Jim Hill
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(By the way, just for the record, the Jim Henson Company / Muppets acquisition wasn't the only deal that Disney screwed up because it got greedy. Back in the early 1990s, the Walt Disney Company was actually in negotiations with Ramona Ward -- Jay Ward's widow -- as the corporation sought to buy up the theme park & merchandising rights to all of Jay's great characters: Dudley DoRight, Snidley Whiplash, Gidney & Cloyd, Rocky, Bullwinkle, Boris, Natasha, Capt. Peter Peachfuzz, Fearless Leader et al.

Why was it doing this? Well, first of all, Disney had already seen how well the "Adventures of Rocky & Bullwinkle" tapes were selling on home video. So the natural assumption was that -- if the public likes Jay Ward's characters enough to buy them on VHS -- they're going to love seeing these guys walking around inside one of the Walt Disney Company's theme parks.

More importantly: Just as he'd done when he initially went after the Muppets in the summer of 1990, Disney CEO Michael Eisner was still actively looking for additional cartoon characters -- besides Minnie, Mickey, Donald. etc. -- to make regular appearances at the company's new Disney/MGM Studio theme park. Besides, the Imagineers already had tons of great ideas for new silly attractions that they could build around Jay Ward's crazy characters. On paper at least, acquiring Rocky & Co. made a great deal of sense.

The only problem was that the negotiations dragged on for months. Disney's lawyers haggled endlessly with Ward's widow [Jay himself passed away back in October 1989], trying to get the very best possible deal for the Mouse House.

Meanwhile, the folks over at Universal -- after seeing how well all of those old "Bullwinkle" TV shows were selling on home video -- sensed that there was a real opportunity to be had here. So MCA representatives swooped in and quickly made Ramona an offer. In doing so, they managed to swipe the theme park & merchandising rights to the Jay Ward characters right under Mickey's nose.

Which is why Dudley DoRight's Ripsaw Falls is located inside of Universal Studio's Islands of Adventure, not Disney / MGM Studio Theme Park. More to the point, this is the real reason that Disney -- in spite of how well the home video versions of "The Adventures of Rocky &Bullwinkle" were selling -- decided not to renew its option to distribute the old shows on VHS. Mickey wasn't going to do anything that would make MCA's newly acquired characters any more valuable for its competition.)

Anyway ... Getting back to the Henson / Disney video deal.

The financial community seemed somewhat surprised -- given the animosity that Disney and Henson had displayed for one another eight months earlier -- that the Frog & the Mouse would now be getting in bed together. That's why Henson's PR reps worked hard to try & put a positive, sensible spin on the whole situation.

They reminded Wall Street types that one of the main reasons that Jim Henson had initially approached Michael Eisner about merging the two companies was because he wanted the Muppets to become really big in home video. And -- given that Disney (at the time) was the undisputed leader in selling videos to children -- it just made sense to make this deal now with the Mouse.

Plus the terms of the deal seemed to be very much in the Jim Henson Company's favor. For example, at the request of Henson's lawyers, the Disney name was nowhere to be found on any of these video tapes. Only the Jim Henson logo -- with the Buena Vista distribution name in teeny tiny letters -- could be seen on the tape's labels or slipcase.

Plus Disney had agreed to bankroll up to three new Henson productions a year for direct video release. But -- at the end of the pact -- the rights to these shows (plus all the other video versions of Muppet TV programs & movies) would automatically revert back to the Jim Henson Company.

Taken at face value, the Buena Vista Home Video distribution deal seemed to be the best possible thing for the Jim Henson Company. It would generate tens of millions of dollars in revenue for the corporation, which would help Henson quickly retire its multi-million dollar debt. The deal would also help put the Muppets back in the marketplace, which would -- hopefully -- eventually increase the value of the whole Henson brand. And maybe even allow the corporation to attract another buyer for the Muppet franchise.

Given that their fortunes suddenly seemed to be improving, Henson representatives sounded downright magnanimous in interviews with the press back in December 1991. Muppet PR reps deliberately downplayed their earlier troubles with the Mouse, insisting that they'd never really had any problems with all the folks who operated Disney's theme parks, television or home video units. It was just a few of those unnamed executives back at Mickey's corporate headquarters that Kermit &Co. had had issues with.

However, one wonders if the Henson people would have come across as being so lovey-dovey toward Disney if they had realized the impression that this deal -- as well as the company's decision to make 1992's "The Muppet Christmas Carol" and 1996's "Muppet Treasure Island" for Walt Disney Studios -- was going to give the public.

For -- as that FAQ excerpt at the top of this story proved -- a lot of folks think (and -- to be honest -- have thought for a number of years now) that the Walt Disney Company already owns the Muppets. Which is what supposedly spurred the Jim Henson Company to prove that it -- not Disney -- was actually in control of its destiny. Which is why Kermit cut that deal with EM.TV last year.

Coming next Tuesday: Explaining the deal that undid the Muppets. Plus why Disney may finally get another chance to acquire the Jim Henson Company.

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-- Jim Hill

-- Posted September 27, 2001