I'm not sure if this is a good or bad thing. I love Pixar, but am not a big fan of some some things about Disney. http://www.chron.com/cs/CDA/printstory.mpl/business/3609358 Disney buying Pixar for $7.4 billion By GARY GENTILE Associated Press LOS ANGELES — The Walt Disney Co. said today it is buying longtime partner Pixar Animation Studios Inc. for $7.4 billion in a deal that could restore Disney's clout in animation while vaulting Pixar CEO Steve Jobs into a powerful role at the media conglomerate. Disney will buy the maker of the blockbuster films Toy Story and Finding Nemo in an all-stock transaction that makes Jobs Disney's largest shareholder. Jobs, who controls more than half of Pixar's stock and also heads Apple Computer Inc., will also join Disney's board. "With this transaction, we welcome and embrace Pixar's unique culture, which for two decades, has fostered some of the most innovative and successful films in history," Disney Chief Executive Robert Iger said in a statement. Disney has co-financed and distributed Pixar's animated films for the past 12 years, splitting the profits. But that deal expires in June after Pixar delivers Cars. Disney, the theme park owner that also owns the ABC and ESPN TV networks, and Pixar have been talking for months about a new relationship. Pixar Executive Vice President John Lasseter will become chief creative officer of the animation studios and principal creative adviser at Walt Disney Imagineering, which designs and builds the company's theme parks. Pixar President Ed Catmull will serve as president of the new combined Pixar and Disney animation studios, reporting to Iger and Dick Cook, chairman of The Walt Disney Studios. "Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," Jobs said in a statement. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world." With Pixar, Disney gains a company that has produced a long-running string of animated blockbusters, including The Incredibles. Through Jobs, Disney will tightens its link with Apple Computer, the innovative technology company behind music and video iPods. Disney is not acquiring a direct interest in Apple. But Jobs could help Iger push his plans to marry films, TV shows, video games and other content to computers, iPods, handheld game consoles and even cell phones. The deal will accelerate Iger's plans to strengthen Disney's animated features, the hallmark of the company since its founding and a steady source of characters for Disney's theme parks and other units. Pixar has served as Disney's de facto animation unit for a decade. Two Pixar movies, Finding Nemo and The Incredibles, have won Academy Awards for best animated feature film. Pixar films have been a financial windfall for Disney, which receives 60 percent of the profits. By contrast, Disney's own animation unit has struggled, producing some modest successes, such as 2002's Lilo & Stitch, and many flops, including Treasure Planet and Home on the Range. Its first fully computer-animated effort, Chicken Little, grossed more than $100 million domestically since its release last year and will likely be profitable. But that figure falls well short of the more than $200 million domestic gross of 2004's The Incredibles. Disney and Pixar had been discussing an extension of their distribution deal since early 2003. Last year, analysts said striking that agreement was Iger's top priority. The talks stalled in 2004 after Pixar demanded that it own 100 percent of all future films and pay Disney a straight distribution fee, similar to the deal Star Wars creator George Lucas had with Twentieth Century Fox. Pixar also wanted ownership of all the films already produced as well as two that were remaining under the existing agreement at the time. Personal animosity between Jobs and former Disney CEO Michael Eisner also contributed to the breakdown. In 2004, Jobs broke off talks with Disney and said he would begin talking to other studios, including Fox and Warner Bros. Relations soured even more after Disney announced it would make the sequel Toy Story 3, a project strongly opposed by Pixar. The relationship between the two companies goes back to 1991, when Disney agreed to finance and distribute three films from the fledgling company. That deal led to the release of Toy Story in 1995 — the world's first fully computer animated feature film. It was a huge hit and became the highest-grossing film that year. The same year, Pixar raised $140 million in an initial public offering.
Likely a bad thing long term. Disney screwed up its animation studios and is chomping at the bit to do the same to Pixar. My question is how does this benefit Pixar shareholders, myself included?
I was watching CNBC earlier this afternoon (ok, so all day because I'm in love with Maria Bartiromo and Erin Burnett) and they interviewed both CEO's after the merger went down. One of the things I think Pixar wants is have their characters injected into things like theme parks easier - in other words merchandising. Whether Disney destroys them or helps them with this, who knows...
From the sounds of it, a few of the Pixar people will now have a lot of power at Disney (Lasseter, Jobs), so that might be good. Also, apparently Disney has been very different since Eisner left; Robert Iger is supposedly leading the company in a different direction from what I've read. Kind of feel better about the news after readings some of that stuff.
Seems like its a good deal for both fronts. I don't think there should be any worries Disney will bring Pixar down because Eisner is gone and Jobs and Lasseter will have a lot of control. Plus it'll hopefully revive Disney's floundering animation front.
This is good news, as it smells a bit like Apple buying NeXT. Looks like a takeover of Disney by Pixar.
i think it's more of a 'we haven't made anything significant animation-wise since the Lion King so ...desperate times..' move by Disney. I would have liked to see Pixar sans Disney but hey as long as Pixar keeps making good movies, it's all gravy.
From what I read, it sounded like Iger is trying to bring back their animation department, which Eisner seemed to screw up in the past ~10 years or so. Getting Pixar (and the people behind the company) onboard seems to be a good start in doing that from what I can tell. Just seems like a win-win situation to me, as mentioned earlier.
Win-win? Disney is the big winner, paying no premium for aquisition. Jobs and Lasseter have a bigger playground. Pixar shareholders got screwed. Pixar was heading for one release per year schedule. Their ever growing back catalog sells well. Their next distribution deal would be open market and would deliver a larger slice of the sales pie plus more control of their movie's rights.
seems a little overpriced, as you hope to get to recoup your initial investment, although, Disney has nothing, so it may be worth it...I liked Chicken Little, but definitely not in the Toy Story/Nemo range... I just hope Pixar get to remain creative...
