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 http://money.cnn.com/2004/01/29/news...ex.htm?cnn=yes


Pixar dumps Disney


Studio headed by Steve Jobs says it will seek other distributors for its films starting in 2006.

January 29, 2004: 7:20 PM EST



NEW YORK (CNN/Money) - Pixar Animation Studios Inc. said Thursday it ended talks with Walt Disney Co. to extend a five-picture deal for Disney to distribute Pixar films.


Pixar CEO Steve Jobs, whose studio has been a runaway success.

Pixar, the computer animation pioneer founded by Apple Computer Inc.'s Steve Jobs, said it would begin talks with other companies to distribute its films starting in 2006.


"After ten months of trying to strike a deal with Disney, we're moving on," Pixar CEO Steve Jobs said in a statement. "We've had a great run together -- one of the most successful in Hollywood history -- and it's a shame that Disney won't be participating in Pixar's future successes."


The move was a clear setback to Disney, which reaped a financial and critical bonanza from the partnership and has struggled with its own strategy for animation.


Disney said Pixar's final offer would have cost Disney hundreds of millions of dollars from the existing distribution deal and was not sweet enough going forward.


"Although we would have enjoyed continuing our successful collaboration under mutually acceptable terms, Pixar understandably has chosen to go its own way to grow as an independent company," Disney Chairman Michael Eisner said in a statement.


Pixar (PIXR: Research, Estimates) stock rose initially in after-hours trading but later fell back, while Disney (DIS: Research, Estimates) stock tumbled about 6 percent.


Other studios are already expressing interest in forging a relationship with Pixar. A Warner Bros. spokesperson told CNN, "We would love to be in business with Pixar. They are a great company." Warner Bros. has not yet engaged in formal talks with the animator.


Pixar said its five films so far -- including "Toy Story", "Monsters Inc." and "Finding Nemo" -- have taken in $2.5 billion at the worldwide box office and sold more than 150 million DVDs and videos. "Finding Nemo" was highest grossing animated film of all time.


Pixar had complained that the terms of the distribution deal were tilted too heavily in Disney's favor. Under the deal, Pixar was responsible for content, while Disney handled distribution and marketing.


In exchange, Pixar has split profits with Disney and pays the studio a distribution fee of between 10 percent to 15 percent of revenue. Based on its blockbuster success, Pixar has argued that it should keep the profit itself and cut the fees its studio partner charges.


Many observers had expected Pixar and Disney to keep talking at least until the middle of this year and to eventually reach a deal since both had gained so much from their partnership.


"It makes it look like Eisner did something wrong again, but we shouldn't jump to conclusions. This could be a negotiating tactic by Pixar as well," said Patrick McKeigue, an analyst at Independence Investment, which holds Disney shares.Roy Disney and ally Stanley Gold, who both resigned from the Disney board late last year and called for Chief Executive and Chairman Michael Eisner to step down, placed the blame on Eisner.


"More than a year ago, we warned the Disney board that we believed Michael Eisner was mismanaging the Pixar partnership and expressed our concern that the relationship was in jeopardy," they said.


Disney noted in its statement that it owns rights to all the Pixar movies, as well as two more animated features yet to be delivered -- "The Incredibles" due this year and "Cars", expected in 2005.


Disney will distribute those two films with Pixar getting its share of the profits. Disney also has the right to finance and produce sequels if Pixar declines to co-finance and produce them under the current agreement.
 

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Hmm, I wonder how long before Eisner is out and Jobs is made "CEO for life" of Disney. :D


How else am I going to get my Lizzy McGuire Edition Video iPod?


Randy
 

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Yeah, I heard news of this on NPR this morning on my way to the office. Pixar will be gone, and this on the heels of the announced closure of the Orlando animation studio. But hey, they still have the theme parks. :D


Is it just me or does anyone else think the time has come for Eisner to go?


--Jerome
 

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Disney still has the right to distribute sequels, under the same contract, to the Pixar films they've already distributed. But I agree, this is a huge problem for Disney. They have not been able to make a hit on their own in animation for a while.


The bottom line is Disney needed Pixar more than Pixar needed Disney. Wow, what a power shift.


~Dominic
 

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I'm just curious and don't know that much about the biz, but does Pixar really need to find other studios as distributors? Aren't they sitting on a mountain of cash with no debt? How much does it cost to distribute a film? I'm probably taking a much too simplistic view, but it would seem that Pixar would just need to have one solely-distributed hit film and they would be set as major players, and also have full rights to the films they make.
 

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A couple of points here


1. You have to assume that either (a) the folks as Disney are morons, or (b) they ran all the numbers and they are better off without this deal. Pixar was asking an awful lot of Disney to keep the association, and at some point the prestige simply isn't worth the money.


2. Pixar has had 5 straight hits. Depending upon your worldview, this either means (a) they are unstoppable geniuses, or (b) their time is almost up.


The Golden Age of Walt Disney himself lasted 5 films (Snow White -> Bambi). After that he turned out Saludos Amigos, The Three Caballeros, Make Mine Music, Fun And Fancy Free, Melody Time, The Adventures Of Ichabod And Mr. Toad. Is that were Pixar is headed?


The "Second Golden Age" was 4 films (Little Mermaid -> Lion King) after which the quality gradually dropped off (Pocohontas -> Atlantis; which weren't bad films, but didn't keep up the quality (or profits!) of the previous 4.


In between the Golden Ages there was a fairly decent run of 6 films (Cinderella -> 101 Dalmations) but nobody has ever been able to maintain the highest quality for very long.


Disney has the next two Pixar movies. So is Pixar going to be able to maintain their momentum and quality for movies 8+ that they put into 1-7?


3. Distribution isn't just about money. It's about thousands of people doing all sorts of various jobs to get the finished movie into theaters. Pixar isn't interested in getting into that biz. The question is whether they want to go in as partners with a distribution company, or just hire somebody out as labor.
 

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I'm glad. Perhaps Pixar will make more "adult" oriented fare. It is not surprising that they have had 5 straight hits when they have been ALL THE SAME MOVIE!!!! The standard someone's lost lets go find em fare which ALL OF THEIR MOVIES HAVE BEEN! Enough. Pixar has become stale with Disney!!
 

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Quote:
been ALL THE SAME MOVIE!!!!
Not sure what you meant by that, but I'm hoping that you didn' t mean that the concept/premise of all the 5 Pixar movies has been the same?!


Even within the Toy Story movies, it was the same characters but different story, situation, plot, etc.

Quote:
Perhaps Pixar will make more "adult" oriented fare.
Like what?! And, why would they do that, none of the adult oriented 'fare' that I know of has made an inkling of what their younger audience movies have made.


There has only been a handful of TRULY "adult" oriented fare and most of it borderlines on the X category.


Most of the best animated films contain material to suite both audiences, Shrek for example and also Toy Story 2.


My take....


Troy
 

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Several of the news stories mention that Eisner has announced plans to have Disney go ahead and make Toy Story 3 without Pixar, as allowed under their contract. But without any of the original character and set models, textures and shaders, Pixar's proprietary software, or Pixar's writing team, TS3 is bound to be a terrible, cheap knockoff. And you know this inferior sequel will eventually be bundled with the much better TS1 and TS2 films when the "Supra-Ultimate Toy Box: Platinum Collector's Edition" comes out in 2007 or so...
 

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Quote:
Originally posted by Troy LaMont
Not sure what you meant by that, but I'm hoping that you didn' t mean that the concept/premise of all the 5 Pixar movies has been the same?!


Even within the Toy Story movies, it was the same characters but different story, situation, plot, etc.




Like what?! And, why would they do that, none of the adult oriented 'fare' that I know of has made an inkling of what their younger audience movies have made.


There has only been a handful of TRULY "adult" oriented fare and most of it borderlines on the X category.


Most of the best animated films contain material to suite both audiences, Shrek for example and also Toy Story 2.


My take....


Troy
I did not mean porn obviously. A fantasy movie perhaps that is dark like Secret of Nimh or Dark Crystal. SOMETHING DIFFERENT!!!!


And Yes if you examine all the Pixar features they all have the same plot (someone is lost and they have to find them) including having that annoying fat guy Randy Newman singing and playing the Same piano song over the credits.


This has been examined before to an almost concensus. Search for the thread.


If you think any of the Pixar movies are different plot wise then you are either 5 years old or blind.
 

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Quote:
Originally posted by mkultra
If you think any of the Pixar movies are different plot wise then you are either 5 years old or blind.
Was that crack really necessary?


--Jerome
 

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Discussion Starter #14
Quote:
Originally posted by Mark Fontana
Several of the news stories mention that Eisner has announced plans to have Disney go ahead and make Toy Story 3 without Pixar, as allowed under their contract. But without any of the original character and set models, textures and shaders, Pixar's proprietary software, or Pixar's writing team, TS3 is bound to be a terrible, cheap knockoff. And you know this inferior sequel will eventually be bundled with the much better TS1 and TS2 films when the "Supra-Ultimate Toy Box: Platinum Collector's Edition" comes out in 2007 or so...
I'm pretty sure that that petty little move would bring the curtain down on the Michael Eisner era then. It would be a fitting exit considering how his prestige has slid from the top of the mountain and into the valley.
 

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I'm pretty sure that that petty little move would bring the curtain down on the Michael Eisner era then.


Disney has been cranking out inexpensive direct-to-video sequels of their prestige titles for years - and making a fortune off them. Such wonders as Cinderella II: Dreams come true and Belle's Magical World. Not sure how this would change anything. Heck, they've already done Buzz Lightyear of Star Command.
 

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Quote:
But without any of the original character and set models, textures and shaders, Pixar's proprietary software, or Pixar's writing team, TS3 is bound to be a terrible, cheap knockoff
Why is this necessarily true? Are we all so young here that we do not remember the creative genius that the Walt Disney Company has shown in the past? I for one have a lot more faith in the mouse - with or without Eisner.


Disney should be able to replicate the quality of Pixar's films with relative ease just like other studios did with Shrek, Ice Age and Antz. Also, Disney clearly has the clout to bring in MAJOR voice actors which always adds immediate appeal to an animated film. Tom Hanks is much more likely to sign a deal with Disney alone than Pixar alone.


Lets not forget that it was Disney that green-lighted and funded Pixar's first film. Pixar would not be where they are without them.


I wish Pixar all the luck and I hope this split leads to a renewed effort at Disney to continue being the best. The success of Pixar has allowed Disney to sit on its duff for a while.
 

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Quote:
Originally posted by Mark Fontana
Several of the news stories mention that Eisner has announced plans to have Disney go ahead and make Toy Story 3 without Pixar, as allowed under their contract.
I believe Pixar has first right of refusal to these sequels. So Disney can make the sequels only if Pixar decides not to.


The reason that Pixar has only made one sequel so far (Toy Story 2) is that Disney screwed them over but good. Their agreement called for Pixar to develop five movies for Disney. Disney then claimed that TS2 was a continuation of the original TS movie and thus did not count towards the quota. Jobs must have gone ballistic...


Hopefully, now that they're free of the pigs at Disney (by 2006), Pixar will be able to work on a few good sequels.
 

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TS 1 & 2, and Finding Nemo had the someone's lost now find em story, but Monster's Inc and A Bug's Life did not. So 3 out of 5, not all.


Sean
 

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Hey! what did you expect? Disney had to negotiate hard in order to pay for Eisner's multi-million dollar annual salary.
 

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Monsters Inc had its little girl lost theme, for me A Bug's Life has been Pixars best film to date, also worth noting that Dinosaur which i loved was completely CGI and shows Disney can do it.
 
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