You’ve seen Thor, are about to go to the X Men prequel and are waiting to see Captain America.  But where is Superman?

It turns out that a copyright issue has bedevilled the Superman character for many years.  Jerry Siegel and Joe Shuster signed away rights to the Superman character to DC comics for $130 over seventy years ago.  As the character literally and figuratively took off in the movies and in comic books, Siegel and Shuster got little share in the revenue.  But the Copyright Act of 1976 allowed the original owners and their heirs to reclaim ownership if it turned out the value of their invention had become clearer over time and they had been underpaid.  Siegel’s heirs used the law to eventually achieve joint ownership in 2008.  Since then, investment in the Superman character has languished.

The reasons are simple and are related to the classic hold-up model of Grossman-Hart.  Any gain from investment in Superman made by DC Comics will have to be shared with the Siegel heirs.  This acts like a tax on investment and hence generates underinvestment.  It is better of the ownership is in just one hand.  But this amplifies the hold-up problem – it is obvious that DC Comics should own the rights to Superman. After all, they have the expertise in the comic book business and in the brand extensions.  But how will they decide the price they will pay the Siegels to get 100% ownership? The present discounted value of the franchise going forward will be the key determinant. Hence, DC Comics (Warner Bros is also involved) have the incentive to destroy the value of the franchise to get a good price.  Fans lament that this is what is happening:

Perhaps the most damning part of the decision document was the revelation that executives at Warners shared fans’ cynicism about Superman’s potential (Remember, Warners and DC were the defendants in this case):

Defendants’ film industry expert witness, Mr. [John] Gumpert, termed Superman as “damaged goods,” a character so “uncool” as to be considered passe, an opinion echoed by Warner Bros. business affairs executive, Steven Spira… Indeed, Mr. [Alan] Horn [Warner Bros. President] admitted to being “daunted” by the fact that the 1987 theatrical release of Superman IV had generated around $15 million domestic box office, raising the specter of the “franchise [having] played out.”

Almost as surreally, DC and Warners apparently argued to the court that

Superman was equivalent [in terms of public recognition and financial value] to a low-tier comic book character that appeared mostly on radio during the 1930s and 1940s and that has not been seen since a brief television show in the mid-1960s (the Green Hornet); an early 20th century series of books (Tarzan) or a 1930s series of pulp stories (Conan) later intermittently made into comic books and films; or a television, radio, and comic book character from the 1940s and 1950s, much beloved by my father, that long ago rode off into the proverbial sunset with little-to-no exploitation in film or television for decades (The Lone Ranger).

And these are the people in charge of the character?!?

(Hat Tip: Scott Ashworth)