'Spider-Man' Creator Stan Lee Spins New Web
San Fernando Valley Business Journal
Even after losing more than $1 million of his own money on an ill-fated Internet site and missing out on the profits generated by the hit film, "Spider-Man," based on the character he created, Stan Lee is back in business.
It was just a little over a year ago that Encino-based Stan Lee Media went belly up amid charges of mismanagement, alleged illegal stock sales and misappropriation of funds by Lee's partner, Peter F. Paul, who was arrested in Brazil and faces extradition to the U.S.
Lee did receive a six-figure salary from Marvel Enterprises Inc. for his work as executive producer on the film, "Spider-Man," but does not share in the blockbuster's royalties.
And despite having trouble pushing movie and television deals due to the Stan Lee Media problems, Lee has seen new interest in his characters and stories because of "Spider-Man." He recently signed deals with Metro-Goldwyn-Mayer Inc., worth $2 million, and Cheyenne Entertainment Inc. to produce films and television programs.
Lee created the character in 1962 with artist Steve Ditko, but Spider-Man is the property of Marvel, where Lee was editor and lead writer at the time. "It's not my character," he said. "It belongs to Marvel and they get all the money."
Still, Lee said the film's success has made it easier for him to market other characters that he owns outright. Besides that, his autobiography, "Excelsior! The Amazing Life of Stan Lee," was released to coincide with that of the film earlier this month.
At about the same time most of the deals involving "Spider-Man" were being made in 2000 without him Sony Pictures Entertainment was agreeing to develop his "Hulk" character into a live action movie set for release later this year. "And we're already in the process of developing three motion pictures for MGM based on my new characters," said Lee, who would not reveal their identities due to contractual agreements with the studio.
Lee is also developing a show for cable's The National Network titled "Stripperella," an animated series starring Pamela Anderson as the voice of a crime-fighting stripper.
Lee signed the three-movie deal with MGM through his newly created Purveyors of Wonder Entertainment Inc.
"These are movies that have been green lit and, if they are successful, they could make the deal worth millions upon millions of dollars," said his attorney, Arthur Lieberman.
Lee's development deals are in stark contrast to his troubles last year when Stan Lee Media closed for good amid charges of mismanagement and fraud. Lee himself owned shares in the company that at one time were valued at more than $90 million.
The firm was started in 1999 after Lee left Marvel Comics, then struggling through near-bankruptcy itself. It was dedicated to creating and licensing characters and stories based on Stan Lee-owned properties, along with providing an outlet for new cartoons on its Web site.
Stan Lee Media completed a successful initial public offering in early 2000. The company spent millions rounding up talented writers and artists, but reported little in revenues. In 2000, the company posted a $23.9 million loss.
The stock went from a February 2000 high of $28 a share to 13 cents a share when Nasdaq halted its trading in November 2000, pending an investigation of alleged stock manipulation by Paul. Stan Lee Media ceased operations the following month.
Lee, cleared of any wrongdoing, blames himself for not questioning his partner's business practices earlier.
"I was totally trusting in the past, I left the business decisions to him and it was a mistake," Lee said. "I'm more on top of things now."
Paul, former Stan Lee Media Chief Operating Officer Stephen M. Gordon and Gordon's brother, former Merrill Lynch & Co. financial consultant Jonathan Gordon, were indicted in October on 13 counts each of defrauding the Internet company, US Bank and Merrill Lynch. Paul and Gordon also face separate charges in New York involving stock manipulation. All the cases are still pending.
Lee said he's still counting his losses as a result of the fiasco. "You can't do business when you have something like that going on," he said, "and it hurt me personally."
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