Rights to Old Comic Strip Characters Worth Millions

Anyone under the age of nine who is familiar with Charlie Brown probably wasn't introduced to the mopey character in the newspaper. More than likely, he or she has watched Charlie Brown TV specials or seen Peanuts-branded merchandise.

In fact, the readership for most of the classic, syndicated comics doesn't necessarily include children. The majority of newspaper readers are 55 or older. While many newspapers have eliminated less popular sections of the newspaper, most continue to run syndicated comics for fear of alienating their older readers.

"The whole newspaper industry is antsy," Tom Daning, managing editor for United Media, told CNN in 2006. "Many are scared to do anything to hurt circulation." Daning added that it's easier to drop a new comic strip than an old standard like Peanuts.

That doesn't mean some newspapers aren't trying. The San Francisco Chronicle said last month it planned to revamp the comics page in its weekend supplement, which includes a roster of indie comics including Friendship Town, instead of the predictable lineup of syndicated comics.

"You won't find any Family Circus or Marmaduke in here," the newspaper said in a blog post announcing the change. "This page of full-color comics will also include several fun activities for people who hate comics."

The reason for including indies in the weekend supplement, says Matt Petty, art director at the San Francisco Chronicle, is that the section is meant to appeal to a younger readership -- those for whom the decades-old syndicated comics does not appeal.

Comics as Profitable Brands

In the meantime, brand managers and marketers are having a heyday selling vintage comic-related merchandise. Earlier this week, E.W. Scripps (SSP), owner of the beloved Peanuts brand, said it is selling United Media Licensing to brand management company Iconix (ICON) and the estate of Charles Schulz in a $175 million cash transaction. Under the terms of the deal, which is expected to close at the end of the second quarter, Iconix will own 80% of the business, while the Schulz estate will hold the remainder. Though United Media owns the licensing rights to an array of brands from Dilbert to Good Night Moon, the majority of its licensing revenue is generated from deals involving the Peanuts characters. Retailers sell more than $2 billion worth of merchandise featuring United Media's licensed brands annually.

Although the news probably doesn't come as a surprise to many -- Scripps made it clear a couple of months ago that it was "exploring strategic options" for its licensing business -- the price might seem a tad low given that Iconix thinks it can generate $75 million in royalties a year from United Media Licensing. The implication is that the acquisition will completely pay for itself in a little more than two years.

From the looks of it, the potential upside for Iconix is great. There may be no shortage of merchandising opportunities for the Peanuts brand, even if few kids have ever read the comic strip. Betty Boop, the 1930s comic character who last made an appearance in the 1989 television special "Betty Boop's Hollywood Mystery," is alive and well and featured in print and TV ads for a range of products including Mercedes Benz and Coca-Cola. She even has her own set of banking products at Bank of America. Similarly, Popeye, who last appeared in a daily comic strip in 1994, is pitched by King Features Licensing (which also owns the licensing rights to Betty Boop) as the "No. 1 licensed character food brand in the world." King Features wasn't available to comment for this story, but it's fair to guess that both characters are quite profitable.