City Of Heroes: Man-Thing Begins Filming in Australia

Man-Thing is a minor character in the Marvel library, and we suspect this could be a direct to video product. Recall that we had spoken a couple months ago about the prospect of MVL testing the direct to video market with some of their minor characters. I believe this may be the first film in such a market. The budget on such a film would be in the $5 million range. With MVL putting up none of the capital, the risk is very low. If successful, this could open a new distribution channel for MVL's smaller properties. This channel could also be a development step for certain characters to grow their brand (remember that Blade was a minor Marvel character and is now on its third movie).

We do not model any earnings impact from a Man-Thing movie in 2004. While even a successful Man-Thing movie would not contribute earnings anywhere near a Punisher or Spider-man, it could prove to be accretive in the low 7 figures. The take-away would be MVL's potential to begin exploiting another distribution channel for its characters. If MVL were to open this channel and produce 3-4 of these movies a year, the impact to the P&L could become more significant. MVL remains our top pick.

Joe Hovorka
SVP - Equity Research
Leisure Industry
Raymond James & Associates

[i] Source: Newsarama.com