Muppets Join Disney Menagerie
Aug. 29, 1989
Miss Piggy and Mickey Mouse may have more pressing concerns than mergers and high finance, but their corporate masters have other ideas.
In a combination of some of the entertainment world's best-known children's characters, the Walt Disney Company said today that it would acquire Henson Associates Inc., the company that created and owns the Muppets.
The deal will bring Miss Piggy, Kermit the Frog, Fozzie Bear, Gonzo and the other Muppets to Disney's roster of characters, and Disney already has plans to use them in its theme parks, on television and in movies. Jim Henson, the 52-year-old creator of the Muppets, will become a consultant to Disney under a long-term agreement and will produce television shows and films exclusively for Disney.
The companies did not disclose a price, but Wall Street analysts speculated that it was between $100 million and $150 million. The deal does not include rights to Big Bird, Bert, Ernie or the other characters created by Mr. Henson for the ''Sesame Street'' television show, which is produced by the Children's Television Workshop.
The deal underscored the value to entertainment companies of established popular characters. Aside from Disney's own characters, ''there are only a few characters in the world who have the kind of appeal'' the Muppets have, said Michael D. Eisner, Disney's chairman and chief executive. Characters That Never Grow Old
The Muppets will provide Disney with another set of what industry executives call ''evergreens,'' or properties that can be introduced to a new generation of children every few years. Such characters can be recycled not just on films and television, but on books, lunch boxes, T-shirts and other products.
Mr. Eisner called the deal ''a business association made in family entertainment heaven'' and compared it with the company's acquisition of the rights to Winnie the Pooh in 1961.
Mr. Eisner said he was a children's programming executive with ABC when he first met Mr. Henson, in 1967. He said that they had stayed in touch over the years and that they began discussing a buyout about six months ago. The deal was completed late last week.
''We will bring Miss Piggy into the fold the same careful way Walt Disney brought Winnie the Pooh into the fold,'' Mr. Eisner said in a telephone interview from the new Disney-MGM Studios theme park in Lake Buena Vista, Fla., where the deal was announced.
In a statement, Mr. Henson said, ''I have enjoyed running my own company, but now I am really excited about joining forces with Michael Eisner and the Disney organization and finding out how much more we can accomplish together for our audiences all over the world.''
Officials of Henson Associates said it is a privately held family company, but declined to disclose who would receive the proceeds of the sale.
Henson Associates receives some revenues from the licensing of the Sesame Street characters. Disney officials said those revenues would not flow to Disney and presumably would continue to be paid directly to Mr. Henson.
Mr. Eisner said that Disney was paying ''a lot of money'' but added that between ''the established franchises and the upside of new Jim Henson products, we will earn a really good return on our investment.'' Deal Makes Sense to Analysts
Analysts said the deal made good business sense for both Disney and Henson, which is based in New York.
''Disney can always use more characters and can exploit them better than anyone else because of their reach in television, feature films and the theme park business,'' said Harold Vogel, an analyst at Merrill Lynch & Company. ''For Henson, I suspect they didn't have the capital to fully exploit the potential of the characters on their own.''
Mr. Vogel said that part of Disney's motivation may also have been to keep its competitors from buying Henson. ''It's a strategic acquisition,'' Mr. Vogel said. ''It almost doesn't matter if they paid too much or too little.''
Peggy Charren, the president of Action for Children's Television and a critic of commercialization in children's programming, said she was concerned that the deal would reduce diversity.
''I don't like this type of merger, even when all sides care deeply about children's television,'' she said. ''I would prefer two groups making children's television than one. I don't want the Muppet characters to start sounding like Donald Duck.'' Plenty of Adult Fans
Disney has long been careful about overexposing Mickey Mouse and its other trademark characters, and has made the development of new characters a priority. Its biggest success in recent years is Roger Rabbit, the animated star of one of last year's most successful films.
The Muppets seem to fit Disney's requirements perfectly. Although primarily developed for children, the characters have always had plenty of adult fans, and many of the films and television shows in which they appear include a measure of adult comedy.