Marvel Told to Pay Stan Lee 10% of Profits From Recent Films

Times Staff Writer

Caught in a sticky legal web, Marvel Enterprises Inc. was told it owes comic book icon Stan Lee 10% of the profit it has received since November 1998 for films based on Spider-Man and other superheroes Lee created.

The 82-year-old Lee could be entitled to tens of millions of dollars, considering the blockbuster success of the movies “Spider-Man” and “Spider-Man 2,” said his attorney, Howard Graff. “This is a sweeping victory for Mr. Lee.”

Marvel will appeal the ruling and “continue to contest vigorously the claims on which the court did not rule,” said John Turitzin, the company’s general counsel.


One of those claims involves whether Lee is entitled to a piece of the money made from merchandising deals with Sony Corp. for “Spider-Man” and with Universal Studios for “Hulk,” Marvel said. Lee contends that he should have shared in those profits.

Lee began working for Marvel in 1939 and was one of the company’s most prolific creators, also creating such characters as X-Men, Daredevil and the Fantastic Four. A Los Angeles resident, Lee is Marvel’s chairman emeritus.

“I am gratified by the judge’s decision, although, since I am deeply fond of Marvel and the people there, I sincerely regret that the situation had to come to this,” he said in a statement Wednesday.

He sued Marvel in November 2002, maintaining that he was being shortchanged.

Marvel’s defense was that it had entered into a contract with Lee that gave him so-called rights of net profit participation -- known as “Hollywood accounting” deals. These deals have long been criticized for yielding no money to profit participants because studio bookkeeping wizardry can add in so many costs that a hit can be made to look like a dud.

Marvel executives were quoted in newspaper articles and in the company’s annual reports as saying that they had signed contracts with the studios that ensured them “gross-profit” participation -- a more favorable arrangement ensuring that they would see money from the studios’ profits.

Avi Arad, Marvel’s chief creative officer, testified at the trial that he was “allergic” to Hollywood accounting deals because they are so hard to “monitor.”

But U.S. District Judge Robert Sweet in New York ruled in Lee’s favor.

According to his decision, Marvel received more than $50 million from Sony after the movie “Spider-Man” in 2002 helped Sony set the industry box-office record with more than $820 million in worldwide ticket sales.

“Spider-Man 2,” released last year, earned more than $775 million worldwide.

Marvel shares closed down 82 cents to $17.41 on the New York Stock Exchange.

Times wire services were used in compiling this report.