Third Time's a Charm

[Sarangel]

It looks like Disney is finally getting serious about aquiring the Jim Henson Co. Yahoo News reports this morning that they are preparing a bid of $135 Million for the Muppets. Yahoo also speculates that Disney is overbidding for the company, since they rate the assets at roughly $80 Million.

Disney isn't the only company bidding for the Muppets:

According to people familiar with the situation, the other four parties mulling bids for Henson are London-based Entertainment Rights ; privately held Classic Media; billionaire investor Haim Saban; and Dean Valentine, the former chief executive of United Paramount Network.

This looks like it could be resolved fairly shortly, since EM.tv needs to make a payment on a fairly substantial loan no later than the 1st quarter of 2003.

Sarangel

 

[treesinger]

Do you think this is because Disney has a chance of losing their rights to the Pooh empire? Or has Disney been looking at acquiring The Muppets officially for while now?

Duh! Third time's a charm, right? It pays to pay attention.

 

[raidermatt]

THANK YOU!

This content acquisition would be a PERFECT fit for Disney. I'm not so sure current management would use the Muppets properly, but its still a good acquisition.

I'd rather see them overpay a few million on this, than overpay a few BILLION on another 4th rate cable network...

 

[Cricket2]

Am I right in saying that "Sesame Street" is not part of this deal and will still remain part of the CTW?

 

[bkcwilliams]

Another bad move??

http://biz.yahoo.com/rb/021219/media_henson_4.html

 

[airlarry!]

M. Cricket:

According to what I have read from M. Jim Hill, your assumption would be correct.

 

[OnWithTheShow]

Disney has been seeing pretty good revenues from ABC Family. I think everyone undervalues the assests of the Television Networks. Just because a network isnt number one doesnt mean it doesnt make money. People fail to realize that. Otherwise why would there be 30 or more basic cable channels?

 

[raidermatt]

Its the overpaying and the opportunity costs that are the main problems.

Everyone, including finally even Disney, agrees on the overpayment.

How they program it and manage it is another issue, but even a 4th rate network does have value. Its a question of whether it fits Disney's strategic vision, and, this is key, whether the money could have been BETTER spent on something else.

If they were going to spend that kind of money, wouldn't it have made sense to put some of it into DCA instead? Beastly Kingdom? They could have used that money to give the creative folks more freedom and resources for these projects (or others related to their greatest assets, the parks).

Apparently, Eisner believes that the returns they will see from ABC Family are greater than the returns from a better DCA, a Beastly Kingdom in AK, an improved WDW transportation system, or any other park/resort related projects.

 

[OnWithTheShow]

Disney is not just a theme park company, and never has been. It is an ENTERTAINMENT company, and like it or not television networks are an important part of the ENTERTAINMENT industry. The purchase of ABC and FOX Family fits with the Walt Disney Company's mission statement and strategic plan. I do not understand why everyone can't accept Disney's owning of the networks.

 

[airlarry!]

How do you feel the purchase of Fox Family fit the strategic vision of DIS? Or, more correctly, explain the value of the Fox Family purchase both in terms of vision and in terms of the actual price paid.

I will listen....

 

[Sarangel]

Am I right in saying that "Sesame Street" is not part of this deal and will still remain part of the CTW?

Somewhere I read that Henson sold off the Sesame Street characters to CTW for $160 Million, of which CTW still owes $70 Million. This makes the valuation of the company a little scary ($80 Million), but I agree with the thought that the content is worth the $136 Million the mouse seems willing to pony up.

Sarangel

 

[DEE DEE]

It seems to me the more Disney buys the less you get.The Disney Channels have been running on empty for a long time now.ME is hoarding all the movies so what is the point ? Instead of increasing a pent up desire for his movies ,I think he is lossing a lot of money by wasting the airwaves hour after hour with nothing.

 

[manning]

Isn't it called spreading yourself thin?

 

[Bob O]

OnWithTheShow-A mission statement is useless unless the company has the ability to follow thru on it which disney has shown no ability to do what so ever as of late!!! ABC has been a big mistake/failure and their is no proof that abc/fox family wont suffer the same fate and cause a furthur loss of shareholder value!!!
I think the Muppets could be a great addition, but with the current regime they will just screw it up!!!
Isnt eisner the same fellow who though go.com was a great idea. the hiring of ovitiz,the idea to call katzenberg a midget???? eisners great ideas like the building of dca/ak and other about ideas have been failures and he has shown little abiity to acquire spomething and improve upon it!!!!

 

[raidermatt]

he has shown little abiity to acquire spomething and improve upon it!!!!

NOT TRUE!

In recent years, his bank account has shown tremendous improvement over what it was when he acquired it!

 

[Bob O]

Raidermatt- I was thniking more in terms of shareholder value and in creating movies/shows/attractions.
But even in regards to his pocketbook he has lost millions due to the depressed state of the stock price.

 

[bkcwilliams]

I do agree that the Disney Channels are getting pretty thin. Even though my son loves it, if I see "House of Mouse" one more time, I might scream!

 

[Bob O]

Why would anyone believe abc family will be of high quality when abc has shown little quality in its programming and the disney channel has failed to wow most consumers???
Now a high quality attraction in the theme park can be used to base a advertising campaign around and can thrill millions for decades!!!!

 

[lrodk]

You want to talk about over-paying? EM.TV paid $680 million for Henson in February 2000. Today's prices, even at 120 million, seem like a relative bargain in comparison.

 

[Sarangel]

It looks like Disney isn't going to be given a chance to overpay for this asset - Dean Valentine (a former UPN exec.) and a group of investors have signed a letter of intent to purchase a 49.9% stake in the Muppets, for a reported $30 Million.

Mr Valentine's group received financial backing from Europlay Capital Advisors, a private equity shop that specialises in media and entertainment.

Mr Valentine, who ran Disney's Touchstone TV and animation unit overseeing the creation of hit shows Home Improvement and Ellen, expects to build the Henson brand, which has suffered under Munich-based EM.TV.

"We feel there is enormous potential for growth, not merely from Kermit and the Muppets, but from the expansion of the Henson brand into all areas of family entertainment," Valentine said.

Valentine will run Henson with a management team that includes Mort Marcus, the former chairman of Miramax Television and Video, a Disney subsidiary, and Nick Van Dyk, former executive vice-president of Artisan Entertainment.

Here's a Link to the full story.