Ike Perlmutter: Marvel’s empire builder

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It's the 90s.

We're in Manhattan, New York.

Picture that infamous skyline pierced by skyscrapers.

You know, down below, yellow cabs are honking, competing to cut through traffic-choked streets.

And now emerging from the distance is a band of businessmen.

They are racing through the city like their lives depend on it and the pack is led by a man called Isaac Perlmutter, his impeccably tailored suit jacket flying in the wind.

Now he sort of looks like a young Joe Pesci, you know, lithe, tanned, he spends hours on the tennis court and behind him his right-hand man clad in black biker leather.

Together these two are Toybiz, a company who mainly make action figures and the comic book giant Marvel which owns them has just filed for bankruptcy.

Inside the imposing office building are the banks holding Marvel's debt.

They're meeting with their top brass to decide the company's future, and Toy Biz are not invited.

But that's not going to stop our roadrunners from trying to get a seat at the table.

Reminds me of, if you're a fan of succession, of Kendall Roy trying to get to a keyboard meeting and being stuck in traffic in the Holland Tunnel.

Sweating.

Sweating.

Well, so who exactly is this presumably now quite sweaty toy dealer?

And how would he come to be one of the most influential men in entertainment?

Welcome to Good Bad Billionaire from the BBC World Service.

Each episode, we pick a billionaire and we find out how they made their money.

Then we judge them.

Are they good, bad, or just another billionaire?

My name is Sing Sing and I'm a journalist, author, and podcaster.

My name is Simon Jack and I'm the BBC's business editor.

And on this episode, we are talking about Isaac Pearl Mutter, who prefers to be called Ike.

The man behind some of the biggest hits in box office history.

Who arguably created one of the most influential franchises of all time.

We're talking about the Marvel comic universe.

And Ike Palmutter is currently worth $4.9 billion.

He's known for being the former chief executive of Marvel and is regarded as being famously frugal, an unrelenting executive, they say, with a knack for driving a hard bargain.

But what is particularly surprising about about Ike is that even though he made his riches in show business, he managed to go almost his entire career out of the public eye.

And I mean, completely out of the public eye.

Up until very recently, he almost never gave interviews to press, and there was only one public photo of him: this 1985 business portrait published in Forbes.

Okay, I'm just looking at him.

Does look a bit like Joe Pesci, very smart.

Doesn't look like your usual cartoon kind of guy.

No.

Apparently, he even went to Iron Man's 2008 premiere disguised in glasses and a fake moustache.

So fair to say, pretty media shy, but we'll pick our way through.

Now, apart from him being one of the most mysterious men in Hollywood, what will really define his career and go on to make him billions is that he profits from other people's mistakes.

So let's find out how he did it.

Let's go back to the beginning.

Unsurprisingly, as we've said, for such a private person, there's not a huge amount of info out there on Ike's early years, but we do know that he was born Isaac Perlmutter to a poor Jewish family in British mandatory Palestine in 1942.

Now, this was a time when the region was still under British control, and apparently, back then, a few families controlled most of the businesses.

If you weren't born into money, forget about it.

Very much like today, there were frequent territorial wars, so Ike, like all Israelis, was required to serve in the IDF.

The Israeli Defense Forces.

But when he was 24, he decided he wanted to take his chances abroad.

So he boarded a plane for New York with only $250 in his pocket to see if he had what it took to make a better life in the land of opportunity.

Now, this is where we see the first signs of his enterprising nature.

He was selling prayers in cemeteries.

Ike would wait outside with a prayer book in his hand, offering to read verses in Hebrew for mourning families.

Obviously, this all came for a price.

Interesting.

By 1970, he'd been in the US for a few years.

He's been doing other sort of scrappy jobs.

And now at this point, he saved up a little bit of money and he decides it's time for a holiday.

So he books a vacation in the Catskills, which are outside of New York City, mountains and lakes.

It's where tons of wealthy New Yorkers spend their summers to escape the heat.

And it's here he meets Laura Spare, who goes by lorry, and not long after that, they're married.

Now, fortunately for Ike, his in-laws generously welcome him into the family with a loan.

Very good for him.

And here marks the start of his business career proper.

He's taught himself to read company financial books, so he's developed some business smarts, and now he has to loan.

He takes the opportunity to buy up surplus stock from other companies.

Yeah, he sells these items on at a higher price, anything from scrap metal to toys, develops a real knack for reaping the maximum profit out of other businesses' mistakes, something we'll see him do time and again.

So really hustling in a way, buying up stuff on the cheap, trying to make a buck on it.

And also stuff that seems at first glance quite random, right?

You know, there's not a lot that connects scrap metal to toys.

Which is why, in a way, he calls his company in 1973 Odd Lot Trading.

And that's a chain of retail stores that sold end-of-the-line stock from clothes to pharmaceuticals, a bit like TK Max.

For those who don't understand, what is TK Max?

So TK Max is a kind of discount store that sells a little bit of everything, apparently at very large cut-down prices.

It's called TJ Maxx in America.

Yeah.

Fellow New York discount store owner Sam Osman described their business as, our business is other people's mistakes.

Now, it's difficult to know the exact deal that made Ike Palmutter a millionaire as his companies were private.

And as you mentioned, he wasn't talking to the press.

But by 1983, Oddlock Trading had 58 stores across the northeast of America.

And had profits of over $11 million.

So safe to say that by 1983, Ike's a millionaire.

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But now, let's fast forward 15 years.

So Ike's sold his first company, Odd Lot Trading, is gone.

But while the resurrection of Marvel is what he's most famous for, it's worth spending a bit of time on his earlier deals to understand how he thinks.

At this point, Ike's becoming known for his hardline negotiating style.

For example, Ike felt he'd been sold a bad deal when his profits tanked after he bought a discount pharmacy chain, but quickly got his own back by trying to put together a hostile takeover.

A hostile takeover is when you basically bypass the company's management, go directly to their shareholders, and say, I will give you more money than someone else for your shares.

And we don't even send it to the board.

You go direct to the owners to make them a better offer.

Talk about hostile going straight over the owners' heads.

So Ike had expanded his one man's junk is another man's treasure approach to buying ailing divisions of companies, including household names like the electric razor manufacturer Remington Products, incredibly famous back in the 70s and 80s.

So Ike Palmutter clearly enjoys dabbling in a lot of different pots.

And now he he adds another string to his bow, which is buying up other companies' debt.

So this is a bit like if you owe money to, I don't know, the local council or to a company,

you sometimes will get a collection agency coming after you for the money.

And sometimes what companies will do, you're indebted to them, but they sell the debt that you owe to them to someone else so they can go and try and recover it.

Right.

And in return, what you do is you kind of pass on the debt.

Well, let's say, for example, I owe you $100.

I'm on my uppers.

I don't think I'm going to be able to pay you back the $100.

So, in a way, you might think that this debt that I owe you is only worth $20.

But you sell my debt that I owe you to someone else, and they think I'm buying it for $20.

Maybe I can get $40 back.

So, you're buying up other people's debts and thinking that you can get more money back than they think you can.

I mean, it sounds risky to me, but Ike clearly disagreed with that because what he did was he bought a company called Coleco, who had had huge success with cabbage patch dolls in 1983.

Do you remember those?

I really do.

There was an absolute manic frenzy for these things and people would trample over each other to get these cabbage patch dolls around Christmas time.

It was a big thing in the early 80s.

If you're a younger listener and you're wondering what on earth is a cabbage patch doll, let's just say they are, you know, cute little dolls.

And by 1988, Coleco was not selling as many of those cute little dolls.

They actually had to file for bankruptcy.

And Ike had been buying and selling Coleco's surplus surplus toys for years so ike and his business partner bought up the debts that were owed to coleco put it this way he took a bet on essentially a bankrupt company and ended up actually making a 23 million dollar profit ike's tactics earned him the label of raider pirate speculator and hinted at strategies he'd later use in his marvel takeover now this is the big moment because in january 1990 ike buys a toy manufacturing company called toy biz for an undisclosed sum now after they were initially successful in the 80s 80s, Toy Biz were desperate to reduce their $40 million debt.

And this purchase gives a bit of a taste of, if you like, the Ike Perlmutter playbook.

Firstly, you go in, cut costs.

He installed himself as chairman and worked to lower the overheads by outsourcing most manufacturing to China.

He was ahead of the game there and selling only to mass merchandisers.

So selling in volume rather in lots of small batches.

So this created a pretty low employee to sales ratio with nearly $2 million in annual revenues per employee.

That's a very high annual revenue per employee.

Now, part of the toy biz purchase included rights to make toys for Marvel, but the toys were not selling because Marvel was becoming more for adult collectors like the comic shop guy from The Simpsons.

So, this is when Ike is introduced to the hottest talent in design, a fellow Israeli named Avi Arad.

But that's where the similarities end, where Ike is dressed in suits, very much the dapper financier.

Freelance designer Arad arrived dressed in black with leather boots from riding his Harley-Davidson motorcycle.

So quite the pair.

Yeah, quite a look.

Avi comes in and he says to Ike, I want to make toys.

Ike says, but no one buys them.

And Avi's like, what about Spider-Man?

And Ike's like, what's Spider-Man?

What a quote.

What is crazy to imagine someone running a business with the rights to Marvel, not knowing who Spider-Man was, but I think Ike genuinely didn't.

But, you know, part of his business genius was knowing what he didn't know and bringing in people who did.

So Ike hires Avi, who brings with him a 22 strong toy development team to work at Toy Biz full-time in exchange for 10% of the company.

And Avi Arad soon becomes chief executive.

So he got to make those Spider-Man toys.

And in 1991, his X-Men toys, strategically released to coincide with something called the X-Men Legacy Comic, made $30 million.

And by 1992, Toy Biz's brilliant in-house design team has helped grow revenues to $65 million with products including Kabudos, Baby Loves to Talk, and of course the Marvel superhero action figures.

My all-time favorite is the Silver Surfer because he's got a great backstory, better even than Ike's.

And listen, their success doesn't go unnoticed by Marvel themselves, who decide to buy Toy Biz in 1993.

So at that point, Ike and Avi joined the board of directors of Marvel.

Now, Ike wanted the perpetual right to make action figures based on Marvel's characters without paying licensing fees for them.

So he sold 46% of privately held Toy Biz for an undisclosed price.

He's throwing his lot in with Marvel because Marvel are hardly going to charge themselves essentially for the licensing of these characters.

Now I have a guilty admission to make which is when I was growing up I absolutely loved comic books.

Good for you.

So all of good for me was it?

I mean

it's reading isn't it?

Yes it is reading and to be fair Some comic books are very adult.

Yeah, well I feel like a comic book side try to justify this.

So who are your faves?

I grew up reading X-Men.

X-Men.

Yes, yeah.

Because the movies were such massive deals when I was growing up, but we will get to that later, of course.

Well, I had this Spider-Man annual, I think in 1976 or maybe, and then many years later, I got another one with Spider-Man with the silver surfer in as well.

And I couldn't believe how great it was that two of my favorite superheroes were in the same thing.

And when you see it on screen brought to life, I mean, no wonder the Marvel cinematic universe is still doing gangbusters.

Absolutely.

So anyway, the comic book bubble, though, that we were talking about just there is about to burst because Marvel had ridden high on it in the boom in the early 90s, but it came clear that it was increasingly being driven by speculative collectors, like going back to our comic book man from The Simpsons.

You buy up multiple copies in the hope that these things will become really valuable later on.

And so, this actually affected the sales of comic books.

They plummeted, putting nine out of ten American comic book shops out of business.

Not good for Marvel, whose share price fell by about 93% in just three years.

And I remember this period because I was working in finance at the time and everyone was saying Marvel shares are so cheap.

Are they a buy or not?

So people were noticing, blindly, this thing has fallen out of bed in terms of its value.

Imagine if you bought Marvel shares back then.

Oh, gosh, I did actually have some.

Am I allowed to say that?

I wish I kept hold of them.

So the stage is set for Marvel's biggest showdown yet, the Battle of the Billionaires.

Now let's take a moment to meet the key players here.

Ron Perelman is Marvel's billionaire owner, known for his smooth-shaven hair, sharp dress, bold investment style.

He was actually described as the incredible hulk of investing.

He was actually America's richest man in 1989.

But he ended up saddling the company with debt.

So there's Ron Perelman, the other guy, a huge titan of the American banking scene, a guy called Carl Icahn.

He was well known as a corporate raider, would go in, you know, buy companies, turn around, strip off the assets.

He was also a fan of a hostile takeover.

So Marvel files for bankruptcy in December 1996, and Carl Icon is keen to play Ron Perelman in his own game.

They think that if Icah and the other people who are owed money can get hold of Perelman's shares, they would gain control of Marvel.

But Perelman's not one to back down easily.

He fought back in bankruptcy courts alongside Marvel's bankers, who then were owed up to $700 million.

So as these two financial superheroes battle it out, where is Ike Perlmutter in all of this?

At this point, the fight seemed over his head.

But let's put it this way: in comic book terms, he is the quiet, unassuming force observing the chaos on fold, much like Doctor Doom.

Now, this corporate tactician whose ability to navigate this labyrinth of Marvel's assets makes him our dark horse in the running.

So it looked like two billionaires were just going to battle it out to save or, you know, ruin a company.

But Pearl Mutter had a dog in this fight.

Because toy business success depended on superhero content being produced by Marvel, if it went bankrupt, the business model is Kapoo.

Yeah, and so initially, Ike Perlmutter supported Perelman, and so if ICAN won, they worried he might convince the bankruptcy court to cancel Toy Bizzy's royalty-free toy license.

Essential point that.

They had a royalty-free toy license, and if ICON wins, they worry they would lose that.

But by June 1997, Perelman is out.

He did take a cool $50 million with him, so don't feel too bad.

But to oust him, ICAN first won approval to take control of the shares and then a few months later to take over Marvel's board.

When ICANN tries to take over Toybiz as well, Ike finally comes into the fray.

On October the 1st, 1997, the banks who held Marvel's debt were meeting with the members of Marvel's new top brass.

So they're basically trying to forge a path to get their money back since Marvel is in so much debt.

But they'd previously been called comedians by Icon when they raised the issue of repayment.

Ike and the Biz team, perhaps unsurprisingly, weren't invited to this meeting.

But here's where Toy Biz seems to have been inspired by the superheroes they're trying to save.

Because in the words of Spider-Man, you think you've won, don't you?

You think that because you're bigger, stronger, faster, you've already won.

But you haven't, not yet.

Because Ike kept calling the office, hosting the meeting, and getting no response.

But just like Spider-Man, he wasn't about to give up.

Remember that high-stakes race we started with through the streets of New York?

Well, we're about to find out what happened when the Toy Biz crew burst into that meeting room unannounced, gasping for breath.

Avi passionately argued the company was undervalued and that Marvel's intellectual property, their ideas, their designs, etc., was a cash machine way beyond the comics.

Apparently, he said, How do kids learn about Spider-Man from their pajamas?

So, Ike and Avi were offering to buy Marvel.

They couldn't put up as much cash as ICAN, but they could pay the bankers $130 million plus 40% of a merged Marvel and Toy Biz.

And these terms were better than Icons.

So the debt-laden bankers switched sides.

And on July the 30th, 1998, a settlement was reached.

And the Toy Biz crew now owned Marvel.

Now, this is really the moment when everything starts changing for Ike.

After this successful race through the city, Avi nicknamed Ike Roadrunner.

Yes.

The speed at which he presumably ran through the streets of New York.

In a way, this was a David and Goliath contest, and David has beaten them.

This isn't where the story ends, though, because Marvel is in really, really deep trouble.

So they had to bring Marvel back from bankruptcy.

Yeah, the plucky underdog investors won the battle.

Australians, their new office space.

Pictures of superheroes line the walls.

And Ike wanders over to the glass conference room, doors etched with Spider-Man and studies them very carefully.

Presumably, by this point, he knows who Spider-Man is.

I would hope so.

Every penny counts for this frugal businessman, so he sells the doors at auction.

Probably worth a fortune now.

And by the time the staff writers arrive at work, there's a pile of furniture in the corner with a post-it note that just said sold.

Yeah, Ike moved on to firing staff to make the company leaner.

But, you know, Marvel can't survive on selling off glass doors and furniture alone because they desperately needed to bring in revenue to stabilize the company.

You know, at one point in 2000, they only had 3 million in the bank and only 250 employees.

But Ike and Avi made good on their promise to reap the profits from the untapped intellectual property, their IP, the designs, the figures, etc.

So they start licensing out the best love characters to other companies to make action figures, role-playing games, and finally movies.

Now, this is huge.

This is where it all starts for Hollywood and superhero franchises.

And it's the beginning of big money generators for Marvel.

And it's not, it's not unprecedented.

If you remember the Star Wars figures, they became incredibly popular.

Now, these films started to be really successful at the box office.

So there was Blade, which is about a vampire killer in 1999, X-Men in 2000, like I said, a huge moment for me as a child, and the Spider-Man trilogy.

So this was actually made by Sony Pictures.

Now, it began in 2002 with Toby Maguire as Peter Parker, and it was a huge box office success, putting Marvel characters back on the map.

But...

Due to the licensing agreements, Marvel was only getting a small cut of the profits.

For example, they only made 62 million, still sounds quite a lot, but from the 3 billion Toby Maguire Spider-Man trilogy.

Now, as you might have gathered from someone who likes to sell off office furniture to get the cash for it, as the newly minted chairman of Marvel, Ike started to get a bit annoyed about this.

Marvel wasn't getting a big enough slice of the pie for him or as much recognition, especially, and I'm sure this must have really annoyed him, after the first Spider-Man film became known as Sony's Spider-Man.

So, Avi and Ike sued Sony.

Eventually, they settled the lawsuit.

Marvel got better terms on the toys, but Sony retained the rights to produce Spider-Man films and keep most of the profits.

But an idea was brewing.

Now, let's take a quick quick step back to find out how Ike spends his money.

Now, at this point, he's probably worth several million.

He famously doesn't spend a lot of money at home.

Him and his wife shop at Costco and enjoy splitting a hot dog there the weekends.

What money Ike does spend is usually on property, like his house, a sprawling waterfront complex in Palm Beach.

And he's actually a neighbor of Donald Trump and a member of Trump's exclusive Mare-a-Lago Club, which you'll hear about in the news almost every night, which is where the next chapter of his rise to billionaire status begins.

Now, in 2003, Paul Mutter agrees to have lunch at Mar-a-Lago, Florida.

I'm looking at the company's website.

I imagine quite a lot of people have looked at that, given what goes on there these days.

An introductory video shows gorgeous couples, you know, blondes of big blowouts and high heels, men handing over glasses of champagne, mock colonial architecture.

You know, the kind of place where you might imagine a billion-dollar deal might be made.

So, Pearl Mutter is a member of this club.

To maintain the membership, he had to spend a minimum of $2,000 in the the dining room, so he had agreed to have a lunch meeting to help hit that target.

He walks up the vast carved stone entranceway, tall wrought iron doors swing open for him as he's ushered past ivory and darkwood sofas and under gargantuan chandeliers to the dining room.

And guess what?

Donald Trump pops by to say hello to his old friend in this, you know, I'm looking at pictures of it right now.

It looks like a sort of mock French Rococo dining room.

Yeah, and Palmutter is there to meet a softly spoken young producer called David Maisel, who had an idea for Marvel to run their own film studio.

So this idea wasn't new.

RV had actually wanted to do this, but hadn't convinced Pearl Mutter of how the money side would work.

Meisel sold it to Pearl Mutter purely on the money terms.

First, he pointed out how much of the profit they'd missed out on from the recent hits.

Secondly, he outlined the potential for control of the finances.

If Marvel made and released movies, they could plan when toys were made and released so as not to saturate the market.

Now, when X-Men was released earlier than expected by Fox, Marvel couldn't get the toys out in time.

So they were actually losing money on this.

Yeah, so Marvel could also stop the films going too far away from what they could make toys of.

For example, Blade wasn't very toy-friendly.

X-Men was getting quite adult in tone.

But if they could control the kind of movies that were coming out, they could make them just about child-friendly enough.

They could make it pitch perfect for the toys as well.

Exactly.

And also, he pointed out that by parceling out their intellectual property, the company had sacrificed part of the appeal of their comics its heroes couldn't intermingle on screen if you're licensing spider-man over here and someone else over there if you control it all you can put them together yep and you can have that silver surfer versus spider-man moment that everyone wants to see and that is basically the origin of what we now know as the mcu the marvel cinematic universe yep and maiso does actually kurn credit for giving birth to the mcu he offered to work in return for stock options so palmata hired him and you know Maiso eventually becomes chairman of Marvel Studios.

But these are expensive films to make, so they need some cash.

And that revived in the form of Merrill Lynch, big financial firm in the US, and gave Marvel access to a huge reservoir of cash, 525 million over seven years, which it could use to spend on 10 movies.

Now, Marvel has a critical decision to make.

They have to figure out which characters to use for their first films, and they need one hit in their first four to appease the bankers.

And they couldn't choose just any Marvel character.

Some had already been licensed out to other studios and would be far too expensive to buy back.

So in the end, it was either Iron Man, Ant-Man, or The Hulk.

What a choice.

Now, no one beyond comic book fans actually knew about Iron Man, which seems wild when you think about it now.

When they did consumer testing, public awareness was next to nothing.

But when they ran focus groups for kids describing the character of each of these heroes, Iron Man was the one they wanted to play with.

I have to confess, I was a bit of a comic book person and I was very unfamiliar with Iron Man.

Certainly wasn't even in my top 10 people.

That's so interesting.

So really they did take a huge creative risk on picking Iron Man.

Yeah.

And Palmutter was always thinking about potential toy sales, of course.

Apparently the Hulk had always sold well.

So Iron Man and the Hulk were chosen for the first two films.

So I do think this actually changed the kind of direction of the Marvel cinematic universe.

You know, it's really the start of people thinking about who is going to sell the most number of toys, who's going to give us the most amount of money.

And the interesting thing about Iron Man is that when you get to know him better, you do warm to him because he's somebody who is a creative human genius.

He actually hasn't got sort of supernatural powers.

No.

He can't fly.

He's sort of a genius inventor.

And of course, it's a persona that one Elon Musk has gratefully accepted as a kind of parallel in the real world.

Wow.

It's funny, isn't it, which superheroes billionaires seem to be drawn to.

Anyway, but during this era, Pearl Mutter doesn't seem plagued by conventional blockbuster movie making strictures.

He yelled at his new head of production, can you make these two movies in two years?

And Kevin Feiger, the director, nervously replied that he could.

Now if you know anything about making movies, that is quite the request.

So clearly this is a man who isn't afraid to ask the moon if it will help his bottom line.

Now remember that comment about Pearl Mutter's time and discount stores that our business is other people's mistakes?

Well some of that is reflected in Marvel Studios' initial approach to the talent to be in these movies.

So they were looking at people who had been out of the limelight a while, you know, maybe down on their luck, keen for a comeback, but crucially that meant they would accept a lower than usual rate for example jon favreau talented director but by 2005 had just had a box office flop with a sci-fi adventure film called zathura neither have i and pearl mutter isn't above taking advantage when he can so apparently jon favreau really wanted robert downey jr for iron man and peel mutter initially said no because downey was coming off the back of a series of commercial failures plus several highly public stints in rehab but then the news of downey playing tony stark was accidentally leaked, and internet fans were overjoyed.

So they kind of bounced into it and hired him, but a fee of $500,000 with a percentage of the profits.

Now, this might sound like a lot of money, but just to contextualise that, Terence Howard was actually the highest paid star in Iron Man the film.

He played a guy called James Rodie Rhodes, and he reportedly earned between $3.5 million and $4.5 million.

Yeah, Pearl Mutter, still nervous about whether Iron Man would be a hit, so he kept a close eye on all costs for Iron Man.

At the Hollywood premiere, he suggested they only give the guests potato chips crisps in the UK instead of catering the event normally.

Now, remember, this is also the premiere where Palmutta reportedly wore a disguise.

Well, he may have been cost-conscious, but in the end, they spent $140 million making Iron Man, which actually fairly average for 2008, but it made...

over 585 million worldwide.

So it's getting back four times what they spent on it.

Now, we should say at this point that even though, you know, he may have inadvertently been a comedy genius wearing a disguise to his own premiere, he isn't always looking to cut costs.

He was so pleased with the success of Iron Man that he approved a very generous thank-you gift for the director, John Favreau, and the star, Robert Downey Jr., drew a couple of luxury cars.

So, Downey had a Bentley in a custom colour, and Favreau has a Mercedes.

Yeah, well, that's actually small beer when you've made a profit of $445 million on the original $140 million that you spent on it.

So, it seemed Palmutter had now got a formula.

He's got a Midas touch, so much so that some big players started sniffing around.

And that big player is none other than Disney.

So Bob Iger, Disney's CEO, saw how well Marvel were doing with the demographic that Disney was struggling to connect with, young male viewers.

So of course, he wants to buy Marvel.

Perlmutter was curious to hear more, so he invited Iger to his office.

Iger said Perlmutter's office was Spartan, and Palmutter offered him a banana and a bottle of water from Costco.

He's probably not used to being wined and and dined in this way, is he?

No.

So Palmutter wasn't initially won over by Iger, but Iga thought he might be able to get him on side.

He later said, Ike stood to make a lot of money from a sale to Disney, but he'd also taken control of Marvel and turned it around.

I think the notion that some CEO would just come in and buy it up didn't sit easily with him.

In the end, it was another character who clinched this deal, one Steve Jobs of Apple Fame, because at the time he was Disney's largest individual shareholder.

Remember, that was was when Disney bought Pixar, which he had founded.

That made Steve Jobs a big shareholder of Disney.

So he called Perlmutter to explain how Disney had acquired Pixar without damaging the company's culture.

So Perlmutter was sold.

He called Iga and said, Steve Jobs said you were true to your word and accepted the deal with Disney.

Yeah, so in August 2009, they agreed a $4 billion sale to Disney.

Perlmutter received $1.4 billion in cash and some Disney shares in return for his 37% stake in Marvel.

And one month later, in September 2009, Isaac Pearl Mutter was included on Forbes' billionaire list for the very first time.

Yeah, they estimated his wealth to be one and a half billion after the Disney deal, but this is not far off the Disney payout.

And this is, by the way, where they run that super dated photograph we looked at in the beginning.

Because just a reminder, this whole time, despite being very active in showbiz, Pearl Mutter has somehow been yet to be photographed.

So it's likely that Pearl Mutter became a billionaire in the early 2000s.

If not, then he was very likely a billionaire off the success of Iron Man in 2008.

Either way, safe to say by 2009, Isaac Perlmutter was very comfortably a billionaire.

So let's take Ike beyond a billion.

After the deal with Disney, Ike Perlmutter becomes chairman of Marvel Entertainment, ultimately answerable to his boss Bob Iger.

But he also becomes the second largest individual shareholder after Steve Jobs.

And he settles in and starts to try and impose Marvel's culture on the newly merged workforce.

His detail-driven, cost-cutting approach seemed comical initially, given how much money they were making.

His head of production joked, Do you like our purple pens to visiting writers and directors?

Because they weren't allowed to order any black or blue ones until the purple ones, which had all come as a multi-pack, were used up.

And there are even reports that there's only one bathroom each for men and women, so staff have to stagger their lunches to avoid the queue.

Cameras were allegedly installed in the West Coast office to monitor productivity.

Yet Ike had his fans.

Sid Gainis, a Marvel board member, says the industry was totally willing to pay exorbitant salaries to actors that weren't justified.

Marvel wouldn't do that.

It's the culture that comes from a man who, despite his enormous wealth, knows the value of a buck.

And remember, this is happening in the immediate aftermath of the 2008 financial crisis.

So Ike's reputation for frugal deal-making in Hollywood and refusing to pay actors huge salaries was actually welcomed.

Not that welcomed by the actors, of course.

Mickey Rourke was reportedly initially offered $250,000 to appear in Iron Man 2 as the lead villain.

Plus, directors Joe and Anthony Russo said they made more money from TV shows like Community than they were paid for Captain America the Winter Soldier.

And there are some other serious things here.

Beyond the cost-cutting, there are some complaints about some of Ike's editorial decisions.

For example, Terrence Howard had been the highest paid actor in Iron Man, playing Colonel James Rhodes.

For the sequel, Pearl Mutter wanted to cast Don Cheadle, and he's reported to have said to Disney executive Andy Mooney that the change cut costs and allegedly added words to the effect that no one would notice because black people look the same.

Oof, yeah.

Disney and Ike declined to comment on the allegations at the time, and Ike has since denied making this comment.

But a spokesperson for Marvel said, Mr.

Pearl Mutter and all of Marvel have a long record of diversity in the workplace and on movie sets around the world, as evidenced by both Mr.

Perlmutter's own history and Marvel's management team.

And it was reported in Vanity Fair that a person with knowledge of his approach said Ike Perlmutter neither discriminates nor cares about diversity, he just cares about what he thinks will make money.

Now, Andy Mooney left Disney in 2011, and the Financial Times reported that three African-American women, all of Mooney's direct reports, also left the company at the same time.

Ike was also adamant that female-led Marvel films were not worth pursuing.

In some leaked emails, he talks about how Electra, Catwoman, and Supergirl were box office disasters.

He says, these are just a few examples, there are more.

And this sentiment also extended to the toy division.

So there was only one four-inch black widow toy as opposed to multiple-sized action figures for male characters in The Avengers.

Apparently, Ike believed that female action figures just didn't sell.

In 2015, there was an online campaign asking Marvel to make more toys for girls.

Even Mark Ruffalo, aka The Hulk, joined in saying, Marvel, we need more Black Widow merchandise for my daughters and nieces.

Pretty please.

Remember, Black Widow is paid by none other than Scarlett Johansson.

So herself a very bankable movie star.

I think so.

Ike also got into hot water when Disney's CFO Anne Gates made a formal complaint about him verbally abusing her when she didn't use a Marvel-style format for a spreadsheet.

During the dispute, Pearl Mutter allegedly said that he had a bullet with her name on it.

But despite all of this, Marvel seemed destined for success because the next five films raged from moderately successful, The Hulk, through very successful, Iron Man 2, Captain America Thor, to box office smashes with The Avengers.

So The Avengers was a huge deal for Marvel.

It made $1.5 billion in 2012, broke the record for biggest US opening weekend, taking 200 million, and it was the most successful film of that entire year.

And that was helping Ike's wealth.

A year later, Forbes estimated Palmutter's wealth had gone from $1.9 billion to $2.3 billion.

But the Disney buyout is also when Ike's stronghold on the Marvel Empire starts to falter.

Yes.

Ike cemented his reputation for micromanaging by setting up a central committee that would oversee every film.

And this definitely rubbed some of the creators up the wrong way.

They found it stifling and not even cost-effective.

So take one example that happened on the first day of filming The Avengers.

The committee apparently sent a 26-page memo suggesting the entire story be rewritten.

A former exec called it destructive madness.

Gosh.

So a power struggle erupts when Kevin Feiger as head of production makes choices without committee approval.

But ultimately, Disney boss Bob Iger ends up removing Marvel Studios from Ike's control.

In 2019, he loses Marvel television shows too.

So in the fullness of time, he was right to be cautious about selling out to Disney, because Bob Iger is a huge figure in entertainment.

And Iger actually published a memoir in 2019 sharing the behind-the-scenes story of this.

He claimed he told Ike to stop putting up roadblocks to film starring Marvel's female and black superheroes.

And Ike's attorney counted that Ike resisted Black Panther, which was the first of these to go into production, not because he was racist, but because it had never been done before and its success wasn't guaranteed.

But Black Panther and the female-led Captain Marvel ended up being two of Marvel's highest-grossing films of all time.

So who was right in this power struggle?

Iger clearly took a chance and won big.

Yeah, but taking a step back just a few years, somehow, despite being in showbiz, Ike's managed to keep a low profile, but it's harder to hide when you're mates with a presidential hopeful.

Ike and his wife donated at least $31 million to pro-Trump Super PAC.

It's a way of getting funding to candidates over the last two election cycles, but it was that initial donation back in 2016 that finally pushed Ike out of the shadows and behind the lens of the press.

And remember, there wasn't a single public photo of this guy since 1985.

So we'll have another look now.

There he is in the background, you know, Donald Trump towering over over him by about a foot.

Yes.

He's now greying.

He's got white hair.

He's incredibly tanned and wearing a kind of, I would say, Goodfellows style sunglasses and another sharp seat.

So clearly he hasn't lost his punch-up for snappy dressing.

Yeah, and he's very much in the shadow of Donald Trump here.

Yeah.

But back to business.

On a Wednesday in March 2023, aged 80, Isaac Pearl Mutter receives a phone call.

He was informed that his division would be closed down and he was no longer needed at the company.

On the Monday before, Disney had started laying off 7,000 workers to save $5.5 billion.

God, this is really kind of stuck in his crawl.

Yeah.

The guy who basically saved Marvel's characters from the bargain basement bin being shoved out.

It just goes to show, like I said before, that when you kind of get into bed with Disney, they are going to be the more powerful part of this partnership.

There are no favours granted in that rather ruthless world.

When you enter the house of mouse, you better watch your back.

Exactly.

So Pearl Mutter slams down the phone, paces the room, decides to break his veil of secrecy to give a very rare press interview.

So fuming, he tells the Wall Street Journal, well-known financial publication, that he wasn't laid off but fired due to clashes with Disney executives.

He also adds that Marvel's superhero films are too expensive and too long and that he's been telling Disney this for years.

He said, all they talk about is box office, box office.

I care about the bottom line.

I don't care how big the box office is.

Only people in Hollywood talk about box office.

That's interesting.

I mean, there is a connection between box office and bottom line, particularly when it comes to those Marvel films and the Avenger ones.

Pearl Mutter says letting him go was merely a convenient excuse to get rid of a long-time executive who dared to challenge the company's way of doing business.

Now, a Disney spokesperson told the Wall Street Journal that Pearl Mutter had been told that his termination was part of broader layoffs.

And I can just imagine if you're someone like Ike Pearl Mutter, being told that being let go is part of a general restructuring.

I mean, your blood must be boiling.

Sure.

He's like, you know, general restructuring.

I brought you great treasures of the screen.

Now, you could argue that what the Avenger films, for example, have done for filmmaking and whether it's become rather kind of bland and commercialized.

And, you know, a lot of people will say, my wife included, there are far too many superhero films these days.

Not a very nourishing medium of artistic expression.

It's no 2001 space odyssey.

Certainly not.

But he's made a ton of money for Disney.

So this must feel like very cold recompense for that.

So that's where Ike Pomutter's story ends.

He's cut from the scene.

And he's kind of down and out.

But, you know, much like the superheroes he once represented, maybe there's a path to comeback for him.

You never know.

When you say he's down and out, let us not forget that he's still worth nearly $5 billion.

So we're going to start with wealth, absolute wealth, how far he's come, ragsta riches, all that kind of stuff.

So Ike Palmutter's wealth is currently estimated at $4.9 billion.

The highest it ever was, was estimated to be $6 billion in 2021.

He's still actively managing that wealth.

In July 2024, it was reported he sold his full allotment of shares in Disney because he didn't have confidence in Disney's management.

He sold them, though, and they were $115 each.

But he did say if the share price declined to around, you know, $65 or $75, he might buy them all back.

We don't know if he's bought that back because Disney's share price did drop further, but not that low and has since risen.

So how would you score him on absolute wealth?

He's not in the top 10.

No, not in 10.

He's not even in the top 50.

Certainly not at the top of the tree.

He did arrive in the US with $250 in his pocket, made his first few bucks reading Hebrew prayers around cemeteries.

So to get to $5 billion, he's come a long way.

So I'm going to give him a solid five, mainly because he's, you know, that American dream.

I arrived in the great land of opportunity with only $250 in my pocket and made $5 billion.

I'm going to score him higher because of that.

I'm going to give him a six out of 10 because that journey from being, you know, the down and out new immigrant, fresh to the streets of New York, hustling your way into bed with one of the biggest entertainment companies, if not the biggest entertainment company in the world, Disney.

That's quite the journey.

So I'm going to give him six out of 10.

Fair enough.

Now, villainy.

This is how, what have they done to get to the top?

And there's some interesting episodes here, particularly we've noticed the reluctance to produce female-led films or black heroes.

I mean, there's also in his ruthless drive for cost-cutting, you know, that 1998 Marvel restructuring cost jobs.

Then there are those accusations of racism and sexism.

I mean, he comes off like not a very nice guy to work with.

And Stan Lee, legendary comic book writer, former creative lead at Marvel, said of Pearl Mutter, he doesn't care about the creative side of things.

He cares only about making money.

That's not a criticism.

It's just a fact.

I think sending those committee notes to the creatives must have driven them absolutely mad.

I can only imagine when you've basically lined up the call sheet, got everyone on side for production, you're about to start filming, and then you receive the memo.

Yeah.

Your heart must sink.

Yeah.

So I think on the reluctance to lead with female or black leading characters, that's got to be, you know, taken into account.

So I think on villainy, I'd give him, this is a tricky one, isn't it?

You could argue that his alleged sexism and racism was not based on deeply held prejudices, but on his perception that they wouldn't do as well at the box office, which was proved wrong.

It was.

But then how do you score that when clearly those perceptions are based on a kind of, you know, on a prejudice, really?

Okay, so I'm going to give him a five for villainy.

I would say that I would have scored him higher, but given, you know, we have had real villains, super villains, some might say, on this podcast.

The allegations of him kind of stifling female-led comic book heroes, you know, it it all just seems like relatively small fry in the context of bigger things that we've talked about, like drug smuggling, for instance.

So I would give him a five out of 10.

Okay.

It's also nice to see that he was proven wrong, you know, so he clearly had to change his ways of thinking.

Okay, so villainy, what about giving back?

We've talked about the taking.

What about the giving back?

He has a charitable foundation in his and his wife's name that has to date given away more than $78 million.

Yeah, so cancer research is a key cause for them.

In 2014, a New York hospital named their cancer center after the Perlmutters after they donated $50 million.

But $78 million as part of their overall fortune

is not insignificant.

So he's basically given away one and a half percent of his fortune.

We've seen a lot more.

We have seen less.

I'm going to give him three.

Yeah, I would say three out of ten, really.

I mean, he's not doing particularly well in the philanthropy stakes, is he?

So power.

Well, he's probably more powerful now in political circles than he was ever when he was making blockbuster movies.

In fact, in 2017, Ike was one of 20 people the New York Times listed as close advisors to Trump.

I mean, I'm sure his power will only increase.

Yeah, he was categorized as a club goer due to his long-term membership of Mari Lago.

And in terms of his legacy, I mean, you know, he arguably brought Marvel back from the brink of the dead.

He essentially invented the Marvel comic universe, which is enormously valuable property and has had an outsized influence on what gets made at the box office.

I mean, you could argue, and you know, some directors will, that actually getting a truly original movie that isn't in hockey to some pre-existing franchise or intellectual property is now so rare and so difficult to get off the ground because people have adopted the Palmutter way of thinking about it.

It's all about the bottom line.

I think although he's mates with Donald Trump, you know, lots of people claim to be friends with Donald Trump.

Probably his most lasting legacy and power has been in the way that movies are made and the idea of the franchise.

But there's also an argument I think you can make that audiences are starting to get tired of the mega franchise.

So I think in the next 10 years, we're really going to see how much power and legacy Ike Perlmutter has managed to exercise over the filmmaking world.

Yeah, I'm going to give him a holding score of four.

Oh, I'll actually go higher than that.

And it's also going to be a holding score for me.

I think seven out of 10, just because the way Marvel has changed the film industry is just...

Incredible.

Okay, that's a big difference between us.

Four for me, seven for you.

So is he good, bad, or just another billionaire?

Oh, this is so difficult difficult for me as a former comic book fan.

Yeah.

Because I was thrilled when they started making more comic book movies.

I wanted the Silver Surfer versus Spider-Man, you know, moment.

I wanted to see all my favorite heroes kind of fight each other and make up and become friends, et cetera, et cetera.

But even I have become fatigued.

Right.

Okay.

I'm going to say that.

I mean, he's given pleasure to millions of people.

A lot of people like these movies.

Has he kind of taken the soul out of filmmaking?

You could argue plenty of directors would say he has.

I'm going to say he's just another billionaire.

I would say that if we were just judging Ike on Ike's terms and what he's done for cinema, for me, I would say he's bad.

But then when you put him into context of all our other billionaires, you know, arms dealers, people who are selling drugs, he really is just another billionaire.

Fine.

Sorry, Ike.

Well, you might be pleased.

You are just another billionaire.

You're no supervillain.

Who have we got next episode?

We have an African telecoms titan who took Robert Mugabe, Zimbabwe's dictator, to court and won.

Yeah, and basically made a fortune during the birth of a nation in a post-colonial environment, going up against, as you say, liberator-turned dictator Robert Mugabe.

That's Zimbabwe's first billionaire, Strive Masaiiwa.

Take a moment to share your thoughts by sending a text, voice note, or WhatsApp to plus1-917-686-1176.

Or you can send us an email to goodbadbillionaire at bbc.com.

You can find both linked below in the episode description.

Thanks for joining us.

You've been listening to Good Bad Billionaire from the BBC World Service.

This episode was produced by Louise Morris, our researchers Tamzin Curry, and our editor Paul Smith.

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