Disney Bets $200 Million on Iron -- Here's Why It'll Pay Off

Updated

Not long ago I argued that shares of Walt Disney (NYS: DIS) looked like a screaming buy because its Marvel Studios unit is taking careful, deliberate steps to build new franchises.

Today brings us a closer look at what may be the brightest of that bunch: Iron Man. Marvel Studios released its first official trailer for Iron Man 3, starring Robert Downey Jr. as Tony Stark/Iron Man. The film debuts next April in Europe and then on May 3, 2013, in the U.S.

This time, the Golden Avenger will take on The Mandarin:


Source: Marvel Studios.

For me, it's a blatant and altogether awesome call back to the first movie, in which a group called The Ten Rings kidnaps Stark. Fans should also appreciate seeing The Mandarin (played by Sir Ben Kingsley) brought to life on screen, given how often the ring-wielding Asian power broker conflicts with Stark's Iron Man character in the comic book series, which dates back to 1963.

Iron Man 3 seems intent on taking the cinematic tale further by exploiting Stark's relationships with girlfriend Pepper Potts (played by Gwyneth Paltrow) and his best friend Col. James Rhodes (played by Don Cheadle), who also doubles as the government-sanctioned agent War Machine.

If history is any guide, director Shane Black will use what's likely to be a $200 million production budget to push and pull each character slowly into whatever grand plan Marvel's film maestro, Joss Whedon, has planned for Avengers 2, which is due in 2015. But as a franchise character, Iron Man already has few equals.

The first two films rank seventh and eighth on Box Office Mojo's list of the top domestic grossing superhero flicks of all time. And don't forget Marvel's The Avengers, which tops the list and features the Golden Avenger as a main character.

There are also digital sales to consider. Apple ranks 2008's Iron Man as the 65th best selling movie at its iTunes Movie Store. The Avengers ranked seventh as of this writing.

Put differently: Downey Jr.'s take on the Golden Avenger is directly responsible for $1.21 billion in worldwide box-office receipts, plus another $1.51 billion for The Avengers. By contrast, Christopher Nolan's acclaimed Batman trilogy has brought Time Warner (NYS: TWX) $2.46 billion in global box-office receipts.

Then there's Spider-Man, who helped kick off studios' interest in superhero films a decade ago. The trilogy directed by Sam Raimi and starring Tobey Maguire as protagonist Peter Parker brought modest profits to Marvel even as it generated $2.49 billion at the worldwide box office for Sony's Columbia Pictures. This year's reboot, starring Emma Stone and Andrew Garfield, puts the total at more than $3 billion.

So, yeah, Spidey beats all comers. But does it really matter? Consider how amazing these figures are. Six years ago, a character few Americans had ever heard of now stands within spitting distance of Batman's legendary earnings. Iron Man 3 could put the old Shellhead over the top.

Yet film screenings can only tell us so much in the new age of mobile media. Today, Apple introduces the iPad mini to an expectant audience that's spending more time than ever watching TV and movies whenever and wherever they please, thanks to the way the company has revolutionized the way we use technology. What's the next big thing in the tech world? The Motley Fool has compiled a new report called "The Only Stock You Need to Profit From the NEW Technology Revolution." To get instant access to the name of this company and get in on the stock before everyone else does, click here -- it's free.

Editor's note: A previous version of this article stated that Paramount Pictures would distribute the film. The Fool regrets the error.

The article Disney Bets $200 Million on Iron -- Here's Why It'll Pay Off originally appeared on Fool.com.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Time Warner, and Walt Disney at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool owns shares of Apple. The Motley Fool has sold shares of Sony short. Motley Fool newsletter services have recommended buying shares of Walt Disney and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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