Disney deal estimated between $40-60 million

[Phillip Chapman]

Here is the only published estimate I have seen so far alluding to the dollars that may be involved with the deal of Disney buying the Muppet and Bear characters and TV library. Let us know what you think of the estimated sale price.

Disney and Henson declined to disclose financial terms of the deal for the Muppets, but two sources familiar with the matter said it included a payment of $40 million to $60 million plus a share of future Muppet profits.

Jim Henson's heirs paid about $89 million last year in order to regain control of the company he had founded.

http://www.katc.com/Global/story.asp?S=1650174&nav=EyAzKta7

[beaker]

According to this article on Jim Hill media that Luke pointed out, two things http://www.jimhillmedia.com/legacy/index.htm?../articles/02182004.2.htm~contentFrame

"For how much?" you ask. Low. Ridiculously low. I've heard that the Jim Henson Company was in such rough financial shape that Disney was actually able to snatch up the characters, the film and television library and all the associated copyrights and trademarks for under $60 million.

Man, that is sad. Under $60 million? Comcats couldnt even buy disney for $60 BILLION. So I was thinking, lets get a collection plate going...I brought this up in 1998 when the electric mayhem bus was on ebay for 50k...this is only 50 mil! c'mon, bill gates spends that much a week on socks.
The average comic book movie costs more than TWICE that amount...I just never thought I'd see the day. I guess I am still for this buyout, but man...
well I got some funds in my paypal account, whose all in?

If I owned the muppets, first thing I'd do is get going on that edgy new live show and film thingy, as well as some other things.

[Luke]

It's not just $60-$100 million, it's that with all sorts of later payments and incentives depending on exactly what happens and how things go over time. It is very cheap but if you consider that the Kids bought back the entire company for near $90 million, and they are managing to hold onto the physical property, some brands, parts of the film library and the Jim Henson name as well as being given a 3 year production deal and 4 year consulting deal into the bargain it is pretty much about right.

[Chad Kermit]

Do we know if the New York property was sold before this happened? I wonder if that cash would be used to give the company a cash flow at that point or went to the Henson family.

[Phillip Chapman]

Here's another estimate of $100 million. It might be accurate if it takes into account a share of "future Muppet profits". Or possibly the early estimates were to low. It's only a matter of time before the real figure gets out there.

Walt Disney yesterday announced it is acquiring the popular characters from the heirs of their late creator, puppeteer Jim Henson, for an undisclosed price said to exceed $100 million.

http://www.nypost.com/business/18184.htm (http://www.nypost.com/business/18184.htm)

[Phillip Chapman]

Do we know if the New York property was sold before this happened? I wonder if that cash would be used to give the company a cash flow at that point or went to the Henson family.
Apparently, the NY Townhouse is still in Henson hands. To my knowledge, it's "for sale" just not "sold". Disney bought character and program rights, not the actual buildings.

[AruggeRadio]

Phil

I'm posting the Variety Artical that is in todays Daily Variety. It leads some insite, but still this is very sketchy. To me personaly it sounds like an Exclusive Rights Buying of the characters trew Disney. Meaning they can't take the muppet characters anywere else to do stuff. Then again i could be totaly wrong.

CW

site www.variety.com

Kermit and his Muppets pals are finally heading to the Magic Kingdom.

On Tuesday, a day after rejecting Comcast's offer to acquire Disney, the Mouse House announced a long-sought deal to acquire the Jim Henson puppet characters and the lesser-known "Bear in the Big Blue House" property.

Discussed for more than a decade in one form or another, the deal's coming together appears mostly coincidental to Mouse's current corporate dilemma.

Still, the announcement is serendipitously timed for head Mouseketeer Michael Eisner, who can point to the deal as evidence of his ability to lead Disney down new and profitable paths.

Agreement also reps a coup for the children of the late Jim Henson, securing a high-profile future for the best-known of their father's character creations while keeping an array of film entertainment assets for projects of their own making.

"It's great for Disney, but it's also a win for the family," said one industryite with a history of dealings with the Henson company. "They basically have parked their father's legacy in perpetuity at the place where it belongs, and they can kind of have their own lives as well."

Hensons in action

Brian Henson and Lisa Henson, son and daughter of the company founder, have an array of film and TV projects in active development at the company, which is expected to focus more on entertainment for older demos than it has in the past.

Hollywood-based Jim Henson Co. also will continue to operate its Creature Shops in L.A. and London and will maintain and exploit rights to its other film and TV franchises such as "Fraggle Rock," "Farscape" and "The Hoobs."

Financial terms of the agreement with Disney weren't released.

Disney will likely have to pay only part of the purchase price upfront -- believed to be well under $100 million -- and compensate the Hensons additionally by extending profit participation in the exploitation of the Muppets and other characters over the next several years.

Further limiting Disney's out-of-pocket expense is the fact the deal involves only properties with a natural fit for its family-oriented theme parks and cable webs.

"They bought the assets that they care about, without the liabilities," said one financial community observer.

Entertainment attorney Skip Brittenham helped fashion the agreement for the Henson family. Deal is expected to close within two months.

Agreement was announced after the close of market trading. But if Mouse shares rise on the news this morning, Team Eisner could find its defenses against the Comcast assault bolstered appreciably.

That's because Comcast's bid was entirely stock-based, so any escalation of Disney shares or decline of Comcast stock makes it harder for Comcast to argue the appeal of its offer.

Movement in the companies' stock since the Comcast bid was announced already had most analysts predicting the cable company would have to sweeten its offer for Disney.

Previous deals

The Henson family paid $78 million cash in July to buy back their father's company from the German media group EM.TV, which had acquired Henson three years earlier. Henson's Sesame Street characters were sold off in 2001 to Sesame Workshop for $180 million.

In buying the Muppets, Disney is acquiring assets, and the film and TV library associated with characters such as Kermit, Miss Piggy, Fozzie Bear and Animal. Similarly, the Mouse is acquiring all assets related to live-action kids skein "Bear in the Big Blue House."

"Since I worked with Jim Henson on the first Muppets TV special in the 1960s, it was obvious to me that his characters would make a deep imprint on the hearts of families worldwide, and this announcement is the culmination of a longtime desire to welcome them into the Walt Disney Co.," Eisner said in a statement.

"Kermit and Miss Piggy are well known and beloved around the world, and will have an opportunity to be seen and loved by millions more well into the future through Disney's distribution channels at home and abroad, including homevideo, family television programming and consumer products, in addition to the existing theme park presence at Walt Disney World and Disneyland," Eisner continued.

"We are honored that the Henson family has agreed to pass on to us the stewardship of these cherished assets."

Safe harbor

Henson co-chairman Lisa Henson called the agreement with Disney a culmination of her father's vision for the Muppets franchise.

"The deal ensures that the Muppet characters will live, flourish and continue to delight audiences everywhere, forever," she said.

"This new and very important relationship will enable our two companies to combine our respective talents and resources in ways that will fully realize the tremendous potential of the Muppet and Bear franchises," Brian Henson said in a statement. "Michael Eisner's long-standing passion and respect for the Muppets gives me and my family even more confidence in Disney as a partner."

While Henson co-chairman's reference to Eisner will no doubt be appreciated by the embattled Disney topper, terms of the company's agreement with Disney would have to be honored by any future regime in the event of a Mouse takeover.

Long time coming

The Henson family said at the time of its buy-back from EM.TV that efforts already were under way to establish long-term rights exploitation deals with one or more studios. The deal with Disney -- which accomplishes that aim in the most dramatic fashion -- completes a negotiating dance with the Mouse first started by the late Jim Henson.

Just before Henson died in 1990, Disney was poised to buy the Henson company and fold it into the House of Mouse.

Though that deal was never concluded, Disney -- along with Viacom, Time Warner and others -- again figured in talks to acquire the company just before EM.TV stepped in to buy Henson for $680 million in February 2000 and again during an auction leading up to the Henson family's repurchase.

"We think the Muppets are evergreen characters that have a broad family appeal," said Peter Murphy, Disney's chief strategic officer.

"We will look aggressively at developing new programming featuring both the Muppets in their classic presentation and perhaps in a new form that could include 3-D (computer-generated imaging). This could be in a TV movie, a TV series or a feature film."

Lisa Henson noted the Henson company has already done some CGI tests on the Muppets Babies characters. Disney is aware of the tests but hasn't yet seen the work, she said.

"There are a lot of cool possibilities, and bringing the Muppets into new technologies is one of the interesting new possibilities," Henson said.

Intriguing prospect of a new CGI franchise is another well-timed development for Eisner, who was criticized when Pixar broke off negotiations to extend its animation studio's co-production pact with the Mouse.

Past Muppet movies have used the puppet characters in mostly live-action settings. Recent theatrical titles have included "Muppets From Space" and "Elmo in Grouchland," both released to modest success in 1999.

[dmx10101]

"We will look aggressively at developing new programming featuring both the Muppets in their classic presentation and perhaps in a new form that could include 3-D (computer-generated imaging). This could be in a TV movie, a TV series or a feature film."

I don't like CG Muppets, that makes them not real!

[Klonoa]

Yeah the CG Muppets in Muppets Party Cruise just didn't seem quite right. I mean, they weren't bad or anything, and I can see why they'd want to use CG Muppets for like, a video game. But I'd hate to see a whole movie with CG Muppets.

Of course I guess I am a bit of a hypocrite, seeing as though I like the animated Muppet Babies cartoon, and that's not 'real' in a Muppet sense.

I'll still remain hopeful with the whole Disney/Muppet thing. I'll only get irked if they actually do ruin something.

--Klonoa

[mupvisiongirl]

ok- I can contribute 73 cents and some paper towels

[Buck-Beaver]

I agree with Luke - it's a reasonable price all things considered epsecially since there is potentially more future revenue involved. Weren't there problems with the rights to some shows like "The Muppet Show" that led EM.tv to dump the company so cheaply in the first place?

[bigkybp]

Well I am happy to hear about it but sad at the same time. But one thing I am not clear about. Is or is not Disney going to own the Henson Company? I mean is it everything or not? As for the Muppet characters on Sesame Street, I thought the Jim Henson Company owned those characters and not Sesame Workshop. Or did Sesame Workshop bought the rights to the characters? And if they did, was there an article telling of that.

The reason why I am sad is because hearing that a favorite company of mine as the Jim Henson Company being bought. It is like the time my favorite game show company like Mark Goodson Productions was bought. I was sad but eventually come to accept it. I mean if I was in the entertainment business and had the money, I would have tried to buy it too. But with the Henson Company being bought, I will eventually get over it. I just felt that with Henson being bought, that the quality or the vision of Jim Henson might be changed. But with Mark Goodson Productions, the company that now owns it has made improvements to the game shows. Like with the "Price Is Right" and "Family Feud". Comparing the shows now to what it was like then. So I am sure that with Disney owning the JHC, I am sure they can even make it better. To help JHC even grow more and better than ever.

I wonder if Disney might do more seasons of "Dinosaurs" that was produced by Henson? I would like to see more shows of Henson's to make a come back with new episodes or seasons. Like for instance, "Muppets Tonight" which I heard aired on the Disney Channel. But also heard that it did not last that long. I never got to see it at that time cause I did not have the channel on regular cable cause it was not offered. But it was offered on digital cable. In which I now have. One time I e-mailed JHC to ask why the show did not last very long and they answered that I should ask the Disney Channel. Does anyone know why it did not last long? I heard that it is not like the "Muppet Show" but it was a more updated version from what I heard.

I have another question. If the deal goes through and is finalized in a few months, what happens to JHC's deals with other companies to distribute their movies in theaters and on dvds, their shows on dvds too like the "Muppet Show"? I don't know about you but I find such things very interested to know. I mean, like with Henson's music that they have gone through many record companies. But for movies and dvds, the JHC has gone through many studio distributors. I am just very curious.

I have heard that many Muppet performers, etc. have used this forum. So when Disney takes control, will that mean that they can't say much on here or whatever? I would hate for that to happen.

Sorry if this post is SO long. Since hearing the news, it sort of bring out alot of questions in me.

Brian
Henderson, KY

[MuppetDanny]

I don't know if anyone has been to Henson.com yet, BUT here's there PRESS NOTE (http://www.henson.com/company/press/html/021704.html)

See ya

[a_Mickey_Muppet]

"We will look aggressively at developing new programming featuring both the Muppets in their classic presentation and perhaps in a new form that could include 3-D (computer-generated imaging). This could be in a TV movie, a TV series or a feature film."

I don't like CG Muppets, that makes them not real!


I wouldnt mind seeing a 3D Muppet movie :smirk: just ONE tho :)