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Mouse meal ticket fed up.

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 fastfood opportunities.

And with the Pixar-Disney deal still up in the aft; the Mouse can't yet dangle future Pixar product in negotiations.

The McDonald's-Disney relationship will almost surely continue in some form. 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.

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Title Annotation:Mouse House; Walt Disney Co.
Author:Cohen, David S.
Publication:Variety
Article Type:Brief Article
Geographic Code:1USA
Date:May 16, 2005
Words:264
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