Pixar For Sale? 251
blamanj writes "The on-again off-again relationship between Pixar and Disney is currently on-again, and in a big way according to this story. Pixar originally signed a distribution deal which gave Disney a percentage of the profits and a distribution fee of 10%-15% of revenues. With Pixar revenues well over two billion dollars on their films, Jobs was looking for a better deal and dropped negotiations with the mouse. But now, according to CNN, he might be willing to sell the company outright. I can't believe that Pixar employees would be happy."
Current deal (Score:3, Informative)
1: All proceeds are returned to Disney until distribution costs are covered. That works out to 10-15% of all proceeds.
2: The remaining proceeds are split 50-50 between Disney and Pixar. Ultimately, that works out, in conjunction with the distribution costs, to a 60-40 or 65-35 split with Disney raking in the higher end of the money for each film Pixar created in its entirety.
3: Disney owns the rights to ALL characters appearing in Pixar movies. Pixar owns the right of refusal on sequels. ie: if Pixar opts against making a sequel to a given movie, Disney can and probably will make it with no input from Pixar. Witness Toy Story 3.
It works (Score:5, Informative)
Jobs ready to sell Pixar: Report
Newspaper says animated studio head open to the right deal; receptive to offer from partner Disney.
October 31, 2005: 9:08 AM EST
The success of the Walt Disney Co. film "Chicken Little" could determine whether Disney or partner Pixar has the greater leverage in upcoming talks.
Pixar has had nothing but hits since it started making films in 1995.
NEW YORK (CNN/Money) - Steve Jobs, the chairman and CEO of Pixar Animation Studios, would be open to a sale of the company at the right price, according to a published report.
The New York Times reports Jobs, who owns about 50 percent of Pixar (Research), would want a strong premium to its current $5.9 billion market capitalization to consider a sale, but he would be open to an offer from its long-time partner, Walt Disney Co. (Research) The paper attributed Jobs' willingness to consider a sale to "two people with knowledge of the talks" now taking place between Disney and Pixar about possibly extending their partnership.
But the paper reports that in talks about a new version of their partnership, Disney CEO Robert Iger has yet to make an offer to acquire Pixar. The paper reports that Disney is hoping that its new animated feature, "Chicken Little," due in theaters this weekend, will give it greater leverage in talks with Pixar.
"Chicken Little" is the first offering from Disney's animation studio since it was revamped to produce computer-generated features that have a three-dimension look, rather than the traditional hand-drawn two-dimensional cartoons.
Pixar has produced only CG features and nothing but blockbusters since it started producing movies in 1995, while many of the Disney-generated animated movies during the period were considered box office flops.
The Times reports that if "Chicken Little" is a hit, it would show Wall Street and Jobs that Disney need not depend on Pixar for creation of new animated movie characters that could be adapted for theme park rides, consumer products and television.
The movie has gotten generally favorable early word, but if it is not well received by critics or moviegoers, the paper reports that Jobs will gain leverage in his talks with Disney because the media conglomerate would be seen as relying on Pixar to add new stories to its creative arsenal.
If the movie performs poorly, Bernstein & Co. media analyst Michael Nathanson told the paper, "investors might want to see a Pixar deal right behind it." Still, he added, "it's all about numbers, and both sides - Disney and Pixar - are looking for leverage."
Pixar has strong cash reserves and no longer needs Disney's to help finance films, so it is looking for a distribution agreement for a far larger percent of the box office than the 50 percent it receives under the current deal with Disney.
But while there are likely to be other studios willing to distribute Pixar films, analysts see Disney as best positioned to promote future Pixar films and its characters due to theme parks and strong merchandise sales channels.
Jobs would evaluate any Pixar partnership based on where he could get the best deal for the studio, the paper reports, not on his developing friendship with Iger. Jobs often sparred with Iger's predecessor, Michael Eisner. The Disney Channel and ABC, other units of Disney, recently signed a deal to distribute shows on the new video version of the Apple Computer (Research) iPod. Jobs is also Chairman and CEO of Apple.
The Times reports that detailed negotiations between Disney and Pixar are likely to begin in mid-November and could be wrapped up by late December or early January, said one of the paper's sources. The studios have several issues to grapple with, according to the paper, including who would have creative oversight over new Pixar characters at Disney theme parks and how revenue from rides and other attractions would be split.
In summary: This is a news article about another news article
Re:Guess who will buy Pixar? (Score:1, Informative)
Re:Why wouldn't they be happy? (Score:5, Informative)
You're kidding, right?
It's probably not so bright a future for those employees who have no talent or vision
Those that can do their job competently, and have done it well with no problem for 10 years? Yeah, damn those people. Maybe not everyone wants to have the hassle of running a company of their own (after all, it IS a lot of work). Those people get screwed over. The only people that are safe are the truly brilliant, if the company doesn't just get you to retrain it's own employeed before sacking the lot of you completely.
Oh, it also sucks if you have a good contract, and the aquiring company doesn't have as good a contract for its employees.
Re:Makes a bit of sense (Score:4, Informative)
The current market cap is $5.9Billion, Jobs owns 50% : $3Billion on your bankaccount can make the difference.
Maybe he can fetch double of that, plus a bonus from the other share holders for doing such a great job. Probably some of pixar personel will be happy too because of stockoption plans, making them rich overnight in case of a sale.
#Billion.... on my bankaccount $3 would make the difference (sad LOL).
Re:Love em and leave em? (Score:2, Informative)
Re:Oh please... (Score:4, Informative)
Bad example. "The Emperor's New Groove" is actually one of the very best Disney films of recent years. It is a lot of fun, doesn't take itself seriously, for once has an obnoxious hero who does not really become a sweet guy at the end, and has a very original style. But it sucked at the box office and DVD sales, so I am wondering that maybe those suits really know what they are doing when they make the team focus on crappy sequels for blockbusters. They are not in it for the art, you know.
Re:Some other tidbits from my poor memory... (Score:3, Informative)
The genuis son character looks alot like the main char in chicken little.
Mycroft
Re:A Neat Pixar/Disney Story (Score:3, Informative)
Still, I agree that Disney purchasing Pixar would be a complete disaster, in terms of blending cultures.
Re:What about Pixar's Software Arm? (Score:2, Informative)
By standard I think you're referring to the Renderman Shading Language, a component of the larger renderer, not the renderer itself.
Re:Give Jobs Credit (Score:3, Informative)
That's nothing to do with Jobs though. Pixar has always been John Lassiter's baby, he is the creative genius behind it, Jobs is just the money/business man in the operation. Lassiter made and now makes sure that the cartoons produced are good stories first and that the technology is not more important than the story. It's amazing that these days Jobs is seen as the main man behind the company when it was always Lassiter's creation. This leads to my one worry about a sell off. If sold, will Lassiter lose creative control of the company. Then it would suck.
And in fact, although a number of more recent disney movies might have sucked, Lassiter drew his imfluence from earlier drawn cartoons, which often were incredibly clever, funny and well written.
Re:It's Just Business (Score:5, Informative)
In an era when most movies have horrible scripts, and special effects laden comic book movies especially so, a movie studio with good story tellers is priceless. Most CG laden movies fail because the effects try to carry movies with no script.
If someone buys Pixar and Lasseter and all his many proteges leave you end up with an empty shell worth nothing. Disney's problem stems from a time when their talent, Katzenberg in particular, left for places like Dreamworks, and their story telling crater. This is why all their movies have sucked since, they are formulaic stories with cardboard characters. Eisner treated his animation studio as a business and its precisely because he didn't look out for the happiness of its key people, management and employees. Disney has a reputation for having a sweat shot work environment for its animators and that is a really bad environment to cultivate creative talent.
Re:Give Jobs Credit (Score:3, Informative)
IIRC, the specific animation branch that made it was closed by Eisner.
Steve owns 50% of Pixar (Score:3, Informative)
Steve Jobs personally owns more than 50% of Pixar (See the Annual Report [pixar.com]) I'm not exactly sure why Jobs is not listed among Pixar's insider roster [yahoo.com]. I'm guessing it has something to do with the fact that Steve's shares have never actually been traded. Or maybe he's got a very good accountant and a healthy fear of the IRS. Who knows.
Anyway, as far as motivation goes, I'd wager "Billions and billions of dollars" would explain it.