Jim Henson: The Biography (72 page)

Away from the television cameras, Jim was more effusive as he explained to the press why he had chosen to sell his company. “
I feel I have reached a certain level with my own company,” he explained, “but what really intrigues me is to find out how much more we can accomplish by joining forces with an organization as effective and far reaching as the Disney company.” He was excited by more than just his new creative freedom; he was optimistic about the future of the Muppets, too. With Disney’s deep pockets and enormous marketing and merchandising machine behind them, the Muppets could
be promoted around the world, giving them the kind of international prominence that Henson Associates could never buy. “I think Michael Eisner and Jeffrey Katzenberg have been brilliant in their handling of the Disney company,” Jim continued. “I look forward to seeing what we can do together.” For his part, Eisner was delighted to have both Jim on their team as “
a creative designated hitter” and the Muppets filling out their character roster.
“There are only a few characters in the world who have the kind of appeal [the Muppets have],” explained Eisner. “And they’re all evergreen,” added Katzenberg. “You’re dealing with material that does not age.… There could not be a more productive association for our company.”

Still, not everyone was happy about it, due mainly to confusion over how the transaction would affect the
Sesame Street
Muppets. Despite Jim’s best efforts to make it clear that the
Sesame Street
characters were
not
included in the deal, some critics fretted that Disney’s acquisition of the Muppets meant that Ernie and Bert would soon be selling Disney toys and clothing. Jim finally drafted a letter, to be published under Kermit’s signature, in yet another attempt to correct the record. “
Just thought I’d let you know that our friends from
Sesame Street
 … are expressly
not
part of the agreement with The Walt Disney Company,” wrote Jim-as-Kermit. “All of the
Sesame Street
friends will remain right there at home on
Sesame Street
, under the watchful eye of the Children’s Television Workshop and Mr. Jim Henson.” Still, misunderstandings over the status of the
Sesame Street
Muppets would be a continuing source of anxiety during the negotiations.

Joan Cooney, however, was genuinely delighted for Jim. She understood exactly why he had made the decision to sell the company. “
He will no longer have to be raising money for his movies and trying to find air time on television,” she told
USA Today
. “I can’t imagine that he would have [sold to anyone else]. It is a marriage made in heaven.” As always, Jim promised Cooney that she could count on his continued involvement with
Sesame Street
—he’d already joked that he and Oz would be performing Ernie and Bert when they were eighty—and assured Cooney, with a twinkle in his eye, that he would insist his lawyers insert language into his Disney contract guaranteeing that he would spend two weeks of each year
working on inserts for t
he show. “He
never
spent two weeks a year with
Sesame Street
, but he just
loved
putting that into the contract!” laughed Cooney. “
We could not ask for a more supportive friend.”

As described in the agreement-in-principle, the transaction would be fairly straightforward: in exchange for $150 million in Disney stock, Jim would sell all of his copyrights to the Walt Disney Company, including all of the Muppets (with the exception of those from
Sesame Street
),
Fraggle Rock
, all three Muppet films,
The Dark Crystal
, and
Labyrinth
. Once in Disney’s hands, the company could freely use the characters in merchandising, videos, theme parks, publishing, or in any of the countless other media under the Disney imprint. Additionally, Jim himself would be attached exclusively to Disney for fifteen years (Eisner had joked that he hoped it would be “
for life”), but would still have the opportunity to pursue his own projects through his own independent production company, with offices in New York, London, and Los Angeles (in fact, Jim already had producer Martin Baker scouting for office space in California). It was a corporate structure, said one confidential Henson Associates memo, that should ideally “
[give] Jim the maximum operating flexibility with the minimum financial risk.”

Still, the agreement-in-principle was only a road map; there were a number of small but important details that would have to be carefully worded and resolved on the way to the final agreement. Jim had interviewed four law firms to represent his interests, and had liked each of them so much he had engaged all four, though much of the work was left to the powerhouse firm of Skadden, Arps, which specialized in mergers and acquisitions. The attorneys would have their hands full, especially as Disney had a reputation for hard-knuckled negotiating. It had yet to be decided, for example, whether Jim Henson Productions would operate as a kind of subsidiary of Disney, or whether it would be a truly independent production company. The distinction was important: as a subsidiary, Disney would own the company and pay Jim a salary and a share of the company’s profits, while as a completely independent production company, Jim would own and fund the company and receive production and development fees from Disney. Negotiators were already working to find a middle ground between the two alternatives—but whatever the final compromise,
Jim was insistent that Disney at least pay the dreaded overhead costs for his production company.

Another sticking point related to the use of the Muppets themselves. Jim hoped he would be permitted to retain some sort of limited control over the use of the “Muppets as puppets”—that is, in any production that required the use of puppeteers to perform the Muppet characters. Put simply, Jim wanted to be involved in the selection and hiring of puppeteers. As Jim was constantly reminding anyone who would listen, characters didn’t come easily; many took years to develop. Sometimes it was a matter of finding the character through something as intensive as the writing process, or as wonderfully impromptu as an ad-libbed aside. Other times, an old puppet in the hands of a new performer could create miracles, such as when Richard Hunt—frustrated with a fuzzy red
Sesame Street
monster named Elmo—hurled the Muppet at Kevin Clash and asked him to do something with it—and a lovable, huggable star was born. “
A lot of times, you go through a lot of experimenting and moving around before it all [comes together],” Jim said. Performers were crucial; he didn’t want Disney treating puppeteers, or their puppets, interchangeably. Early on,
Katzenberg had promised to put in writing the rates at which the performers would be paid—and even suggested that some of them be put on the Disney payroll—but had backpedaled immediately, refusing to speculate on whether Disney could actually legally make such a commitment. But Jim wanted a guarantee his performers would be taken care of—and, perhaps more important, that their craft be respected. Without them, Disney was simply getting a toy box full of puppets.

Jim had a similar concern about the integrity of the Muppets in licensing and merchandise. “Much like Disney,” he explained to Eisner, “we have a reputation in the consumer products community as a licensor with very exacting quality control procedures.” Jim had always taken licensing seriously, putting in place a rigorous review process for every kind of Muppet merchandising or for the use of Muppet likenesses; now he wanted a guarantee that he could pre-approve quality standards for any of Disney’s Muppet merchandise—or, at the very least, that Disney would “
treat our characters with the same high quality standards that apply to their own characters.” He
wasn’t being unreasonable, he thought; rather, he simply wanted to maintain his hard-earned reputation for quality, the trust he’d earned from consumers who could be certain that Muppet products weren’t junk. “
That was Jim’s mandate,” said Lazer. “He only wanted quality things out there.”

And then there was Kermit the Frog. While Jim was prepared to hand over all of the Muppets to Disney, he didn’t intend for Kermit to go with them unconditionally. He was too important. “
Kermit should be treated in the negotiations as a separate issue,” recommended a confidential Henson Associates memo. “Since Kermit the Frog is so closely associated with Jim Henson,
Jim must have control over the use of Kermit
.” For Disney, however, getting the Muppets without the free use of Kermit was like getting the cast of
Peanuts
without Snoopy. For the moment, Kermit was in a kind of legal limbo as both sides tried to figure out, Solomon-like, how to split the million-dollar baby.

Still, regardless of the issues that had yet to be resolved, Disney—and particularly Eisner—knew they were getting a lot for their $150 million. Eisner acknowledged that the company was paying
“a lot of money” but added that, from a purely financial point of view, with “the established franchises and the upside of new Jim Henson products, we will earn a really good return on our investment.” On Wall Street, Disney stock crept slightly upward the day the deal was announced, but astute analysts understood the deal was about more than money. “It’s a strategic acquisition,” said one trader. “It almost doesn’t matter if they paid too much or too little.” For Jim, though, it was never really about the money. “
Jim is ambitious in expressing himself, not in wanting a lot of money or fame,” Oz told one reporter. “If that was all, he could kick back and relax now. But he wants to play and have fun and do good stuff.”

Jim also understood that his success—and the success that had made Henson Associates such a desirable commodity for Disney that they were willing to invest $150 million in it—had been a collaborative effort. “
It’s not just me doing this stuff,” he once said. “It’s a lot of us creating it, writers and designers and puppeteers.” Despite his frustration with the personality conflicts that had become a regular part of running his company, Jim was always sincerely fond
of his colleagues, collaborators, and staff. “
[It’s] the people who have made this company such a delightful place for me,” Jim told Eisner. “As you well know, it all begins with them and their loyalty and dedication.” Once the deal went through, then, Jim wanted to show his appreciation for that loyalty and dedication.

For several weeks he’d been scribbling what came to be called “The List”—the names of people who Jim believed had played a significant role in the success of the Muppets or had brought value to the company over the last thirty years. Next to each name was a dollar figure, running from thousands all the way up into the millions. “
He really wanted to do right by everybody,” said Lisa Henson. “This was money he wanted to get into people’s hands” as a show of his appreciation. In the past, Jim had been generous about rewarding a number of key writers, producers, and performers with shares in merchandising profits, or awarding partial ownership of a project. Several years earlier, for example, Jerry Juhl had been struck speechless when he learned that Jim had given him a percentage of the profits from the lucrative
Muppet Babies
merchandising. “
After twenty-five years, you can still surprise me, chief!” Juhl told Jim warmly. “
[Jim] really wanted this deal to be a good thing for everyone,” said Mary Ann Cleary. “He seemed only thrilled to be sharing his bounty with everyone that had made contributions to the success of the company.”

Jim took great pleasure in The List, carrying it around with him and taking it out from time to time to add another name or adjust a dollar figure. It gave him the opportunity to do a personal inventory of his relationships with his collaborators, and think about what others had done with him and for him over the last three decades. “
He tried to be very benevolent with everybody,” said Dave Goelz—and yet there were some who still felt, fairly or not, that he had never been generous enough in his praise for their efforts. With The List, Jim felt he was in some way atoning for what he considered his greatest weakness as an employer and manager: no matter how hard he tried, he had not always made his employees happy. The bonuses, he hoped, would finally soothe some of the bruised egos at Henson Associates, providing the fiscal equivalent of the backslapping “attaboys” that Jim never really bestowed. For the most part, though, Jim
took genuine glee in working on his list. For someone who enjoyed giving gifts as much as Jim did, it was going to be a fun way to spend his own money.

If asked, however, Jim would often enthuse that the most exciting part of the Disney deal was neither the money nor the production company he would oversee; it was the chance to develop rides and attractions for the Disney theme parks. As recently as 1987, Jim had been seriously exploring the idea of a Muppet-themed amusement park, even commissioning concept art for a park called Muppetville before conceding that
“Disney does it so well that we could never do it better.” Now, however, he was being given a corner of the fledgling Disney-MGM Studios in which to develop Muppet-themed rides, attractions, and restaurants, with Disney’s wildly creative and innovative Imagineers at his full disposal. This was a playground far more fun to play in than even his Creature Shop. “The idea of working our characters into the Disney parks!” Jim gushed. “I can’t wait! This is going to be such fun.”

By the beginning of September, in fact, Jim was already enthusiastically at work on his first project for the park, a 3-D Muppet movie he’d pitched to Eisner at dinner the night before their joint announcement. Jim had been intrigued by 3-D films for years; while he could never get the technology to work correctly for the “interactive film” he’d been hoping to make, he thought a 3-D movie might provide a similarly immersive experience for audiences—but there, too, the technology left something to be desired. By the early 1980s, 3-D film technology had improved markedly since its gimmicky, eye-straining heyday in the 1950s, but Jim still wasn’t impressed enough with it to use it for a Muppet project, telling one 3-D producer, “
If you’ve seen a process that works, I’d love to have my people see it.”