Golden Books will terminate its publishing license with the Walt Disney Company December 31, 2000, although the company will continue to sell existing inventory through January 31, 2002. According to Golden chairman and CEO Richard Snyder, in its negotiations with Disney, "it became apparent that there was no room for Golden Books' profit in the enterprise. We walked away from an unprofitable license with Star Wars in 1998, and that has been our direction ever since."
The cancellation of the agreement will mark the end of more than a 70-year relationship between Golden and Disney, and Disney has traditionally been one of Golden's most important licenses, representing 15% to 17% of revenues. But Disney's sales contribution has steadily slipped and Disney product-related sales are projected to be about $35 million in 2000, down from a high of $80 million. Golden signed the current agreement in late 1997 for approximately $50 million, and at the time executives were thrilled at expanding Golden's relationship with Disney.
Richard Collins, chief operating officer for Golden, explained the turnabout by observing that "the old guard of children's licenses is no longer what it used to be, and is now driven by television properties, not film properties. We have to move along with that tide, and place our emphasis on our more vibrant licenses and our own proprietary publishing." The company will concentrate on such licensed products as Pokemon, Powerpuff Girls, Scooby Doo and SpongeBob SquarePants, its first license with Nickelodeon.
