Muppets Returning to Hensons’ Hands

Miss Piggy and Kermit the Frog are going home.

The family of late Muppets creator Jim Henson said Wednesday that it would buy the company it sold in March 2000 to Munich, Germany-based EM.TV & Merchandising.

The Henson family said it would acquire the characters -- as well as TV and motion picture production companies and a special effects unit known as the Creature Shop -- for $78 million. That’s far less than the $680 million that EM.TV paid for Jim Henson Co. just three years ago.

Not included in the deal: “Sesame Street” characters such as Big Bird and Elmo and other assets that EM.TV previously sold for about $300 million.

EM.TV has searched for nearly two years for buyers for the struggling Los Angeles company, whose suitors had included Walt Disney Co., billionaire media mogul Haim Saban, Classic Media and a group led by Dean Valentine, former head of the UPN network.

Brian Henson, son of founder Jim Henson, said the uncertainty about the characters’ fate was too painful to watch.

“We felt like enough was enough,” he said. “We weren’t confident where this blind bidding process was going. We decided to get it and run the company again.”

The Hensons had sold their business believing that the Muppets would find a thriving home in the German media company.

EM.TV instead became saddled with debt and was unable to restore magic to the Muppets franchise, which was hugely popular on television in the late 1970s and early ‘80s.

“We sold the company to EM.TV on highflying plans that they had, and then it totally crumbled into itself,” said Brian Henson, who will be involved in managing the company with his sister, Lisa.

Last year, EM.TV was set to sell nearly half the company to an investment group led by Valentine, but that deal unraveled. Then in March, Disney chief Michael Eisner said at the company’s annual meeting that Disney had revived its long- standing interest in the assets. More than a decade ago, Disney had agreed to buy Henson Co. for $150 million, but negotiations stalled after Jim Henson died in May 1990.

This time, Eisner was said to be reluctant to invest the money needed to turn around Henson Co.

A Disney spokesman declined to comment Wednesday.

The Muppets made their network TV debut in 1956 on “The Steve Allen Show,” and “The Muppet Show” ran in first-run syndication from 1976 to 1981. Since then, Henson Co. has struggled to make its characters connect with younger audiences.

The 1999 movie “Muppets From Space” flopped, as did the TV series “Muppets Tonight,” which ran on Disney-owned ABC.

However, a Muppets Christmas movie that aired on NBC on Nov. 29 drew surprisingly strong ratings.

The buyers include five Henson children: Brian, Lisa, another brother and two other sisters. The sale must be approved by EM.TV shareholders.