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Disney to Distribute Marvel's 'The Avengers,' 'Iron Man 3'

Studio pays $115 million for transfer of rights from Paramount.

UPDATED 8:03 p.m. PT, Monday, Oct. 18 2010

Having already pumped up its box-office market share thanks to its relationship with Marvel Studios, Paramount was guaranteed at least another $115 million Monday when it closed a deal with Disney to transfer worldwide marketing and distribution rights to Marvel’s “The Avengers” and “Iron Man 3” to the Burbank studio.

Disney purchased Marvel Entertainment for $4.24 billion last year, but Marvel’s current cycle of movies had been contracted for release through Paramount via a distribution deal in place when Disney entered the picture.

The Marvel distribution deal was one of Paramount chairman and CEO Brad Grey’s first major moves after taking over the Melrose Avenue studio in 2005, and Marvel’s comic book-derived tentpoles “Iron Man” and its sequel strategically filled the studio’s pipeline while the new regime readied its own franchises.

Now that Paramount has “Star Trek,” “Transformers” and new takes on “Mission: Impossible” and the Jack Ryan character in the works, it no longer needs the Marvel properties.

“Five years ago, when Paramount and Marvel made our initial deal, both our businesses were in very different places,” Grey said. “Today, this new agreement is the right deal for Paramount, for Marvel and for Disney. We look forward to working together on ‘Thor’ and ‘Captain America,’ and we wish Disney and Marvel the utmost success in what we know will be a very productive and wide-ranging partnership.”

Disney has agreed to pay Paramount $115 million as “a minimum guarantee against the distribution fees” that Par would have collected on the films. That money will be payable in two equal installments on the films’ theatrical release dates regardless of how the films perform, or even if they are not made at all.

Paramount had scheduled “The Avengers,” which will feature an all-star lineup of Marvel heroes, for May 4, 2012. Disney has not indicated whether it will maintain that date, though Paramount has agreed not to compete against it that weekend with a release of its own.

The third “Iron Man” flick had yet to be slotted, but Disney immediately handed it a May 3, 2013, release date in the wake of the new deal. That would keep the further adventures of Robert Downey Jr.’s Tony Stark/Iron Man consistent with previous releases, which Paramount unveiled on the same first-summer weekend slot in 2008 and 2010.

“Iron Man” and “Iron Man 2” collectively grossed $1.2 billion worldwide.

Paramount insiders say the studio will receive its usual 8% distribution fee for “The Avengers” and an increase to 9% for the third “Iron Man” — a sweetener of gratitude for launching the franchise so successfully.

“In completing this agreement, Disney will now leverage these two highly anticipated films across the multiple global platforms of the Walt Disney Co.,” Disney Studios chairman Rich Ross said. “We appreciate the tremendous momentum that Paramount established with these iconic Marvel characters and look forward to propelling the brand even further in the coming years.”

The deal gives Disney, which has faltered at the box office recently, an earlier opportunity to benefit from its acquisition of Marvel. “The Avengers,” originally envisioned as a mega-capper that would capitalize on a series of origin pictures about Thor, Captain America, Iron Man and Hulk, will spawn new story lines about each in further solo outings for Disney.

Disney’s ability to launch and market “Avengers” itself guarantees it control over how it steers all of those potentially ongoing franchises.

The profits from Marvel movies eventually flow into the Disney corporate coffers no matter who distributes them, but by taking over the releases of “Avengers” and “Iron Man 3,” Disney’s distribution apparatus will gain the ability to use the potential hits as leverage when booking its surrounding titles into theaters.

Paramount will retain distribution rights to Marvel properties “Thor” and “Captain America: The First Avenger,” which will open May 6 and July 22 next year, respectively. It also retains rights to the first two “Iron Man” films.

Joss Whedon, who will direct “Avengers,” has been rewriting the script and casting it in concert with the development of “Thor” and “Captain America,” so continuity will be maintained. The latter two were far enough along in production that it was determined it would have been disruptive to pass those films along to Disney as well.

Paramount views the deal as an opportunity “to do no work on ‘Iron Man 3’ and ‘Avengers’” and still make more money on the films,” according to a source.

Paramount’s developing 2012 slate includes the untitled Jack Ryan reboot, which has Chris Pine starring and Jack Bender directing, and a sequel to the 2009 actioner “G.I. Joe: The Rise of Cobra,” being penned by “Zombieland” scribes Rhett Reese and Paul Wernick. Both are nearing a greenlight.

Paramount also will distribute DreamWorks Animation’s “Madagascar 3” on May 18 and the “Star Trek” sequel on June 29 that summer. And the company is moving forward with Fox on a re-release of “Titanic,” converted to 3D, which could land in April on the 100th anniversary of the ship’s sinking.

Meanwhile, Disney already has the first live-action Pixar film, “John Carter of Mars,” scheduled for June 8, 2012, and another Pixar movie, “Brave,” tentatively penciled in a week later.

As for the pay-TV future for the titles that are moving, “Avengers” will be licensed to Epix under Paramount’s existing pay TV arrangement. “Iron Man 3” will go out through Disney’s output deal with Starz.  ∂