McDonald's Trades Mouse for Troll

McDonald's (NYSE: MCD  ) apparently enjoys freedom -- and who doesn't? The home of the Hamburglar recently got some as it announced a hookup with DreamWorks Animation (NYSE: DWA  ) to market Shrek3 when it is released to theaters in 2007.

The green troll isn't the only character that will be supported. Under the agreement, new animated properties will be up for grabs during the two-year timeframe of the arrangement.

But the big kicker in the deal is the aforementioned freedom - you see, the contract with DreamWorks Animation is on a non-exclusive basis.

McDonald's previous deal with Disney (NYSE: DIS  ) was an exclusive setup to market that media conglomerate's movies over a ten-year period. Right from the inception of said agreement, critics pointed out how inflexible the architecture was and how many missed opportunities Ronald and team would have to endure over the years.

Think about it -- if McDonald's had been free at the time, do you think it would have tried to bring fans of the new Star Wars movies to the Golden Arches as promotional partner?

I don't think anyone would argue against the notion that this newfound flexibility will open up new market-strategizing avenues for McDonald's, nor that it's also going to put pressure on the competition for these kinds of partnerships. When Time Warner (NYSE: TWX  ) or Viacom (NYSE: VIA  ) want to promote a film, the powers that be at the head of these companies now know that Mickey D's is no longer beholden to Mickey Mouse. And let's face it -- who doesn't want to work with the Arches? McDonald's must be gloating.

DreamWorks Animation CEO Jeffrey Katzenberg -- the former Mousketeer who later engaged in laborious litigation against Disney over compensation -- helped to announce the news. So you can bet that Disney is smarting a bit over this development.

But in the end, it really won't affect Disney too badly. McDonald's wanted - and got - leverage and Disney has it now by default, as well. Although I agree that the first choice of most marketing partnerships in this arena -- especially in terms of family fare -- should probably be the Happy Meal platform, Disney will now find itself in a position to synthesize programs that might work better at places like Wendy's (NYSE: WEN  ) or Yum Brands! (NYSE: YUM  ) . Simply put, this change works both ways.

So in conclusion, I think this benefits all parties involved. McDonald's gets its Shrek while Mickey sits in his Magic Castle, waiting to see what other fast-food players might make an offer. And all the movie companies have an opportunity to win a plum table at the most famous distributor of greasy grub -- which means that we probably haven't seen the last of the Mickey and Mickey D Show.

Ronald McDonald is in the Foolish house:

Check out these related Foolish discussion boards:Disney,DreamWorks Animation, andMcDonald's.

Fool contributor Steven Mallas owns shares of Disney. The Fool has an ironclad disclosure policy.


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