It is an empire built on a discarded old coat and a ping-pong ball, providing for this high-tech era a lasting reminder of the ultimate power of a boundless imagination and singular passion.

Today, Jim Henson Prods, is a key player in the entertainment industry, its influence felt in every medium and around the world.

It has a 15-film, $200 million partnership deal forming Jim Henson Pictures with Sony Pictures Entertainment; a pact with ABC complete with plans for new shows “Muppet Live!” and “Aliens in the Family”; a new arm, Jim Henson Interactive, working with Starwave Corp. to produce everything from Muppet screensavers to CD-ROM games; a Fox Children’s Network show, “Jim Henson’s Animal Show With Stinky and Jake”; the eternal success of “Sesame Street”; offices in Los Angeles, New York and London; and a reported annual revenue of more than $50 million.

Despite all the trappings of corporate Hollywood, the company retains some of the spirit of the high school senior and puppet club member who landed a gig on a Saturday morning kids show back in 1954.

Born in Greenville, Miss., in 1936, but raised mostly in Hyattsville, Md., Jim Henson grew up with a steady diet of Edgar Bergen and Charlie McCarthy and early TV puppet shows “Kukla, Fran and Ollie” and “Life With Snarky Parker.” But in 1954, when WTOP in Washington, D.C., offered Henson a job as a part-time puppeteer, he showed he had more than a flair for puppetry. He also demonstrated an uncanny sense of how to maximize this relatively new medium of television.

While the creators of shows such as “Kukla, Fran and Ollie” merely put standard puppet theater on in front of a camera, Henson created new softer puppets made of foam rubber, which could handle TV’s intimacy, and worked by holding the puppets over his head so he and the other puppeteers could watch the monitors and see exactly how the act was playing.

He also used rods and strings to give extra life to the arms and electronic remote control for some characters’ eyes.

A year later, Henson was studying theater arts at the U. of Maryland when he was hired by rival WRC to create five-minute segments on an afternoon show. This soon developed into “Sam and Friends,” which was given its own timeslot.

The popularity of these Muppets – Henson’s creations were part marionette, part puppet – led to two daily broadcasts, a network television appearance on “The Steve Allen Show” in 1956 and a local Emmy in 1959.

Amid this sudden success came the birth of two fruitful relationships that would play critical roles in Henson’s career. Joining him on the puppet show at WRC was a schoolmate, Jane Nebel. In 1957 they founded Henson Associates, and in 1959 they were married. The Hensons, who were separated in the 1980s, had five children; the middle child, Brian, is now president, CEO and chairman of the board of Jim Henson Prods.

Meanwhile, back in the mid ’50s, Henson’s mother was getting rid of a green coat, but the puppeteer – who was still holding down part-time jobs and going to college – rescued it to make a new Muppet, cutting a ping-pong ball in half for eyes. The anonymous character soon evolved into a frog, which Henson named Kermit. (The name came from T. Kermit Scott, a grammar-school classmate of Henson’s.) Despite the subsequent popularity of the 400 characters he created, such as Miss Piggy and Big Bird, it was always Kermit the Frog – whom Henson said was a more playful, less restrained version of himself – who remained the most recognizable Muppet.

Henson’s career climbed to a new level in the 1960s as he and the Muppets made frequent network appearances on “The Today Show,” “The Jimmy Dean Show” and “The Ed Sullivan Show.” But the most important developments took place behind the scenes, where the company added three newcomers who would be integral to the Muppets success – Jerry Juhl, who later became head writer for “The Muppet Show,” puppeteer-in-arms Frank Oz, and Don Sahlin, who built many of the Muppets.

“Jim had a gift for pulling together like-minded people with a common goal and getting them to work hard and produce quality work,” says Martin Baker, executive vice president of production at Henson Prods.

The camaraderie between Henson and his associates helped produce the enormous success of Ernie and Bert, Oscar the Grouch, Cookie Monster and the entire “Sesame Street” community. A year after the show’s debut, Big Bird was on the cover of Time Magazine.

But creating such renowned children’s characters was a double-edged sword.

Henson had always envisioned a forum for his Muppets to entertain both adults and children, but now they were being pigeonholed. His two pilots for a primetime series called “The Muppet Show: Sex and Violence” were rejected first by ABC and then the other networks.

But in late 1975, British television mogul Lord Lew Grade saw the pilots and decided to produce a season’s worth of episodes for his ATV in Great Britain and for firstrun syndication in the U.S.

The show was a hit in England, where Grade had provided it with a strong time period and a major launch. In the U.K., “there were no preconceived notions that the Muppets were just for kids,” Baker says.

However, the program took off more slowly in the States. But once it caught on, the show – which featured guests from Lena Horne to Rudolf Nureyev – became arguably the most watched television show in the world, seen by 235 million viewers in 100 countries – more than half of whom were adults.

“The Muppet Show” also catapulted Henson into the world of film, with the 1979 hit “The Muppet Movie.” By this time, the company’s staff had grown to 71, with 11 puppeteers and 30 designers and two Henson associates, Al Gottesman and David Lazer, running the business side.

Henson Associates (which became Jim Henson Prods, in 1988) kept rolling along, introducing the hit TV shows “Fraggle Rock” on HBO in 1983 and “Jim Henson’s Muppet Babies” on CBS in 1986 and “The Muppets Take Manhattan” on the bigscreen in 1984. Books, records and other merchandise contiued ringing up at cash registers while Jim Henson’s Creature Shop in London became an innovative force in building animatronic creatures.

On May 16,1990, Jim Henson – who was in the process of negotiating a complex deal to bring his company into the Disney corporation – suddenly died at age 53 from a virulent streptococcal infection in his lungs. With Henson gone, both the merger and the future of the company were very much in doubt.

After some stormy negotiations and lawsuits, the Henson family broke off the deal with Disney. But the company did not, as many observers predicted, disintegrate without Henson’s creative energy. Brian Henson stepped in and oversaw projects on TV (“Dinosaurs”) and in movies (1992’s “The Muppet Christmas Carol” and the forthcoming “Muppet Treasure Island,” both of which he directed and produced).

Although there has been some comment that with the aggressive Charles Rivkin as chief operating officer, creativity has begun giving way to the bottom line at Jim Henson Prods., the company has stayed remarkably on track in the aftermath of the trauma surrounding Henson’s death.

“It has changed a little bit, but I like to think Jim’s spirit is embedded within the company,” says Baker, since everyone who worked with Henson has “a little bit of Jim inside us.”

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