BK mulls Disney counteroffer

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Burger King, which had tied in promotionally with many of Walt Disney Co. feature films in recent years, is considering its options in light of Disney's pending, unprecedented promotional alliance with McDonald's Corp. Executives familiar with negotiations confirmed a report in Variety on Wednesday that McDonald's, the world's No. 1 fast-food chain, is finalizing a 10-year, $100 million deal for exclusive involvement in nearly every aspect of Disney's media and entertainment operations, from movies to consumer products to ESPN. It appears the deal would also keep McDonald's married to Disney and prevent it from doing promo deals with other studios.

McDonald's is said to want the deal done in time to announce to its franchisees in two weeks; but as the deal is not yet complete, there is time for Burger King to make a counteroffer. While leaking word of the proposed deal may have been a negotiating ploy, it's believed Disney has its sights set on McDonald's, given its brand name, market share dominance and global reach.

The proposed deal would have McDonald's pay $100 million in licensing and royalties for as many as 17 promotional opportunities a year, as well as a sponsorship of Animal Kingdom, a new Disney theme park. McDonald's and Disney had an exclusive relationship from 1987 to 1991 for feature films; BK has been with Disney since then in most of Disney's event films.

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