Two major Hollywood studios are working together on one of the hottest properties in the biz. Who slipped hallucinogens in my coffee again?

Just as the audition shows wind down on News Corp.'s (NYSE: NWS) Fox network, American Idol pops up in a new venue. This time, Walt Disney (NYSE: DIS) is turning television's biggest show into a Walt Disney World attraction, complete with tie-ins to the Fox property itself. After auditioning in a video booth, selected park visitors will get to perform in front of a roomful of mouse-eared tourists plus three judges, and daily winners get ushered to the front of a real audition line when that time comes.

The premise of the deal is understandable: tap into the "Idol" cachet to draw more visitors to the recently renamed and always underrated Hollywood Studios park. Financial terms have not been disclosed, but the numbers hardly matter anyway. It's the execution that comes as a surprise. Of course, it turns out that Fox never had a say in the matter. My coffee is clean this time.

Disney negotiated the property directly with 19 Entertainment and Fremantle Media, from which Fox simply holds a license to run the show. It's a side deal worthy of comparisons to David Letterman's interim writers contract, and a potentially shrewd marketing move. Now, when Fox promotes its golden goose, a squeaky rival also stands to profit from those marketing dollars.

Fremantle doesn't seem to worry about how bewitched, bothered, and bewildered its broadcasting partner might be over this state of affairs.

"It is owned by us, so we can extend the brand in the off-air space in the ways that we want to," a Fremantle spokesman told the AP. "We don't see this in any way as a News Corp. vs. Disney debate. That's never been part of the discussion, and it's not something that's relevant to us. It's just part of 'American Idol.'"

It remains to be seen whether Disney will divert traffic from rival theme park operators like Cedar Fair (NYSE: FUN) and Six Flags (NYSE: SIX) with visions of a Simon Cowell tongue-lashing. Either way, the deal is signed, sealed, delivered, and auditions will start later this year.

Further Foolishness:

Disney is a Motley Fool Stock Advisor recommendation, and Cedar Fair is a Motley Fool Income Investor pick.

Fool contributor Anders Bylund is a Disney shareholder and an aspiring pianist; he sounds great in the shower but goes through pianos fast. He doesn't hold a position in the other companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure gets standing ovations for its rendering of "Unchained Melody."