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Muppets characters to join Disney

By Alex Armitage
Bloomberg News

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Disney said it is planning new television specials and series based on the characters. The transaction, expected to close in two months, does not include Sesame Workshop's "Sesame Street" characters such as Oscar the Grouch and Big Bird.

Lisa Henson, co-chief executive of the Jim Henson Co., said she had been close to a deal for weeks to sell the Muppets to Disney, reviving an agreement that was almost completed 14 years ago.

The agreement may help Disney Chief Executive Michael Eisner rebut claims by former directors Roy Disney and Stanley Gold that he has let the company's heritage of providing quality family entertainment languish.

Los Angeles-based analyst David Miller said Disney may have paid less than $50 million for the puppet characters.

"These are characters that are naturally exploitable across a myriad of Disney assets," Miller said. "With Disney's brand being so family oriented, there's no other logical entertainment home."

In May, German media company EM.TV sold the Muppets to the children of the characters' founder, Jim Henson, for $89 million. EM.TV bought the company for about $680 million in 2000. Jim Henson, who founded closely held Jim Henson Co. in 1958, died from pneumonia in 1990.

The transaction includes the film and TV library, and copyrights and trademarks for "Muppets," including Fozzie Bear, Gonzo and Animal.

"These are wonderful characters," said Miller, who rates Disney a "hold" and doesn't own shares.

Miller said Disney might exploit the characters on its Disney Channel, ABC broadcast network and at its theme parks.

Material from Reuters is used in this report.

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