Business Law: advertising and licensing

As we have seen, some food companies manipulate products to maximize their appeal, without regard to thehealth of their customers. Disney took a dierent approach, deciding that only healthful foods could beadvertised on its children’s television channels, radio stations, and websites. Candy, fast food, and sugaredcereals were banned from its parks.Its characters could no longer associate with unhealthy foods. No more Mickey Pop-Tarts or Buzz LightyearHappy Meals. Said Disney chairman, Robert Iger, “Companies in a position to help with solutions to childhoodobesity should do just that.”Disney lost advertising, but would not say how much. Food sales at its theme parks could decline if childrenfound the options unappealing. Its licensing revenues were also aected by its decision to remove Disneycharacters from the likes of Pop-Tarts and Happy Meals.On the other hand, this healthy initiative enhanced its reputation, at least with parents, who increasingly soughthealthy food options for their children. Disney also proted from license fees it received for the use of a MickeyCheck logo on healthy food in grocery aisles and restaurants. This food initiative might also help forestall moreonerous government regulation.In contrast, the Nickelodeon television channel, home to SpongeBob SquarePants and Dora the Explorer,decided to continue allowing ads for such nutritional failures as Trix and Cocoa Pus cereals. It said that itsgoal was “to make the highest quality entertainment content in the world for kids … [while leaving] the scienceof nutrition to the experts.” Food ads were the third highest source of advertising revenues for Nickelodeon.Also, it did not have as many other revenue streams as Disney does—no theme parks, for example.How much advertising and licensing revenue would you be willing to give up to protect children from ads forunhealthy foods? Does your answer depend on how protable the division is?

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