The Truth Behind Disney's Acquisition of Kermit and crew at HENSON!

Speaking of the Muppets … When the Disney / Muppet acquisition deal was initially announced back on February 17th, a lot of people – myself included – said some pretty awful thing about Brian & Lisa Henson. All but accusing these two of selling out their father’s legacy for just a few million Disney dollars.

Well … As it turns out, perhaps there’s a kinder, gentler way to explain what actually went do here. But – in order to do that -- you first have to understand that the Muppets were Jim Henson’s creation. NOT Brian & Lisa’s.

And – after Jim died in 1990 – the Henson kids were actually … Well … Sort of kind of pressured into taking over the Jim Henson Company. At the time, it was felt that it would probably be best for the corporation if a member of the family took the helm. So there’d be some sort of sense of continuity.

The only problem was … None of the Henson kids really want to do this. Not Brian. Not Lisa. Not John, Cheryl or Heather. None of them had ever aspired to running the Jim Henson Company. But someone had to step up to the plate.

Eventually, it was decided that – together – Lisa & Brian would run the Jim Henson Company. But then – at the very last moment -- Lisa actually opted out. She went back to work at Warners, where she was already on a career track.

Whereas Brian … He decided that he’d try & be the good son. He – along with Charlie Rivkin – took over the day-to-day running of the Jim Henson Company. And that day-to-day gig somehow turned into 14 years. 14 long years, Harry … Doing something that Brian never really want to do (I.E. Watch over the Muppets, safeguard his Dad’s legacy, etc.). That’s an awful lot to ask of someone. Don’t you think?

Sure, there were some mis-steps along the way. Selling off the entire Henson Company to EM.TV in February 2000 comes immediately to mind. But even that was done with the hope that – with all that German money behind them – that maybe the Muppets would finally be safe. That Brian & Lisa (Lisa finally came on board at JHC sometime in the late 1990s) would have finally insured that his father’s creations were safeguarded. That Kermit, Miss Piggy & Co. would now survive, would still be entertaining audiences long after the Henson family was gone …

Luckily, after EM.TV imploded, Brian & Lisa – working for the entire Henson family -- were able to reclaim the Jim Henson Company. But it was also time for them to stop pretending that they were something that they were not. They weren’t Jim Henson. They were just Jim Henson’s kids. Which meant that they were entitled to have lives of their own. Not spend the rest of the their lives just safeguarding the Muppets.

So that’s allegedly actually why Brian & Lisa Henson sold off the Muppets earlier this month, Harry. NOT because they were out to make a quick buck. But – rather – because it was finally time that they laid this burden down. Got on with their own lives. Rather than continuing to live their Dad’s life for him.

By selling the Muppets off to the Mouse, Brian & Lisa knew (just as Jim did back in the late 1980s / early 1990s) that the Walt Disney Company has a real gift when it comes to keeping characters evergreen. And – if the buzz that I hear coming out of Burbank is any indication – the Muppets will be back up to full speed very soon. There’ll be new Muppet TV shows, movies, theme park attractions. There’s even reportedly been talk of Disney putting together a new Broadway show that would star the Muppets.

So where does this leave the Jim Henson Company? An organization that’s been linked – for decades now – with Fozzie Bear & the rest of his felt-covered friends? Well … For starters, it allows Brian & Lisa to finally remake the Henson Company in their own image. To not just have to make Muppet movies anymore. But to branch out, try new things.

“What sort of things?,” you ask. Here, Harry. Take a look at the e-mail that Lisa sent to all of the Jim Henson Company’s employees the day the Disney deal went down:

MEMO

To: Everyone

From: Brian, Lisa and Peter

Date: February 17, 2004

Re: Finally together, after all these years

It took us fifteen years, but we finally got it right. The combination of The Walt Disney Company and Jim Henson's Muppets was Jim Henson's and Michael Eisner's dream, and it has remained the dream of the Henson family and our Company ever since. Later today we will announce an agreement that transfers to Disney the Muppet and Bear in the Big Blue House properties. Financial details of the transaction are not being published, but you should know that in addition to an upfront payment, JHC will share in the future revenues from the exploitation of both franchises in Disney's hands. We expect that the deal will close within 30-60 days, and a copy of the press release announcing the agreement is attached for your review.

We are thrilled that, after so many years, and so many heartbreaking near misses, these classic characters have found their perfect and permanent home, where they will live on forever and finally receive the kind of distribution and marketing investment that a small company like ours could not provide. As most of you know, this deal has been in negotiation for several months, and our timing is unrelated to the current flurry of corporate news activity at Disney. The Walt Disney Co. is the world's premier family entertainment company, and we have every confidence that it will remain so.

Upon completion of the transaction, Disney will oversee all aspects of Bear and the broad group of characters we all commonly think of as the Muppets. They will therefore handle the distribution of the library of Muppet and Bear films and television programs (all of the Muppet, Muppet Babies and Bear series, movies, specials, etc), all merchandising, marketing and promotion and other ancillary exploitation, as well as the production of any new Muppet or Bear projects.

Having produced so many successful projects together [“MuppetVision 3D,” “Muppet Christmas Carol,” “Muppet Treasure Island” and “Bear,” to name just a few], Disney is well aware of the unique nature of what they have bought. They have therefore, in addition to our significant economic participation, given us far reaching production and consulting deals in all areas of the Muppet and Bear "businesses". We will do this happily, and look forward to sharing with them the special skills and knowledge of so many of our wonderfully talented group. We will be sitting down with the senior operating people at Disney in the next few days and weeks to plan how to transition the properties and how to re-launch them in Disney's hands, and we'll be asking many of you to contribute to the process.

Remaining with our Company are The Creature Shops, as well as the rest of our program library [including “Dark Crystal,” “Labyrinth,” “FarScape” and “Storyteller,” and “Fraggle Rock,” “The Hoobs,” “Construction Site,” and others]. We intend to be very active finding partners to help us exploit these properties and to help us create new ones. We are currently exploring a joint venture to form a "fantasy label" to house that entire side of our library and future production. We will also be expanding our live action and animated feature film businesses, with new and separate partnerships for each. The Creature Shop's character building capabilities and digital puppetry technology will be instrumental to all of these activities. The true genius of the very talented people that have worked, and still work, for our company lies in the unequalled breadth of creativity reflected in our Company's output. We are intent on continuing that unique tradition.

Building the future for a "new" JHC, while helping Disney achieve long lasting greatness for the properties from our past, seems like an ideal combination. On behalf of the Company and the Henson family, we thank each one of you for your help in making it happen.