Controversy Clouds Disney, McDonald’s Pact

It was expected that the Walt Disney Co. and McDonald’s were going to end their 10-year marriage for Happy Meal premiums later this year, but there’s controversy over the reasons why the relationship will terminate.

McDonald’s said yesterday its decision to end the relationship was mutual and that it did not exercise its option to renew the agreement in 2004 based on its desire to have more flexibility and options in its entertainment relationships. Last summer, McDonald’s signed a two-year deal with DreamWorks Animation to promote its films starting in 2007.

Disney had no comment, but the Los Angles Times reported yesterday that the Disney ended the deal over concerns it wants to reduce ties to the fast food industry and its links to childhood obesity.

“[The] Los Angeles Times story involving the McDonald’s/Disney alliance is based on Hollywood hearsay from unnamed sources, and the entire premise is a misrepresentation of the truth,” said McDonald’s spokesperson Jack Daly said in a statement.

McDonald’s deal to promote Walt Disney films, which it held exclusively, ends this summer with Disney’s release of the animated film Cars and Pirates of the Caribbean: Dead Man’s Chest. Despite ending its agreement with Disney, McDonald’s said it will continue to explore additional Disney opportunities in the future, Daly said.

Disney’s decision comes amid growing concerns about fast food and its effect on consumers, especially children. Scott Hume, executive managing editor for the Oak Brook, IL-based Restaurants & Institutions said the timing is somewhat suspicious.

“If this was prompted by concerns of childhood obesity, Disney should look at the food it serves at its parks,” Hume said. “I don’t think anybody ever accused Disney World of being a health farm. You’ll find bags of Mickey Mouse French fries [there]. It seems a little disingenuous of Disney to suddenly be worried about children’s healthy eating habits. It sounds much more like a smoke screen than a serious concern.”

If Disney was concerned about an association with fast food, the company would have removed itself from McDonald’s long ago and won’t enter into any promotional partnerships with any other QSRs in the future, he added.

“I can’t believe they would really want to do that,” Hume said. “[Disney] moved a lot of Little Mermaid toys through McDonald’s. Of all the [QSRs], nobody has tried harder to push healthy meals than McDonald’s. McDonald’s is hardly the worst offender in the category.”

“I don’t think McDonald’s will have difficulty finding promotional partners,” Hume added. “They are the most popular chain with children and tweens. There are more than enough marketers that will be happy to step in to fill void that Disney creates. They will be just fine.”

As for future marketing deals, McDonald’s is sure to fill the void. DreamWorks Animation is already working on plans to promote Shrek 3 as part of its new two-year marketing partnership with the fast food chain (Xtra, Aug. 7, 2005).

The non-exclusive agreement, announced in August 2005, includes tie-ins with two movies a year beginning with Shrek 3 slated for release in May 2007, followed by Bee Movie in November 2007. As part of the deal, DreamWorks will only work with McDonald’s in the fast-food industry.

In response to the LA Times article, DreamWorks issued a statement from Anne Globe, the studio’s head of worldwide promotions and consumer products, that read: “DreamWorks Animation is excited to be working with McDonald’s. This is one of the world’s great companies and it’s a privilege for us to be their partner. We look forward to developing fun and entertaining promotions around the world that create excitement and anticipation for our films. We’re big supporters of McDonald’s balanced, active lifestyles program.”