The black Mercedes-Benz smoothly turned onto Fifth Avenue in Manhattan, cruising past a line of high-end boutiques before heading towards the Marvel Entertainment headquarters at 417 Fifth Avenue.
"This week, I've met with Kevin Feige twice."
Gazing through the car window at the retreating luxury brand logos, Helen Herman spoke to Matthew, who was seated beside her. "Marvel Entertainment firmly rejected your proposed 20+20 deal. To be precise, most of their top executives can't even accept a $20 million salary."
She turned her attention from the window to Matthew. "I've looked into it. Marvel Entertainment has financial issues. Unless we drastically reduce your fee, this leading role..."
Helen Herman trailed off, but Matthew understood her point and responded directly, "Then let's forget about it."
He wasn't particularly interested anyway. Without sufficient incentive, it was best to let this role go.
Helen continued, "After Kevin Feige spoke with you, it seems Marvel Entertainment has decided to drop their plan to invite you to play Iron Man. Just two days ago, they terminated their preliminary agreement with Rachel McAdams and opted to cast Gwyneth Paltrow as the female lead instead."
"Does this have anything to do with me?" Matthew speculated.
"Perhaps partly, but mainly it's due to Marvel's financial constraints." Helen explained in detail, "Rachel McAdams' preliminary contract had her salary set at $2.5 million."
She held up five fingers, "Gwyneth Paltrow will take the role for just $500,000. So, Marvel triggered the exit clause in the preliminary contract, paying Rachel McAdams $250,000 to walk away. And if asked by the press, Marvel will claim that Rachel McAdams voluntarily gave up the role."
Matthew realized Marvel might be in a tighter financial spot than he had imagined. "Is Marvel Entertainment facing a significant funding shortfall?"
"Marvel Entertainment itself doesn't have liquidity issues. In recent years, the 'Spider-Man' series and the 'X-Men' trilogy have performed well in the market. Their comic book business only breaks even, but the revenue from licensing is substantial."
Helen Herman had clearly done her homework on Marvel's current situation. "However, that only keeps Marvel Entertainment's cash flow and operations stable. If they have to allocate $140 million for producing 'Iron Man,' they'll be in trouble. Should the movie fail, they might find themselves back in the dire straits of the late 1990s."
The comic book industry had entered a decline in the 1990s, a trend Matthew had heard about over the years. Both Marvel and DC had seen their comic book sales dwindle, a far cry from their glory days in the 70s and 80s.
It wasn't just the comic book industry; Hollywood films had also stagnated. Although the overall box office revenue in North America appeared to be rising, it was mainly due to higher ticket prices. In reality, the total number of moviegoers each year was declining.
From Matthew's perspective, the sheer number of entertainment options available today inevitably fragmented consumer attention.
This was likely why Marvel Entertainment sought to expand into movies and other industries like gaming.
These thoughts crossed Matthew's mind as he asked Helen Herman, "Has Marvel tried to secure financing?"
"Indeed, they have." Helen continued, "Marvel has set a budget of $140 million for 'Iron Man,' but that's only on paper. They've secured some funds through various channels, but they're still far from their goal."
She smiled, "Marvel Entertainment tried to finance 'Iron Man' using the same model as Hollywood's big six studios, but they aren't a major studio. Even though Marvel's superhero films have two successful franchises, those were produced by Sony Columbia and 20th Century Fox. Marvel had little involvement. 'Iron Man' is Marvel Entertainment's first attempt at independently producing a film. Most people have little confidence in their ability to pull it off."
Matthew could understand this. Having others succeed with adaptations of Marvel comics was one thing, but a comic book company venturing into film production was entirely different.
Without his foreknowledge, even if Marvel had approached him directly, he wouldn't have invested in them.
Helen Herman had also mentioned earlier that directly investing in Marvel was highly risky, which was a sentiment widely shared in Hollywood.
Helen added, "Not to mention, Marvel finalized a distribution deal for 'Iron Man' with Paramount Pictures. They're trying to get Paramount to invest, but so far, Paramount has refused. Kevin Feige is still negotiating with Paramount's higher-ups. Even if Paramount eventually invests, the amount won't be substantial."
Matthew didn't comment further, signaling Helen to continue.
"Marvel has also considered bank loans or funding from investment firms," Helen said after clearing her throat. "But their evaluations aren't favorable. Banks and investment firms have declined direct loans, demanding that Marvel use their most valuable superhero rights as collateral."
"Marvel refused?" Matthew asked.
Helen nodded gently. "From Kevin Feige to Stan Lee to Avi Arad, they were unanimously against it. Marvel is determined to avoid repeating the tragedies of 'Spider-Man' and 'X-Men.'"
Matthew vaguely remembered that the loss of rights to 'Spider-Man' and 'X-Men' had been a significant blow to Marvel.
"So, Marvel Entertainment rejected my fee conditions and excluded me from the lead role selection, but still wants to meet me to discuss investment?" Matthew summarized.
"Everyone knows you're wealthy, and they need cash flow," Helen stated plainly.
Matthew nodded and fell silent for a moment. How did Marvel Entertainment eventually secure the funds to produce 'Iron Man'? He couldn't recall. Speculating, he figured they might have used standard Hollywood financing methods or even pledged some character rights to banks or other lending institutions.
This would have been a tough choice; no one wants to mortgage their children's futures.
"Marvel Entertainment hasn't yet managed to fill the multi-million-dollar funding gap," Helen continued, glancing at Matthew. "They… well, to put it bluntly…"
She paused, then switched to a more persuasive tone, "Matthew, are you really sure you want to invest in Marvel Entertainment's first film? They lack experience."
Seeing Matthew remain silent, Helen went on, "You know that in commercial films, producers often have more influence than directors. Not only does Marvel Entertainment lack experience, but Kevin Feige is also inexperienced. He's been involved in producing the 'Spider-Man' and 'X-Men' series, but only as a minor member of the production team, often just as a Marvel representative in name."
Although she had conducted relevant research and communicated with Marvel as Matthew had asked, Helen couldn't understand why Matthew wanted to make such a high-risk investment.
Had she not known Matthew for years, both as a professional collaborator and gradually as a friend, she wouldn't have tried to dissuade him.
"Thank you, Helen," Matthew appreciated her concern but had no way to explain his foresight. He could only fabricate a reason. "I'll let you in on a secret. Rachel McAdams overheard Kevin Feige and Avi Arad mention something. 'Iron Man' is just Marvel Entertainment's first step. They plan to bring a whole series of projects to the screen. Have you heard of the Avengers?"
Seeing Helen nod, he continued, "Marvel aims to create an Avengers series. Imagine the success of 'Spider-Man' and 'X-Men.' What if Marvel succeeds? The returns could be enormous. I'm not just looking to invest in this one film but to secure a deal that includes more projects."
Since Helen would need to handle the subsequent negotiations, it was important to inform her of this sooner or later.
Matthew added earnestly, "I've subtly probed Kevin Feige, and Rachel McAdams' information seems accurate. If 'Iron Man' succeeds, Marvel's position will change. This is my only chance to get in."
Helen sighed, "You're buying a ticket for an uncertain future with millions of dollars?"
Matthew smiled and said, "You know I can afford it."
Helen didn't push further. She knew Matthew well enough and acknowledged that he could indeed afford the risk.
"Let's meet with Marvel's executives first." Helen adjusted her approach. "Based on the situation, I'll modify our strategy and conduct targeted negotiations. But…"
She added one more caution, "Don't stake everything you have."
"Of course not," Matthew chuckled. "I'm still guarding against potential failure."
Even with his memories, he wasn't foolish enough to put all his funds into the 'Iron Man' project. He wasn't that naive about investments.
The Mercedes-Benz pulled up to the curb on Fifth Avenue. Matthew and Helen stepped out and took the elevator to the seventh floor of 417 Fifth Avenue. As they exited, they saw the "Marvel" logo on the wall behind the reception desk.
After explaining their visit to the receptionist, they received visitor passes and waited for their escort to arrive, allowing them entry into Marvel's offices.
Due to Marvel's nature as a content creation company, security was stringent. Matthew and Helen had to register twice for entrance, and even with passes, they couldn't enter many areas without a guide.
This was especially true for the creative committee.
Before entering, Matthew noticed the security guards standing stiffly like soldiers and mused that without the proper credentials, one might need to shout, "Hail Hydra!" to get in.
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