Disney in talks to buy Pixar (merged)

[Doctor Gonzo]

So do you think this will be good or bad for either company?

from USA Today:

Report says Disney, Pixar engaging in buyout talks

By David Lieberman and Laura Petrecca, USA TODAY
Walt Disney (DIS) shares rose 4% and Pixar (PIXR) shares closed up nearly 3% after a published report that the companies are discussing a possible Disney purchase of the computer-animation studio.
That is now on the table as they discuss a future after their often rocky, but always profitable, partnership expires in June, The Wall Street Journal reported Thursday. Both companies declined to comment.

Since 1997, they made computer animation one of cinema's most lucrative genres as Disney distributed Pixar-produced blockbusters including Toy Story, Finding Nemo and The Incredibles. In the same period Disney — known for drawn animation classics including Snow White and The Lion King - produced disappointments including Atlantis and Treasure Planet. The company's first solo, fully computer-animated film, Chicken Little, was a modest hit in late 2005.

"Animation is central to everything they do" at Disney's movie, TV and theme park empire, Sanford C. Bernstein's Michael Nathanson says. He says they must have decided "that on their own they can't create enough must-have content and must believe that Pixar has the secret sauce."

It would be a "nice payday for short-term investors" in Pixar, says Harris Nesbitt analyst Jeffrey Logsdon. And Disney gets "proven animation capability, production expertise, management and leadership, all things that are very hard to buy," he says.

But analysts warn Disney might overpay if it has to add a premium to Pixar's market value, already up 40% since September. "The stock has run up in anticipation" of a deal, says Michael Cuggino, president of Permanent Portfolio, which owns 95,000 Disney shares.

Pixar closed Thursday at $58.87, up $1.61, which means the market thinks it's worth at least $7 billion. The company generated an estimated $143 million in net income in 2005 on revenue of $276 million — about 94% from films in the Disney partnership.

The numbers might look worse if Pixar films lose some of their cachet — if they're simply triples or doubles instead of home runs.

Richard Greenfield of Pali Research worries that Pixar may be "selling right at the top knowing that its upcoming original films are not as good."

He adds: "Pixar does not need to sell; it could easily have struck a distribution deal with Disney or another studio. Why trade a clean and simple studio with a perfect track record for 13% to 14% of Disney, which owns businesses that have uncertain futures like broadcast TV and radio stations, and slower growth businesses like theme parks?"

Disney and Pixar currently split production costs and profits, plus Disney gets a distribution fee of as much as 15%. It also gets rights to the characters for sequels — a point that has irked Pixar CEO Steve Jobs.

[Dazed]

Disney need this as their non Pixar 3D films havent exactly set the world on fire.

I just cant believe Jobs would sell to Disney after all the bad blood.

[Terrell]

Disney need this as their non Pixar 3D films havent exactly set the world on fire.

Disney survived long before Pixar came along. They'll survive long after Pixar is gone. About the time Disney buys them, Pixar's film will probably take a deep slide. That's usually how things work. Just remember this. Disney went on 2-3 runs like Pixar is on now. Everybody said "Disney can't lose!" But it always ended. The same thing will happen to Pixar. Their next film, Cars, doesn't look so hot. Sooner or later, Pixar will hit a bad streak.

It would be nice if they could work their differences out and keep their autonomy. But I'm not one to slam Disney and praise Pixar, simply because it's popular nowadays to do so. Nothing would suit me more than to see Disney Animation get back to form and spank Pixar at their own game. We'll see if Iger can do that.

The thing that will get Disney back on track is when they stop thinking of "brand" and start thinking about "quality product". Stop micromanaging everything and let the artists make the decisions, not the pencil pushers.

[Michael Corvin]

Disney need this as their non Pixar 3D films havent exactly set the world on fire.

I just cant believe Jobs would sell to Disney after all the bad blood.

The bad blood was between Eisner & Jobs. Jobs has been in talks and negotiating since Igor was announced before Eisner was gone.

It would be great to see Pixar remain autonomous but working with Disney. Once the corporate money of Disney seeps in so do the pencil pushers that think they know what's best for the company. See Hercules, Hunchback, Treasure Island, Brother Bear, etc.

[FinkPish]

It would be great to see Pixar remain autonomous but working with Disney. Once the corporate money of Disney seeps in so do the pencil pushers that think they know what's best for the company. See Hercules, Hunchback, Treasure Island, Brother Bear, etc.
Exactly my feelings. Pixar is great at developing creative stories that don't feel like they were written by committee, even though a lot of people are involved in the process. If Disney executives were to get involved in the actual storytelling process, I can't see much good coming out of it.

[Jackskeleton]

Disney need this as their non Pixar 3D films havent exactly set the world on fire.

I just cant believe Jobs would sell to Disney after all the bad blood.


Chicken little did 248 million world wide.. is that not steller work? Now that Eisner is gone, I see no reason why this is a bad thing. Pixar is in business to make family friendly films and that is what Disney wants as well.

[Nesbit]

Is there any bad blood between John Lasseter and Disney?

[tanman]

Nothing would suit me more than to see Disney Animation get back to form and spank Pixar at their own game. We'll see if Iger can do that.

The thing that will get Disney back on track is when they stop thinking of "brand" and start thinking about "quality product". Stop micromanaging everything and let the artists make the decisions, not the pencil pushers.


What would that accomplish exactly? I know why you are irked by people praising Pixar and bashing Disney but if you look at their track record over the last ten years. What does that tell you. Wanting Disney to spank Pixar at their own game is pointless. I still think there is plenty of room for more animation. Over the past few years there have been more and more animated films. I think that Disney and Pixar and peacefully coexist and be successful.
Why oh why would this be good news?! At best Pixar gets to put the the Disney name in front of it's own once more and gets a little financial help and exposure. At worse Disney bureacracy comes in and starts micromanaging Pixar. If you look at their special features the entire Pixar staff seem to work really well together. Now you throw in different people into the mix who they have to answer to.

Not good news at all if it is true.

Personally I can't wait until Disney gets back on track again but I sure don't want them to drag along Pixar for the ride. I don't see Disney having a neo neo classic period in the near future as their backs are not against the wall as it was before they had a shake down and resulting prolific phase.

[Libby]

maybe with the merger we can finally see animated movies back at top form. Hard to say if would be sucessful though....

[Jackskeleton]

At best Pixar gets to put the the Disney name in front of it's own once more and gets a little financial help and exposure

Uh.. just a little? I'm sorry, but you have a McDonalds agreement (sure, it's going to end soon), A theme park, a parent company owned network television station, cable channels, name appeal that you can't buy with millions of bucks. Disney is much more than "a little" help to get something exposed to others. Pixar would never have to worry about distribution and that is a stress releiver that you can't believe.

[Breakfast with Girls]

I would hope this wouldn't happen, but after <i>Cars</i> is released I think Disney will be in a better position to try, since that just looks all kinds of crappy.

[Terrell]

I still think there is plenty of room for more animation.

Well, you completely misread my intention. I wasn't saying I hoped Disney would put Pixar out of business, but rather create even better animation that Pixar. I myself don't want Disney Animation to basically become Pixar animation, because it's not the same thing. I want Disney Animation to have a renaissance and regain the form. Keep Pixar and Disney Animation seperate, even if Disney buys Pixar. Let them each do their thing. Perhaps put Pixar under Brad Bird and Disney Animation under John Lassiter, since that's his roots.

[majorjoe23]

Chicken little did 248 million world wide.. is that not steller work? Now that Eisner is gone, I see no reason why this is a bad thing. Pixar is in business to make family friendly films and that is what Disney wants as well.

Considering most Pixar films do that domestically, it's not that stellar.

[Suprmallet]

I don't see any benefit to Pixar here, other than the fact that most people have associated Pixar with Disney. But the Pixar name itself is well-known, and all the ads have to do is say "From the creators of Finding Nemo!" to draw in the crowds. Considering their track records, any studio would be willing to distribute them, especially Fox, who has been trying for years to break Disney's animation monopoly.

Perhaps Jobs is more focused on Apple and just wants to unload Pixar for a big paycheck.

[RichC2]

I don't see any benefit to Pixar here, other than the fact that most people have associated Pixar with Disney. But the Pixar name itself is well-known, and all the ads have to do is say "From the creators of Finding Nemo!" to draw in the crowds. Considering their track records, any studio would be willing to distribute them, especially Fox, who has been trying for years to break Disney's animation monopoly.

Perhaps Jobs is more focused on Apple and just wants to unload Pixar for a big paycheck.


Could you blame him?

[Terrell]

Well, perhaps it's telling that Pixar didn't sign any deals after falling out with Disney. Why didn't they try to go it alone if they were that confident? Maybe they thought they needed Disney for it's name and marketing muscle. We can argue all day long, but I do think Pixar gains from Disney's name, just as Disney gains from Pixar.

Still, I thought Pixar would go it alone and find another distributor instead of Disney. I'm even surprised that talks renewed with Disney, with the acrimony that seemed to develop between the parties.

[mrpayroll]

http://news.yahoo.com/s/nm/20060124/bs_nm/media_pixar_disney_dc

Disney board okays takeover offer to Pixar: source 55 minutes ago



LOS ANGELES (Reuters) - The board of Walt Disney Co. (NYSE:DIS - news) has authorized Chief Executive Robert Iger to make an offer to buy Pixar Animation Studios Inc. (Nasdaq:PIXR - news) and is expected to do so by Tuesday, a source familiar with the matter said late on Monday.

Pixar's board is expected to consider the offer on Tuesday as well, said the source, who did not disclose financial terms.

Pixar shares closed at $58.27 on Monday on Nasdaq, putting its market value at just under $7 billion. The shares have risen about 12 percent in the last month, partly on speculation that Disney would buy the computer animation company behind such hits as "Toy Story," "Finding Nemo" and "The Incredibles."

The Wall Street Journal has reported that Disney is considering an all-stock offer, which would make Pixar Chief Executive Steve Jobs its largest individual shareholder.

The Journal reported late on Monday that the offer under consideration would give Jobs, who has a controlling stake in Pixar, a set on the Disney board.

Disney shares closed 0.78 percent lower at $25.52.


As an employee, I was hoping that they would make this decision. :thumbsup:

Now let's see what the future holds for this merger and if it does go thru, how it will benefit both companies.

Chris

[BigDan]

It's amazing to me that a company with a only a small number of produced films in its library and with a fairly long time between films could be worth $7 billion when MGM/UA (including the Bond franchise, MGM's post-1986 catalog, UA's post 1952 catalog, Orion's film and TV library, the pre-1996 Samuel Goldwyn library, etc) was sold last year for $5 billion.

Even if each new Pixar film threw off $500 million in profit all in, it'd take 30 years to earn back what they paid for it at Pixar's current output.

But I guess that's why I'm not one of them high-falutin' finance guys.

[Jackskeleton]

I don't see any benefit to Pixar here.......

Perhaps Jobs is more focused on Apple and just wants to unload Pixar for a big paycheck.


You're not looking hard enough.

"The Wall Street Journal has reported that Disney is considering an all-stock offer, which would make Pixar Chief Executive Steve Jobs its largest individual shareholder.

The Journal reported late on Monday that the offer under consideration would give Jobs, who has a controlling stake in Pixar, a set on the Disney board."

You think Disney will be forcing creative control when you have their guy as the single largest shareholder? You see the benefit now?

[Suprmallet]

You're right. I wasn't looking hard enough. Go Jobs!

[mrpayroll]

It's amazing to me that a company with a only a small number of produced films in its library and with a fairly long time between films could be worth $7 billion when MGM/UA (including the Bond franchise, MGM's post-1986 catalog, UA's post 1952 catalog, Orion's film and TV library, the pre-1996 Samuel Goldwyn library, etc) was sold last year for $5 billion.

Even if each new Pixar film threw off $500 million in profit all in, it'd take 30 years to earn back what they paid for it at Pixar's current output.

But I guess that's why I'm not one of them high-falutin' finance guys.

It's not just profits from the film that Disney is looking at. Think merchandise, new themepark rides, etc. If it were just about movie profits, then I don't think Disney would be doing this.

Chris

[BigDan]

It's not just profits from the film that Disney is looking at. Think merchandise, new themepark rides, etc. If it were just about movie profits, then I don't think Disney would be doing this.

Chris

Well, I was figuring about $250 million in profit from the movie itself and another $250 million in ancillaries per movie on average, which would equal roughly 10% of Disney's FY2005 profits. I'm personally skeptical that a movie every other year, even one with significant opportunities for a wide variety of ancilliary products, etc. could generate an additional 10% in profits for the company.

But even if you double the profit, that's still 15 years to recoup and assumes there won't be a dog in the bunch, something that even Andy Fastow would feel uncomfortable assuming.

[Michael Corvin]

Doesn't Disney make about $500 mil worldwide on each release? That would be before DVD & merchandising. Being able to release & pull home video versions is a boon for Disney.

Smaller but also important factors may include: how do you value not having Pixar as your competition? Critical acclaim & awards?

[Brain Stew]

It's not just profits from the film that Disney is looking at. Think merchandise, new themepark rides, etc. If it were just about movie profits, then I don't think Disney would be doing this.

Chris
I think you need to remember that Pixar is pretty much THE computer animation production house. In much the same way that ILM is considered THE special effects house. When you buy Pixar, you buy the best animators.

[BigDan]

Doesn't Disney make about $500 mil worldwide on each release?

In grosses, yes, the Pixar movies do in excess of $500 million worldwide, but that's not pure profit. Using "The Incredibles" as an example. It grossed roughly $630 million worldwide, subtract the reported budget and P&A costs of $150 million, and it's down to $480 million, of which the theaters end up with roughly 45% (though different for different movies, this is the general "rule of thumb" number), leaving an estimated $264 million for Disney/Pixar.

Looking at Pixar's Income Statement, they had total Net Income of $141.7 million in FY2004. Disney had $329 million net income from consumer products and $1.12 billion in studio entertainment for FY2005 (which began Oct. 1, 2004 and would include the entire "The Incredibles" release).

[Janus09]

Hmm disney and pixar both make quality animation so I have no reservations about this.

[BigDaddy]

The Walt Disney Co. says it is buying longtime partner Pixar Animation Studios Inc. for $7.4 billion.


Cnn breaking news.

[Thor Simpson]

I was so looking forward to when Pixar ended their relationship and went out on their own... now they are simply being BOUGHT OUT. Ugh.

The Adobe / Macromedia buyout impacted me personally and I hated that... now this one is going to drive me crazy as well.

Smart move for Adobe, brilliant move for Disney. The question is... is this going to be any good for the consumer? :(

FYI, the story is breaking news on CNN right now, no story yet.

[Aphex Twin]

It will cost them ~$7,400,000,000

[Mopower]

One day everything will be owned by one company and YOU will be working for them.

[Thor Simpson]

The strategy is to always make the initial impact of these things seem negligable. But trust me... this isn't good for most people.

Disney wouldn't spend that 7400000000 if they didn't think they'd get 7400000002 back somewhere.

Having said that... Disney needed this. And I've always been a fan of Disney (in most ways, not all). It's just that I'm also a big fan of Pixar as well and I like seeing more rather than less.

[das Monkey]

More here (http://forum.dvdtalk.com/showthread.php?t=453013).

das

[dork]

Oh no, Disney's buying Pixar!!! I'm so scared!!!!!
http://i.a.cnn.net/cnn/2005/SHOWBIZ/Movies/11/04/ew.movie.little/story.chicken.jpg

[Nesbit]

One day everything will be owned by one company and YOU will be working for them.

I believe Superboy has a remedy to that...

[jaeufraser]

Dude, that is so sweet. I have to do work for Pixar, but this buyout means I won't have to anymore in the future. God bless this purchase!

[ShagMan]

I believe Superboy has a remedy to that...

rotfl

[Vibiana]

I wonder what ol' Walt would have said if SuperBoy invited him to -- oops, let's not go there. LMAO

[Minor Threat]

:lol:

[neiname]

This is good as M&A activity fuels the economy (actually just wall street bonuses). The best will be when Wall Street gets even more fees as whatever form Pixar becomes spins off from Disney in a few years.

[Giles]

I guess Disney has agreed to stop writing lame scripts in-house and re-employ a studio that can.

[BigDaddy]

NEW YORK (CNNMoney.com) - Walt Disney has announced that it is buying Pixar, the animated studio led by Apple head Steve Jobs, in a deal worth $7.4 billion.

Speculation about a deal being imminent raged on Wall Street for the past few weeks. Disney has released all of Pixar's films so far, but the companies' current distribution deal was set to expire following the release of this summer's "Cars."



Steve Jobs, the CEO of Apple and Pixar, will become a board member of Disney following the closing of Disney's purchase of Pixar.

"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Jobs. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."

As part of the deal, Jobs will become a board member of Disney, the companies said. And John Lasseter, the widely respected creative director at Pixar who had previously worked for Disney, will rejoin the House of Mouse as chief creative officer for the company's combined animated studios and will also help oversee the design for new attractions at Disney theme parks.

"The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses," said Disney CEO Robert Iger in a written statement.

According to the terms of the deal, Disney (Research) will issue 2.3 shares for each Pixar share. Based on Tuesday's closing prices, that values Pixar at $59.78 a share, about a 4 percent premium to Pixar's current stock price. Shares of Pixar (Research) fell slightly in regular trading on the Nasdaq Tuesday but the stock has surged more than 10 percent so far this year on takeover speculation. Disney's stock gained 1.8 percent in regular trading on the New York Stock Exchange but slipped about 0.5 percent after-hours.

Prior to the deal's announcement,.some Wall Street observers had speculated that Disney may be paying too much for Pixar. But one hedge fund manager said that the risk of Disney losing Pixar was too great.

"The question isn't did Disney pay too much but how expensive would it have been for Disney if Pixar fell into someone else's hands," said Barry Ritholtz, chief investment officer with Ritholtz Capital Partners, a hedge fund that focuses on media and technology stocks.

Pixar has yet to have a flop with its six animated movies, which include "Toy Story," "Finding Nemo" and "The Incredibles." Disney, however, has struggled in the computer-generated animated movie arena. Even though its most recent CG-animated film, "Chicken Little" performed better than many had expected at the box office, it was not as big a hit as any of the Pixar films.

[Michael Corvin]

As part of the deal, Jobs will become a board member of Disney, the companies said. And John Lasseter, the widely respected creative director at Pixar who had previously worked for Disney, will rejoin the House of Mouse as chief creative officer for the company's combined animated studios and will also help oversee the design for new attractions at Disney theme parks.

That is a blessing for fans. The head of Pixar now overseeing ALL animated features. Igor & Jobs, deserve a round of applause for pulling this together.

I wonder what Michael Eisner is doing today.

[Suprmallet]

Lasseter in charge of all Disney animation is a godsend for a company whose only good cell-animated film of the past seven years was Lilo and Stitch.

[naughty jonny]

Great. Guess Pixar films will soon suck. :sad:

[mrpayroll]

http://news.yahoo.com/s/nm/20060124/bs_nm/media_pixar_disney_dc

Disney to buy Pixar for $7.4 billion
45 minutes ago

LOS ANGELES (Reuters) - The Walt Disney Co (NYSE:DIS - news) on Tuesday said it has agreed to acquire Pixar Animation Studios (Nasdaq:PIXR - news) in a $7.4 billion all-stock transaction that brings the leader in computer animation under the banner of the world's most famous name in cartoons.

Under the agreement, expected to close this summer, Pixar Chief Executive Steve Jobs will join Disney's board of directors.

"The price tag is a little more than people were expecting," said McAlpine Associates analyst Dennis McAlpine.

Disney locked up the creative talents of Pixar by installing Pixar's president and co-founder, Ed Catmull, as president of the combined Pixar and Disney animation studios, and Pixar's creative director John Lasseter as chief creative officer of the combined animation studios.

Lasseter will also become the principal creative director of the Walt Disney Imagineering group, which designs theme park attractions.

Both boards of directors have approved the deal, which calls for 2.3 Disney shares to be issued for each Pixar share.

"The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses," Disney Chief Executive Robert Iger said in a statement announcing the deal.


I work for Walt Disney Imagineering and I wonder if he is taking over for Marty Sklar?

Chris

[mrpayroll]

Even though I'm at home on medical disability, we just got this e-mail at work.

Disney to Acquire Pixar

Long-time Creative Partners Form New Worldwide Leader in Quality Family Entertainment

--

Ed Catmull Named President of the Combined Pixar and Disney Animation Studios and John Lasseter Named Chief Creative Officer; Steve Jobs to Join Disney's Board of Directors

--

Disney Increases Stock Repurchase Authorization



Burbank, CA and Emeryville, CA (January 24, 2006) - Furthering its strategy of delivering outstanding creative content, Robert A. Iger, President and Chief Executive Officer of The Walt Disney Company (NYSE: DIS), announced today that Disney has agreed to acquire computer animation leader Pixar (NASDAQ: PIXR) in an all-stock transaction, expected to be completed by this summer. Under terms of the agreement, 2.3 Disney shares will be issued for each Pixar share. Based on Pixar's fully diluted shares outstanding, the transaction value is $7.4 billion ($6.3 billion net of Pixar's cash of just over $1 billion).*

This acquisition combines Pixar's preeminent creative and technological resources with Disney's unparalleled portfolio of world-class family entertainment, characters, theme parks and other franchises, resulting in vast potential for new landmark creative output and technological innovation that can fuel future growth across Disney's businesses. Garnering an impressive 20 Academy Awards, Pixar's creative team and global box office success have made it a leader in quality family entertainment through incomparable storytelling abilities, creative vision and innovative technical artistry.

"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. The talented Pixar team has delivered outstanding animation coupled with compelling stories and enduring characters that have captivated audiences of all ages worldwide and redefined the genre by setting a new standard of excellence," Iger said. "The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses. This investment significantly advances our strategic priorities, which include - first and foremost - delivering high-quality, compelling creative content to consumers, the application of new technology and global expansion to drive long-term shareholder value."

Pixar President Ed Catmull will serve as President of the new Pixar and Disney animation studios, reporting to Iger and Dick Cook, Chairman of The Walt Disney Studios. In addition, Pixar Executive Vice President John Lasseter will be Chief Creative Officer of the animation studios, as well as Principal Creative Advisor at Walt Disney Imagineering, where he will provide his expertise in the design of new attractions for Disney theme parks around the world, reporting directly to Iger. Pixar Chairman and CEO Steve Jobs will be appointed to Disney's Board of Directors as a non-independent member. With the addition of Jobs, 11 of Disney's 14 directors will be independent. Both Disney and Pixar animation units will retain their current operations and locations.

"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Jobs. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."

"Pixar's culture of collaboration and innovation has its roots in Disney Animation. Our story and production processes are derivatives of the Walt Disney 'school' of animated filmmaking," said Dr. Catmull. "Just like the Disney classics, Pixar's films are made for family audiences the world over and, most importantly, for the child in everyone. We can think of nothing better for us than to continue to make great movies with Disney."

The acquisition brings to Disney the talented creative teams behind the tremendously popular original Pixar blockbusters, who will now be involved in the nurturing and future development of these properties, including potential feature animation sequels. Pixar's 20-year unrivaled creative track record includes the hits Toy Story, Toy Story 2, A Bug's Life, Monsters, Inc., Finding Nemo and The Incredibles. Disney will also have increased ability to fully capitalize on Pixar-created characters and franchises on high-growth digital platforms such as video games, broadband and wireless, as well as traditional media outlets, including theme parks, consumer products and live stage plays.

"For many of us at Pixar, it was the magic of Disney that influenced us to pursue our dreams of becoming animators, artists, storytellers and filmmakers," said Lasseter. "For 20 years we have created our films in the manner inspired by Walt Disney and the great Disney animators - great stories and characters in an environment made richer by technical advances. It is exciting to continue in this tradition with Disney, the studio that started it all."

"The wonderfully productive 15-year partnership that exists between Disney and Pixar provides a strong foundation that embodies our collective spirit of creativity and imagination," said Cook. "Under this new, strengthened animation unit, we expect to continue to grow and flourish."

Disney first entered into a feature film agreement with Pixar in 1991, resulting in the release of Toy Story, which was hailed as an instant classic upon its release in November 1995. In 1997, Disney extended its relationship with Pixar by entering into a co-production agreement, under which Pixar agreed to produce on an exclusive basis five original computer-animated feature films for distribution by Disney. Pixar is currently in production on the final film under that agreement, Cars, to be distributed by Disney on June 9.

The Boards of Directors of Disney and Pixar have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antritrust Improvements Act, certain non-United States merger control regulations, and other customary closing conditions. The agreement will require the approval of Pixar's shareholders. Jobs, who owns approximately 50.6% of the outstanding Pixar shares, has agreed to vote a number of shares equal to 40% of the outstanding shares in favor of the transaction.

The Disney Board was advised by Goldman, Sachs & Co. and Bear, Stearns & Co. The Pixar Board was advised by Credit Suisse.

Separately, the Disney Board approved the repurchase of approximately 225 million additional shares, bringing the Company's total available authorization to 400 million shares. Since August 2004 through the end of December 2005, Disney has invested nearly $4 billion to purchase nearly 155 million shares. Disney anticipates further significant share repurchases going forward, reflecting Disney's continued commitment to returning value to shareholders over time.

* Based on Disney's closing share price of $25.52 as of 1/23/06.



About The Walt Disney Company:
The Walt Disney Company (NYSE:DIS), together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products. Disney is a Dow 30 company, had annual revenues of nearly $32 billion in its most recent fiscal year, and a market capitalization of approximately $50 billion as of January 23, 2006.


Chris

[Pistol Pete]

Great. Guess Pixar films will soon suck. :sad:
Yeah, Pixar films are great not because of but in spite of their Disney involvement. I guarantee you that Disney will royally screw up Pixar. The executives are already creaming at the thought of meddling with the company. And that's ok, because another creative startup will rise up to challenge Disney just as Pixar did. In the interim I hope that Pixar employees get a piece of the 7.4B before they jump ship to build the next mouse slayer.

[BadlyDrawnBoy]

I was at Pixar on Saturday for a screening of The New World. our friend who works there was talking about this on the way over.

[Rogue588]

So....is this a good thing? Or a bad thing? On the other hand, I really hope Lasseter sets up another "hand-drawn" animation studio.

[keyed]

So, how long do you think it'll be before we hear news about Pixar starting work on Toy Story 3?

[BadlyDrawnBoy]

They have apparently already been working on it, or at least Disney have, I think it was going to get released with or without this deal.

[Hokeyboy]

Lasseter in charge of ALL Disney animation? Chief Creative Officer?

There IS a God!! :banana:

This is good news for EVERYONE!

[majorjoe23]

John Lassetter is becoming Chief Creative Officer for Disney, in charge of all animation. This means Disney films should get better, not that Pixar films will get worse.

[nevermind]

I believe Superboy has a remedy to that...

The CGI short & curlies look so REAL

[DonnachaOne]

I hope for the best for everyone involved.

Will Pixar become their primary animation house?

[kantonburg]

I wonder what ol' Walt would have said if SuperBoy invited him to -- oops, let's not go there. LMAO


Do you end every post with LMAO, LOL, ROTLMAO?

[Corleone]

Disney wouldn't spend that 7400000000 if they didn't think they'd get 7400000002 back somewhere.


I am sure that is exactly what Time Warner was thinking.

So when does Jobs become the CEO of Disney?

[ChiTownAbs, Inc]

Did you see Chicken Little? What a terrible movie. They *need* Pixar.

[al_bundy]

steve jobs is the real winner here

he gets a ton of money and a disney board seat that he will use to push disney into issuing more content on the Itunes store.

Pixar is basically worthless. It's a bunch of artists that can leave at a whim to work for Dreamworks, someone else or to start their own company if disney pisses them off

[Goldberg74]

:up: To John Lassater and his promotion.

I think that deal is a good one.

However, the Macrodobe deal sucked hard.

[mikehunt]

and all this time I thought Pixar was owned by Disney

[Terrell]

Right about now, George Lucas is probably thinking that selling Pixar to Jobs was the worst deal he ever made.

Sounds good to me. Though the problem at Disney was not the animators and artists. It was the micromanaging, basing decisions on markets and brands rather than quality. I still remember reading about one of their best projects in years, getting axed because of the ding-a-ling that oversaw WDFA. I want to say it was American Dog, but can't really remember.

[Kittydreamer]

I was so looking forward to when Pixar ended their relationship and went out on their own... now they are simply being BOUGHT OUT. Ugh.

The Adobe / Macromedia buyout impacted me personally and I hated that... now this one is going to drive me crazy as well.

Smart move for Adobe, brilliant move for Disney. The question is... is this going to be any good for the consumer? :(

FYI, the story is breaking news on CNN right now, no story yet.

:( No way! This sucks.

[emanon]

This is nothing....I heard somewhere that Disney has offered to buy out kvrdave for $7.4B!!!!!

[Sdallnct]

Yeah, Pixar films are great not because of but in spite of their Disney involvement. I guarantee you that Disney will royally screw up Pixar. The executives are already creaming at the thought of meddling with the company. And that's ok, because another creative startup will rise up to challenge Disney just as Pixar did. In the interim I hope that Pixar employees get a piece of the 7.4B before they jump ship to build the next mouse slayer.

So let me get this straight...

Some dude has a vision about making cartoons, creates a stupid looking rat, about doesn't make it, in debt up to his ears (pun intended) but manages to release a feature length cartoon based on an old kids book which vaults the company into a mega billion $$$ media/entertainmen empire. This empire buys another company that (god forbid) uses a computer to make movies and wasn't even around 15 years ago for 7.4 Billion (with a "B"). And your saying there will be another "start up" company to do the same thing right around the corner?

God I love America!!!

[Terrell]

By the way, here's an interesting article from JHM that discusses why Jobs being a board member or possible CEO of Disney is not a good thing. It even discusses how Pixar became successful, in spite of Jobs.

Of course the article admits Jobs is a brilliant businessman, but it does make some compelling arguments as to why Jobs being in a controlling position at WD is not necessarily a good idea. Don't shoot the messenger.

http://www.jimhillmedia.com/article.php?id=1812

[AudioWizard]

And to think in DisneyWar Roy Disney told the company to buy it for 15 million and they thought it was a stupid idea.

[Terrell]

I guarantee you that Disney will royally screw up Pixar. The executives are already creaming at the thought of meddling with the company. And that's ok, because another creative startup will rise up to challenge Disney just as Pixar did. In the interim I hope that Pixar employees get a piece of the 7.4B before they jump ship to build the next mouse slayer.

And you know this how exactly! -rolleyes-

[Suprmallet]

It is obvious that Disney wants to integrate Pixar into the company, by giving Jobs a seat on the board and making Lasseter head of animation. This isn't a case of Disney execs dying to meddle with Pixar, it's a case of them realizing that Pixar has consistently made better and higher grossing films than Disney ever since they started working together. It's worth it for them to pay 7.4 billion, because if the Pixar trend continues, they'll make back much more than that just by letting the Pixar people do exactly what they've been doing.

In other words, the sky is NOT falling.

[RayChuang]

I guarantee you that Disney will royally screw up Pixar.

Disney will NOT cause problems at Pixar. Remember, new Disney CEO Robert Iger is far more a hands off CEO than Eisner, and as such will let each division head do what's best for the company. :up:

[SteveGo]

With Jobs on the board at Disney, does this mean we could see Disney themed Apple products, like ipods or macs?

[Inverse]

If Lasseter is still there in three years, I'll be surprised.

Despite all the rhetoric about "preserving what made the company great," usually when an innovative company is bought out by a much bigger entity the founders end up leaving. And I don't understand why Pixar would bother selling out to Disney unless one of the major shareholders wanted to cash out and do something else.

[BigDan]

Were there any other major shareholders in Pixar that could push through such a thing except for Jobs (and his 50.6%)?

[Suprmallet]

With Jobs on the board at Disney, does this mean we could see Disney themed Apple products, like ipods or macs?

We could be seeing Disney-themed ipods, but I doubt Macs. I imagine much more synergy between Disney content and Apple in the future, though, especially any Pixar films.

[Jackskeleton]

Think much more ipod content because of this merger. Disney can't screw up Pixar because Jobs has a lot of power now.

[fumanstan]

I'd rather see Pixar independent, but this doesn't bother me too much. I don't care so much about all the inner workings as long as Pixar keeps on delivering.

What will trouble me is what may happen if years down the line Pixar has a couple dissapointments.

[Puzznic]

So, how long do you think it'll be before we hear news about Pixar starting work on Toy Story 3?


Hopefully Disney will scrap any Pixar sequels they were working on up to this point and let Pixar work on them. It wouldntt make much sense for Disney to release crappy Pixar sequels and damage the name they just paid a premium to aquire.

[Hokeyboy]

I wonder what ol' Walt would have said if SuperBoy invited him to -- oops, let's not go there. LMAO
Amen to that. Next thing we know, Superboy would end up decimating half of the Teen Titans and have to be shoved into the Speed Force by the various Flashes, the entire lot never being heard from again. :mad:

[JoeyOhhhh]

So how long have those Disney shorts been up on iTunes?

[Rogue588]

Amen to that. Next thing we know, Superboy would end up decimating half of the Teen Titans and have to be shoved into the Speed Force by the various Flashes, the entire lot never being heard from again. :mad::lol:

[Michael Corvin]

They have apparently already been working on it, or at least Disney have, I think it was going to get released with or without this deal.

They were starting from scratch, which means recreating all the models for the characters so the animation would have been "off." The story was also penned by Disney w/o Pixar involvement. So chances are it would have royally sucked based on their recent track record. Lasseter said that Pixar had/has an idea for 3 but wouldn't do it until a new contract for Pixar was on the table. With Pixar involved chances are higher of all the actors returning.

John Lassetter is becoming Chief Creative Officer for Disney, in charge of all animation. This means Disney films should get better, not that Pixar films will get worse.

Exactly. Obviously some people didn't read the same articles. With Iger hands off, I see all Disney animation only getting better.

Anyone else find it ironic that all these guys left Disney to form Pixar and are now back working for the company they left? :lol: I hope everyone at Pixar gets some kind of bonus, not just the big dogs.

I was also thinking of the Apple/Disney angle. iTunes & ABC/Buena Vista/Disney content is a given, but it will be interesting to see what develops in the next few months.

[cisman]

This is interesting to hear. Last I heard Disney and Pixar left on bads terms when the stopped working together on films.

[cisman]

Just found this in today's news....WOW that was unexpected...Maybe jobs can save disney.

Taken from Techweb.com

Analysis: Pixar's Steve Jobs To Join Disney Board

By W. David Gardner, TechWeb News

With Pixar Animation Studios now officially a part of the Walt Disney Co., which paid $7.6 billion for the animated film creator Tuesday, a major question is just where does Steve Jobs go?

For starters, Jobs, who now owns about 6.5 percent of Disney's stock, will become a member of the Disney board, and as one Pixar executive put it, Jobs will be "a ball of fire" at Disney. Jobs will remain in his post as chief executive of Apple Computer where he has a very full plate.

Jobs is often described as brilliant and charismatic and Disney needs some brilliance and charisma in the wake of management upheaval and stockholder battles as well as a loss of traction in its own animation projects. He has ruled out becoming Disney's chairman, at least for now.

Apple has been on a tear lately, its stock soaring on its successful iPod products. But Apple's stock has dropped in recent days, and Apple still has a challenge to deliver on its new computers based on Intel processors.

For the time being the Pixar acquisition is all sweetness and light for Jobs and for new Disney CEO Robert Iger. Even Roy Disney, the firm's former vice chairman who led a bitter stockholder fight against the previous Disney management, praised the deal. According to the Wall Street Journal, Roy Disney said: "This clearly solidified the Walt Disney Company's position as the dominant leader in motion picture animation and we applaud and support Bob Iger's vision."

[Vibiana]

Do you end every post with LMAO, LOL, ROTLMAO?

Well, aren't you the quick study. :lol:

[Michael Corvin]

By the way, here's an interesting article from JHM that discusses why Jobs being a board member or possible CEO of Disney is not a good thing. It even discusses how Pixar became successful, in spite of Jobs.

Of course the article admits Jobs is a brilliant businessman, but it does make some compelling arguments as to why Jobs being in a controlling position at WD is not necessarily a good idea. Don't shoot the messenger.

http://www.jimhillmedia.com/article.php?id=1812

Just read the article. Interesting. For those that haven't read it, to sum it up, Jobs wanted Pixar so he could sell computers and software to other design shops, not for the animation. Which from a buisiness stand point sounds like a decent idea. Pixar/Jobs was in the red for $60 million from the time he purchased until Toy Story came out in 95, about 10 years. He was looking to unload the company since they weren't turning a profit.

The article basically blasts him for not seeing the genius of the animation and the quality of the animated shorts. Hindsight is 20/20. Equal arguements could be made for Lucas & Katzenberg. Lucas who sold Jobs the company and Katzenberg for passing up buying it for $15 million from Lucas before Jobs stepped in.

So the whole article is rather silly, just boils down to "Jobs should have known what he had."

[Terrell]

Lucas who sold Jobs the company and Katzenberg for passing up buying it for $15 million from Lucas before Jobs stepped in.

Well, Lucas sold it for one reason and one reason only. Lucas wanted to keep Pixar, but he was going through his divorce about that time and his wife Marcia, got half of his entire wealth. So he was in need of cash.

I think the gist of JHM's article is this. Most have been arguing that the problem with Disney is the suits have been running things and making decisions over the last decade, instead of the creative people. His argument is Jobs is just another suit, and that Pixar was successful in spite of his mismanaging. The funny thing is, Jobs wanted to dump the very thing that made Pixar what it is today, the animation department, because it was so costly. Interesting to say the least.

[kantonburg]

Well, aren't you the quick study. :lol:

I had an unusually slow day at work yesterday and I acutally got to read a bit more than I usually do. After about 10-15 posts it kinda stuck out....n00b. ;)

kidding...welcome to the forum

[BigDan]

I think the gist of JHM's article is this. Most have been arguing that the problem with Disney is the suits have been running things and making decisions over the last decade, instead of the creative people. His argument is Jobs is just another suit, and that Pixar was successful in spite of his mismanaging. The funny thing is, Jobs wanted to dump the very thing that made Pixar what it is today, the animation department, because it was so costly. Interesting to say the least.

It's interesting to a point, but in the end, Jobs not only kept the animation department, but apparently left them with free reign creatively. There were likely plenty of opportunities to kill Pixar by micromanaging or whatnot even in the aftermath of Toy Story's big success, but, Jobs was apparently largely hands-off in terms of the creative.

Jobs may be a suit, but with Pixar, at least, he let the creatives be creative. And that's something that Disney could probably use.

[Terrell]

Jobs may be a suit, but with Pixar, at least, he let the creatives be creative. And that's something that Disney could probably use.

But they need people like Lasseter far more than they need Jobs.

[BigDan]

But they need people like Lasseter far more than they need Jobs.

That's certainly true, but the point was that because Jobs let Lasseter be Lasseter, he's a better kind of suit than what Disney has apparently had of late.

Certainly if your creative people suck, giving them free reign won't make for good, successful movies.

[Grubert]

Toy Story 3 axed (http://www.latinoreview.com/news.php?id=225)

[mrpayroll]

Toy Story 3 axed (http://www.latinoreview.com/news.php?id=225)

The wording leads me to wonder if this is bogus or not. I see that a lot of news organizations are carrying this story, but remember the Disney - Pixar merger will not be completed until the summer. I don't think Lasseter and Catmill are employees of Disney yet and hold any power to make these decisions.

Can somebody who knows about buyouts or mergers of companies confirm or deny that?

Chris

[awmurray]

I just caught up reading this thread. I believe this is the beginning of the end of the greatness of Pixar.

[Chrisedge]

I think this is GREAT news for all involved. Disney has effectively re-started it's animation group with the leader of CGI animation. You can argue all day about Jobs, but I think he will be a awesome addition to Disney and it's board.

Great News.

[Jackskeleton]

I just caught up reading this thread. I believe this is the beginning of the end of the greatness of Pixar.


Is that because di$ney is... EVIL?!?

This actually makes complete sense as a deal and is very much a good thing for both Disney and Pixar. Especially for Pixar since it gets a sugar daddy and becomes a major influence on Disney.

[mrpayroll]

I stand corrected!

I popped into work today and talked with someone who was at this animation meeting and it is indeed true that Lasseter has effectively disbanded the animation group responsible for Toy Story 3.

So I guess things are already starting to move in a positive direction.

Chris

[Terrell]

Is that because di$ney is... EVIL?!?

:lol: You watch. If Cars turns out to be Pixar's first dud and box office disappointment, the Disney haters will surely blame Disney for it.

[Michael Corvin]

:lol: You watch. If Cars turns out to be Pixar's first dud and box office disappointment, the Disney haters will surely blame Disney for it.

No. But I do see their first flop, be it Cars or something else, being shrugged off considering their streak. More of a "it was bound to happen sometime," type reaction.

Didn't take them long to kill Disney's version of TS3. So does that mean we will be hearing about a new TS3 production soon. :lol: The premise from the article didn't sound half bad.

[Terrell]

No. But I do see their first flop, be it Cars or something else, being shrugged off considering their streak. More of a "it was bound to happen sometime," type reaction.

Just remember that Disney went on a few "can't miss" type runs with their films. Sooner or later, Pixar will hit a bad streak.

[Jackskeleton]

I see Pixar's first flop still be shrugged off as well. They have atleast two or three flops before there rep is effected in any way by it all. But it's bound to happen.

[mrpayroll]

http://news.yahoo.com/s/nm/20060127/bs_nm/media_pixar_disney_dc

Disney-Pixar merger pact lays out conditions

By Gina Keating
1 hour, 48 minutes ago


LOS ANGELES (Reuters) - The merger agreement between the Walt Disney Co. (NYSE:DIS - news) and Pixar Animation Studios Inc. (Nasdaq:PIXR - news) rests, in part, on whether Pixar's award-winning creative team agrees to work for the combined company, according to a securities filing made on Thursday.

The agreement also has a provision that would require Pixar to pay $210 million in the event it bails out of the deal, and expands by one member Disney's board of directors to 14, to include Pixar Chief Executive Steve Jobs.

The agreement gives Pixar Vice President John Lasseter, who will become chief creative officer of the Pixar and Disney animation studios, the authority to "green light" films for both studios, although Disney CEO Robert Iger has final approval.

The loss of Lasseter or Pixar President Ed Catmull, who will serve as president of both animation studios, could be a deal-breaking event, the agreement says.

Pixar's "brain trust" of seven directors and creative executives were also listed as company assets, and the agreement requires that a majority of them agree to join the combined company.

Those employees include "Finding Nemo" director Andrew Stanton; "Monsters, Inc." director Pete Docter; "The Incredibles" director Brad Bird; director/writer Bob Peterson; story artist Brenda Chapman; editor Lee Unkrich; and sound designer Gary Rydstrom.

The merger also sets up a "steering committee" whose job is to oversee feature animation at both studios, and to help maintain the Pixar "culture," among other duties.

The committee would consist of Catmull, Lasseter, Jobs, Iger, Walt Disney Studios Chairman Dick Cook, and Disney Chief Financial Officer Tom Staggs, and must meet at Pixar headquarters at least one full day every other month.

The agreement protects Pixar's right to eschew employment contracts, and mandates that the studio continue to be called Pixar.

The branding of films made after the merger is finalized will be changed to "Disney Pixar."

The groundbreaking animation company will, however, stay in Emeryville, California, with a sign at its gate that "shall not be altered" from "Pixar," the agreement said.


Chris

[mrpayroll]

http://news.yahoo.com/s/nm/20060126/media_nm/media_disney_toystory_dc

'Toy Story 3' to be retooled at Pixar: sources

By Gina Keating
Thu Jan 26, 4:43 PM ET



LOS ANGELES (Reuters) - The Walt Disney Co. will scrap production of the latest "Toy Story" sequel and hand the project over to Pixar Animation Studios Inc. as part of its deal to acquire Pixar, sources familiar with the situation said on Thursday.

It was not clear how the change would affect the production schedule at Pixar, which has not announced release dates for films beyond the June opening of "Cars."

Disney said on Tuesday it would acquire Pixar in a $7.4 billion stock deal expected to close by this summer.

Production had already started on "Toy Story 3" at Disney's new animation unit in Glendale, California. The unit, dubbed Circle 7, was set up while the two companies were haggling over the terms of a new distribution agreement for Pixar films.

Circle 7 will not immediately be shut down, but its future is yet to be determined, one of the sources said.

Disney's current agreement with Pixar allows it to make sequels to the animated films the two studios made together.

Sequels can be made in three to four years compared with four or five years of development for an original animated film because technical work on most of the characters has already been done.

Former Disney Chief Executive Michael Eisner ordered "Toy Story 3" into production after the two companies broke off talks over a new distribution deal nearly two years ago.

Current Disney CEO Robert Iger, who took over in October, returned all sequel-making to Pixar as part of the merger agreement.

"It was really important to me that the people who made the films originally ... get a shot at making any films that were derivative," Iger told analysts on a conference call earlier this week.


Chris

[Rogue588]

Well, I guess there's one good thing so far...

[ChrisKnudsen]

I am still worried about this.

[Jackskeleton]

why? are you a disney stock holder? Pixar already scrapped Toy Story 3 and then decided to take it to a new direction if they are going to go ahead with it.

[Trigger]

Pixar made a good move - cg animated movies are becoming a dime a dozen and far too easy to make with smaller studios... Pixar's reign wasn't going to last... now all their animators should cash in and find work elsewhere. I don't like this merger just for the possible cross marketing between disney and apple. Bleh

[mndtrp]

While I'm glad the Disney Toy Story 3 group isn't making the film, it's kind of crappy what happened to them.

Disney: "Here, guys, Toy Story 3 is your new project. Have fun."
TS3 group: "Cool, we'll get started."

cut a year or two later

Disney/Pixar: "Oh, sorry, you're shut down. All that work you did, yeeeaahh, thanks. Hang out while we decide if we're going to disband you altogether or not."
TS3 group: "Oh, uh, hmmm. That blows. Do we still get paid?"


If the movie gets made, it will probably turn out much better. As far as the entire merger thingy, I think it will be better for both companies. Give me another movie with Tigger in it, please.

[Jackskeleton]

I thought Pixar was taking them in since Lasseter was taking in the 2d animation again they simply wouldbe mixed into the fold of whatever animation department will be created. So in a sense it's simply them getting a kick ass boss.

[Terrell]

I hope Jim Hill is not correct in his latest article. This buyout of Pixar could end up a disaster for Disney, not Pixar.

While I'm glad the Disney Toy Story 3 group isn't making the film, it's kind of crappy what happened to them.

Disney: "Here, guys, Toy Story 3 is your new project. Have fun."
TS3 group: "Cool, we'll get started."

cut a year or two later

Disney/Pixar: "Oh, sorry, you're shut down. All that work you did, yeeeaahh, thanks. Hang out while we decide if we're going to disband you altogether or not."
TS3 group: "Oh, uh, hmmm. That blows. Do we still get paid?"

Jim Hill made this exact point. What if Lasseter decides to do the same to Disney's 3D animation, thinking they don't need to do 3D since Pixar is doing it. Disney will have wasted tens of millions. What happens to all of those 3D artists? Do they get fired? Do films like Meet the Robinson, American Dog, and Rapunzel Unbraided get canned? Three films which look like the best output Disney's had in years. This buyout is a lot more complicated than it would first seem.

[Michael Corvin]

I don't like this merger just for the possible cross marketing between disney and apple. Bleh

Why? Cause it might increase Apple's share from 4% of the PC market? :lol: Apple has the better OS and they deserve more of the market than they have. I say bring on the cross marketing, whatever it takes to put a dent in the Windows market.


Jim Hill made this exact point. What if Lasseter decides to do the same to Disney's 3D animation, thinking they don't need to do 3D since Pixar is doing it. Disney will have wasted tens of millions. What happens to all of those 3D artists? Do they get fired? Do films like Meet the Robinson, American Dog, and Rapunzel Unbraided get canned? Three films which look like the best output Disney's had in years. This buyout is a lot more complicated than it would first seem.

If I'm not mistaken, those 3D animators were the 2D artists. Those that wanted to stay got to learn 3D. I also doubt Lasseter would just drop everyone. They could easily setup the 2D shop again & or hire the best of the 3D bunch for Pixar so they can turn out films a little faster.

[Terrell]

If I'm not mistaken, those 3D animators were the 2D artists. Those that wanted to stay got to learn 3D. I also doubt Lasseter would just drop everyone. They could easily setup the 2D shop again & or hire the best of the 3D bunch for Pixar so they can turn out films a little faster.

That's not the only point. What about those 3 films Disney has been working on? I want to see those, and they've spent a lot of money on them. If Lasseter cans them I'll never forgive him. They look like interesting films. I see no legitimate reason to stop Disney from making 3D films. Pixar doesn't have a patent on CG animated films. There's room enough for Disney and Pixar to do CG films. I hope Iger doesn't let him cancel those 3 films.

[Drop]

I see no reason why Lasseter would. Toy Story 3 is a different case. That is his series, he does not want to see someone else do anything with it. I mean he certainly respects all animation, and those all seem like good projects. I think the only reason he would cancel them is because they aren't turning out well. But I think even then he might steer them into a "better" direction.

[ChrisKnudsen]

I didn't realize John Lasseter was going to be the head of animation for Disney. That is good news then.

[mrpayroll]

I didn't realize John Lasseter was going to be the head of animation for Disney. That is good news then.

He will also be principal creative director of the Walt Disney Imagineering group, which means it will be his vision that will create the rides and attractions at the Disney Theme Parks.

Chris

[mrpayroll]

Link (http://www.marketwatch.com/news/print_story.asp?print=1&guid={0AB7808D-AC3B-403A-937F-F5310463CA89}&siteid=yhoo)

For Pixar, opportunity came calling
Disney deal gives Jobs more market power, and less risk

By Russ Britt, MarketWatch
Last Update: 11:02 AM ET Jan. 30, 2006


LOS ANGELES (MarketWatch) -- After Walt Disney Co. agreed to acquire Pixar Animation Studios, much was made about the deal giving the Magic Kingdom the creative juice it needed to get back in the movie-animation game.

As for Pixar, it may be an especially opportune time for the independent studio to become part of the Disney family. A huge slate of computer-animated films from throughout Hollywood is set to hit theaters this year, and the company's market value has never been higher.

As many as 15 computer-animated features could appear on the big screen between now and December, nearly quadruple the four that were released in 2005.

By taking shelter under the Disney banner and its marketing muscle, Pixar chief Steve Jobs won't have to worry as much about carving out a place in Hollywood's newly crowded release schedule, said Michael Barrier, an animation historian based in Little Rock, Ark.

"I think from Pixar's standpoint, that's a very definite motive for being acquired by Disney," Barrier said. "I think this happened because the timing is right for both of them. There's no reason to believe that Pixar can continue this unbroken string of hits without a stumble."

Pixar executives, who weren't available to comment, haven't directly addressed how selling the company may relate to over-crowding cineplexes with digital animation. However, Jobs did say the two sides now will be able to "collaborate without the barriers that come from two different companies with two different sets of shareholders."

To be sure, Pixar's innovation in computer-animated features has catapulted it to the top of the heap -- and kept it there. From its first full-length feature in 1995, "Toy Story," through 2004's "The Incredibles," all six Pixar films have scored at least $350 million at the worldwide box office.

Casualties

"Every month, there's a new animated film entering the marketplace. Not all of them can do well," said Paul Dergarabedian, president of box-office tracker Exhibitor Relations. "There's going to be some casualties out there, for sure."

The financial zenith thus far in the Pixar library has been 2003's "Finding Nemo," which took in $865 million worldwide. DreamWorks Animation's "Shrek 2" holds the record for computer films, with $881 million in 2004. Pixar's last release, "The Incredibles," made $624 million in 2004 and 2005.

Computer films released in 2005 included DreamWorks' "Madagascar" which made $407 million, Fox's "Robots" at $246 million, Disney's "Chicken Little," which made $180 million and The Weinstein Co.'s current release, "Hoodwinked," with $30 million domestically thus far.

At a time when results are losing box-office momentum, did Disney agree to buy Pixar just as the era of the computer-animated megablockbuster is coming to an end? At least one analyst seems to think so.

Just before the deal was reached, Spencer Wang of J.P. Morgan argued that the glut of upcoming films is a sign that computer animation is entering a hangover period that is an echo of what happened to hand-drawn films in the mid-1990s after Disney's triumph on "The Lion King."

Wang said "Shrek 2" may well end up being the peak for computer-animation, just as 1994's "Lion King" was the peak for hand-drawn films.

"Lion King" made $784 million worldwide -- the equivalent of more than $1 billion in today's dollars. It prompted a rush into animation by all studios and drove the labor costs so high that budgets for Disney and others soared past $100 million per movie. Some animators pulled down more than $1 million a year in salary.

Pressure on margins

The same thing may be happening in the digital-animation age, Wang said. High returns that lead to more competition ultimately saturate the market, resulting in lower market share and higher costs. That ultimately puts pressure on film margins.

"If we are correct in this hypothesis, then Disney would be essentially buying a business with diminishing returns," Wang wrote in a research note. "This, in turn, would also imply that Disney would be acquiring Pixar at peak earnings and a peak valuation."

Wang added: "Said another way, if the prospects for [computer] animation are so bright, this begs the question: Why would Pixar be willing to sell now?"

Disney's $7.4 billion purchase price included a nominal premium to Pixar's stock price. With Pixar at its maximum value, the buyout essentially allows Jobs to avoid the risk of Pixar's peaks and valleys based entirely on the success of its own releases. And he is poised to become Disney's largest individual shareholder.

"Who could buy those shares? Disney is the most obvious candidate," said Robbert Van Batenburg, head of global research for Louis Capital Markets.

There are, however, a number of other industry watchers who feel the Disney-Pixar deal makes sense and should be hugely profitable for both sides.

They say that as long as Pixar's creative process is preserved -- as Disney Chief Executive Robert Iger has vowed -- then the entity should continue to be the gold standard in computer animation.

But the key ingredient isn't computer animation itself, says Laura Martin, analyst for Soleil Media Metrics. The play's the thing, she adds.

"There is no upside limit to great storytelling," Martin said. "That kind of storytelling is going to benefit the entire Walt Disney Co."

Indeed, there are rumblings that even Pixar executives are not wedded to computer imagery. John Lasseter, the creative force behind "Toy Story" and a key executive at Pixar, will become the chief creative officer for the combined Pixar and Disney animation departments.

A Disney alumnus from the company's hand-drawn days, Lasseter is said to be interested some two-dimensional projects as well, said Ramin Zahed, editor-in-chief of the trade publication Animation Magazine.

"I think we may be seeing a renewed interest in 2-D animation," he said.

Pixar executives in charge

Lasseter and Pixar President Ed Catmull, who will oversee all animation activities at both companies, are evaluating all of Disney's projects. David Stainton will step down as president of Disney's animation operations.

Disney will drop production on "Toy Story 3," a sequel that it planned when Pixar originally said it would end its relationship with Disney in 2004.

That bone of contention out of the way, the duo are looking to see whether such planned features as 2008's "Gnomeo and Juliet" and 2009's "Rapunzel Unbraided" will see the light of day.

In the immediate future, it seems clear that the next Pixar feature, "Cars" should be another hit when it's released June 9, Zahed said.

And for now, computer animation is proving to be profitable. With the $30 million made thus far domestically by "Hoodwinked," the film already has brought in double its $15 million budget. Disney's "Chicken Little" turned in $180 million on a $60 million budget. That budget is markedly smaller than those for many of its hand-drawn projects.

That sends the message to filmmakers to keep going, said Bill Mechanic, head of Pandemonium Productions and former chairman of Fox Studios. Mechanic's company is putting out its own computer animated feature, "Coraline," in 2007.

"Until the audience tells you it's too crowded, it's not too crowded," Mechanic said.

Mechanic also points out that Pixar already has several processes in place to boost prospects for a hit. Foremost is that Pixar puts out a picture when it's ready and doesn't rush into production.

"Right now, it's very hard to bet against John Lasseter," he said. "I think he's in a league of his own."


Russ Britt is the Los Angeles bureau chief for MarketWatch.
Copyright © 2006 MarketWatch, Inc. All rights reserved.


Chris

[Rogue588]

2-D!!

:fc:

[mrpayroll]

http://news.yahoo.com/s/nm/20060201/media_nm/media_pixar_lasseter_dc

Pixar's Lasseter seen as 'new Walt Disney'

By Gina Keating
1 hour, 5 minutes ago

LOS ANGELES (Reuters) - John Lasseter, the man chosen to revive the fortunes of Walt Disney Co.'s animation business has professed a deep regard for the legendary studio, but has criticized it for killing Walt Disney's innovative spirit.

Lasseter, the creative force behind hits factory Pixar Animation Studios Inc, is now set to take charge of Disney animation when its $7.4 billion purchase of Pixar closes this summer.

Industry watchers have dubbed 49-year-old Lasseter "the new Walt Disney" and are awaiting signs that his talent for creating compelling stories and characters will rub off on a cornerstone division that has been in a slump for a decade.

"Most animators regard Lasseter as the most respected current creator," Sarah Baisley, editor-in-chief of Animation World Network, said. "He lives the life of animators ... (he has) a pure dedication and love of the art and how to treat the artist."

Lasseter first worked at Disney in 1975 as an animation student, then joined the company after graduating from the California Institute of the Arts in 1978.

He was mentored by Frank Thomas and Ollie Johnston, two of Walt Disney's "Nine Old Men," who animated the classics "Snow White and the Seven Dwarfs," "Pinocchio," "Fantasia" and "Bambi."

But Lasseter, who championed computer animation at Disney, left the studio after Disney passed him over for a directing assignment, according to James Stewart's "Disney Wars."

Moreover, the legendary studio, which turned hand-drawn figures into internationally renown works of cinematic art for generations of viewers, was not ready for Lasseter's new ideas.

BRAVE NEW WORLD

At a tribute to Thomas, who died in 2004, Lasseter said the Disney studios of the late 1970s "was a little different than my dreams."

"All of us at CalArts were just so empowered with wanting to do great films -- Star Wars had just come out. We wanted to do that in animation," Lasseter said, according to a transcript of his speech in Animation World Network.

"But we get there and it was not quite what we had dreamed of. At times, we were told just to keep our ideas to ourselves and to do what we were told. It was like my heart was ripped out."

At Disney, Lasseter first encountered the three-dimensional animation that he later pioneered at Pixar in "Toy Story," the first feature-length computer animated film.

"I got so excited about it," Lasseter said at the tribute. "(Thomas) was so excited, too, about this notion, because Walt always was trying to get more dimension into his animation. I looked at the computer and said, 'This is what Walt was waiting for.' And Frank (said), 'Yes."'

Lasseter and another animator created a 30-second 3-D test film for Disney, but the project was deemed too expensive and the technology too cumbersome.

"I followed my dream, though, and Frank was with me in spirit, and I went to Lucasfilm and worked with (Pixar President) Ed Catmull and our group named Pixar," Lasseter said.

Through the years, Lasseter stayed in touch with Thomas and Johnston and put their advice to work in each of Pixar's six blockbuster films, including "Finding Nemo," "Monsters, Inc.," "A Bug's Life" and "The Incredibles."

"It's not just moving something (on screen)," Lasseter said. "It's what the character is thinking. It's the heart. The character should be thinking. I never forgot that."

Lasseter, who also will oversee the Imagineering division that creates rides for Disney's theme parks, has a contract with Pixar that expires in 2011.

The agreement, signed in 2001, pays him $2.5 million to start with 5 percent annual pay increases, and gives him Pixar stock options worth about $84 million at Wednesday's share price.

Lasseter is seen as so integral to Pixar's successes that Disney stipulated that his death or departure, or that of Catmull, could nix the deal.


Chris

[gerrythedon]

The Walt Disney Co. and Pixar Animation Studios Inc. have agreed to extend their current distribution agreement to include Pixar's 2007 release, Ratatouille, a deal that will be moot if Disney's proposed acquisition of Pixar closes this summer as expected. The two companies negotiated what amounts to a one-picture extension as a fail-safe measure in case the acquisition doesn't happen. "This is a deal that Disney and Pixar negotiated independent of the proposed merger to handle the distribution of 'Ratatouille' until such time as the transaction closes," Pixar said Thursday in a statement.

FREEZEDRIEDMOVIES.com

[mrpayroll]

http://www.latimes.com/business/la-fi-disney7feb07,0,1010620.story?track=tothtml

February 7, 2006

Disney Profit Up; ABC Radio Deal Settled
The media giant's first quarter beats expectations despite a drop in studio earnings.

By Kim Christensen, Times Staff Writer

Disneyland's 50th-anniversary celebration helped boost Walt Disney Co.'s fiscal first-quarter profit by 7%, despite a sharp drop in its movie studio earnings.

Television operations and consumer products also made strong showings, the Burbank media giant said Monday, the same day it announced it would merge its ABC Radio stations with Citadel Broadcasting Corp.

Disney's net income for the quarter ended Dec. 31 rose to $734 million, or 37 cents a share, from $686 million, or 33 cents, a year earlier. Not counting the gain from the sales of a cable television equity investment and a magazine business, the per-share profit of 35 cents still beats Wall Street's expectations by a nickel. Sales of $8.85 billion were up 2%, also surpassing analysts' consensus predictions.

"I am encouraged by the solid momentum in our earnings and the financial and creative strengths that underpin these results," Disney Chief Executive Robert Iger said in a statement.

Chief Financial Officer Thomas Staggs said the first-quarter results reflected fundamental growth in the company's businesses, adding that Disney remained on course to achieve double-digit earnings growth at least through 2008.

Disney announced its results after the market closed. Its shares rose to $25.47 in extended trading, after falling 5 cents to $24.96 in regular trading.

"Altogether, I think it's very solid," said Harold Vogel, an independent media analyst. "I don't see anything that would make someone rush out and buy stock over what they had last night, but at the same time, there's no reason why anyone should rush to sell it either."

Disney's parks and resorts business posted a profit of $375 million for the quarter, a 51% gain from a year earlier. The company's California and Florida theme parks set a holiday season attendance record, Iger told analysts in a conference call.

"This was due to the strength of our industry-leading theme parks propelled by the ongoing excitement of our 50th-anniversary celebration," he said.

The consumer products division, including video games, showed a 17% increase in profit, while media networks, including ABC and ESPN, gained 7%. As expected, the studio entertainment division's profit dropped, sliding 60% to $128 million from a year earlier.

Despite strong box-office performances by "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" and "Chicken Little," Disney's slate overall fell short of the previous year's offerings, which included such hits as "The Incredibles" and "National Treasure."

Iger and some analysts predict that the studio will fare much better this year, largely because of the summer releases of "Pirates of the Caribbean: Dead Man's Chest" and Pixar Animation Studio's "Cars."

Disney last month agreed to acquire Pixar for $7.4 billion in a move to resurrect its ailing animation business. In buying Pixar, Disney not only would get the computer animation pioneer responsible for a string of hits, such as "Finding Nemo," but also its talent, including creative guru John Lasseter.

"We believe the combination with Pixar provides us with great promise for the future across, not just our studio business, but a number of our businesses," Iger said. "Clearly it strengthens our asset portfolio."

Media analyst Katherine Styponias of Prudential Equity Group rates the stock "overweight" and set a price target of $34 a share. But in a note to investors, she warned of potential risks, like terrorist threats, that could affect park attendance.

Also Monday, Disney announced that it had reached an agreement to merge ABC Radio — which includes 22 stations and the ABC Radio network — with Citadel Broadcasting of Las Vegas. For months Disney has considered selling its ABC Radio operation, which it does not believe is essential to its core businesses.

The cash-and-stock deal, valued at $2.7 billion, would result in the creation of a new company, Citadel Communications, which would be the third-largest radio group in the country, Disney said. If the merger is completed as planned, Disney shareholders would own 52% of the new company and Citadel shareholders 48%. Disney also would keep $1.4 billion to $1.65 billion in cash, based on Citadel's share price when the deal closes.

Citadel shares rose 4 cents to $12 on Monday before the deal was announced.

The new company would be headed by Citadel CEO Farid Suleman, a former CEO of Infinity Broadcasting Corp.


Chris

[mrpayroll]

http://news.yahoo.com/s/nm/20060216/media_nm/disney_dc

Disney's Marty Sklar exits Imagineering job for parks post

By Sheigh Crabtree
Thu Feb 16, 7:09 AM ET


LOS ANGELES (Hollywood Reporter) - The executive shake-ups continued at the Walt Disney Co. on Wednesday as the company adjusts to its recent $7.4 billion acquisition of Pixar Animation Studios.

Marty Sklar, a 50-year veteran at Disney, stepped down as vice chairman and principal creative exec for Walt Disney Imagineering in the wake of Pixar executive vp John Lasseter being named principal creative adviser of the theme park division. In his new position, Lasseter reports to Disney CEO Robert Iger, bypassing parks and resorts management.

Sklar will serve as Walt Disney parks and resorts Imagineering ambassador, a role as yet undefined.

"I knew that as my 72nd birthday and my 50th Disney anniversary approached, I would look for new challenges," Sklar wrote in a memo to Disney employees. "So when Jay Rasulo (chairman of Walt Disney parks and resorts) asked me to talk about the future, I was 'all ears' to a challenging proposal Jay made. It not only seems to be one of those ideas that is overdue, but it was clear to me that I am the perfect casting (perhaps the only candidate) capable of originating and organizing this assignment."

Describing the new assignment as a "blank sheet of paper," Sklar wrote that he planned to recruit new talent at colleges and universities, develop traveling exhibitions to promote the talents -- present and past -- of Imagineering and speak at conferences and conventions.

Sklar's former position is not expected to be filled, according to an Imagineering spokesperson.

"This has been in the works for some time," the spokesperson said. "We have a very strong creative team in place. For the past 10 years we have been working with Pixar as we take the stories from their films and bring them to our theme parks. We have had a very strong creative relationship with Pixar."

When Lasseter and Ed Catmull, the newly appointed president of Pixar and Disney animation studios, toured the Walt Disney Co. divisions after last month's acquisition announcement, the two visited briefly with Imagineering staff.

In a memo to WDI staff regarding Sklar's new position, Rasulo emphasized the talents of the group's creative leadership, noting that they all "look forward to the energy and insight Imagineering will get from John Lasseter in his new role as principal creative adviser."

Reuters/Hollywood Reporter


I can finally post about this happening. We got an e-mail yesterday from Marty letting us know that after 50 years with the company he was taking on a new 'Ambassador' role with the company. But I didn't want to post this news until it was an official press release.

I actually saw him yesterday and wanted to yell out "Hey Ambassador, how's it going?", but I like my job! :D

Chris

[mrpayroll]

http://biz.yahoo.com/bizj/060227/1233596.html?.v=1

bizjournals.com
Disney stock up, Apple down, on acquisition speculation
Monday February 27, 10:35 am ET

Stock in Walt Disney Co. opened up slightly on Monday following a report by Barron's on Saturday that Apple Inc. could make a bid to buy it.

Shares in Burbank-based Disney (NYSE:DIS - News) were up about 17 cents to $28.15, or 0.61 percent, in early morning trading. Shares in Cupertino-based Apple (NASDAQ:AAPL - News) were down 38 cents to $71.08, or 0.53 percent.

Apple CEO Steve Jobs, who is also the CEO of computer animation business Pixar (NASDAQ:PIXR - News), sits on Disney's board as its largest individual shareholder.

"I think he has an open option," Barron's quoted analyst Christopher Whalen, a New York-based managing director of Institutional Risk Analytics. "Disney is badly undervalued right now. Jobs might get an opportunity to take it out."

Published February 27, 2006 by the Silicon Valley/San Jose Business Journal


Chris

[mrpayroll]

http://www.hollywoodreporter.com/thr/article_display.jsp?vnu_content_id=1002076606

March 01, 2006


'Mermaid' men back in Dis net

By Sheigh Crabtree

The future of Walt Disney Feature Animation under Disney CEO Robert Iger, Walt Disney Studios chairman Dick Cook and Pixar Animation Studios' John Lasseter and Ed Catmull might lie in the future of CG, but the studio said Tuesday that as it moves forward, it also is returning to its past.

Disney has signed composer Alan Menken, an eight-time Oscar winner and one of the driving forces behind "The Little Mermaid" -- which helped resuscitate Disney animation in the '80s -- to a nonexclusive, multipicture deal.

Highly regarded feature animation directors John Musker and Ron Clements, the team behind such animated hits as "Mermaid" and "Aladdin," also are returning to the Disney fold.

Menken, whose deal also involves live-action films, is developing the feature animated musical "The Frog Princess," based on the classic Grimm fairy tale.

Musker and Clements, who together directed "The Great Mouse Detective" and "Hercules," among other Disney animated films, were engaged by interim WDFA president Don Hahn to develop original new projects.

The directing team already has begun work on the lot in Burbank, discussing story ideas with Lasseter and Catmull on a daily basis while they also oversee the digital remastering of "The Little Mermaid," which Disney is preparing to release on DVD.

Musker and Clements had been developing a project titled "Fraidy Cat" since late 2004 but departed Disney when it failed to win a green light. It is not among the projects the directing team is actively developing, according to executives close to the situation.

For his first assignment under the new deal, Menken will score as well as write five original songs for Walt Disney Pictures' upcoming romantic musical fantasy, "Enchanted," a combination of live action and 2-D animation from animator James Baxter (HR 1/13). "Enchanted" is directed by Kevin Lima ("Tarzan"), and the project will see Menken reunite with Tony- and Oscar-winning lyricist Stephen Schwartz, his collaborator on "Pocahontas" and "The Hunchback of Notre Dame."

"Alan is a true Disney legend, and his music has enriched so many of our films," Cook said.

Added Walt Disney Music president Chris Montan: "He was an important part of our animation renaissance here at Disney and continues to be one of the most exciting, original and prolific composer-songwriters of our times. We're thrilled to be working with him on such a wide variety of projects and look forward to seeing him stretch his talents in new and innovative ways."

Under the terms of this new arrangement, Menken is expanding his role from within other divisions of Disney. For Disney Theatrical Prods., he is in preproduction on the stage version of "The Little Mermaid."

For Disney Creative Entertainment, Menken is creating a stage musical of "The Snow Queen," set to debut at Tokyo DisneySea with Amon Miyamoto directing and John Weidman as the bookwriter and Glen Slater the lyricist. He also is writing music for a Sinbad attraction in Japan for Walt Disney Imagineering.

Menken recently completed scoring Disney's upcoming live-action comedy "The Shaggy Dog," due in theaters March 10.

Menken's deal with Disney was brokered by Richard Kraft of Kraft-Engel Management.


also

http://blogs.orlandosentinel.com/entertainment_movies_blog/2006/03/disney_bringing.html

Disney bringing back the animators

Disney's merger-purchase of Pixar continues to pay dividends as Pixar filmmaker Mr. Lasseter goes out to round up the animation talent that Michael Eisner spent his dotage (senile-itage?) chasing away.

The Hollywood Reporter says that folks from The Little Mermaid Days, including the directing team and composer Alan Menken, are being brought back into the fold for Enchanted, the animation/live action feature starring Amy Adams. The dream is back!

Chris

[Michael Corvin]

Great news.

[gotrice487]

Thank you for the news mrpayroll!

[milo bloom]

Menken, whose deal also involves live-action films, is developing the feature animated musical "The Frog Princess," based on the classic Grimm fairy tale.

:hscratch: Is this the story that ends "And that, your honor, is why there was a 16 year old girl in my hotel room!" ?


The Disney news just keeps getting better, somebody must have finally seen the writing on the wall and realized that the company needed new direction. Like, 180 degrees from "hell in a handbasket".

[mrpayroll]

:hscratch: Is this the story that ends "And that, your honor, is why there was a 16 year old girl in my hotel room!" ?


The Disney news just keeps getting better, somebody must have finally seen the writing on the wall and realized that the company needed new direction. Like, 180 degrees from "hell in a handbasket".

And our stock has gone from around $23.50 a share, when Iger took over in October, to a little over $28 a share today! :thumbsup:

Chris

[Terrell]

Musker and Clements had been developing a project titled "Fraidy Cat" since late 2004 but departed Disney when it failed to win a green light. It is not among the projects the directing team is actively developing, according to executives close to the situation.

That's exactly what I was afraid of. Fraidy Cat, Rapunzel, and Wilbur Robinson, the 3 best looking Disney projects in the last 10+ years, will probably never see the light of day now. Three films I wanted to see get made.

The rest of the news is great, but that bit pisses me off.

[milo bloom]

What was Fraidy Cat about?

[mrpayroll]

http://news.yahoo.com/s/nm/20060310/media_nm/media_disney_dc

Disney-Pixar deal to close by late April, May: CFO

By Gina Keating
53 minutes ago

ANAHEIM, California (Reuters) - Walt Disney Co.'s planned purchase of Pixar Animation Studios Inc. likely will close in late April or May, Disney Chief Financial Officer Tom Staggs said on Friday at the company's annual meeting.

Disney said in January that it would acquire Pixar in a $7.4 billion transaction giving Pixar animators creative control over the world's most famous cartoon studio and making Pixar Chief Executive Officer Steve Jobs Disney's largest individual shareholder.

As part of the deal, Jobs joins the Disney board.

Under the transaction, Disney will cede control of its animating studio to Pixar creative chiefs Ed Catmull and John Lasseter. The hands-off management arrangement is akin to the one Disney employed with the ESPN cable sports network, which Disney acquired in 1996.

In his remarks at the meeting, Lasseter obliquely touched on the years of rancorous negotiations he, Pixar President Ed Catmull and Pixar CEO Steve Jobs had with former Disney CEO Michael Eisner.

"When Bob Iger came to the three of us and said we are interested in acquiring you ... I was worried until I got to know Bob Iger," Lasseter said. "Ladies and gentlemen, you are led by a great man." Robert Iger is Disney's chief executive officer.

Lasseter also showed the first sneak previews of the upcoming Pixar films, "Cars," set for its theatrical release in June 2006, and "Ratatouille," scheduled to be released in the summer of 2007.

While not revealing any specific plans for Disney animation, Lasseter said that he believed the Imagineering department, to which he will become a creative advisor, should work more closely with animation.

"I get to help design theme park rides," Lasseter said. "I never understood why you wouldn't start designing a ride when you start making a film so two months after a film comes out you have a ride. I promise you we are not only going to make great motion pictures we are going to make great rides."

Disney and Pixar first became partners in 1991 under an agreement to share production costs and profits, with Disney distributing the films. The companies also negotiated a second agreement but talks on a third one broke down in 2003.

Shares of Disney rose 11 cents to $28.20 on the New York Stock Exchange. Pixar shares rose 32 cents to $64.51.


Imagineering is who I work for! :D

Chris

[mrpayroll]

http://yahoo.businessweek.com/investor/content/mar2006/pi20060310_909483.htm

MARCH 10, 2006


Investing
By Ronald Grover

The Happiest Place on Earth -- Again

If new CEO Bob Iger's first annual meeting is any indication, the recent changes at Disney are all to the good

There was plenty of applause to go around on Mar. 10 at Disney's (DIS ) first annual meeting under CEO Robert Iger, who replaced Michael Eisner in October. Iger got a healthy reception from the estimated 4,000 Disney faithful in Anaheim as he strolled past Mickey, Donald, and other costumed Disney characters who were parading through the arena.

There was wild cheering -- and some whoops -- for former Disney board member Roy Disney, who led the shareholder revolt that eventually forced Eisner's early departure. Even Oswald the Lucky Rabbit, founder Walt's pre-Mickey Mouse creation, got a hand when his image flashed on the giant screen behind Iger. Rights to Oswald were recently reacquired from Universal Pictures (NBC ), Iger explained.

"After 78 years we had a bit of fun bringing Oswald back to the place where he belongs," said Iger. "While this is a small gesture, it speaks volumes about commitment to honor, respect, and appreciate our past."

But the biggest hand was reserved for a guy who wasn't even at the meeting: Steve Jobs, the mercurial Apple Computer (AAPL ) founder. Jobs is scheduled to join the Disney board in a few months, when Disney's $7.4 billion deal to buy Jobs's Pixar (PIXR ) Animation Studios becomes official.

DISNEY DOWNLOADED. Indeed it appears that peace again reigns at the Magic Kingdom, which had been under seige for most of the last two years. Notably absent from the lovefest was Eisner, the company's largest shareholder with a 1.7% stake.

Also missing was the kind of self-deprecating humor he often used at the annual meetings. Instead, Iger won the crowd over with his nod to Disney's past and with straight talk about its future.

Iger unveiled a service on ABC.com to allow consumers to download selected shows from the Disney network, set to start in the next few months. To placate advertisers nervous about losing eyeballs to network shows that are popping up on the net, Iger said two versions will be offered: one that consumers can get for free, with ads, or ad-free ones for a fee -- likely the same $1.99 that an iPod download costs. He promised more details on the service in the next few months.

While Jobs didn't make the trip to Anaheim from Northern California, the studio was represented by its top creative guru, onetime Disney animator John Lasseter, the creative force behind such Pixar hits as Toy Story and A Bug's Life. Under the terms of the Pixar deal, Lasseter is scheduled to become Disney's top creative officer, with influence both at the company's theme parks and in animation.

TOTALLY ANIMATED. "To build upon the legacy of Walt Disney and achieve the full potential of the company that bears his name, we have made animation our top priority," said Iger in introducing Lasseter.

The animation wiz then introduced film clips of the next two films that Pixar is making for Disney -- Cars, debuting in June, 2006, and Ratatouille, scheduled to come out in June, 2007. A good sign for Disney shareholders: The place was rolling with laughs as Lasseter played the 10 minute trailer for Cars.

As he bounded onto the stage in his traditionally downscale attire -- jeans, an untucked Hawaiian shirt, and blue blazer -- he got a rock star reception. "Oh, stop it," he shouted, and then, pointing to his black sneakers, joked that he had dressed up for the occasion.

But when he began talking about animated films, the mood was half comedy show, half revival meeting. "Quality is a great business plan," Lasseter said to more cheering.

And the applause got louder when the former guide on Disneyland's Jungle Cruise announced that he will also be designing rides for Disney's theme parks. "I will make rides that you will want to get back on as soon as you get off, no matter how long the line," he promised.

MUTUAL ADMIRATION. It was hard -- no, impossible -- to miss the upbeat feel of a company in turnaround. Iger could show off Lost, Desperate Housewives, and other hot ABC shows, pitch live-action films that will include this summer's Pirates of the Carribbean sequel, starring Johnny Depp, and talk realistically about double-digit growth into the future.

But if the cheers were as loud for Jobs in absentia, it was Lasseter who gave the greatest praise. "Ladies and gentlemen, you are led by a great man," he bellowed at one point. "Bob Iger is the reason Pixar joined up with Disney."

Great praise from the man some call the current Walt Disney, for the man who brought the magic back.



--------------------------------------------------------------------------------


Grover is Los Angeles bureau chief for BusinessWeek
Edited by Patricia O'Connell


Chris

[Terrell]

What was Fraidy Cat about?

Taken from Jill Hill Media.

It was to have been Ron'n'John's first computer animated feature. A comedy thriller that affectionately paid tribute to the films of Alfred Hitchcock. And -- according to WDFA insiders -- the rough story reel version of this picture was playing as well as anything that Ron Clements & John Musker had ever produced.

http://www.jimhillmedia.com/mb/images/upload/fc_logo.jpg

(For those of you who haven't figured out who Ron'n'John are yet: Ron Clements & John Musker are the writers / directors of such Disney animated hits as "The Great Mouse Detective," "The Little Mermaid," "Aladdin," "Hercules" and "Treasure Planet." Over the past 20 years, these gifted filmmakers are personally responsible for billions of dollars pouring into Disney's corporate coffers.)

http://www.jimhillmedia.com/mb/images/upload/fc_cat_cornfield_plane.jpg

The new, improved version of "Fraidy Cat" was shown to Stainton last month. And -- according to someone who attended that screening -- the story reels for this picture got huge laughs. Even in this incredibly rough form, "FC" was going over as well as "The Little Mermaid" and "Aladdin" had at this phase in their productions.

A few more stills.

http://www.jimhillmedia.com/mb/images/upload/fc_shadow_at_door.jpg
http://www.jimhillmedia.com/mb/images/upload/fc_cat_on_couch.jpg

Looks like it's been scuttled once and for all, which is depressing as hell. Here's the article from Jim Hill. Note that this article is old.

http://www.jimhillmedia.com/mb/articles/printer_friendly.php?ID=1604

[milo bloom]

Wow, that does look pretty neat. Surely they would only put something like this on the backburner?

Maybe once they get thru the merger they'll give it another look.

[Terrell]

That and Rapunzel Unbraided looked by far to be the most interesting and well conceived films under Disney in the past 10 years. But Fraidy Cat has been done in twice now, once by the ignorant suits at Disney, and now again after the merger. So I'm not sure it will survive, which is sad. Who knows if Rapunzel has been axed. Even Wilbur Robinson looked so much better than past Disney fare since The Lion King.

[Michael Corvin]

Fraidy Cat does look interesting, moreso than Cars. A shame that it has been shelved. Hopefully they can get back to it.

[mrpayroll]

http://www.latimes.com/business/la-fi-pixarent21mar21,1,6383503.story?coll=la-headlines-business

Disney Closes Unit Devoted to Pixar Sequels

With the firm's planned acquisition of Steve Jobs' studio, the division is no longer needed. Thirty-two are laid off.

By Claudia Eller, Times Staff Writer
March 21, 2006

The first casualty of Walt Disney Co.'s acquisition of Pixar Animation Studios came Monday when the Burbank entertainment giant shuttered a computer animation unit created to make sequels to such Pixar hits as "Toy Story" and "Finding Nemo."

Thirty-two employees, or nearly 20% of the 168 artists, production managers and support staff, were told they would lose their jobs effective May 26.

The remaining 136 will be absorbed into Disney's feature animation division and redeployed to work on such productions as "Meet the Robinsons," "Rapunzel" and "American Dog."

In a statement, Disney confirmed Monday's developments with The Times and said it would help laid-off employees find new work. At least half a dozen or more hired to work on "Toy Story 3" were foreigners working in the U.S. on visas.

Workers should find themselves in demand, with computer animation enjoying a boom. Studios such as DreamWorks Animation SKG Inc., 20th Century Fox and Sony Pictures are poised to release a slew of digitally animated movies this year.

Dubbed "Circle 7" after the Glendale street where the unit sits, the sequels operation was quietly set up last year by former Disney Chief Executive Michael Eisner at a time when Disney's lucrative partnership with Pixar was strained and in danger of dissolving. Rivals derided the attempt to replicate Pixar's unique creativity, nicknaming the operation "Pixaren't."

Disney had the right to make Pixar sequels under its previous distribution agreement. But its decision to move ahead irked Pixar executives, who worried that a botched effort would hurt their company's reputation.

All of that changed in January, when Disney agreed to buy Pixar for $7.4 billion. Disney CEO Bob Iger and Pixar Chairman Steve Jobs pledged that any Pixar sequels would be produced at Pixar's Emeryville, Calif., headquarters using artists who worked on the originals.

In addition, Disney's core animation operation will now be run by Pixar creative director John Lasseter — who directed "Toy Story" and whose next film, "Cars," is due out this summer — and Pixar President Ed Catmull.

Disney declined to comment about the future status of Circle 7 chief Andrew Millstein, who announced the layoffs to his staff at a noon meeting.

But it is believed that he will look for another job within Disney. Millstein, who once ran Disney's now-defunct Florida animation studio, has worked at Disney for nine years.

Also unclear is what will become of the multimillion-dollar computer animation facility in Glendale, although it is likely the company would use it for future productions.


Chris

[mrpayroll]

Wanna peek at Pixar's theme park "To Do" list? Go check out "Re-Imagineering"

Jim Hill directs you to a blog that's actually being run by some Pixar staffers who are actively soliciting opinions about what should be done to fix the Disney theme parks and Walt Disney Imagineering
by Jim Hill - 02-27-06
--------------------------------------------------------------------------------

Early yesterday morning, Ian G. sent me this e-mail:


Hi Jim,

Love the site, especially the "why for's" with concept art!

Do you know where I could mail a letter to John Lasseter or Tony Baxter? I know the address of WDI but is there a specific department or anything? any address you know of would be great.

Thanks
Ian

Well, as it turns out, Ian, I do actually kind of know a way to get a message to John Lasseter. By that I mean: Check out this blog, Re-Imagineering (http://imagineerebirth.blogspot.com/) .

Believe it or not, folks, this site is legit. What they say at the very top of this webpage -- I.E. That it is ...

... A forum for Pixar and Disney professionals passionate about the Disney Theme Parks to catalog past Imagineering missteps and offer up tenable practical solutions in hopes that a new wave of creative management at Imagineering can once again bring back the wonder and magic that's been missing from the parks for decades.

... is true. Some very well connected people at Pixar are reportedly directly involved with this blog.

"Like who?," you ask. John Lasseter's personal assistant for starters. More importantly, Pete Docter (I.E. the co-director of " Monsters, Inc.") has supposedly given this website his blessing.

"But why should I care that Pete Docter has allegedly given this 'Re-Imagineering' blog his blessing?," you continue. Well ... What if I were to tell you that Mr. Docter may soon assuming a very important role at Walt Disney Imagineering?

To explain: As Executive Vice President, Creative, at Pixar Animation Studios AND as the newly installed Chief Creative Officer of Walt Disney Feature Animation AND as the newly appointed Chief Creative Adviser at Walt Disney Imagineering ... John Lasseter's plate is just too full right now. Even with a proposed work week that would have John down in Burbank & Glendale on Tuesdays, Wednesday & Thursdays and back up in Emeryville on Mondays & Fridays (So that Lasseter can then spend his weekends at home with his family), he's still going to need a hell of a lot of help in order to pull off everything that John now wants to accomplish.

Which is why Lasseter is reportedly moving some loyal lieutenants and/or old friends into key positions at both Pixar Animation Studios and Walt Disney Feature Animation. EX: When John's away from Emeryville, "Finding Nemo" director Andrew Stanton will supposedly oversee day-to-day operations at Pixar. And when Lasseter's no longer on site in Burbank, newly appointed interim head of WDFA Don Hahn will allegedly oversee what's going on at the Mouse Factory.

"But when John's not watching the store in Glendale, who's going to be keeping an eye on how things are going at Walt Disney Imagineering?," you query. Well, this is where Pete Docter reportedly comes in.

Yes, I know. All of you Disney fanboys out there had been assuming that -- given John Lasseter's on-going friendship with Tony Baxter (More importantly, given that John made such a big show of going up to Tony and publicly shaking his hand during Lasseter's first official visit to WDI) -- that Tony would be soon calling the shots at Walt Disney Imagineering.

Well, over the past few weeks, Lasseter has learned quite a bit about WDI's toxic atmosphere. How the past two decades of corporate infighting & political gamesmanship have made it rather difficult to know who exactly to trust in 1401 Flower Street.

So -- rather than going with Baxter (WDI's senior VP of design) or Tom Fitzgerald (Imagineering's executive vice president) or even Don Goodman (WDI's current president) -- the current rumor has it that John now wants to bring in someone from the outside. Someone that he can trust implicitly. Someone who's new to Imagineering's corporate culture but also loyal to Lasseter. Who -- after observing operations for a while -- can then tell John where changes really need to be made.

This is the role that Pete Docter has allegedly been asked to fill. The guy who's first got to determine what is actually wrong with Walt Disney Imagineering and the Disney theme parks, then tell Lasseter what he thinks should be done to fix both WDI and the theme parks.

"So where does that 'Re-Imagineering' website fit into all this?," you ask. Well ... Think of this blog as a preliminary fact-finding mission. Something that a few folks at Pixar are now doing in order to gather info for Pete. So that Docter can then have some sense of what he's actually getting himself into.

Just so you know, folks: When they say " ... Pixar and Disney professionals" at the "Re-Imagineering" website, they really mean professionals. Only those who have actually worked for Pixar Animations Studios, the Walt Disney Company and/or in the themed entertainment industry will be allowed to post on this particular blog. So sorry, but no Imagineer wannabees need apply.

Also ... Once word actually gets out about this "Re-Imagineering" website ... Well, I'm not entirely sure how long this blog will remain up & accessible to the public. Those guys up in Emeryville ... They really like keeping their secrets. Which is why I don't think that they'll be all that pleased to learn that their Disney theme park "To Do" list is now out there for the whole world to see.

But -- that said -- I have to admit that I'm rather pleased to see the folks at Pixar doing this. Actually out there actively seeking opinions from entertainment industry & animation professionals about what needs to be done in order to fix WDI and the Disney theme parks.

And even if -- in the end -- this just turns out to be some sort of PR ploy ... It's still a pretty brilliant PR ploy. Putting the message out on the Web that "We know that something's wrong with the Disney theme parks & Walt Disney Imagineering. Which is why we're actively soliciting opinions about what must be done to fix WDI and the parks" ... That's a great way to start John Lasseter's tenure as Imagineering's new Chief Creative Adviser. To signal that the company wants its theme parks to seem special again.

More to the point, it puts those who are currently in charge of WDI on notice that -- once Pete Docter finally arrives in Glendale to assume his yet-unnamed position -- that he's going to bringing a list with him. And that those execs had better be ready to defend some of the decisions that they've made over the past 10 years. Otherwise, they may soon find themselves pruned from the Flower Street facilities.

So what do you folks think? Is this "Re-Imagineering" blog and/or Pete Docter supposedly coming on board to help John Lasseter fix Walt Disney Imagineering & the Disney theme parks just what the doctor ordered for Disney's theme parks and resorts?

Your thoughts?



So it should be interesting to see what changes happen over here in the next year! Chris

[Chrisedge]

I met Tony Baxter years ago, at the Good Guys in Orange, CA and he was one of the nicest people I ever met. Invited us (me and a friend) up to Burbank to take a tour. I didn't end up going, but my friend did, and I occasionally saw him at Ken Cranes (Laserdisc store) and was wondering reading this thread if he was still there. Cool to hear he is. (but too bad on the passover for the head job)

[mrpayroll]

http://biz.yahoo.com/rb/060412/media_disney_iger.html?.v=1

Reuters

Pixar, Disney integration "terrific": Disney exec
Wednesday April 12, 7:41 am ET

By Gina Keating


LOS ANGELES (Reuters) - The integration of Pixar Animation Studios Inc (NasdaqNM:PIXR - News) into Walt Disney Co. (NYSE:DIS - News) "is happening better than we had ever dreamed it would," Disney Studios Chairman Dick Cook said.

Disney, which is in the process of acquiring Pixar in an all-stock deal worth $7.4 billion when it was announced in January, plans to make two animated films per year after the merger is completed late this month or in May, Cook told an A.G. Edwards conference on Tuesday.

"That's where we would like to be," Cook said. "Some years we won't make that (number); some years we'll probably have one; some years we may have three; but we will hopefully ... have two new original (films) -- one coming from Pixar and one coming from Feature Animation."

Integration has been "terrific" he said.

Cook also said he expected the glut of animated films released this year -- about one each month -- to ease in the next year or two.

"There will be a shakeout process ... we will probably hit the high-water mark .... then I'm sure there will be a reduction," he said.

He said the current slate of films, which is heavy with sequels to popular franchises and animated films, should show whether box office attendance dropped 9 percent worldwide in 2005 on the quality of films "or if ... people are obtaining their entertainment in some other way."

Cook said that the DVD market, which also saw a slowdown last year in sales, has been relatively firm in the last few months.

Disney Chief Executive Bob Iger on Tuesday told the same conference that he expects the company to use the Internet and other nontraditional platforms to distribute its media products.

"I remain rather sobered by the experience that the music industry had," Iger said. "The bottom line is that they were not in tune with that their customers wanted and what the world was demanding of them. And I think it hurt them significantly."

Iger said it was not clear yet when Internet initiatives, such as the company's offering of ABC television shows on Apple Computer Inc.'s (NasdaqNM:AAPL - News) iTunes Web site and abc.com, would generate enough revenue to affect earnings.


Chris

[mrpayroll]

http://news.yahoo.com/s/nm/20060505/media_nm/media_pixar_merger_dc_1

Pixar shareholder approve Disney takeover
7 minutes ago


SAN FRANCISCO (Reuters) - Shareholders of Pixar Animation Studios Inc. on Friday approved a takeover of the company by the Walt Disney Co. in an all-stock deal valued at more than $7.4 billion.

The vote was taken at a special meeting of shareholders in San Francisco presided over by Pixar Chief Financial Officer Simon Bax. Pixar Chief Executive Steve Jobs did not attend.


I'm not sure how many more steps are needed before the deal is finalized.

Chris

[mrpayroll]

http://biz.yahoo.com/ap/060505/walt_disney_acquisition.html?.v=1

AP
Walt Disney Completes Pixar Purchase
Friday May 5, 5:56 pm ET
Walt Disney Finishes $7.4 Billion Pixar Buy, Making Steve Jobs Biggest Disney Shareholder


BURBANK, Calif. (AP) -- Walt Disney Co. said Friday it completed its all-stock acquisition of Pixar Animation Studios Inc., the studio that created movies including Little Nemo, The Incredibles and Toy Story.

The deal, valued at $7.4 billion, was announced in January. Disney issued 2.3 shares for each Pixar share. Pixar will become a wholly owned subsidiary of Disney.

The deal makes Steve Jobs -- chief executive of Pixar and also of Apple Computer Inc. -- Disney's single largest shareholder, with a 7 percent stake in the company. Jobs also will join Disney's board of directors as a non-independent member.

Former Pixar President Ed Catmull will serve as president of the new Pixar and Disney animation studios.

Former Pixar Executive Vice President John Lasseter will serve as chief creative officer of the animation studios and principal creative adviser at Walt Disney Imagineering.

Shares of Walt Disney climbed 69 cents, or 2.4 percent, to close at $29.09 on the New York Stock Exchange. In after-hours trading, Walt Disney shares climbed 8 cents to $29.17. Walt Disney shares have traded between $22.89 and $28.85 over the past 52 weeks.


Chris

[Terrell]

The remaining 136 will be absorbed into Disney's feature animation division and redeployed to work on such productions as "Meet the Robinsons," "Rapunzel" and "American Dog."

That's good to hear. Although I fear Fraidy Cat has been effectively killed. These all sound like interesting projects, and hopefully they will be done right with effective stories, characters, and art design.

[mrpayroll]

http://biz.yahoo.com/ap/060510/earns_disney.html?.v=12

AP
Walt Disney Shares Advance on 2Q Results
Wednesday May 10, 4:52 pm ET

By Gary Gentile, AP Business Writer
Walt Disney Second-Quarter Earnings Rise 12 Percent to $733 Million; Shares Jump 1.8 Percent

LOS ANGELES (AP) -- Strong television ratings and increased theme park attendance helped profit at The Walt Disney Co. rise 12 percent in the second quarter, although the media conglomerate did report a drop in earnings at its film studio.

Disney's stock rose 53 cents, or 1.8 percent, to close at $30.11 Wednesday on the New York Stock Exchange.

The Burbank-based company reported late Tuesday net income of $733 million, or 37 cents per share, for the three months that ended April 1, compared with income of $657 million, or 31 cents per share, in the same period last year.

Revenue grew to $8 billion from $7.8 billion in the same period last year.

The results beat estimates of analysts surveyed by Thomson Financial who had been expecting earnings of 31 cents per share.

Operating income fell 39 percent at Disney's film studio while revenue decreased 22 percent to $1.8 billion. This year's DVD releases have not sold as well as the DVD of the Pixar Animation Studios hit "The Incredibles" in the same period last year.

Studio performance should pick up in the second half of the year with the release of the latest Pixar film, "Cars" next month and the sequel to "Pirates of the Caribbean" in July, the company said.

Home video revenue from the DVD release of "Chronicles of Narnia: The Lion, The Witch and The Wardrobe" will also be seen in the third quarter.

The company's media networks division, which includes ABC and cable channels such as ESPN, delivered the best performance with a 20 percent jump in operating income and an 18 percent rise in revenue to $3.6 billion.

Results were helped by higher subscriber fees at ESPN and rising advertising revenue at ABC, which continues its ratings comeback.

That trend should continue as the network gets ready to negotiate new deals with advertisers for the fall schedule. ABC will present its lineup next week and expects strong increases in ad rates over last year, the company said.

Attendance at Disneyland in California grew 15 percent in the quarter as the theme park's 50th anniversary celebration winds down. Attendance at Walt Disney World in Florida rose a more modest 3 percent, Disney said.

The company said it does not expect rising gas prices to lower attendance at its domestic parks.

"Over the years, fuel costs have not had a demonstrable effect on our attendance," Disney Chief Financial Officer Thomas Staggs said during a conference call with analysts.

Staggs said gas prices are a small percentage of a family vacation budget. A $1 increase in the cost of a gallon of gas would mean a hike of about $40 for the entire trip.

"Unless the increase in oil prices meaningfully impacts consumer confidence and spending, we would not expect to see gas prices have a large effect on our theme parks this summer," Staggs said.

Attendance at Disney's latest park in Hong Kong has been lower than anticipated, but company executives said they still expect to hit their one-year goal of 5.6 million visitors.

"We clearly have a lot to learn about the market," Disney Chief Executive Robert Iger said. "Overall, I don't think our marketing efforts have been as effective as they could be. But we're going to figure this out."

Looking ahead, Staggs said the acquisition of Pixar Animation Studios Inc., which closed last week, will reduce earnings per share for the year by 10 cents, spread evenly over the next two quarters. Disney issued new shares to pay for the purchase.

Iger confirmed that work on a sequel to Pixar's "Toy Story" franchise has begun, although no release date has been set.

Iger also said he was pleased with the response to the free, advertising-supported streaming of TV shows on ABC.com. He said that option, which is in addition to the sale of ABC shows on Apple Computer Inc.'s iTunes store, will continue past the original trial date of June 30.

Disney may also join Warner Bros. in distributing its shows via a peer-to-peer computer network, Iger said.

This week, Warner Bros., a unit of Time Warner Inc., said it will distribute films and TV shows using technology developed by BitTorrent Inc.

Disney is considering using similar technology to offset the cost of buying more high speed Internet bandwidth, or the capacity to transmit large files, Iger said.

"While I'm not necessarily advocating using BitTorrent, the whole notion of using peer to peer sharing mechanism to move content is one we have been very interested in and actually have been working on ourselves," Iger said.

For the six months that ended April 1, Disney reported net income of $1.5 billion, or 74 cents per share, compared with $1.3 billion in the same period last year.

Revenue increased to $16.9 billion from $16.5 billion in the first six months of 2005.


Chris

[SeekOnce]

So they scrapped the work done on Toy Story 3, only to start it back up again?

[mrpayroll]

So they scrapped the work done on Toy Story 3, only to start it back up again?

Yeah, but they are going to do it the <s>Pixar</s> right way this time!

Chris

[mrpayroll]

http://www.latimes.com/business/la-fi-pixar10feb10,0,7960951,full.story?coll=la-home-business

Others' options may have paid off for Jobs

If backdating inflated Pixar's profit, Disney might have overpaid in its $7.4-billion purchase of the studio, benefiting its biggest shareholder.

By Joseph Menn, Times Staff Writer
February 10, 2007


Could Steve Jobs have benefited from backdating of stock options without actually receiving the securities in question?

Legal and business experts say he might have done just that in the $7.4-billion sale last year of Pixar Animation Studios Inc. to the Walt Disney Co. Jobs, who was Pixar's chairman and chief executive, owned half of its shares and therefore reaped a big reward from the sale of the animation studio.

But Disney shareholders might have overpaid for the animation studio behind such hits as "Cars" and "Toy Story." That could have happened if Pixar's earnings were inflated by an understatement of compensation costs related to option grants years before the Disney deal, according to these experts.

The case is forcing Disney to decide whether Jobs enriched himself at the expense of its shareholders.

Jobs, the CEO of Apple Inc., is Disney's biggest shareholder as a result of the Pixar sale, as well as a Disney director and key advisor on technology to Chief Executive Bob Iger.

In addition to Jobs' role in granting options at Pixar, federal authorities are probing option practices at Apple, which has acknowledged making two grants to him that were improperly dated.

Disney disclosed in November that it had received inquiries from federal regulators about possible option backdating at Pixar. The Burbank-based entertainment giant has launched its own probe of the issue.

A Disney spokesman didn't respond to questions Friday about the investigation. Apple declined to comment.

More than 180 companies are under investigation by the Securities and Exchange Commission for questionable option backdating practices. More than a dozen CEOs have lost their jobs, including Bruce Karatz, former head of Los Angeles-based builder KB Home. A couple of executives have been hit with criminal charges related to the scandal.

Options are rights to buy stock at a set price within a certain time period. The price of stock to be bought using an option is generally the stock's market price on the day the option is granted by the company's board.

In their probes, regulators want to know whether option grant dates were changed after the fact to make them coincide with a stock's lowest price in a particular period. Doing so could give executives instant paper gains on their options. It could also inflate a company's earnings by understating employee compensation costs.

Backdating isn't necessarily illegal, but failing to disclose the practice in a timely manner is.

Pixar is an unusual case because the company no longer exists. That would make government or private lawsuits more complicated. No such claims appear to have been filed.

Any cases would be weakened by a jump in Disney shares since the Pixar deal, in part because of Disney's aggressive Internet strategy. That would make it difficult for Pixar shareholders who held on to their Disney stock to prove they had been damaged by an overstatement of earnings.

Another complication is the widely held belief that Disney overpaid for Pixar to shore up its own weak animation unit and that the price was not actually based on Pixar's reported earnings.

Pixar expressly asserted in its sale documents to Disney that the option dates were accurate.

As of late last month, Disney's investigators hadn't questioned several of the Pixar directors who voted to approve the option grants, according to people familiar with the inquiry and who asked not to be named because of the confidential nature of the probe.

If they did talk to the former Pixar directors, they might not have learned much. The board didn't discuss the dates of the options and took minutes to approve the grants, according to two people knowledgeable of the board discussions.

Instead, the directors relied on dates that appear to have been picked by Pixar's management.

Top executives such as Jobs might have relied on financial and legal executives to choose those dates.

The bottom line at Pixar, said attorney Claudia Allen, who advises corporate boards on options matters, is that "the income was overstated," through such option grants to the likes of Ed Catmull, the former Pixar chief technology officer and now president of feature animation at Disney, and John Lasseter, Pixar vice president for creative development, who is chief creative officer at Disney's film animation and theme-park design units.

Lasseter's good timing with options dates to 1997. On Feb. 21 of that year, he was granted 125,000 at that day's price of $7.06, adjusted for a later split. That was close to the yearly low. Just three days later, Pixar announced a new distribution deal with Disney that drove shares up sharply.

A bigger payday came in 2000.

Lasseter got options on 2-million split-adjusted shares, and Catmull got 1 million options, both with a strike price of $13.25. The options were officially priced Dec. 6, 2000, the stock's lowest point for a year.

In its next proxy statement, Pixar said Lasseter's options were given "in connection with" an employment contract signed March 21, 2001.

Between Dec. 6 and March 21, Pixar's stock rose 17%, making Lasseter's options worth about $4.6 million by the time his employment contract took effect.

As a result, Pixar's fiscal 2000 profit of $78.4 million should have been reduced by roughly that amount, or 5%, ignoring taxes, to account for Lasseter's increased compensation, according to New York University business professor David Yermack, an option expert who first wrote about suspicious timing of option grants in 1997.

Merrill Lynch analyst Richard Farmer, who combed through Pixar's SEC filings and stock history, said the likelihood that so many grants were made at or near so many monthly and yearly lows was one in many millions.

*


--------------------------------------------------------------------------------
joseph.menn@latimes.com


Chris