LOS ANGELES — When Walt Disney Co. asked publisher Dan Vado to make a series of comic books based on its Haunted Mansion theme-park ride, he worried that the empire built on the likes of Snow White and Tinker Bell would reject his brand of creepy humor.
Vado gave Disney skeletons dangling from nooses, scattered corpses and a ghostly poodle that says "crap." To his surprise, Disney signed off on his vision.
"Everything we did was really strange," says Vado, founder of SLG Publishing. "The interesting thing about Disney is, for a company perceived as being stodgy, they do a good job of reinventing themselves."
Disney CEO Robert Iger, 59, is on a spending spree at the world's biggest media company to transform his film studio, amusement parks and stores. In fiscal 2009, net income at Disney fell 25 percent to $3.3 billion — the worst annual performance in Iger's five-year reign — and was almost flat in the first quarter of 2010 compared with a year earlier.
The global recession has hammered the company's 11 theme parks. The company's studio is also struggling: In 2009, it churned out box office flops such as "G-Force," which featured wisecracking guinea pigs.
Iger is pouring billions into attracting a new generation of kids — boys especially — raised on video games and reality shows.
In December, Disney completed its $4.3 billion purchase of Marvel Entertainment, home of Iron Man, Spider-Man and the X-Men, paying a 40 percent premium over the stock price.
The company is now building two additional cruise ships, one of which includes an AquaDuck water coaster that plunges four decks.
Park guests will see more-complex, life-size robots made to look like U.S. presidents and Disney characters.
And with input from Apple CEO Steve Jobs, Disney's largest shareholder, Iger is giving his 350 retail stores a high-tech makeover and opening a new one in New York's Times Square.
The total price tag for all of the upgrades through 2014: more than $12.3 billion, according to New York-based Soleil Securities Corp. analyst Alan Gould.
Investors give mixed reviews of Iger's moves to refresh the entertainment giant, which was founded as a cartoon studio by Walt Disney and his brother Roy in 1923.
After Iger took over in October 2005, the stock rose 53 percent to a seven-year peak of $36.30 in May 2007 before crashing in 2009 during the credit crisis to a low of $15.59. From that bottom last March through Friday, the shares jumped more than 100 percent, closing at $33.22.
"What we look for is a company that is constantly refreshing its operations, improving and continuing to build a business, and that's true of Disney," says Michael Cuggino, president of San Francisco-based Permanent Portfolio Family of Funds, which owns 720,000 Disney shares.
In December, S&P affirmed its outlook on Disney, citing concerns about the company's recovery, the growth in spending and threats from deep-pocketed rivals.
"Disney is going to be basically doubling what they are spending," says James Tarkenton, a managing director at Lateef Investment Management. Lateef has sold all of the 149,984 Disney shares it held in April 2009.
Iger has proved to be a serial acquirer. Three months after taking the helm as CEO, he agreed to pay $7.4 billion for Pixar, which was co-founded by Jobs, to improve Disney's flagging animation pipeline. In all, the CEO has snapped up 28 companies in whole or part, according to data compiled by Bloomberg.
When announcing the deal for Marvel and its cast of superheroes in August, Iger said they would add to Disney's stable of characters and attract more boys to its cable cartoon offerings.
"Content and products for boys have been less consistent for Disney than those for girls," says UBS analyst Michael Morris in New York. "When Disney looks for growth opportunities, it sees big potential with boys."
Last year, Disney also bought Wideload Games, maker of the violent video game "Stubbs the Zombie in Rebel Without a Pulse." And the company rebranded its Toon Disney cable cartoon channel into Disney XD. The channel's new programming features shows such as "Kick Buttowski" aimed at boys age 6 to 14, the company said.
During a conference call in May, Iger criticized his studio, led by 40-year Disney veteran Dick Cook, which had produced clunkers such as "Bedtime Stories."
"It's about choice of films and the execution of the films that have been chosen for production, and we've had a rough year in terms of the performance," Iger said. Four months later, Cook resigned.
In 2009, Disney finished No. 5 in box office sales among the six major studios, according to Box Office Mojo.
To fill theaters, Disney can't yet rely on several of Marvel's most popular comic-book characters. They're tied up in licensing deals: News Corp. has the rights to the X-Men, Sony controls Spider-Man and Universal Studios claims several Marvel characters for exclusive use in its Orlando theme parks.
The licensing deals soured some analysts on the Marvel purchase.
"Over the long run, we suspect this will be viewed as Mr. Iger's first major mistake as CEO," Citigroup analyst Jason Bazinet wrote in September.