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Sesame Workshop and Sony join forces with Classic Media to acquire Henson

Courtesy of Reuters
May 6, 2003

The bidding for the Jim Henson Co. is expected to wind down this week, but two new players have emerged to bolster the offer fielded by New York-based Classic Media: Sesame Workshop and Sony Pictures Entertainment's home video division.

Classic Media, the media licensing outfit that owns the rights to the Harvey Comics library, among other characters, has long been a suitor of Henson, which is being auctioned by its troubled German parent company, EM.TV & Merchandising, as has the Walt Disney Co. After two years of on-and-off sale talks, sources said Disney and Classic, headed by industry veteran Eric Ellenbogen, are the only contenders for the home of Kermit the Frog and other classic Muppet characters.

In an effort to compete with the deep pockets of Disney, sources said Classic has enlisted "Sesame Street" producer Sesame Workshop as a minority partner in its prospective Henson purchase. More importantly, sources said Classic also has worked out an agreement with Sony's Columbia TriStar Home Entertainment division to help bankroll the bid. Financial details of the Henson sale process remain murky, but industry observers expect the company to fetch $70 million-$80 million.

Sources said the complex arrangement calls for Columbia TriStar to essentially bankroll the bulk of the Classic-Sesame Workshop bid in exchange for home video rights to existing and future Henson productions, but Sony would not have a formal ownership interest in Henson.

Columbia TriStar has had success distributing many Henson feature and direct-to-video titles for about the past five years. Its pact with Henson is set to expire early next year, and sources said Sony top brass viewed the behind-the-scenes alliance with Classic and Sesame as a cost-effective way of hanging on to the Henson video rights in perpetuity.

Sesame Workshop has long been in business with Henson on the enduring PBS series "Sesame Street," which features Kermit, Big Bird and numerous other iconic Muppet characters. Nearly two years ago, as EM.TV began to face crippling financial troubles, Sesame struck a $160 million deal with EM.TV to buy out the long-term licensing rights to the "Sesame Street" Muppet characters, which Henson previously had controlled.

EM.TV purchased Henson from the heirs of its founder, Jim Henson, for $680 million in cash and stock in early 2000, when the company was a highflier in Germany's now-defunct Neuer Markt stock exchange.

If Classic and Sesame succeed in acquiring Henson, the two companies would be in the unique position of having access to the entire Muppet cast of characters. But some industry observers who have followed the Henson saga expect Disney to emerge victorious some 13 years after Disney first sought to acquire the company through a deal that unraveled shortly after Jim Henson's death in May 1990.

Henson, Sesame Workshop, Sony and Disney declined comment Monday. EM.TV reps in Munich could not be reached for comment.