McDonald's Seeks 'Flexibility' After 10-Year Disney Pact
By RICHARD GIBSON
May 11, 2005 12:40 p.m.
Of DOW JONES NEWSWIRES
McDonald's Corp.'s (MCD) reliance on Walt Disney Co. (DIS) for major movie-related marketing promotions may be coming to an end.
The fast-food giant raised that possibility at its annual meeting Wednesday in response to a shareholder's question about whether McDonald's was seeking entertainment-related options that don't involve Disney.
"Our deal with them expires in '06 and we are looking forward to the opportunity to have flexibility around promotional activities and products," replied Chief Executive Jim Skinner.
"Yet we continue to work effectively with Walt Disney," he added without further elaboration.
The 10-year exclusive pact between the companies has long been controversial among McDonald's franchisees, either because it prevented McDonald's from picking up blockbuster movie properties from other studios as promotional vehicles or because some animated Disney films generated disappointing Happy Meal sales.
Although McDonald's hasn't disclosed terms of the deal, published reports have said it calls for the company to pay Disney about $100 million in royalties as well as conduct a dozen or so promotions a year for Disney films, videos, television properties and theme parks.
The agreement gives McDonald's access to Disney's theme parks for its restaurants.
McDonald's shareholder meeting was broadcast over the Internet.
Shares of the company traded recently at $29.88, down 22 cents.
-By Richard Gibson, Dow Jones Newswires; 515-282-6830; ________.gibson@dowjones.com
By RICHARD GIBSON
May 11, 2005 12:40 p.m.
Of DOW JONES NEWSWIRES
McDonald's Corp.'s (MCD) reliance on Walt Disney Co. (DIS) for major movie-related marketing promotions may be coming to an end.
The fast-food giant raised that possibility at its annual meeting Wednesday in response to a shareholder's question about whether McDonald's was seeking entertainment-related options that don't involve Disney.
"Our deal with them expires in '06 and we are looking forward to the opportunity to have flexibility around promotional activities and products," replied Chief Executive Jim Skinner.
"Yet we continue to work effectively with Walt Disney," he added without further elaboration.
The 10-year exclusive pact between the companies has long been controversial among McDonald's franchisees, either because it prevented McDonald's from picking up blockbuster movie properties from other studios as promotional vehicles or because some animated Disney films generated disappointing Happy Meal sales.
Although McDonald's hasn't disclosed terms of the deal, published reports have said it calls for the company to pay Disney about $100 million in royalties as well as conduct a dozen or so promotions a year for Disney films, videos, television properties and theme parks.
The agreement gives McDonald's access to Disney's theme parks for its restaurants.
McDonald's shareholder meeting was broadcast over the Internet.
Shares of the company traded recently at $29.88, down 22 cents.
-By Richard Gibson, Dow Jones Newswires; 515-282-6830; ________.gibson@dowjones.com
