chapter 11 bankruptcy protection in June, the buzz being created by Disney's plans, Universal's wizards and Marvel's superheroes is a welcome relief from revenue dips and attendance drops.
"It's good for everybody when you get this publicity out in the marketplace," said Spiegel, who added that for several years, "we have lacked that buzz."