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Adventure Capitalists : Publishing: After inking strategic deals, Malibu Comics has become a leader in the world of mutants and super-heroes.


Thanks to some hip new super-heroes with MTV-style wardrobes, Malibu Comics Entertainment Inc. in Westlake Village is turning the comic book industry on its head.

Founded in 1986 by comic buff Scott Rosenberg, Malibu had by last year edged its way into the top five comic book publishers nationwide. Then in February, a group of popular young artists who penned such hits as X-Men and Spider-Man for giant Marvel Entertainment Group Inc. left Marvel after a dispute over their share of profits and creative control. After a critical article in Barron's revealed the artists' exodus, Marvel's stock plunged $11.375, losing $138 million in market value in one day's trading.

The seven artists formed their own label, Image Comics, then struck an unprecedented deal with Malibu that gave the artists full ownership of all characters they create, while Malibu publishes their material. In August the Image titles accounted for about 90% of Malibu's total billings, said Milton Griepp, president of Capital Distributors, a comic book distributor based in Madison, Wis. Some of the Image books--such as Youngblood, Spawn and WildC.A.T.S--have been among the nation's best-selling comics in recent months.

The Image comics have boosted Malibu's overall sales and helped it shoot to No. 3 in the industry. Comics published by Malibu are expected to account for 10% to 12% of U. S. sales to comic book stores for 1992, according to Internal Correspondence, a newsletter published by Capital Distributors.

Only Marvel, with 50% of the market, and Time Warner Inc.'s DC Comics, with 18%, remains ahead of Malibu. But Rosenberg, an energetic 30-year-old, likens Malibu to the upstart network that proved that the Big Three weren't invincible: "We're kind of like the Fox of comics."

Certainly the two industry leaders must have been unnerved in August, when Malibu temporarily occupied the No. 2 spot with 18% of total sales to comic book stores, while DC slipped to 17%. Malibu, whose annual revenues Rosenberg puts at more than $10 million, has since fallen back to third. But never before had a company infiltrated Marvel and DC's decades-long lock on the top.

It isn't hard to figure out the appeal of Image Comics to the core audience of 12- to 18-year-olds. Image features super-heroes saving the world--no surprise there--but that's where their resemblance to Superman ends. Many characters are mutants or genetically altered beings with dark pasts. They wear spikes and chains, work for secret government task forces and carry futuristic weapons.

"It's garish, it's exciting, the kind of thing a kid looks at and says it's awesome," said Don Thompson, co-editor of Comics Buyer's Guide in Iola, Wis.

True, Malibu's profit margin on Image is no doubt narrower than it would be if Malibu owned the characters, and Malibu won't get a cut from licensing deals Image artists make with movie, TV or toy companies. But Thompson said the deal has only helped the firm.

"Malibu does get profit," Thompson said, "and whatever it is, it's more than they were getting before. Also, their other titles are doing better, and they're attracting better people to work for them."

Officials at Marvel, which is 60% owned by billionaire Ronald O. Perelman, didn't return phone calls. But Paul

Levitz, DC's executive vice president and publisher, said, "We felt for years there's room in our business for more successful publishers."

Malibu's challenge now is to build a company that can stand on its own without Image. After all, said Bill Liebowitz, owner of the Golden Apple Comics retail chain

in Los Angeles, "the long-term staying power of these characters has yet to be proved."

Rosenberg said he's not taking anything for granted. He's hoping to build a "full-service, multimedia company" that will generate more comics in-house, develop video games based on Malibu-owned characters and license its characters to Hollywood.

Just how the privately held Malibu will pay for this expansion isn't clear, and Rosenberg won't discuss the company's finances. The comic book world is fickle, and if the company goes heavily into debt and its plans don't pay off, Malibu could be in big trouble.

Nonetheless, Rosenberg is plowing ahead. In August, Malibu merged with video game developer Acme Interactive (now called Malibu Interactive), also in Westlake Village. "We think we can feed off each other," said Acme Interactive founder Bob Jacob.

Sega of America Inc. is introducing an "Ex-Mutant" video game in December based on Malibu's first comic series, about a pack of super-heroes protecting the world after a nuclear holocaust. Another Malibu title, Dinosaurs for Hire, has also been licensed for a Sega game due out by March.

As part of the merger deal, Jacob was given half ownership of Malibu Comics Entertainment and shares the title of president with Rosenberg.

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