Smash! Pow! Bam! Why superheroes go bankrupt.

• Author: Lott, Jeremy
• Position: Investor Ron Perelman

MEGA-INVESTOR RON Perelman has all the traits of a comic book supervillain. He's massively wealthy and powerful More to the point, he exudes enough vanity and overreach to make Lex Luthor and Dr. Doom seem like a couple of Girl Scouts. So it's not surprising to see Perelman slugging it out with rival billionaire corporate raider Carl Icahn on the cover of Comic Wars: How Two Tycoons Battled Over the Marvel Comics Empire...And Both Lost!!! (Broadway Books). As described by journalist Dan Raviv, the board room brouhaha between Perelman arid Icahn isn't just the most entertaining battle royale since Superman and Muhammad Ali punched each other's lights out in a late-'70s comic. It's a cautionary tale about mismanaging intellectual property.

In 1989 Perelman, best known as head honcho at the cosmetics company Revlon, surprised the investment world by outbidding a number of rivals to buy Marvel. Perelman spoke of the comics publisher as a "mini Disney in terms of intellectual property" and promised to take the company to that vaunted stage of corporate nirvana, the next level. Perelman boasted that there would be more merchandising, more glitz, and--at long last!--good movies based on Marvel's rich stable of characters: Spider-Man, the Incredible Hulk, the Un canny X-Men, and Daredevil.

For a few years, Perelman was invincible. The early '90s saw a collectibles boom that lifted comic book sales. Foil-embossed covers, multiple covers for the same issue, and issues shrink-wrapped with giveaways encouraged folks to buy several copies and wait for the price to rise. The boost in comics' value helped bring about new respect for the oft-maligned genre. "The Wizard"--Raviv's sobriquet for Perelman--branched out, purchasing baseball card and sticker companies.

Then the 1994 baseball strike nearly erased the value of Marvel's card and sticker divisions. Even worse, the speculative bubble in comic books burst, shocking the whole industry and pushing Marvel into bankruptcy. It also revealed how little Perelman really understood the comic book industry.

For much of the century, comics had traditionally been sold in drugstores and newsstands. But by the '90s the overwhelming majority of sales were though small-time comic specialty shops, which were serviced by over a dozen distributors. This system was inefficient from the publishers' perspective, but it provided options for storeowners living on slim profit margins. The competition benefited them, and they...