Could AT&T sell off DC Comics? The answer depends on how much the publisher is worth to its parent company, AT&T.
According to an estimate by Motley Fool writer Leo Sun, the amount is not very big in the scheme of things. Sun deduces the print and publishing side of DC is about “0.2% of AT&T’s annual revenue” right now, or roughly $300 million.
He bases that on a $1.1 billion estimate of comic industry sales in 2018 and DC’s 29% control of the market in 2019.
Sun added DC is under a segment of AT&T’s portfolio labeled “games and other.” It includes publishing, “video games, and other products but excludes its TV and film properties.”
On the TV and film side, Warner Bros. made “$14.4 billion in revenue” in 2019 which accounts for “43% of WarnerMedia’s revenue and 8% of AT&T total revenue.”
DC Extended Universe movies in the last seven years have raked in $5.5 billion worldwide. Todd Phillips’ Joker accounts for $1.07 billion of that.
Though the sales of comics, print and digital, grew between 2012 and 2018 (“from $805 million to $1.1 billion”) in North America, Sun notes the two major problems the industry faces. Sales are dominated by distributors and comic book stores that have a hard time selling issues – which Marvel and DC raised the price of as well.
The other obstacle: superhero comics “are losing ground” to graphic novels and manga. Comic book movies aren’t creating interest or increasing sales of their source material.
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Despite that, Sun doesn’t believe AT&T will sell or outsource DC and its publishing duties to anyone. Rumors Marvel will acquire them, he contends, are exactly that – pure speculation.
Remarking on DC’s “cohesive foothold” on TV with the Arrowverse, Sun wrote, “AT&T probably won’t sell its media rights to those characters or license them to rival publishers like Marvel.”
Later in the article, he added:
“Therefore, it’s doubtful that AT&T will sell off or kill DC Comics anytime soon. DC won’t significantly boost WarnerMedia’s revenue, but its comic book storylines could still provide valuable fodder for future TV and film projects at WarnerMedia.”
Rumors of a sale are stoked by Dan DiDio’s ouster as Co-Publisher and AT&T CEO Randall Stephenson’s remark of “no sacred cows” in the portfolio during a conference call.
Ethan Van Sciver has said on multiple occasions his insider sources tell him a sale or licensing to another publisher is inevitable in order to placate AT&T’s investor Elliott Management – whom Sun refers to as an “activist investor” with demands.
Sun disputes this, saying it won’t make a dent in the company’s debt:
“Elliott Management’s moves and the dismissal of Dan DiDio sparked wild rumors, but a sale or licensing deal would arguably weaken AT&T’s DC business without significantly reducing its massive long-term debt of $151 billion.”
DiDio being fired reportedly had to do with creative conflicts and micromanaging exacerbated by 5G. It wasn’t a financial move, at least not entirely.
So it appears DC is safe, for now, and we can breathe a sigh of relief. Still, the concerns over their editorial agenda and how 5G will pan out remain.
Can we be optimistic about DC’s future? Time will tell, but you can sound off in the comments. Tell us where you stand.