Jim Hill
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Disney / Muppet Merger 2.0?
It's been nearly 12 years since the Mouse first tried to swallow the Frog. But now that the Muppet's German owners have officially put Jim Henson's creations up for sale, the big question is will Mickey take another stab at acquiring Kermit & Co.? Perhaps ... If the price is right

For months now, it's been a story that's been cruising along -- just below the entertainment industry radar.

Back in February of 2000, the German entertainment consortium EM.TV paid $680 million to acquire the Jim Henson Company. Less than 10 months later, the company found itself in such severe financial distress that it needed to raise cash fast. The best way to do this? Sell off all unnecessary assets.

Which is how Kermit & Co. suddenly found themselves on the auction block.

This is where these felt favorites have remained for some five months now. Numerous other entertainment conglomerates have allegedly come by and "kicked the tires," so to speak. Among the firms who have reportedly made offers for the Muppets are Viacom, Time-Warner and HIT Entertainment, the owners of "Barney" and the popular "Bob the Builder" animated children's show.

But -- as time drags on -- there's only one corporation whose name keeps coming up as the eventual new owner of the Muppets. And that's the Walt Disney Company.

Don't believe me? Think back to last week, when Disney's chief financial officer Thomas Staggs was in New York speaking at a Bank of America Securities conference. At that time, Staggs -- in spite of the soft attendance levels that the Mouse was experiencing at both its Anaheim &Orlando theme parks -- made mention that the corporation was "well positioned" to make some new media acquisitions. Was Staggs deliberately hinting at a new deal that was waiting in the wings? Perhaps.

And then there's Disney CEO Michael Eisner. Eisner has made no bones about his long term desire to acquire the Muppets. Bad behavior on the part of Mouse House attorneys allegedly lead to the cancellation of Mickey & Kermie's first attempt to merge back in the early 1990s. But that never stopped Eisner from continuing his dogged pursuit of Miss Piggy & pals.

Indeed, there have been persistent rumors over the past 10 years -- some as recently as January of 2000 -- that Disney was once again in talks to acquire the Muppets. But that last deal fell through when EM.TV stepped in and offered to pay what many industry observers believe was far too much for the Jim Henson Company.

Of course, now that EM.TV is in enormous financial trouble (The German entertainment consortium actually had to accept financial help from its hated rival -- the Kirch Gruppe -- in order to to stay afloat), Disney's now taking its time with the negotiations -- hoping that it will be able to acquire Kermit & Co. for less than half of what EM.TV paid 15 months ago.

The figure that I keep hearing that Disney has offered is $300 million. That plus a promise to give EM.TV / Kirch access to certain elements of the Mouse's massive television & motion picture library over the next few years.

Given that Mickey is anxious to get the best possible price for this deal, negotiations are moving at a glacial pace. But dedicated Disney watchers are still wondering at the significance of "The Muppet Treasure Island" airing on ABC's "Wonderful World of Disney" this Sunday night. Could this be a none-too-subtle indication that Kermit the Frog &friends are about to take up permanent residence in the Magic Kingdom?

My advice? Keep an eye on the financial pages, folks ... News of the second coming of the Disney / Muppet merger could break as early as next month.

Better still, keep an eye on LaughingPlace.com, where -- once this deal becomes official -- we'll launch a series that explores the entire history of the Walt Disney Company's dealings with the Jim Henson organization. You'll learn all about the great attractions we missed out on when the first merger deal fell through -- the Great Muppet Movie Ride, for example -- as well as Disney's initial controversial plan bring the Muppets on board at Disneyland (Mickey's going to be away on vacation all summer? Really?).

All that ... just as soon as Eisner gets around to making the official announcement.

Til then ... Have a little patience, friends. After all, it's taken the Mouse & the Frog almost 12 years now to finally close this deal. In comparison to that, what's the point of making a fuss about having to wait a few weeks to hear a story?

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Related Links

• Muppet*Vision 3D Grand Opening at Disney's California Adventure

-- Jim Hill

-- Posted May 24, 2001