Deal Is a Natural for Muppet Maker Who Built an Empire

It seems inevitable that the master Muppeteer would eventually become a Mousketeer.

Jim Henson, creator of the Muppets and founding father of Henson Associates Inc., once wanted to be an animator for Walt Disney Co.

Instead, he built a far-flung entertainment empire of his own on a handful of bug-eyed stocking puppets, a bemused frog named Kermit and a vain sow named Miss Piggy. Channels magazinewould eventually crown him “the new Walt Disney.”

So it comes as no surprise that Henson and Disney finally got together. “It’s kind of ironic,” said Disney’s Chairman Michael D. Eisner, who worked briefly with Henson in developing children’s television programming when Eisner was an executive at ABC-TV in the early 1960s.

Analysts agree that the deal is a natural. “It makes sense in terms of the characters and synergy with Disney’s other operations--particularly in character merchandising and generating ideas for the theme parks,” said Mara M. Balsbaugh, an analyst with Smith Barney, Harris Upham & Co. in New York.

The Disney deal culminates an unlikely career begun 35 years ago, when a skinny kid from the Washington area put a sock on his hand and appeared in a children’s program on WTOP-TV.

A year later, Henson and the woman who would later become his wife and business partner, Jane Nebel, created a late-night daily puppet show on WRC-TV in Washington called “Sam and Friends”--a five-minute program notable because it marked the debut of Kermit the Frog.

According to Muppet mythology, the first Kermit was fashioned from a cast-off coat owned by Henson’s mother.

Kermit Gets Around

In those early days of television, Henson and his puppets soon found themselves an audience on “The Steve Allen Show,” which marked the first appearance of the Muppets--a term cobbled together from the words “marionette” and “puppet.”

Appearances on other variety programs followed. But it wasn’t until “Sesame Street” that Henson found his niche on television. Appearances on the series, which debuted in 1969, propelled Henson to wide fame, and Henson now shares rights to the Muppet creations that appear on the show with the nonprofit Children’s Television Workshop in New York.

Of those characters--including Big Bird and Bert and Ernie--only Kermit appears in other productions, said CTW spokeswoman Elizabeth Martin.

In 1976, Henson produced the first episodes of “The Muppet Show,” which would fuel much of his early success. The series--which ended first-run syndication in 1981 after five years and 120 episodes--won three Emmys and several other awards and was once shown in more than 100 countries at a time.

It spawned three movies that have so far grossed about $132 million in North America, the company said. That would make them Henson’s only notable film successes.

“The Muppet Show” also gave rise to the Saturday morning animated program “Jim Henson’s Muppet Babies,” entering its sixth season on CBS this fall with four Emmys and healthy ratings.

Intense Activity

And it fueled a vast merchandising program that still continues: In the past year, Jim Henson Productions introduced 700 new products licensed to more than 100 companies. Products include books, videos, records, computer products, dolls and other items. There is even a traveling arena show.

Nowadays, much of Henson’s work is done at his “Creature Shop” workshop and production studios in England, which employ about 35 people. Henson’s production company in New York employs another 120. Eisner said many Henson operations would be absorbed by Disney.

A deal brings Disney in at a period of intense activity at Henson Associates. On Sept. 11, HBO will debut a half-hour, 13-week family music program, “The Ghost of Faffner Hall.” It’s the latest Henson effort for HBO; from 1983 to 1986, Henson produced 96 episodes of the children’s program “Fraggle Rock.”

This fall will bring the premiere of the Henson fantasy movie “The Witches” for Warner Bros., directed by Nicolas Roeg, starring Anjelica Huston and based on the children’s book by Roald Dahl. It’s Henson’s sixth feature and, like his earlier fantasy films, it will mix live action with advanced puppetry. “It’s quite gruesome,” added Henson spokeswoman Susan Berry in New York.

New Miniseries

Henson has not had great luck with other post-Muppet movies. “The Dark Crystal” and “Labyrinth” did poorly in the United States, though they found audiences in Japan and Europe. “Crystal,” made for an estimated $28 million, has grossed $45 million in the United States since its release in 1983; “Labyrinth,” made for a reported $27 million, has grossed only $23 million domestically since a 1986 release.

Early next year, NBC will debut a four-hour Henson miniseries based on Jonathan Swift’s satire “Gulliver’s Travels.” Previously, Henson produced the critically acclaimed but dismally rated programs “The Storyteller” and “The Jim Henson Hour” for the network. Though they bottomed out the Nielsens, both shows broke ground with quirky stories told with computer graphics, live action and puppetry.

Meanwhile, reruns of “The Muppet Show” and “Fraggle Rock” are being shown through an exclusive deal with cable mogul Ted Turner’s new Turner Network Television channel.

Berry declined to discuss other financial information.

One observer said the company appeared to have healthy profit margins; others say the company is sustained by existing licenses, especially from long-running programs like “Sesame Street.”

For Henson, the Disney deal comes at just the right time. “I have enjoyed running my own company,” he said in a statement Monday. “But now I am really excited about joining forces with Michael Eisner and the Disney organization and finding out how much more we can accomplish together for our audiences all over the world.”