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Article--The Muppets Reloaded

Discussion in 'Muppet Headlines' started by BoyRaisin2, May 8, 2003.

  1. BoyRaisin2

    BoyRaisin2 Well-Known Member

    THE MUPPETS: RELOADED Henson heirs reclaim rights in $89 mil deal with EM.TV

    May 8, 2003 2:01pm


    Kermit the Frog is heading home.

    Germany's EM.TV said Wednesday it's selling Kermit and his Muppet kin back to the family of the late Jim Henson, creator of the well-known movie and TV characters.

    Definitive agreement comes as a big surprise to most observers and caps a year- plus search by the cash-strapped German company for a Jim Henson Co. buyer. Valued at $89 million, terms call for a cash payment of $78 million by the Henson family plus an $11 million sweep of current cash reserves at the Henson company by EM.TV.

    Deal --- nailed down at 4 a.m. PDT after a whirlwind five-day period of nonstop negotiations --- reps something of a windfall for the Henson heirs, who sold the company to EM.TV three years ago for $680 million and are now set to regain it at a fraction of the price.

    That's partly because character rights from the Sesame Street TV show were sold to producer Sesame Workshop two years ago for $160 million.

    Need for money

    But bargain terms are also traceable to the need for cash at EM.TV, which has been slowly recovering from a near-death experience in 2001. The group has had to shed or shutter many assets acquired by high-flying former topper Thomas Haffa.

    "We've been sprinting to get this done," said Brian Henson, son of the Muppets creator. "When they finally said 'OK, we have a deal,' I almost fell apart, it was so emotional."

    Jim Henson died unexpectedly 13 years ago this month. At the time, Disney had been finalizing a deal to acquire his company, and though that 1990 deal collapsed, the Mouse House was expected until recently to agree to terms to buy the company from EM.TV.

    Ultimately, Disney was scared off by certain regs governing German bankruptcies, which Mouse attorneys advised posed too great a risk to a U.S. acquirer, should EM.TV go belly up.

    Classic Media, a character licensing group, was another bidder for Henson. In fact, the Gotham-based company agreed to broad terms of a Henson acquisition just one week ago, with the Henson family jumping into the picture at that point.

    Deal broke up

    A group led by former UPN topper Dean Valentine also had a previous tentative deal that imploded prior to a definitive agreement, and a management-led buyout mulled in the earliest stages of the Henson auction never materialized.

    Brian Henson said he hopes to retain longtime Henson CEO Charles Rivkin but will not be addressing the matter until after the acquisition is finalized.

    Brian Henson, sisters Lisa, Cheryl and Heather, and brother John will all serve on a company board after completion of the acquisition, with Brian and Lisa Henson expected to be the most active in day-to-date affairs.

    "The board will be very involved in the management of the company," Brian Henson said. "It's too early to comment on what we're going to do going forward. But generally speaking, we plan on developing major strategic partnerships rather than growing internally."

    Henson declined to say if that would include any projects with the Mouse, a partner on some past film, TV and theme-park projects.

    "We think Disney is a terrific company, and when we've worked with Disney, it's been very successful," he allowed.

    Projects in the works

    Henson served as chairman of the company until resigning the mostly honorary post a year ago, saying he wanted the flexibility to develop outside projects. Some of those unspecified projects are well-progressed and will likely be rolled into Henson productions, he said.

    "I'm going to be a very active producer for the company," Henson said.

    A director of several Muppet movies and TV projects over the years, Henson last helmed the 2001 TV miniseries "Jack and the Beanstalk: The Real Story." In 2002, he exec-produced the successful NBC telefilm "It's a Very Merry Muppet Christmas Movie."

    Lisa Henson, a former film exec at Warner Bros. and Sony, serves as prexy of Jim Henson Pictures, the Henson company's film division.

    "We were pleased when we sold the company before (but) it has been a difficult few years," Lisa Henson said. "So, we're definitely looking forward not only to be investor but an active participant in the company."

    Current film projects

    Henson's film division has three current movie projects: "Good Boy!", a live action talking-dog movie to be released through MGM; "Five Children and It," a family pic based on E. Nesbit's classic children's book that's tagged for independent distribution; and "Mirrormask," a family fantasy skedded for homevid releasing through financing partner Columbia TriStar.

    "We would like the company to be producing more than we are in all areas, not just in feature films," Henson said.

    Current production from the lot's TV department includes a recently introduced Discover Kids skein "Animal Jam," featuring a mix of live action and puppets, and a 250-episode order of the half-hour U.K. puppet show "The Hoobs."

    "We've been watching from the sidelines for the whole year and a half as they've been trying to sell the company and it's been a process that has been obviously very disappointing to us," Brian Henson said.

    New energy

    Returning the company to family control should greatly revitalize operations, he said. Based on the historic former Chaplin lot in Hollywood, Henson also has offices and creature shops in Gotham and London.

    Endeavor partner Ari Emmanuel was a "very important adviser in helping us put this together so quickly," Henson said. The agent will continue to serve as a consultant on various Henson projects, he added.

    EM.TV topper Werner Klatten said the Henson family offered the most attractive bid for the company.

    "With the successful completion of the complex sales process, we have completed major steps in the restructuring of EM.TV," Klatten said. "The proceeds from this sale will secure the company's liquidity and significantly increase its business opportunities."

    Among those opportunities is a joint bid with retail giant KarstadtQuelle for Kirch sports channel DSF. But those plans could get shot down by Germany's newest media mogul, Haim Saban, who has also put in his own bid for the web.

    Saban also had figured in earlier Muppet bidding. But the entertainment billionaire shifted his interest to more ambitious media acquisitions in Europe.


    The Henson sale, which is subject to shareholder approval, will allow EM.TV to pay back the remaining $14 million of a $270 million credit line due this month to its own lenders. Company said it would have almost no short-term financial obligations outstanding, with long-term debt consisting only of a convertible bond due in 2005.
     
  2. scarecroe

    scarecroe Well-Known Member

    I don't understand what this means...
     
  3. BoyRaisin2

    BoyRaisin2 Well-Known Member

    The Disney merger was announced on August 28, 1989; the EM.TV sale occured on February 21, 2000; the Dean Valentine deal was announced last Christmas Eve; and May 7, 2003, was when the Henson Family bought their dad's company back.

    I'll probably change my signature anyway, just seeing how I like it.
     
  4. BoyRaisin2

    BoyRaisin2 Well-Known Member

    At least now I know WHAT HAPPENED. Now I'm on the first step of moving on. I just wanted to know how Disney screwed it up again, and now I know.

    So Brian didn't snatch the Frog from under the Mouse's nose, he snatched it from the Friendly Ghost's, mmm, something or rather.
     
  5. Muppets1985

    Muppets1985 Well-Known Member

    Re: Re: Article--The Muppets Reloaded



    Same here, pal!!!:excited: :smirk: :rolleyes: ;)
     
  6. BoyRaisin2

    BoyRaisin2 Well-Known Member

    OK, another article

    FEATURE-Henson family writes surprise end to Muppet caper

    By Peter Henderson

    LOS ANGELES, May 15 (Reuters) - For Kermit the Frog, being green may be getting a little easier these days.

    Perched atop the arched entrance to Jim Henson Co.'s studio in Hollywood, the famous green Muppet can stare at the Crazy Girls Exotic Strip Show across the street -- as he has for years.

    But if he turns around, the unusual sight behind him may be even prettier for the frog king and sidekicks like Miss Piggy and Fozzie Bear -- for there stands Brian Henson, son of the Muppet's creator Jim Henson, Kermit's new boss.

    Brian and his siblings have regained Henson family ownership of the Muppets and their famous studio just off Sunset Boulevard and are planning to breathe new life into what had become a stale, slimmed down franchise under its previous owners, the German media firm EM.TV & Merchandising (ETVG.DE).

    The five Hensons, Brian, Lisa, Cheryl, Heather and John, bought the business back -- minus several major assets like the Sesame Street characters and three cable networks -- for $78 million on May 8, after having sold it three years earlier for $680 million.

    The Henson family sealed the deal, grabbing the company from a handful of bidders who had been haggling for years, nearly 13 years to the day since the death of their father.

    "I think he'd be amused by the whole thing," Brian Henson told Reuters, standing in the Muppet lot, which was built by Charlie Chaplin who filmed some of his most famous pictures there. The lot also houses a recording studio that draws some weirdly dressed humans to the scene, like the group KISS.

    EVERGREEN AND WEIRD

    Hollywood has marveled at the storybook ending of the battle for control of the Muppets, but the Hensons are not banking on nostalgia to fuel new Muppet projects.

    "We rely on our characters to be interesting and strange and weird," Lisa Henson, movie production chief of Henson Co., said in an interview.

    Kermit and the Muppets are widely seen as a bit worn from years of corporate neglect, but Lisa Henson argued they were "evergreen" because they were more than cute.

    Jim Henson created the dancing, singing, wisecracking Muppets and Kermit, Miss Piggy and Fozzie Bear stormed prime time TV with their variety show in the 1970s, then took to the silver screen with a series of movies.

    Kermit sang about the difficulty of being green, visited Sesame Street, the home of Muppet cousins such as Big Bird. Children throughout the United States imitated the loopy accent of the Swedish Chef and the array of squeaks and growls Henson and his cohorts dreamed up for other characters.

    However, after Henson's 1990 death upset an offer from Walt Disney Co.(DIS.N) to buy the business, the company struggled with the question of how big to grow.

    The Henson children sold the company to Germany's EM.TV & Merchandising for $680 million because the media conglomerate appeared to have the resources to compete with huge rivals. But EM.TV's financial health began deteriorating right after the deal and it started selling Henson assets, including Big Bird and the other Sesame Street characters.

    Plans for a new Muppet television show fizzled in the last year, while a made-for-TV holiday movie last year was a hit as sales talks waxed and waned.

    Disney Chief Executive Michael Eisner said earlier this year that he expected to announce a Muppet deal.

    A Disney spokesman declined to comment on the talks, although Brian Henson said his family "loves" Disney and that it was "certainly not out of the question" that Disney, which already features Muppets at theme park attractions, would take a strategic role in Henson's future.

    One source familiar with the process said that bidder Classic Media had nearly sealed a deal, but before it was to close, there was one last chance for bids and that's when the Henson family decided to regain their heritage.

    Brian Henson said the family had knocked together an offer in six days. "Only in the last two weeks did we feel like enough is enough, and we know how to run this company," he said.

    Throughout the Henson empire, there was a huge sense of relief. David Barrington Holt, creative supervisor of the Los Angeles arm of the special effects Creature Shop, which makes aliens and animals such as the critters for the "Doctor Doolittle" movie and the Muppets, said he was waiting for directions.

    "It's great that the company is back home, but now we need to know what the plan is," he said.
     
  7. Luke

    Luke Well-Known Member

    Re: OK, another article

    So who wants the next Muppetfest to be held at the Chaplin Studios then eh Boys ? Seems like there are many benefits of working at the Henson Company not least the ammenities situated close by !

    :flirt: < wiggles suggestively !

    So plans for the new Fox show have 'Fizzled' ? Are we to take it that isn't happening now ? I had thought something like that was up but i thought the deal was quite solid.
     
  8. BoyRaisin2

    BoyRaisin2 Well-Known Member

    Once again, I know WHAT happened. But what does it MEAN exactly? How come it was a risky deal for #2 U.S. media group Disney, but Classic Media was nearing an agreement-in-principle and the Henson kids got it in the blink of an eye?
     
  9. Luke

    Luke Well-Known Member

    Well Disney are a massive worldwide mega-corporation. The Classic Media deal involved a few fairly small media companies, and Henson are a tiny media company. It's all about who has the most to lose. The German regulations mean (i think) that the company making the aquisition has to guarantee the finances so that the deal can go through, and if EMTV went 'belly up' then that would still be on the line, even though they'd still probably have to fight for what they bought through the German legal system. So a big company like Disney (and especially their shareholders) wouldn't want their funds tied up and a long legal battle through foreign courts. It would look worse on them and have a greater impact on their company than a small group of individuals like the Henson kids. I always felt that Disney, if they did buy the Muppets would just go for the characters and library because it would have given them an easier way for them to get the Muppets without all the legal processes of aquiring a whole company. That's how i understand it anyway !

    So right now it's still all in limbo - the deal is waiting to be approved by EMTV's shareholders, and the Henson kids are waiting to move into the boardroom and making preperations for when they do so, but they can't take charge of the company until it's all officially signed and sealed so EMTV and Rivkin are still the people running the company.
     
  10. BoyRaisin2

    BoyRaisin2 Well-Known Member

    Ohhhh, that makes sense. Or does it? :smirk: :)

    Anyway, so that's why, in March, it was said Disney only wanted the characters and the library itself.

    Now, for EM.TV going "belly up." Does that mean if it went bankrupt or out of business? Either way, if Disney had bought Henson before EM.TV went that way, would there be no problem? Because EM.TV, despite its serious financial problems, has not gone bankrupt correct?
     
  11. Luke

    Luke Well-Known Member

    I didn't say it was the reason Disney might have just wanted the characters/library but maybe one of many reasons if they did feel that way. They've already had a lot of problems with the German legal system.

    On the second question, as you've seen, it takes 2 months for the aquisition to actually take place once the deal has been signed as it has to be approved by various people. EMTV going bankrupt has been a real possibility for a long time now and the problem is if EMTV went bankrupt between the deal being signed and it being approved. If the banks took control the deal might not go through, the new buyers might have trouble actually getting what they had bought etc etc. It would cause a lot of headache which is easier for a smaller company to stomach than a larger one. So while Disney could have signed an agreement to buy Henson at a point where EMTV were not bankrupt there was no guarantee they would not be by the time the deal actually went through.
     
  12. BoyRaisin2

    BoyRaisin2 Well-Known Member

    So in short, Disney could've done their $70-100 mil deal to buy Jim Henson Co., but they were ultimately overly concerned that EM.TV could've gone bankrupt by July or whenever the deal was finalized?
     
  13. Luke

    Luke Well-Known Member

    Yes, well at least from how i see it (i'm not a media analyst) but as to whether they were 'overly concerned' i guess you'd have to see the advice they got before they attempted to sign any deal. At least these were the reasons given in the media but obviously we know the Henson kids didn't step in to stop Disney, and were dissapointed they had walked away.
     
  14. BoyRaisin2

    BoyRaisin2 Well-Known Member

    Could the rules of the German legal system have prompted Disney to back away from an alleged $135 million bid for Henson back in December? Or were those rumors from Allen & Co. as well?

    And when you say Disney would have had the most to lose if EM.TV went "belly up," would this mean Disney would have to pay $70-100 mil for Henson plus whatever amount for money for legal fees if the EM.TV went under? And would that negatively effect shareholders?
     
  15. Luke

    Luke Well-Known Member

    As i personally see it :-

    <<Could the rules of the German legal system have prompted Disney to back away from an alleged $135 million bid for Henson back in December? >>

    Not sure, we don't have any firm info on what happened then but it's possible. Thing is though, they went back to bid recently and they were in the same situation so probably not. At a pure guess, maybe they thought it was just too much money. Remember from what we know, EMTV were always reluctant to take less and less money.

    <<And when you say Disney would have had the most to lose if EM.TV went "belly up," would this mean Disney would have to pay $70-100 mil for Henson plus whatever amount for money for legal fees if the EM.TV went under? And would that negatively effect shareholders?>>

    Yes and Yes, not just a negative effect financially but also publicity wise and time wise !

    Remember though, thats how i personally see it from the info we've seen as it all went on, i'm not a media analyst and only have a sketchy knowledge of the legal processes so it could well be wrong.
     
  16. BoyRaisin2

    BoyRaisin2 Well-Known Member

    With every post I feel smarter. :)

    Since you're obviously media savvy Luke, who are the media analysts and "sources?" They seem to know everything, even when it proves to be wrong.

    And what is the overall difference between an agreeement-in-principle (like Valentine had and what Disney had in '89) and a definitive agreement (what EM.TV had in '00 and what the Henson family has now)?
     
  17. Luke

    Luke Well-Known Member

    The "sources" are professional media analysts who are paid to speculate and are usually retained by newspapers etc, they may be "insiders" at the companies concerned or just the normal press contact saying something "off the record". It could also basically be any old media contact the journalist has who would have experience of this kinda thing or maybe even worked with Henson before. It's a pretty loose term to be honest.

    An agreement in principle is usually (but not always) an exclusive negotiating period, the company has the basic framework of a deal, and uses that period to work out the specifics and terms of that deal in order to get to a point where they can sign a definitive agreement and complete the sale. A definitive agreement is the point where the deal is signed, negotiations have all but ended and in the case of a public company, all it needs to do is be approved.
     

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