Disney Buys Superhero Powers: Is It Safe?

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LOS ANGELES (TheStreet) -- Disney's(DIS Quote) purchase of superhero-giant Marvel(MVL Quote) will give the media company Hulk-like powers.

Marvel's movies have been fantastically successful, spawning lucrative offshoots including amusement-park rides. However, riches streaming from the Marvel lineup may be coming to an end for Disney rivals Viacom(VIA.B Quote); Universal Studios, a subsidiary of General Electric(GE Quote); and Vivendi. Time Warner(TWX Quote), home to DC Comics, also will feel the heat.

Disney's agreement valued Marvel's stock at $50 a share, almost a 30% premium. Clearly, Disney saw value in Marvel. After the acquisition, Disney will control the top superhero shop and animation expert Pixar, a formidable competitive position against major competitors such as Warner Bros., a unit of Time Warner.

The addition of teenage-boy-friendly Marvel will plug the gap in Disney's offerings. With a catalog of more than 5,000 characters, most of which haven't been featured in a movie, and the creative brains at Marvel, Disney gains a huge inventory of content.

A strengthened Disney is one of the last things that Time Warner investors want to see. The company's shares have fallen more than 40% over the past year, and now the one division that investors could count on -- Warner Bros. -- will feel more competition than ever. Warner Bros. has been buoyed by "Harry Potter" and "Batman" hits in the past few years. But with the pipeline of new "Harry Potter" titles dwindling and the next Batman installment uncertain at best, Warner Bros. could begin to lose its male audience to the new Disney/Marvel powerhouse.