Jim Henson: The Biography (28 page)

Through it all, everyone acknowledged that the Muppets were instrumental in
Sesame Street
’s success. “
Jim’s contribution was absolutely essential,” said Jerry Nelson. “I mean, the show never would have had the success it has without Jim’s contribution to it.” Even Jim’s tormentor at
The New York Times
, Jack Gould, became a grudging cheerleader. “
Jim Henson’s Muppets … is still central to the success of
Sesame Street
. They are fun for youngsters and intriguing to adults in the imaginative ways in which he uses them.”

The success of the show, in fact, became nearly overwhelming for Jim and quickly came to define the creative direction of Henson Associates, despite Jim’s best efforts. The company that had produced such avant-garde, experimental fare as
Youth 68
and
The Cube
over the last two years was now all Muppets, all the time—but Jim was
optimistic, even grateful, for the opportunity to devote his time to the Muppets again. “
I think it wasn’t until
Sesame Street
that the Muppets took over most of my creative energy,” Jim said later.

The success of
Sesame Street
affected more than just his ability to develop other film projects; it was also the final impetus toward Jim pulling the plug on commercials altogether. “
When
Sesame Street
came on … we were too busy to do commercials,” said Jim. And, he had to admit, “it was a pleasure to get out of that world.… It’s a world of compromise.” While Jim would continue to produce ads intermittently for the rest of his career, the creative thrill was gone. “
I just stopped doing that stuff,” he explained later. “At that point, I was at the level where they respect you and your opinion and all that sort of thing. But even then … every meeting is a meeting with a dozen people who all have opinions and the whole process is really not easy on a creative person.”

So Jim was determined to get out of advertising—“
my goals have changed, and are taking me farther away from the commercial area,” he told a disappointed Quaker Oats—but doing so would mean shutting off a major source of revenue for Henson Associates. Jim never liked discussing money; he had angrily scratched out a paragraph in his copy of a
TV Guide
interview that speculated he had “
hauled in $350,000 in ’69” and earned about $25,000 per commercial. While the article had actually been fairly accurate, for Jim it had been rude to bring the matter up; talking about finances, he told another reporter, was “
really ugly.” And yet the dilemma remained: Jim had given up most of his outside projects to commit himself to
Sesame Street
—and that commitment had impeded his ability to pursue the other projects he needed to stay in business. Clearly, another source of revenue was needed.

Children’s Television Workshop also understood that finding that revenue stream was critical to its continued existence. The organization—which relied almost solely on taxpayer funding and contributions from social-minded companies—knew it couldn’t count on such largesse forever. “
Foundation support is impermanent,” CTW co-founder Lloyd Morrisett said plainly. “Governmental funding is uncertain. Every organization needs a stable financial base in order to attract talented people.”

Jim had actually made just such an argument at an October symposium hosted by Action for Children’s Television, where he laid out the critical need for money in public television, addressing his comments to educators and possible benefactors in the same clear language he used when speaking with his own children. “
If I have a song to sing, it is about money,” Jim wrote, “because I think good children’s television is more a money problem than anything else.… Good shows cost money, and if you want to have a lot of programs for kids, it costs a lot of money and someone has to pay for it.”

Both Jim and CTW, then, had the same problem. And they found their mutual answer in the most unlikely of places: the
Billboard
charts. At the end of
Sesame Street
’s first season, Columbia Records had issued
The Sesame Street Book and Record
, which sold half a million copies, peaked at number 23, and would eventually win a Grammy Award—not bad for a year in which it had to jockey for position with albums by the Beatles and Led Zeppelin. Even more impressive, a single from the
Sesame Street
record—the catchy “Rubber Duckie,” sung by Jim as Ernie—had reached number 16 in September 1970. Clearly, there was a market for
Sesame Street
- and Muppet-related merchandise.

It had been Bernie Brillstein who had first broached the subject with Jim, calling on him at the house in Greenwich to make the case. “
I told him, ‘
Sesame Street
is now
boom,
’ ” Brillstein said. “And Jim was very peculiar about merchandising, because he usually didn’t like what people did. And I’m saying, ‘Jim, you have to merchandise those characters. It’s insane! It’s the most popular show in America!’ ”

And yet, Jim was skeptical. While he was always careful to make certain he owned his characters, that principle, to the frustration of toy manufacturers everywhere, had translated into little merchandise;
in the last decade, he had permitted very few Muppet-related items beyond a series of Kermit and Rowlf puppets and a few promotional giveaways. “
You can’t take advantage of the love the kids have for these characters,” Jim would say time and time again. Oz, too, noted that bags of money had already been waved under their noses, to no avail. “
If Jim or the Muppets wanted to go only after money,” said Oz, “we could have truly cleaned up. I can’t tell you how many cookie manufacturers wanted Cookie Monster to pitch their product.”

But Brillstein was persistent. “
Here’s what you have to do,” he told Jim. “First of all, you have to do it for the fans, for the kids. Second of all, you’ll have complete control of it, and you control the quality. Third of all, if it works like I think it’s gonna work, you will be financially independent and you can use the money for your own independence and creativity and no one will ever tell you what to do again.”

With Brillstein’s enthusiastic advice still ringing in his ears, Jim met with Joan Cooney to discuss the possibilities of merchandising
Sesame Street
. Jim brought with him Jay Emmett, head of the Licensing Corporation of America, which had managed marketing for organizations like the National Football League and handled the merchandising of Superman and Batman for National Publications. It was Jim’s intention to have Emmett independently coordinate all the
Sesame Street
–related marketing—meaning he would be an employee of neither Henson Associates nor CTW. Cooney, however, had other ideas.

“
I said no,” said Cooney, who wanted merchandising controlled inside CTW, “and Jim and I had one of our little tiffs.… Jim could actually do no wrong for me, and I think that was true for him with me. I very seldom said no to him.” But in this, Cooney stood firm—and Jim eventually agreed that merchandising for
Sesame Street
would be managed at CTW, in a new division headed by twenty-nine-year-old Christopher Cerf, a former senior editor at Random House. The basic agreement that Jim and CTW had negotiated in 1969—in which Jim would continue to retain ownership of his characters, and split any merchandise-related profits with CTW—would remain in place. The mechanics of that agreement, however—including
exactly how those profits would be split—was another matter.

Both Jim and CTW agreed that quality and value should drive the product. “
Our bottom line consideration,” stressed Jim, “is to stay cost conscious and make sure the product remains a good value.” On CTW’s end, any contract Cerf negotiated required that merchandise “
receive the widest possible distribution” and be “available at the lowest possible prices.” Further, Jim’s approval would be required for any
Sesame Street
products that used Muppet images—which was practically everything.

The first
Sesame Street
merchandise Jim and CTW agreed to allow—mostly puppets, books, Colorforms, and puzzles—shipped in the fall of 1971 from Random House, Western Publishing, and Topper Toys. Topper in particular had lobbied hard for the merchandising rights, adding 110,000 square feet to its plant in Elizabeth, New Jersey, to meet anticipated demand, allocating $400,000 to marketing, and paying an advance to CTW of $250,000. In the first year alone, Topper estimated it had generated more than $5 million in
Sesame Street
–related sales, splitting its profits evenly with CTW.

When it came to profit sharing between CTW and Jim, however, things were less well defined. For the first few years, it was a complicated math problem, as lawyers from Henson Associates and CTW huddled almost weekly to argue over whether a product had “
more Muppets or more educational value” and then divided the royalties accordingly. Eventually, the two companies negotiated an agreement that outlined broadly defined categories—music, puppets, stuffed animals—with preset percentages for each company, a structure that remained in place for thirty years.

The money began to flow faster and deeper than anyone anticipated. Western Publishing’s
The Monster at the End of This Book
, for instance, featuring Grover in a story written by Jon Stone, sold more than two million copies within a year, with Henson Associates being paid a “designer’s percentage” for the use of Grover. By Jim’s own estimate,
Sesame Street
’s Muppet merchandising had earned nearly $10 million by the mid-1970s.

As was his habit, Jim invested most of the money back in the
company. While Jim’s percentage from the profits would never be enough to put the company on autopilot, it was sufficient enough for him to start investing in what he jokingly called “research and development,” gradually adding new performers and Muppet designers. The revenue would also provide Jim, as Brillstein had predicted, with the freedom to pursue other projects without worrying about whether they would immediately be profitable. “
Jim was incredibly proud of
Sesame Street
and very protective of it,” said Jerry Juhl. “[But] once that show was established, he suddenly found himself being called
Mr. Children’s Television
. He was perfectly happy to accept that—but he really wanted to do something else.”

“
His means of expression were always more than just one thing,” said Oz. “He went with the flow, allowed it to happen to him, and then would diversify along the way.… He enjoyed
Sesame Street
, but he was always doing new things.” At the moment, however, no one knew exactly what this particular new thing was. And neither, really, did Jim.

Jim gives a rooftop performance of the gigantic Boss Man Muppet. Trying to shake his image as a children’s performer, Jim tried for years to stage an elaborate all-puppet Broadway show, with increasingly larger and more complicated puppets
. (
photo credit 7.1
)

T
HE WEEK BEFORE
T
HANKSGIVING
1970, J
IM FLEW TO
L
OS
A
NGELES
with Frank Oz and Don Sahlin to tape several short segments with
Laugh-In
ingenue Goldie Hawn for her first solo television special,
Pure Goldie
. “
We can do anything you like,” Jim had helpfully told Hawn’s producer, but the Muppet moments would be brief—Hawn had crammed her hour-long special with five other supportive guest stars jockeying for time. And yet, the Muppet appearance would be memorable, for it was the first time non–
Sesame Street
viewers would have the opportunity to hear Kermit perform a song that had quickly grown close to Jim’s heart and, within a few years, would be well on its way to becoming a standard.