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Muppets Moving to Mouse House

Kermit and his Muppets pals have decided to move into the uproarious mouse house, having been acquired by The Walt Disney Co. in a deal announced Feb. 17, 2004, on the heels of Disney rejecting Comcasts hostile bid to buy the entertainment conglomerate. Disney has been trying for some time to acquire from Jim Henson Co. all Muppets assets, including the Kermit, Miss Piggy, Fozzie Bear, Gonzo and Animal characters, the MUPPETS film and television library, and all associated copyrights and trademarks, as well as all the BEAR IN THE BIG BLUE HOUSE characters, television library, copyrights and trademarks. Financial terms of the agreement with Disney weren't released.

The transaction is expected to close in two months and doesn't include the SESAME STREET characters, such as Big Bird and Elmo, which are separately owned by Sesame Workshop. The deal also includes non-exclusive production and consulting agreements under which Henson will develop potential new programming featuring the MUPPETS and BEAR IN THE BIG BLUE HOUSE for Disney.

Brian Henson, who, with his sister, Lisa, is co-chairperson and co-chief exec of Jim Henson Co., said, "This new and very important relationship will enable our two companies to combine our respective talents and resources in ways that will fully realize the tremendous potential of the Muppet and BEAR franchises. (Disney chairman/ceo) Michael Eisner's long-standing passion and respect for the Muppets gives me and my family even more confidence in Disney as a partner."

Lisa Henson said, "In the months before his death in 1990, my father Jim Henson pursued extensive discussions with the Walt Disney Co. based on his strong belief that Disney would be a perfect home for the Muppets. As such, the deal we announced today is the realization of my father's dream ... My brothers and sisters -- Brian, Cheryl, John, Heather -- and I are so proud to have the Muppets living under the same roof as Walt Disney's own timeless characters. We could not possibly be more pleased."

"Since the time I worked with Jim Henson on the first MUPPETS TV special in the 1960s, it was obvious to me that his characters would make a deep imprint on the hearts of families worldwide, and this announcement is the culmination of a long-time desire to welcome them into The Walt Disney Co.," said Eisner.

"We are honored that the Henson family has agreed to pass on to us the stewardship of these cherished assets. We are also pleased that this transaction puts us in a position to work with the Henson Co. on future projects," said Eisner.

Disney is planning to re-launch the MUPPETS with new TV specials and series. Disney also expects to expand and enhance the global licensing and home video initiatives based on this new production for the Classic Muppets, the infant/preschool property MUPPET BABIES and BEAR IN THE BIG BLUE HOUSE.

Jim Henson Co., which was purchased by the Henson family in July 2003 from the German media company EM.TV, will retain all other assets of the company including Jim Henson's Creature Shop and ownership and rights to all other characters and entertainment properties in Jim Henson Co.'s extensive film and television library, including FRAGGLE ROCK, FARSCAPE, DARK CRYSTAL, LABYRINTH, STORYTELLER, THE HOOBS and various other properties.

Disney had agreed to buy Henson Co. more than a decade ago, but negotiations stopped when Jim Henson died in May 1990. EM-TV bought the Henson Co. in March 2000 for $680 million, then sold it back to Henson for $78 million.

"We think the Muppets characters are evergreen characters that have a broad family appeal," Peter Murphy, Disney's chief strategic officer, told VARIETY. "We will look aggressively at developing new programming featuring both the Muppets in their classic presentation and perhaps in a new form that could include 3D (computer-generated imaging). This could be in a TV movie, a TV series or a feature film."

Lisa Henson noted the Henson Co. has already done some CGI tests on the MUPPET BABIES characters. Disney is aware of the tests but hasn't yet seen the work, she said. "There are a lot of cool possibilities, and bringing the Muppets into new technologies is one of the interesting new possibilities," Henson said.