Clad smartly in its new logo, Henson Associates—it wouldn’t officially be Jim Henson Productions until November—had become a major player with an international reputation, entirely worthy of Disney’s growing company and legacy. But Jim felt he was bringing to Disney more than just a financial asset or a valuable stock option; he was bringing them a creative commodity that they couldn’t put a value on—for no matter what the transaction or the logo on the letterhead, Disney wouldn’t just be getting the Muppets or Henson Associates or Jim Henson Productions; they’d be getting Jim Henson.
And Disney could use him. As Jim and Eisner casually chatted that spring, Disney, despite its new administrative stability, was still feeling its way creatively. In early 1989, the seemingly unstoppable string of Disney blockbusters—beginning with the ambitious animated musical feature The Little Mermaid—was still to come; the 1988 hit Who Framed Roger Rabbit was the first real smash for the company in years. But with The Little Mermaid still months away from its November 1989 release—and no certainty for how it would be received by audiences—Disney needed not only reliably bankable characters to add to its slowly expanding character base, it needed a blast of creative energy and talent as well. Jim was their man. “It was never just selling the Muppets,” said Frank Oz. “It was always in conjunction with him being there as the main creative guy, who could help the company. Jim felt he could be Walt Disney.”
And so, Eisner had been not only responsive, but enthusiastic when Jim had called him from the car in Toronto and asked to meet at the Hotel Bel-Air in Los Angeles on May 22. Over breakfast that morning, Jim told Eisner he had made up his mind, and laid out his intention to sell his company to Disney. For Eisner, there was never any doubt that Jim Henson was exactly what the Walt Disney Company needed. “It’s special because you get a guy like Jim, who brings a new creative vitality to the company,” said Eisner. “That’s really the reason for the whole deal—plus you get the Muppets.”
As much as Disney wanted and needed Jim Henson, Jim, too, needed Disney. “On a personal level,” wrote Jim, “I think this move will enable me to free up my life and to focus more time on the creative and conceptual aspects of our work, and less time worrying about the business and financial side of everything.” It wasn’t that Jim wasn’t up to the task of running his own company; more than anything, it was a matter of how much of his precious time and energy he wanted to devote solely to business. “It’s not easy on an organization when you’re doing a lot of other activities,” Jim told the American Film Institute. He knew his extended absences had taken a toll on morale in the New York office in particular, where personalities often clashed and jurisdictions overlapped. “When I went off to do Labyrinth … it pulled me away from my core business, which has been in New York, and it became a major draw there on energy,” he admitted.
Despite Jim’s best efforts, the company, said David Lazer, “was getting unwieldy, and there were personnel problems and all kinds of stuff.” Brillstein, who had sat in on a few of the endless meetings with Jim and his managers at Henson Associates, had seen firsthand how “people would go to Jim directly about everything, and he hardly had the time.” “He was a very good businessman,” said producer Larry Mirkin, “but that isn’t what he cared about. He cared about the work, he cared about what it meant in the world, and he cared about making the art grow and develop.” Going with Disney, then, would be the first step in lifting the administrative yoke of running a company from Jim’s shoulders—“the organizational albatross,” as Brillstein called it, “that drained his creative energy.” And he was getting tired; he had been splitting his time between the creative work that was so much fun and the tedium of running his own company since he was seventeen years old. With Disney’s money and machinery behind him, he could finally be creative full-time. “He was an artist first and foremost,” said Brillstein appreciatively, “and he needed to concentrate on his work and come up with magnificent ideas like he always had.”
Disney would be good for the Muppets as well. If there was any organization that knew how to preserve and promote iconic characters beyond the lifetimes of their respective creators, it was the Walt Disney Company: at the moment, the company was tending not only to the classic Disney characters created during Walt’s lifetime, but it was also successfully serving as caretaker to Disneyfied versions of characters from A. A. Milne’s Winnie-the-Pooh books. For Jim, finding such a suitable home for the Muppets was important. The failure of the Muppet sequences in The Jim Henson Hour had spooked him—and if he couldn’t always tend to their well-being, he wanted to ensure they were with someone else who would. “Looking way back down the road to when I stop sitting in my rocking chair and working Kermit the Frog, I really like the idea of characters living on in the Disney parks,” said Jim. “It’s a wonderful future for these characters. It’s as close to an eternal life as a little green frog can get.”
After Jim and Eisner finished their breakfast meeting at the Bel-Air, the two men shook hands—always enough for Jim to seal any deal. They had made a gentleman’s agreement with each other, and that was enough; the details could come later. “This was so much on a handshake between Michael and Jim that whatever [the deal said] didn’t matter,” said Brillstein. “Jim loved Michael and trusted him a lot. And Michael understood Jim. He just really got it.” That evening, Jim made an appearance on The Arsenio Hall Show, strolling casually onstage to a jazzy version of the Sesame Street theme, and looking not at all like a man who had just put in motion a life-altering business transaction.
Two days later, Jim met Mary Ann and Brillstein at the La Costa Hotel and Spa to spend several days swimming, enjoying massages, and celebrating. Jim was clearly delighted with his pact with Eisner, giggling happily as he sipped one whiskey sour after another in the hotel lounge. “[It was] just great,” said Brillstein. Fully relaxed, Jim returned to New York to meet privately with his attorneys and business managers to begin the process of sharing information with Disney to pave the way for the sale of the company. Jim personally wrote a seven-page letter to Eisner outlining the structure of the company and its various departments (to his own surprise, he discovered during a company inventory that over two thousand Muppets were in storage), while his management team circulated internal memos marked PRIVATE AND CONFIDENTIAL. At the moment, Jim was keeping things as quiet as possible; outside of the Henson family, only a small group of advisors and employees—the “JHP ‘deal team’ ”—were aware of Jim’s plans for the company.
Outside the company, however, there was one person who Jim insisted had to be made aware of the negotiations: Joan Ganz Cooney. From the very beginning of his discussions with Eisner, said Cooney, “Jim had been adamant that Disney could not have the Sesame Street Muppets.” In one of his first letters to the Walt Disney Company, in fact, Jim’s manager of strategic planning, Charles Rivkin, expressly warned Disney that not only were the Sesame Street characters off-limits, but so was the shared revenue stream generated by Sesame Street–related merchandise. “In none of the information previously sent to you are Sesame Street revenues included,” wrote Rivkin, then underlined the next part emphatically: “nor is it our intention to include this part of our company in any combination with Disney.” Jim assured Cooney that he regarded Sesame Street as a “holy place” and that he was confident Disney had no intention of asking for it in the negotiations. (Ironically, Disney’s internal memos referred to its acquisition of Jim’s company as “Project Big Bird,” giving the transaction a code name based on a Muppet the company was never going to get.)
Even as lawyers and accountants bustled behind the scenes, creative business continued at One Seventeen. “In general,” Jim told his staff, “things have been pleasantly active over the last few months.” While The Jim Henson Hour had been pulled from the NBC lineup in May, the network had promised to air the remaining episodes in July, so Jim was putting the final touches on Song of the Cloud Forest as well as on a behind-the-scenes documentary The S
ecret of the Muppets, each of which would be incorporated into a later Jim Henson Hour. The Witches, too, was finished—“and looking quite nice,” Jim added—and was now awaiting a commitment from Warner Brothers on a release date. In the meantime, the Creature Shop’s other project, Teenage Mutant Ninja Turtles, was filming in North Carolina, with Brian Henson heading up the puppet team. Jim was thrilled with the work, and thought Turtles contained some of their best animatronics yet. “The lip articulation is the most advanced we’ve ever had,” he enthused. “We’re definitely breaking new ground here.”
There was new ground to be broken, too, he thought, with a new gadget that he found absolutely fascinating: the handheld minicam. The Handycam, Jim explained enthusiastically, was a marked improvement over the “enormous, heavy beasts” normally used in television production—and was so light and easy to use, in fact, that anyone could make a video or a television show. Jim wasn’t quite sure what to do with it yet—he and John Henson would create playful short videos together, looking for the right idea—but he was intrigued with the possibilities of putting filmmaking technology into the hands of anyone and everyone. “We’re going to see a whole new and different kind of television,” Jim said, astutely predicting the democratization of video technology that would make YouTube possible twenty-five years later. As always, Jim had seen the potential in a technology well before the technology could catch up to it.
After work, Jim would walk the few blocks from One Seventeen to his apartment at the Sherry-Netherland. More and more now, Mary Ann was making extended trips from West Palm Beach to the city, where they would spend their evenings eating dinners of fish or pasta ordered from the Sherry-Netherland hotel room service—or walking a few blocks to the fashionable China Grill restaurant—before heading out for a movie or a show. Jim was still an avid theatergoer, and living in the city meant he could attend shows regularly, whether it was concerts at the Brooklyn Academy of Music, dances at Lincoln Center, or any of the countless Broadway shows he loved. His tastes in theater were varied and interesting; one night it might be heady fare like Wendy Wasserstein’s The Heidi Chronicles, the next a musical like Anything Goes!—though if he had to pick a favorite show, it was probably the musical Les Misérables, which he had seen several times, always tearing up at Jean Valjean’s heartfelt solo, “Bring Him Home.” Jim truly loved living in the city, though his growing fame was making it more and more difficult for him to move about freely without being swamped by requests for his autograph or badgered by shouted demands to “Do Kermit!”
The first week in July, following two nonstop weeks of back-and-forthing between New York and Los Angeles to meet with Eisner and Katzenberg, Jim left for Hana, Hawaii, with Mary Ann for what he hoped would be a romantic weeklong getaway. Instead, the week was a bust. Uncharacteristically, Jim was moody and brooding—or at least as moody as he could be—fussing about their nineteen-year age difference, which normally never bothered him very much. “Where are we going with this?” he would ask, and then would sigh with a sad uncertainty, lamenting that he was too old to settle down and start a family with her. For her to have the kind of life she deserved, he said, he would have to let her go, and she would have to move on. At the end of the week, they agreed to separate.
Once again, they would not remain apart long—as Richard Hunt had noted, they always seemed to be on again, off again. A little more than a month later, Jim met Mary Ann in New Mexico, where she was now living, to survey a parcel of land he wanted to buy, with the intention of building either a house or perhaps even a small spa and hotel. They were staying in separate casitas at the Rancho Encantado resort, and following their long day of looking at property, Jim dropped by Mary Ann’s room with caviar and wine. As they sat on the portal of the casita dining on caviar and watching the sun set over the cottonwoods, Jim turned suddenly to Mary Ann and sank to his knees in front of her, his eyes glistening with tears. “For whatever we become,” he said warmly, raising his wineglass to her, “for the love we will always have for each other, and for the friends we will always be.” By the end of the evening, they were back together.
Discussions with Disney continued on through July. While Jim was still trying to keep things quiet, the company was vibrating with internal gossip and rumor. On July 26, 1989, Jim sent a memo to his entire staff begging for patience. “I know that this past period of time has been a difficult one for everyone,” he wrote. Apologizing that “things are not resolving as fast as we thought,” he vowed to “let everyone know what’s happening as soon as we can.… Thanks for your patience and understanding and, once again, I’m sorry for these last few months of uncertainty.” Over the next several weeks, he met privately with Joan Cooney and Frank Oz to keep them apprised of the discussions, and made a quick trip to London to update Kenworthy and a few others in the overseas arm of the company. But news was starting to trickle out; “Disney Said to Be Wooing Henson,” wrote the Minneapolis Star Tribune in mid-August, while the Houston Chronicle speculated—correctly—that “Disney May Be Courting Miss Piggy’s Company.” Both companies could only decline to comment; it was time for Jim and Eisner to make their decision official, and then make it public.
On August 24 at 9:15 A.M.—a sunny Thursday morning—Jim and Disney president Frank Wells, flanked by a small group of staff, boarded a Learjet at JFK Airport, bound for Orlando, Florida. On their arrival at 11:30, they were whisked away in two cars to Disney-MGM Studios, the newest of the three Disney theme parks at the Walt Disney World resort, for a quick meet-and-greet with Disney staff in the park’s Animation Building. For the next six hours, Jim and his staff casually toured Disney-MGM and the Magic Kingdom,then were escorted to the opulent, red-gabled Grand Floridian hotel to check into their suites and change clothes for the evening. At seven, Katzenberg met Jim in the hotel lobby and took him back to Disney-MGM to watch the final run-through of an Indiana Jones stunt show that would be opening the following morning. As Jim entered the show’s amphitheater, Eisner and Wells came over to greet him, followed by Jim’s former collaborator George Lucas, who was serving as executive producer of the stunt show. Jim shook all their hands warmly and looked over the attraction, which resembled the set of an adventure film. Standing next to Lucas, arms crossed as they surveyed the enormous set, the two of them could have been working on Labyrinth again. It truly felt as if he had come home.
Just after dark, Jim and the three Disney chiefs headed for the Portobello Yacht Club, an Italian restaurant in the newly opened Pleasure Island section of the resort. With the other eight spots at their large dinner table occupied by executives and attorneys from the Walt Disney Company and Henson Associates, this would be very much a business dinner. Starting at 9:15, as waiters whirled in plates of pasta and glasses of wine around them, both sides got to work.
Discussion went on late into the evening; lights went off at the restaurants and shops out on Pleasure Island. Finally, just after midnight, the two companies reached an agreement—legally speaking, an agreement-in-principle—that would permit the Walt Disney Company to acquire Henson Associates and allow Jim to enter into a long-term exclusive production agreement with the Walt Disney Company. At 12:30 A.M.—it was now the morning of Friday, August 25—Jim signed his name on the agreement’s final page. Smiling, he said his good nights and retired to his suite at the Grand Floridian. “Jim Henson’s wish, desire, dream was to be with Disney,” said Brillstein. With Jim’s signature, that dream was on the verge of coming true. “The Disney deal,” as Jim would always refer to it in his correspondence, was under way.
Jim arose early to have breakfast with Bob Mathieson, the executive in charge of the Walt Disney World theme parks, then headed for Disney-MGM for the official dedication of the Indiana Jones Stunt Theatre, avoiding any press who may have questioned him about his presence at Disney. After an early afternoon tour of EPCOT, he was taken to the airport and flown back to New York, arriving home at the Sherry-Netherland apartment on Friday evening. Incredibly, the m
edia had picked up no trace of his trip to Orlando or of the agreement. That was just as he wanted it; he and Eisner intended to announce the deal at a nationally televised press conference to be held at Disney World on Monday morning.
On the morning of Sunday, August 27, then, he and Cheryl were driven to Teterboro Airport in New Jersey and headed for Orlando aboard one of Disney’s sleek Gulfstream 3 corporate jets. Jim spent a long afternoon chatting with Katzenberg in the Disney chairman’s Grand Floridian hotel suite, then went to dinner with Cheryl, Eisner, and a few others at the Portobello Yacht Club. The next morning, he was up and out of the Grand Floridian by seven and on his way to meet Eisner at the entrance to the Animation Building at Disney-MGM Studios, where they would announce their agreement live on ABC’s Good Morning America. Standing with Eisner and walkaround versions of Kermit, Miss Piggy, and Mickey and Minnie Mouse, Jim was visibly excited. As a subtle show of corporate respect, Jim had worn—under his colorful purple-and-blue-striped jacket—a red tie printed with pictures of Mickey Mouse, while Eisner, looking very much in charge in his dark suit, added a blue tie emblazoned with images of Kermit the Frog. “I think hooking up with Disney creates such a wonderful force,” Jim enthused, grinning broadly. Eisner thundered excitedly at the crowd, “Mickey Mouse has a new sibling, and he’s going to have to get used to it!” As flashbulbs exploded, Kermit, Piggy, Mickey, and Minnie all gave an approving thumbs-up.
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.”
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