McDonald’s, Disney revise deal for a changed world

When it comes to its relationship with Walt Disney Co., McDonald’s Corp. is hardly lovin’ it. The world’s largest fast-food c...

When it comes to its relationship with Walt Disney Co., McDonald’s Corp. is hardly lovin’ it. The world’s largest fast-food chain wants to revamp its super-sized movie, home video and theme park promotion deal with Disney.

Discontent with the pact is bubbling up to headquarters in Oak Brook, Illinois, from powerful franchisees, who own most of the 30,000-plus McDonald’s restaurants worldwide.

When the Disney-McDonald’s marketing deal was sealed in 1996, Disney was coming off a string of winners like The Lion King and Aladdin. Since then, it has been hits and misses for McDonald’s franchisees, who must purchase movie-related Happy Meal toys and pay for local advertising. Although Lilo & Stitch and Pirates of the Caribbean were successful, franchisees also were saddled with promoting the outright duds Treasure Planet and Atlantis: The Lost Empire.

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Another gripe: Much of McDonald’s promotional schedule each year is spoken for by Disney, with half of the Happy Meals tied to Disney themes. ‘‘The biggest complaint I hear is that the alliance doesn’t give them any flexibility. They get locked into whatever Disney decides to lock them into,’’ said Dick Adams, a consultant to 500 McDonald’s franchisees. McDonald’s spokesman Walt Riker said the company expected to continue its ‘‘productive relationship’’ with Disney. The terms of the McDonald’s-Disney pact — which expires in January 1, 2007 — call for McDonald’s to pay about $100 million in royalties to Disney and to conduct about a dozen promotions a year for Disney films, videos, TV properties and theme parks. McDonald’s agreed to sponsor the Dinoland section of Disney’s Animal Kingdom theme park in Orlando, Florida; Disney promised to allow McDonald’s to open restaurants at Disney parks.

McDonald’s Chief Executive Charlie Bell last month told reporters after the company’s annual meeting that the pact contained ‘‘some things we both like about it and some things we both don’t like about it’’. Chief Marketing Officer Larry Light added that ‘‘a 10-year partnership is a very long time for us’’. For his part, Disney President Bob Iger recently called the relationship ‘‘mutually beneficial’’ and said both sides had an interest in preserving their ties. But he also said that ‘‘for both of us the world has changed, so any new relationship would reflect that.’’

With the McDonald’s partnership, Disney can use the extraordinary reach of the chain to promote movies both in the restaurants and through McDonald’s-paid ads. —(LAT-WP)