Summer-Fall 1988
The Dragon Pictures war room smelled of fresh ink and ambition. Ethan stood before a wall covered in financial reports, comic sales charts, and theatrical release schedules—the blueprint for his entertainment revolution.
**I. THE MARVEL TAKEOVER: A Corporate Coup**
Ethan's team moved with military precision to acquire Marvel Entertainment:
**Phase 1: Debt Accumulation (June-July 1988)**
- Created Dragon Comics LLC as a Delaware shell company
- Purchased $4.1M of Marvel's distressed debt for $1.2M (30¢ on the dollar)
- Planted former Marvel editor Jim Salicrup inside to monitor cash flow
- Discovered Marvel's $10M Chase Manhattan credit line was about to freeze
**Phase 2: The Squeeze (August 1988)**
When Marvel missed payroll:
- Invoked acceleration clauses on $3.2M in bonds
- Offered bridge financing at 22% interest (vs Chase's 18%)
- Demanded two board seats as collateral
**Phase 3: The Final Strike (September 1988)**
As stock hit $1.92:
- Launched $3.00/share tender offer (56% premium)
- Leaked bankruptcy rumors to WSJ
- Flew to Tokyo to convince Mitsui Bank to accept stock
**II. THE COMIC BUSINESS REVIVAL**
Ethan's turnaround plan shocked the industry:
**Distribution Revolution**
- Signed exclusive deal with Diamond Comics
- Created "Dragon Direct" subscription service
- Guaranteed 50% sell-through to retailers
**Content Overhaul**
- Hired Frank Miller to reboot Daredevil as noir
- Launched mature readers "Marvel Edge" imprint
- Partnered with 7-Eleven for convenience packs
**Licensing 2.0**
- Terminated all low-royalty deals
- Signed 12% royalty agreement with Hasbro
- Created in-house merchandising division
**III. THE FILM STRATEGY: Feeding the Beast**
While executing the Marvel deal, Ethan simultaneously built Dragon's film empire:
**1. Distribution Cash Flow**
- Acquired *Blood Moon* ($200k) for drive-ins/VHS
- Pre-sold 25,000 VHS units to Video Treasures
- Grossed $1.2M in 8 weeks
**2. Indie Talent Pipeline**
- Offered unprecedented 70/30 profit splits
- Signed John Dahl, Allison Anders, Hal Hartley
- Ran *"We Want Your 'Unmakeable' Scripts"* ad
**3. Marvel Synergy**
- Greenlit *Iron Man* animated series ($1.5M budget)
**IV. MEDIA WHIPLASH**
**August 1988**
Variety: *"Dragon's *Blood Moon* shows profit in niche distribution"*
**September 1988**
WSJ: *"Marvel Takeover Exposes $4.2M Pension Liability"*
**October 1988**
Entertainment Weekly: *"The Man Who Bought Superheroes"*
**December 1988**
Forbes: *"From Comics to Cinema - The First Media Synergy Play"*
**V. THE MASTERSTROKES**
While media focused on comics:
- Bought back Spider-Man rights from Cannon Films
- Secured first-look deals with Image founders
- Optioned Neil Gaiman's *Books of Magic*
As 1988 ended, Dragon controlled:
✓ 100% of Marvel Entertainment
✓ 9 films in distribution
✓ 3 indie productions shooting
✓ Hollywood's wary respect