...Bankruptcy and Restructuring at Marvel Entertainment Group Bankruptcy and Restructuring at Marvel Entertainment Group 1. Why did Marvel file for Chapter 11? Were the problems created by bad luck, bad strategy or bad execution? Before addressing its bankruptcy, it is necessary to have a general understanding of the company being analyzed. Marvel Entertainment Group began in 1939 as Timely Publications, a comic book publishing company that gained fame around the time of the Second World War. One of its most successful characters from this period was Captain America, who was often depicted fighting against the Germans. Other new characters came in the decades that followed, some of which still maintain popularity to this day, including The Fantastic Four, The Incredible Hulk, The X-Men, and Spider-Man. Attempting to reflect the general “psychological spirit” of the era (WWII, Cold War, etc.), many of Marvel’s creations in the mid-20th century fought against Communist foes. Editor-in-Chief Stan Lee helped usher in the ‘Marvel Age of Comics’ of the 1960’s, writing most of the superhero titles himself, and restoring many of the aspects from the late 1930’s superhero genre. Skipping forward a few decades, Marvel Entertainment Group was bought in January 1989 by Ron Perelman for $82.5 million, financed using only $10.5 million of equity. The remaining portion was borrowed from a syndicate of banks led by Chase Manhattan, seeing this as a relatively insignificant amount for Perelman...
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...When Marvel had filed for Chapter 11 and bankruptcy they were truly In a time of hardship. In the mid 1990s, Marvel experienced sharp declines in both businesses, causing them to file for bankruptcy in December 1996. The problems were caused by a number of things, but I would have to say bad strategies overall being the biggest reason in which they had to file for bankruptcy. Marcel had six principle lines of business. Sports & Entertainment Cards, Toys, Children’s Activity Stickers, Publishing, Confectionary & Consumer Products and Licensing of characters. While continuing to run the company and trying to maintain operations constant, Marvel was not paying attention to the hottest means of entertainment that was trending; video games. Had they been paying attention to the industry they would have developed a strategy to enter this market. Also, the interest of comic books by consumers were falling sharply, which was another thing Marvel neglected to address. The new restructuring plan suggested by Perlman had three parts. First was an investment of $350 million by Andrew Group. Investments made by Andrew Group will relax the Cash flow position of Marvel. It will in turn increase its net cash reserves, after the acquisition of Toy Biz, by $33.5 billion. Next, as just mentioned was the acquisition of Toy Biz. Toy Biz is engaged in the business of manufacturing toys based on Marvel characters. It generates cash flows of approximately $60 million per annum which can be used to...
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...HBS CASE STUDY Bankruptcy and Restructuring at Marvel Entertainment Group Why did Marvel file for Chapter 11? Were the problems caused by bad luck, bad strategy or bad execution? We believe that Marvel filed for Chapter 11 mainly because of its bad business strategy. As of year-end 1995, Marvel had 6 business lines: Sports and Entertainment Cards, Toys, Children's Activity Stickers, Publishing, Confectionery and Licensing of characters. Trading cards, Stickers and Comic Books started facing the decline in sales after year 1993. There were 2 main reasons for this decline: First, these businesses increasingly had to compete with alternative forms of child entertainment (mainly video games). Second, the decline in sales was driven by disappointed collectors who had viewed comic books as a form of investment and stopped buying them as company stopped increasing the prices. We believe that the company should have foreseen these events pregnant with dangerous consequences, while performing a market research and forming a long-term business and financial strategy. As one can see from the diagram below, the three unpromising business lines (filled in red colors) accounted to 61% of total revenues of a company in year 1995. At the same time, the company's financial strategy was based on highly optimistic business expectations and was not suitable for unfavorable turn of demand for entertainment products towards video games. Due to its high leverage (52%), the company was not...
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...lessons from Marvel Entertainment Group’s bankruptcy Joseph Calandro Jr Joseph Calandro Jr is the Enterprise Risk Manager of a global financial services firm and a Finance Department faculty member of the University of Connecticut (joseph.calandro@ business.uconn.edu). s the current recession unfolds, indications are that corporate executives and strategists will be making decisions in an economically distressed environment for some time to come.[1] Historically, investment and M&A activity tend to decline during periods of economic distress. However, a specialty form of acquisition, known pejoratively as ‘‘vulture investing’’ has flourished during such times. Perhaps because it has been practiced as a specialty by financiers accustomed to balancing high risks for quick rewards, acquiring distressed companies has not been widely viewed as a corporate strategic opportunity. Recently, however, distressed M&A has become more common: A B as of April of 2009, there were 60 distressed M&A deals for the year including Valero Energy Corporation’s purchase of VeraSun Energy Corporation’s assets in bankruptcy; in 2008, there were 220 distressed deals; and in 2007, there were 134.[2] B B When assessing distressed M&A opportunities, corporate strategists should leverage their industry knowledge and expertise to search for hidden value, and also to select qualified industry experts to validate strategic and valuation assumptions. The interesting bankruptcy of Marvel Entertainment...
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...Bankruptcy and Restructuring at Marvel Entertainment Group Chen Ziqiang Wu Libin Lin Yingshuai Deng Linli Lim Yihao 2011/11/29 1. Why did Marvel file for Chapter 11? Were the proble ms caused by bad luck, bad strategy, or bad execution? We think that Marvel filed for Chapter 11 mainly due to its bad business strategy. Three of its six business lines, Trading cards, Stickers and Comic Books started facing the decline in sales after year 1993. There were two main reasons for this decline: First, these businesses increasingly had to compete with alternative forms of child entertainment (mainly video games). Second, the decline in sales was driven by disappointed collectors who had viewed comic books as a form of investment and stopped buying them as company stopped increasing the prices. We believe that the company should have foreseen these events while performing a market research and forming a long-term business and financial strategy. The three unpromising business lines accounted to 61% of total revenues of a company in year 1995. At the same time, the company's financial strategy was based on highly optimistic business expectations and was not suitable for unfavorable turn of demand for entertainment products towards video games. Due to its high leverage (52%), the company was not able to serve all the debt in case of sharply declining revenues. It is obvious that the company did not anticipate the change in customers' preferences and was wrong...
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...Richardson Keller Graduate School of Management Abstract Marvel Entertainment, LLC (Marvel) has been producing toys, comics and stories filled with characters that have played a substantial role in the childhoods of millions. In this paper I will examine the leadership that allowed Marvel to emerge out of bankruptcy into a largely profitable company in less than a decade. The type of change that Marvel experienced is not the norm for companies that were in their position, making their story intriguing and valuable to anyone who learns from the success of others. In this paper I will analyze the strategic rationale for change that took place at Marvel, propose a suitable change process for their situation and examine possible obstacles they will face when restructuring their organization. Course Project Paper #2 Developing a Communication Plan Marvel finds itself in a very precarious position emerging from bankruptcy. After a company goes through the bankruptcy process, its customers, employees, partners and investors find themselves consumed with uncertainty when it comes to future prospects. As a result, I believe Marvel must take on reestablishing its image as a boundless and profitable company. Marvel has to put forth communications that clearly separate its future from its past while providing achievable goals for the future. Since Marvel now has a recent track record of failure, it will be fresh...
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...Case Seminar Advanced Corporate Finance Tuesday 10:00 – 13:00, Room 23 Instructor: Tim Adam This case seminar discusses real-world business cases, which relate to the materials covered in Corporate Finance and Advanced Corporate Finance. The main topics are company valuation, capital structure, bankruptcy, corporate governance, project finance and corporate risk management. The main objective of the seminar is to apply the theoretical concepts of corporate finance and corporate governance to real-world situations. To do so we will discuss six Harvard Business School cases. In addition, there will be several company presentations of real-world business cases. This seminar has a high level of practical relevance, but it is also very labor intensive. Expect to spend at least eight hours each week on case preparations. Prerequisites All participants must have successfully passed Corporate Finance, and take Advanced Corporate Finance parallel or prior to this case seminar. Registration Students need to register for this seminar. Please submit your applications electronically (CV, most recent transcript) to Mrs. Bulwahn by April 8, 2016. If you do not attend the first session, your place may be given to other students on the waiting list. Evaluation Four case reports (80%), class participation (20%). Seminar attendance is obligatory. Course materials Cases can be purchased for a total cost of US$ 23.70 using a credit...
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...in 2006, brought Steve into the Disney family, as a board member, a shareholder, a mentor, and a friend, and we were so lucky for all that he represented and all that he contributed. Disney, ESPN, ABC, Pixar, and Marvel are an amazing collection of brands that grow stronger every day as new platforms and new markets provide enormous new opportunities for high quality content and experiences. To that end, we are fortunate to have a talented group of employees who are committed day in and day out to building our brands around the world. Since becoming President and CEO in 2005, I have focused on three strategic priorities: creating high-quality family content, making experiences more memorable and accessible through innovative technology, and growing internationally. In fiscal 2011, net income attributable to Disney was a record $4.8 billion, an increase of 21% over last year, and revenue was a record $40.9 billion, up 7% from last year. Diluted earnings per share increased by 24% to a record $2.52. I’m particularly gratified by our outstanding performance in fiscal 2011, given the challenging global economic environment. Our financial and capital strength has allowed us to make important near and long term investments, two of the most significant being Pixar and Marvel. Animation is the heart and soul of Disney, and since becoming part of the...
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...The Fluidity of Disney. Gender Norms & Racial Bias in the Study of the Modern “Disney” The Walt Disney Company, commonly known as Disney, is an American diversified multinational mass media corporation headquartered at the Walt Disney Studios in Burbank, California. It is the world's second largest broadcasting and cable company in terms of revenue, after Comcast. Disney was founded on October 16, 1923, by Walt Disney and Roy O. Disney as the Disney Brothers Cartoon Studio, and established itself as a leader in the American animation industry before diversifying into live-action film production, television, and theme parks. The company also operated under the names The Walt Disney Studio, then Walt Disney Productions. Taking on its current name in 1986, it expanded its existing operations and also started divisions focused upon theater, radio, music, publishing, and online media. In addition, Disney has created new corporate divisions in order to market more mature content than is typically associated with its flagship family-oriented brands. The company is best known for the products of its film studio, the Walt Disney Studios, which is today one of the largest and best-known studios in Hollywood. Disney also owns and operates the ABC broadcast television network; cable television networks such as Disney Channel, ESPN, A+E Networks, and ABC Family; publishing, merchandising, and theatre divisions; and owns and licenses 14 theme parks around the world. It also has a...
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...purchases, income, and spending cuts due to the loss of jobs. When a household has more income, spending increases; but when the income decreases for whatever reason, they will tighten the reins on spending which will results in fewer sales. This paper will analyze some of the things that have led different companies to fail and to succeed, and then how they try to apply the lessons learned to avoid repeating the events and strategies that led to failure. Part 1: Failed Business Analysis – Borders Books Business Failure Analysis Former Executive of Borders, Andi Lobdell (2012) states, “As a former executive of Borders, I noticed media coverage consistently discussed missing the digital revolution as the core reason behind the Borders’ bankruptcy and liquidation, but the real question on everyone’s mind is why the company got off track (Borders bookstore mission tab).” It seems that Andi along with many other former executives and managers of the Borders Books family agree that mismanagement within the...
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...507-P01 5 DE MAYO DE 2005 ANITA ELBERSE Marvel Enterprises, Inc. Era 29 de junho de 2004, um dia antes do lançamento nos cinemas da tão esperada seqüência do filme Homem-Aranha, baseado no personagem mais popular da Marvel Enterprises. O filme parecia destinado a seguir os passos do recordista de bilheterias original ao oferecer sua mistura familiar de forte ação e drama. Porém, Peter Cuneo, o Vice-Presidente e ex-CEO, sabia que sua equipe havia realizado um resgate que nem o Homem-Aranha (ou qualquer outro dos super-heróis sobre os quais a Marvel detinha direitos) teria sucesso – o resgate da própria empresa. Apenas seis anos depois da firma ter emergido da falência, e apenas três anos depois de ter publicado prejuízos de US$100 milhões e ver suas ações serem negociadas próximo a US$1, a Marvel acumulara um valor de mercado de mais de US$2 bilhões, registrando vendas de US$300 milhões e um lucro operacional de cerca de US$170 milhões em 2003, com suas ações sendo negociadas por mais de US$20 (veja o Anexo 1). “O ápice de nosso trabalho veio a algumas semanas atrás, quando o Wall Street Journal selecionou nossas ações como as de melhor desempenho,” disse Cuneo. “Adivinhe quem foi a ação número 1 na Bolsa de Valores de Nova Iorque nos últimos três anos?” Não apenas o negócio original da Marvel de publicação de histórias em quadrinhos foi transformado em uma divisão lucrativa; suas operações de licenciamentos e brinquedos também geraram retornos impressionantes...
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...Security Analysis: WMT Group 2 Report Date | S & P Value | Last Price | Intrinsic Value | Economic Moat | Recommendation | 11/29/2010 | 1,187.76 | $53.85 | 60.93 | Wide | Hold | I. The Theme Wal-Mart was built to save people money so they can live better. Hints to their slogan: “Save Money. Live Better.” Their mission has allowed the company to grow around the world. The culture and the values of their employees help strive for success of Wal-Mart while serving over 200 million customers and members each week(Wal-Mart Annual). We strongly believe that Wal-Mart is the best- positioned global retailer and that they will continue to progress. Cost leadership is the corner stone of how Wal-Mart goes to market. Doing our analysis of Wal-Mart Stores, Inc., we gathered our information and different figures from the Hoover’s online through the Willis library’s website, Reuters.com, and Morningstar.com databases which gave us insight to several financial aspects of the firm, including its stock, cash flows, risk, dividends, sales, earnings, debt, and overall performance. II. Business Analysis Profile of the company “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.” Wal-Mart founder, Sam Walton, summarized his vision back in 1962 for a new type of discount store that consumers would appreciate. As an owner of a much smaller discount store Walton...
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...Mergers, Acquisitions and Corporate Restructuring II MERGERS, ACQUISITIONS AND CORPORATE RESTRUCTURING Mergers, Acquisitions and Corporate Restructuring Edited by Chandrashekar Krishnamurti Vishwanath S.R. Copyright © Chandrashekar Krishnamurti and Vishwanath S.R., 2008 All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage or retrieval system, without permission in writing from the publisher. First published in 2008 by Response Books Business Books from SAGE B1/I-1 Mohan Cooperative Industrial Area Mathura Road, New Delhi 110 044, India SAGE Publications Inc 2455 Teller Road Thousand Oaks, California 91320, USA SAGE Publications Ltd 1 Oliver’s Yard, 55 City Road London EC1Y 1SP, United Kingdom SAGE Publications Asia-Pacific Pte Ltd 33 Pekin Street #02-01 Far East Square Singapore 048763 Published by Vivek Mehra for Response Books, typeset in 9.5/13 pt Berthold Baskerville by Star Compugraphics Private Limited, Delhi and printed at Chaman Enterprises, New Delhi. Library of Congress Cataloging-in-Publication Data Mergers, acquisitions and corporate restructuring/edited by Chandrashekar Krishnamurti, Vishwanath S.R. p. cm. Includes references and index. 1. Consolidation and merger of corporations. Corporate reorganizations. I. Vishwanath, S.R., 1971– II. Krishnamurti, Chandrashekar, 1956– HG4028.M4 .M44 658.1/6 22 2008...
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...Final PDF to printer 2 Values, Attitudes, Emotions, and Culture: The Manager as a Person LEARNING OBJECTIVES After studying this chapter, you should be able to: 1 Describe the various personality traits that affect how managers think, feel, and behave. [LO 2-1] 4 Describe the nature of emotional intelligence and its role in management. [LO 2-4] 2 Explain what values and attitudes are and describe their impact on managerial action. [LO 2-2] 5 Define organizational culture and explain how managers both create and are influenced by organizational culture. [LO 2-5] 3 Appreciate how moods and emotions influence all members of an organization. [LO 2-3] jon62538_ch02_044-077.indd 44 11/1/13 7:13 PM Final PDF to printer No wonder the fabrics perform so well! With an inventor like Kevin Plank, Under Armour’s innovative endurance products give larger sporting goods companies a run for their money. MANAGEMENT SNAPSHOT Kevin Plank’s Determination at Under Armour What Does It Take to Succeed Against Tough Odds? W hen Kevin Plank was a walk-on fullback football player at the University of Maryland in the 1990s, he often became annoyed that his T-shirt was soaked and weighted down with sweat. Always an original thinker, he wondered why athletic apparel couldn’t be made out of some kind of polyester blend that would help athletes’ and sports aficionados’ muscles stay cool while wicking away, and not holding...
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...CONNECT FEATURES Interactive Applications Interactive Applications offer a variety of automatically graded exercises that require students to apply key concepts. Whether the assignment includes a click and drag, video case, or decision generator, these applications provide instant feedback and progress tracking for students and detailed results for the instructor. Case Exercises The Connect platform also includes author-developed case exercises for all 12 cases in this edition that require students to work through answers to assignment questions for each case. These exercises have multiple components and can include: calculating assorted financial ratios to assess a company’s financial performance and balance sheet strength, identifying a company’s strategy, doing five-forces and driving-forces analysis, doing a SWOT analysis, and recommending actions to improve company performance. The content of these case exercises is tailored to match the circumstances presented in each case, calling upon students to do whatever strategic thinking and strategic analysis is called for to arrive at a pragmatic, analysis-based action recommendation for improving company performance. eBook Connect Plus includes a media-rich eBook that allows you to share your notes with your students. Your students can insert and review their own notes, highlight the text, search for specific information, and interact with media resources. Using an eBook with Connect Plus gives your...
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