October 1 1990 by Tom Ashton
Beyond the great dragon’s maw there is a realm called Dark Water,” says David Kirschner, president and CEO of Hanna-Barbera, speaking of the company’s newest project. But the future Fox Broadcasting adventure series has a greater commercial destiny.
Kirschner told Chief Executive that both Mattel and Hasbro bid for the toy licensing agreement spun off from the series, with Hasbro winning by “doubling what they paid for James Bond.” Cartoon characters have to earn their bread twice in today’s entertainment business: first in programming, then in merchandising. Kirschner learned that from his “hero” Walt Disney’s company, and later when he saw Teenage Mutant Ninja Turtles toys “blowing off the shelves.”
Hanna-Barbera’s new parent, Great American Communications Company, thinks that “Disney is a wonderful road map,” according to its president Charles S. Mechem. GACC is a holding company chaired by financier Carl H. Lindner, who gave Kirschner “the Disney mandate.” Lindner’s plan for Hanna-Barbera was to strip away unsuccessful production units and develop the valuable franchise of copyrighted cartoon characters. To prove the point, the firm sold 14 years worth of syndication rights to The Flintstones for $40 million to Saatchi & Saatchi.
Kirschner was named president and CEO of Hanna-Barbera in October 1989. His own company had racked up more than $165 million in revenues on two big hits: the 1988 horror flick Child’s Play, with its animatronic (robotics plus animation) killer doll, and the animated feature about an immigrant mouse, An American Tail. Kirschner took over the company, founded by Joseph Barbera and William Hanna, which dominated TV animation with characters like Yogi Bear and Huckleberry Hound. The Smurfs followed, but they are now more than ten years old, and the studio’s creators have entered their seventies. Revenues at Hanna-Barbera peaked at $43.2 million in 1984. They got as low as $5.5 million in 1987. “Morale was poor. It was pretty much viewed by the employees as the K mart of entertainment,” Kirschner says.
At 35, Kirschner is only a few years older than Fred Flintstone. But he plans to make Hanna-Barbera a Disney-like force in programming and licensing. “I don’t think there is much future in just being a Saturday morning company,” he says. “To become a player in prime time,” Kirschner has announced new plans for Bedrock productions. A musical called Through the Horn has been sold to NBC for a $5 million Pepsi-sponsored production. CBS has bought Fish Police, a project that may give Dragnet new meaning. “Europe is a piece of the pie now,” says Kirschner. This fall The Jetsons is on the BBC. Although the Jetsons feature movie wasn’t a U.S. summer blockbuster, Kirschner has already started on “a film with Disney called Hocus Pocus for early 1991.”
Going from film studio to entertainment marketer is working. Hanna-Barbera saw its operating income climb to $17 million in 1989. Revenues from production were down from $46.7 million to $32.8 million, but licensing revenues more than tripled to $13.3 million. Nor has Hanna-Barbera missed the connection between cartoons and theme parks. The brand-new Funtastic World of Hanna-Barbera has just opened at the Universal Studio park in Orlando, Fla. “As you come out of the ride,” says Kirschner with enthusiasm, “you walk into an interactive area where you can actually animate characters yourself, and then you step into our store.”
Financier Lindner’s holding company needs the boost Hanna-Barbera can provide. GACC has more than $1 billion of debt on its books-put there by Lindner’s United (now Chiquita) Brands and Taft Broadcasting acquisitions. GACC’s losses rose to over $115 million in 1989. Despite the fact that ownership of Chiquita went from 32 percent to 18.5 percent in 1989, Kirschner’s characters will have to work hard until they can sing, “Yes, We Have No Bananas.”