Download The McFarlane Companies

Chapter 14 Video Case: The McFarlane Companies
Today Todd McFarlane, president and CEO of the McFarlane Companies, buys
the pepperoni supreme pizza even if he doesn’t have a coupon. But that wasn’t
always the case. When his dream of playing major league baseball didn’t
materialize, McFarlane fell back on another interest he developed as a teenager–
drawing super heroes. He sent his sketches to prospective employers, and after
300 rejection letters McFarlane got a job freelancing for Marvel Comics. Working
many hours for low pay, he made a name for himself. By 1990 he was the
highest paid comic book artist in the industry.
Frustrated over creative differences and his desire to own the rights to his
characters, McFarlane quit, took six other artists with him—a dream team, he
said--and started his own company. Starting out working over his garage,
McFarlane went from artist to business manager overnight. While industry
experts predicted he would last less than a year, McFarlane didn’t even think
about the future or about failure. Spawn, his first comic, sold 1.7 million copies.
Through his leadership and creativity, McFarlane Companies has grown to be a
diverse entertainment enterprise that produces feature films, animated television
series, music videos, and licensed action-figure toys featuring professional
sports stars, movie and cartoon characters, and rock and roll icons.
Todd McFarlane is that rare breed—like Walt Disney—who is both artisticminded and business-minded, says Al Simmons, McFarlane Companies curator.
McFarlane describes himself as two people, the artist, the one he likes better,
and the CEO, the one responsible for running the company. CFO Steve Peterson
notes that while Todd is on the cutting edge artistically, he is conservative
financially. He knows it takes money to make money, and it is because he is
financially responsible that he is successful. Since the company is privately held,
McFarlane is less bottom-line oriented than many CEOs and more focused on
product quality. He likes to keep the quality high and the price reasonable and to
adjust strategy as he sees fit. His strong financial skills have made the company
strong enough to weather tough financial times. He is fairly debt adverse,
although some products may require outside financing because of their scope.
McFarlane stays away from investors that might want to exercise control over his
artistic freedom and the direction he wants to take the company.
McFarlane is willing to take risks, exemplified by his purchase of Mark McGwire’s
70th home run ball for $3 million. Many thought he was crazy, but McFarlane saw
an opportunity. He combined the ball with several others hit by McGwire, Sammy
Sosa, and Barry Bonds to create the McFarlane Collection, which was displayed
in every major league stadium and garnered enormous publicity. A portion of the
proceeds was donated to the Lou Gehrig Foundation. Most significant,
McFarlane began a relationship with professional sports that led to his obtaining
the exclusive rights to nearly every professional sports team toy license and
generated an estimated $20 million in profits from the original $3 million
investment.
McFarlane’s goals have few boundaries. His number one priority is looking at
opportunity, no matter what the field, and moving in the direction that makes the
most sense. The company could be into an entirely different medium in the next
few years, according to Larry Marder, who has been with McFarlane from the
start. Marder calls Todd McFarlane a visionary and plans to follow him wherever
he goes.
Questions
1. Is Todd McFarlane a manager or a leader? Explain.
2. What traits does Todd McFarlane possess that makes him a successful
leader?
3. Would Todd McFarlane be considered a transformational leader?