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January 23, 2006

Have I Made Myself Clear On This Point?

A Disney buy of Pixar for $6.8 billion is a bad, bad idea.

Pixar is a company that has been as maximized as it ever will be. The future can be no brighter. And there is little chance that the company will make a return on investment for Disney in anything less than a decade. But that is the positive view.

Steve Jobs is a notoriously poor people-person manager, made up for at Pixar greatly by John Lasseter. He is an autocrat of the Eisner mold and then some.

But most importantly, why would Pixar want this deal if it isn't completely in their favor? They have gotten to the point where they can get a distribution-only deal with any studio in town and yet, they want to be bought. Hmmmm...

Posted by poland at January 23, 2006 12:58 AM

Comments

A bad deal for whom? I think, assuming the price isn't too out of control, it's a better deal for Disney than Pixar.

Posted by: Wrecktum [TypeKey Profile Page] at January 23, 2006 01:30 AM

That 'Hmmm' implies something, but I have no idea what. Oh great Poland, enlighten us!

Posted by: jeffmcm [TypeKey Profile Page] at January 23, 2006 01:32 AM

Why do you ask why "they want to be bought" when referring to Pixar in the last paragraph? Maybe I'm wrong here, but does it really matter what the people at Pixar want? Doesn't the only thing that matters on that side is whether Jobs wants to sell? As an individual, there can be many things that would logically motivate Jobs to sell Pixar and join Disney. Pixar's becoming a nice brand, but it is nowhere near the household name that Disney is...and maybe Jobs wants to leverage the Disney brand as he moves forward on his quest for big media.

If I worked at Pixar right now, I'd be scared shitless, because as nice of a place as it may be to work, it ain't no democracy and ultimately, they're at the mercy of Jobs and his reading of the marketplace.

Posted by: Eric N [TypeKey Profile Page] at January 23, 2006 04:57 AM

6.8 Billion? To be Steve Jobs for a day. Would be nice.

Posted by: Terence D [TypeKey Profile Page] at January 23, 2006 05:23 AM

If I were in a race with Bill Gates to get my technology devices into America's living room before he does, having Disney, ABC, ESPN, etc., squarely in my corner should make Gates sweat.

Posted by: Eric N [TypeKey Profile Page] at January 23, 2006 05:35 AM

Dealing with guys like Gates and Jobs I'd really think twice about signing any deal they were a part of. Just in case. Really do the homework. You don't make billions upon billions of dollars by making dumb business deals.

Posted by: Josh [TypeKey Profile Page] at January 23, 2006 05:53 AM

almost 7 billion for them? they better keep churning out hits.

Posted by: bicycle bob [TypeKey Profile Page] at January 23, 2006 06:53 AM

These are numbers being thrown around that are just way over my head. I can't even comprehend something being worth this much money. It's mind boggling to think that.

Posted by: Rufus Masters [TypeKey Profile Page] at January 23, 2006 07:54 AM

Call him a poor people person all you want but the man has made two multi billion dollar companies. He has to have some people skills to at least jire the right people to communicate for him. It's an impressive feat for anyone to do once let alone twice. They'll only be helped being under the Disney banner. It must be part of a larger plan to sell off to them.

Posted by: Terence D [TypeKey Profile Page] at January 23, 2006 08:37 AM

I think it is a mistake to think of Pixar's dominance as a foregone conclusion. They wouldn't even have their current stature if it weren't for Disney in the first place. With the marketplace filling up with CG animation (even a subpar film like Hoodwinked can do decent numbers), Disney threatening to do Toy Story 3, and the Cars trailer looking a tad weak, Pixar needs Disney more badly than they're letting on.

Posted by: palmtree [TypeKey Profile Page] at January 23, 2006 09:03 AM

I think palmtree is right on.

Sure Pixar has created some great hits...but without the Disney brand I doubt they would have gone that far. It wasn't until Monsters, maybe even Nemo, that people outside of Hollywood started realizing that Pixar and Disney were two separate companies. And most moviegoers even today still think that Incredibles and Toy Story are Disney films.

Talking to parents with young kids and you find that the Disney name doesn't always mean quality, but they can be assured their kids won't be exposed to the hard, adult edges of movies like Shrek or Hoodwinked. Pixar has greatly benefited from this.

Posted by: Eric N [TypeKey Profile Page] at January 23, 2006 09:16 AM

They both need each other. Disney needs Pixar's hit making ability and products. Pixar needs the Disney credibility.

Posted by: Bruce [TypeKey Profile Page] at January 23, 2006 10:46 AM

Well, there is MERCHANDISING! Where the real money from the movie is made! Disney does it like no other, so that could be one thing to think about besides the movies. But still..... almost 7 billion, and Chicken Little got some decent bank despite its critical thrashing. Wow.

Posted by: Joe Straat [TypeKey Profile Page] at January 23, 2006 10:50 AM

7 billion for a company who makes one movie every two years?

Posted by: LesterFreed [TypeKey Profile Page] at January 23, 2006 11:16 AM

Pixar is a guaranteed hitmaker. It's basically priceless right now. With merchandising and dvd sales and everything else that goes into it. This deal could pay for itself in under 10 years.

Posted by: Josh [TypeKey Profile Page] at January 23, 2006 11:47 AM

It is just a ridiculous amount of money being thrown around. I still can't even comprehend it. 7 Billion. Wow.

Posted by: Rufus Masters [TypeKey Profile Page] at January 23, 2006 12:55 PM

If I were Disney I would make sure that John Lassiter and Andrew Stanton are staying on board.

Posted by: The Hey [TypeKey Profile Page] at January 23, 2006 01:41 PM

It is still a huge risk for Disney. That much money for a small studio is a lot of risk. But the track record so far for Pixar is fantastic. Toy Story and Incredibles alone is worth the price.

Posted by: Angelus21 [TypeKey Profile Page] at January 23, 2006 01:45 PM

I don't know much about business or the business world or math. But I do know that 6.8 billion is a lot of money. What it means for the future of their films and Disney is what I would like to know. More movies? More output?

Posted by: Fades To Black [TypeKey Profile Page] at January 23, 2006 02:39 PM

What worries me is how Disney spent so much effort to create its own CG pipeline for Chicken Litter. And with the acqusition of Pixar, it will all be pretty obsolete. Will they collapse the two together? I hope not.

Posted by: palmtree [TypeKey Profile Page] at January 23, 2006 03:07 PM

No, like it was said, the Pixar pipeline is only one movie every other year, Disney will need their new CGI unit making movies for the off-years, or for the summer if the Pixar movie is at the holidays.

Posted by: jeffmcm [TypeKey Profile Page] at January 23, 2006 03:12 PM

Wow, I didn't even intend to write Litter, but I guess it was a subliminal thing.

Okay, granted the two pipelines will remain separate but the political implications of that are staggering. Bringing in a more accomplished stepson should still anger the siblings. Disney let Valiant flop and The Wild is easily on the same track. Something will have to give.

Posted by: palmtree [TypeKey Profile Page] at January 23, 2006 03:24 PM

They need much more than Pixar to stay ahead of the game but it certainly helps the cause.

Posted by: Bruce [TypeKey Profile Page] at January 23, 2006 03:38 PM

7 billion...that's many trips around the world. And then some.
The Hey's got a good point. You definitely need one, but both would be better when it comes to Lasseter and Stanton. Like many film fans I own all of the Pixar films so far, but 'Cars' does look troubling...so this deal may be at the best possible time for Pixar. Of course I hope that 'Cars' is great, but even with Lasseter behind it, I'm not holding my breath...

Posted by: Aladdin Sane [TypeKey Profile Page] at January 23, 2006 04:55 PM

I have to give Pixar the benefit of the doubt. They've made some really good films.

Posted by: PandaBear [TypeKey Profile Page] at January 23, 2006 06:13 PM

Let's not forget Brad Bird. I'll take The Incredibles over Monsters Inc. any day.

Posted by: jeffmcm [TypeKey Profile Page] at January 23, 2006 07:16 PM

Jeff, so will I. But I'd take Monsters Inc over the winner of the best animated oscar of that year. Rewatching Shrek, while still enjoyable, it hasn't aged as well...so yeah, no matter what, Pixar has the crown for the better product - is there any word as to whether or not Bird is doing another film with them?

Posted by: Aladdin Sane [TypeKey Profile Page] at January 23, 2006 08:23 PM

Believe me, Shrek 2 will age even worse than the first. Hell, it was dated when it was released (Ghostbusters and Ricky Martin jokes? crikies). Hopefully more and more people will finally start to realise the Shrek franchise is just not a good one. Watch these movies in 10 years and they won't hold up half as well as "Toy Story" did or, that "Toy Story 2" will.

Posted by: KamikazeCamelV2.0 [TypeKey Profile Page] at January 23, 2006 09:57 PM

There should be a pool somewhere to take bets on which movies/TV shows will be referenced in Shrek 3. Audiences love that feeling of "Hey! I saw that movie too! I'm smart."

Posted by: jeffmcm [TypeKey Profile Page] at January 23, 2006 11:05 PM

Tough to compare any animated franchise to "Toy Story". Those are the best of the best.

Posted by: Terence D [TypeKey Profile Page] at January 24, 2006 06:03 AM

Shrek is dated after 3 months. But you know what? The prime audience, kids, doesn't care. They love Shrek. They have no idea about pop culture. It doesn't hold up well for adults but we're not the ones they're targeting.

Posted by: Bruce [TypeKey Profile Page] at January 24, 2006 06:28 AM

Odd. I remember being criticised a while ago for hating Shrek 2.

My how the times change.

Posted by: KamikazeCamelV2.0 [TypeKey Profile Page] at January 24, 2006 08:39 AM

You should be criticized. It was a fun movie. Both were. I'll see the third one and I'm grown up. At least grown up a little bit. I don't define movies by being dated. Pop culture references don't bother me.

Posted by: BluStealer [TypeKey Profile Page] at January 24, 2006 08:41 AM

Well, now that this looks like a done deal, I'd like to see Poland expand on his thoughts. Why is this such a bad deal? What does he know that the Disney and Pixar boards don't?

I know Poland's doing more important things (like watching movies about canine blowjobs and bulldozer fucking), but when he has a moment, I think a clarification would be great.

Posted by: Wrecktum [TypeKey Profile Page] at January 24, 2006 09:00 AM

I'd say he's watching movies about gay cowboys eating pudding but he's already seen that movie six times.

Posted by: Bruce [TypeKey Profile Page] at January 24, 2006 10:33 AM

dave isn't saying its a bad deal from pixars point of view. its a great one for whatever they want and if they're willing to do it they must know something. it may not be a good deal from disneys.

Posted by: bicycle bob [TypeKey Profile Page] at January 24, 2006 11:53 AM

Well, Poland did say that Pixar "have gotten to the point where they can get a distribution-only deal with any studio in town" which is factually incorrect, so I wonder if he's really thought this aquisition through, or if his reaction is merely knee-jerk.

Posted by: Wrecktum [TypeKey Profile Page] at January 24, 2006 01:27 PM

Disney is paying almost 7 billion for Pixar yet you think Pixar can't get a distribution deal anywhere else? That seems to me like they can. Pretty easily.

Posted by: Mark Ziegler [TypeKey Profile Page] at January 24, 2006 02:29 PM

My only hope is that Pixar retains creative independence. I haven't been able to tell yet from the press if this is the case.

It sounds like the Pixar and Disney animations units will be merging. And frankly, I don't want Pixar tainted by the Disney team.

Posted by: Eric [TypeKey Profile Page] at January 24, 2006 02:32 PM

Hold on.

Just read this.

The Walt Disney Co. said Tuesday 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.


From 6.8 to 7.4. Not bad for Pixar.

Posted by: PandaBear [TypeKey Profile Page] at January 24, 2006 02:48 PM

An even more obscene number being thrown around. How do they come up with it and who from Pixar got them to up their bid by almost a billion dollars? Impressive stuff on their end from a business perspective.

Posted by: Rufus Masters [TypeKey Profile Page] at January 24, 2006 03:03 PM

"Disney is paying almost 7 billion for Pixar yet you think Pixar can't get a distribution deal anywhere else? That seems to me like they can. Pretty easily"

If thye could have, they would have. But they couldn't. Pixar assumed they could waltz into any distributor in town and strike a huge deal, but it didn't happen. Everyone knows how bably Fox was burned by Lucas on their Star Wars deal, and no one was willing to bow to Pixar's exorbitant demands.

Remember, a year ago Pixar wouldn't even talk to Disney. The relationship was that strained. But after no-dice with the rest of Hollywood, they've tucked their tail between their legs and come home to be assimilated by their former antagonist. Sure they're going to make a lot of money in the whole deal, but they've lost their autonomy and their legacy.

Posted by: Wrecktum [TypeKey Profile Page] at January 24, 2006 03:07 PM

Oh, one more thing. $7.4 seems like a lot, but that's the nature of acquisitions.

Back in 2001 Disney bought the struggling Fox Family channel for $3 billion. Cash, not stock. Part of that deal was assuming Fox Family's debt. $2.3 *billion* in debt.

Just a little perspective. Is Pixar worth 30% more that the Fox Family Channel? Of course it is.

Posted by: Wrecktum [TypeKey Profile Page] at January 24, 2006 03:16 PM

Now they're getting 7 and a half billion. You don't think Jobs could have walked into Sony and offered the company for 5 billion? You don't think any major company would want to be in business with Pixar?

And to think the relationship was strained. A lot of companies would take strained to the tune of 7 and a half billion dollars. That eases a lot of bad relations.

Posted by: Mark Ziegler [TypeKey Profile Page] at January 24, 2006 03:54 PM

I guess the question I have is, why sell the company when they could have remained independent and just stuck with a distribution deal? It's better for Disney to integrate Pixar into itself, but not better for Pixar.

Posted by: jeffmcm [TypeKey Profile Page] at January 24, 2006 03:57 PM

When you have that much money thrown at you and the security of the biggest company in the world it makes it a tough decision. And Jobs probably has other reasons for getting into bed with Disney. This deal is probably way more complex and intricate than it appears on the surface.

Posted by: joefitz84 [TypeKey Profile Page] at January 24, 2006 04:07 PM

It's more like Pixar will be taking over Disney. John Lasseter will head both Disney and Pixar animation studios creatively. Pixar's president Ed Catmull will now be president of Disney and Pixar's studios.

I think it's too easy to say, Pixar is the bomb, and they can get anything they want. It's just not true. Why? Because it's a business decision and many of these companies have contracts already with other animation companies and would never agree to Pixar's demanding terms anyways. Sure Pixar has made huge hits, but I don't think they would be willing to watch Disney do Toy Story 3.

Posted by: palmtree [TypeKey Profile Page] at January 24, 2006 04:35 PM

Steve Jobs is going to be the single largest shareholder in Disney now. It may change the whole company.

Posted by: Fades To Black [TypeKey Profile Page] at January 24, 2006 08:53 PM

Of course, what would make the most sense would be for Pixar to keep doing what it does best and letting Disney do what it does best: traditional cel animation. It would certainly eliminate any lack of "distinction" between the two firms. But of course, that would make too much sense.

Posted by: Cadavra [TypeKey Profile Page] at January 27, 2006 10:33 PM

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