Fast-food tie-ins fall out of favor
Despite posting a stellar earnings report last week, Disney got some bad news, in the form of a Mac attack.
Mouse House’s 10-year exclusive tie-in deal with McDonald’s expires in 2006, and CEO Jim Skinner told the fast-food giant’s annual shareholders’ meeting, “We are looking forward to the opportunity to have flexibility around promotional activities and products.”
While it was a good run for both, the pact may be remembered as an example of why not to do such a long-term deal.
In the mid-1990s, many food chains were trying to get into movie tie-ins; an exclusive deal was a natural fit for two family-friendly corporate giants. Plus, Disney was coming off a decade of hit toons, giving McDonald’s a leg up on its competish.
But a few years later, Disney’s dominance in family movies began to erode, thanks to a few flops as well as competition from DreamWorks, Sony and Fox.
McDonald’s franchisees were shut out of “Shrek” and “Spider-Man” tie-ins but locked into “Treasure Planet” and “Hidalgo.”
Meanwhile, Taco Bell, KFC and Pizza Hut moved away from tie-ins, meaning there are now more movie studios chasing fewer fast-food opportunities.
And with the Pixar-Disney deal still up in the air, the Mouse can’t yet dangle future Pixar product in negotiations.
Some McDonald’s-Disney relationship will almost surely continue. The two are still a natural fit, and Disney’s slate has potential biggies like Pixar’s “Cars.”
Just look for McDonald’s to come out of the next round of talks with a deal that does more for Mickey D and less for Mickey Mouse.