MI: Disney and Pixar End Talks

[Michael]

Pixar has elected to conclude its discussions to extend a successful long-term partnership with The Walt Disney Company DIS following the delivery of two more animated features, "The Incredibles" expected in 2004 and "Cars" expected in 2005.

"We have had a fantastic partnership with Pixar and wish Steve Jobs and the wonderfully creative team there, led by John Lasseter, much success in the future," said Michael Eisner, Disney chairman and CEO. "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."

Tom Staggs, Disney senior executive vice president and chief financial officer, said Disney management could not accept Pixar's final offer because it would have cost Disney hundreds of millions of dollars it is already entitled to under the existing agreement, while not providing sufficient incremental returns on new collaborations to justify the changes to the existing deal.

In addition to Pixar's delivery of two more feature films, under the current agreement, Disney maintains the rights to develop and produce sequels to all films created through this partnership, including direct to video presentations, television series and specials; and to exploit all characters and content throughout Disney's theme park and consumer products units, thereby allowing Disney to continue to nurture and grow these successful franchises while benefiting Disney shareholders into the foreseeable future. Disney also owns the entire Disney/Pixar film library, which includes "Toy Story," "Toy Story 2," "A Bug's Life," "Monster's Inc.," and "Finding Nemo," in addition to the two pictures yet to be completed.

In addition to Pixar, the Walt Disney Studios has relationships with other emerging animation producing partners including Vanguard Films, currently producing "Valiant," and San Francisco-based Complete Pandemonium, producing "The Wild" in conjunction with CORE Technologies of Toronto.

Walt Disney Feature Animation will release "Home on the Range" on April 2, featuring songs performed by Tim McGraw, Bonnie Raitt and k.d. lang. Currently in production is "Chicken Little," the Studio's first all-CG effort, which is scheduled for release in Summer 2005. For Summer 2006 and beyond, Walt Disney Feature Animation is producing a series of 3D motion pictures: "A Day With Wilbur Robinson," based on the beloved William Joyce book; "American Dog," directed by Chris Sanders ("Lilo and Stitch"); "Rapunzel Unbraided," directed by legendary Disney animator Glen Keane; and "Toy Story 3." These movies are all anticipated to break new ground in CG movie-making. The Studio has an additional 20 animated features in active development.

[YellowMan]

It's a shame to see them go, if you ask me. I really liked having two companies I really love working together.

Disney maintains the rights to develop and produce sequels to all films created through this partnership, including direct to video presentations

Yippee! So glad they can make some direct-to-video sequels!

[DisneylandRRGuy]

Ow that is going to hurt Disney in the long end

[DisneyHeartJonathan]

I heard about this on NPR this morning when I was coming to work - Everyone is going to put a positive spin on it, but as I see it...
winners: Pixar, Roy Disney
losers:Eisner, Disney animation, Disney Fans

Yellowman: Amen! bring on "Finding Nemo's Step Brother"

Final Opinion - If Eisner says this is Disney's Digital time then maybe they should join: Fox/Ice Age, Dreamworks/Shrek, and now Pixar. Sad that it feels like Disney is quickly bringing up the pack not leading it. WWWD

[FresnoDisneyFan]

I'm curious to hear what each side wanted in the deal. It's entirely possible that Pixars terms were unacceptable and wouldn't have been beneficial in any way to Disney. Steve Jobs is a little full of himself in my opinion and he could have gone a little out there. No doubt both companies will suffer because of this although I believe Pixar needs Disney more than Disney needs Pixar. The problem I see for Pixar with loosing the Disney affiliation is that they'll loose the marketing arm. I don't think anyone can market the product like Disney can (and I don't mean just the box office sales). Disney potentially will loose out on the future releases, however that doesn't mean that they won't be able to develop their own releases that will fill the void (although with Eisner's latest actions I don't think that'll happen). At this point I see it as both loosing out in the short run and the long run unless things change.

[spidermickey]

I think this will be a great oppertunity for Disney to refine it's aniamtion. I don't want to see, however, a bunch of all CG feature (ala Ice Age, Shrek, etc.). They should remember that they are the reason feature animation is around in the first place.

[poo]

when did they annouce toy story 3? its gonna be weird not having pixar do it

[Nemo88]

Disney stock did go down today,but barely,I thought it would go down a few dollars at least...its still trading at 24 dollars.

[Meyers]

After reading details in today's LA Times on the proposed deal with Pixar, I think Pixar was asking for a lot. A sweetheart deal like Lukas has with Fox.

Still seems to me that Eisner and Jobs could have compromised somehow. I wonder if any other studio will accept the same deal, but one might especially if not doing too well themselves. Some profit is better than none.

Eisner taking jabs at Jobs didn't help the sensitive negotiations either with Pixar. This is what Roy was critical of, Eisner bungling the negotiations on Disney's end.

Why did Disney make a deal with Pixar in the first place instead of developing their own CGI capability? Another example of Eisner's failure only short term and not for long term planning. With so many good animators leaving or being forced out of Disney, I question if the company will ever be the #1 animation studio it once was. Sound like hell to work for Disney Animation nowadays and questionable job security. Katzenberg must be thrilled.

"Chicken Little" looks like a dud to me. Toy Story 3 sounds soo original. Lets see if Disney can pull it off without Pixar.

So now, thanks to Eisner, Pixar will be a competitor, not a partner regarding all future movies. Not a very good development.

Roy was and still is right.

SaveDisney.com

[mikeandjen]

From videoETA.....

DISNEY'S BONEHEAD MOVE TO END ITS PARTNERSHIP WITH PIXAR
Discussions between Pixar Animation Studios and the Walt Disney Company
to extend their partnership have collapsed. Thus bringing to an end a
very successful collaboration.

You know the players. Disney, perhaps the world's best brand name, is
synonymous with kid and family-friendly, quality entertainment. Pixar,
close to being a household name itself, is responsible for the
computer-animated hits Toy Story, Monsters, Inc. and Finding Nemo.
Their partnership was a match made in profit heaven.

But that's all about to end, more or less. After Pixar produces two
more feature films (this November's The Incredibles and next year's
Cars) for Disney, the two companies will sever ties. Pixar head (and
Apple Computer CEO) Steve Jobs made the announcement, "After 10 months
of trying to strike a deal with Disney, we're moving on."

According to an Associated Press report, negotiations stalled on
Pixar's request to have the exclusive copyrights for the five films it
released through Disney plus the next two. That's a lot of money for
product licensing and both companies realize it. Disney didn't want to
bet its current assets for a stake in Pixar's potential successes in
the future.

OK, here's why this is a dumb move on Disney's part. The last five
theatrical films produced by Disney's own animation department were
Brother Bear, Treasure Planet, Lilo & Stitch, Atlantis, The Emperor's
New Groove. The total domestic box office revenue for these films was
$437.7 million--and that's not even counting the studio's
should-have-been direct-to-video releases like Piglet's Big Movie and
The Jungle Book 2 which grossed no more than $50 million each. Of
course, Pixar's five theatrical films were Toy Story, A Bug's Life, Toy
Story 2, Monsters, Inc. and Finding Nemo. Total U.S. box office take
for those was $1.2 billion. Yes, that's billion with a "B".

Now just fathom the toy and product licensing profits for each of these
films. I'm guessing there were a lot more Monsters, Inc. lunchboxes
sold than those for Treasure Planet. Licensing is Disney's bread and
butter.

Finally, consider this fact. Disney just last year closed its Orlando,
Fla. animation studio and has dropped its animation staff from a peak
of 2,200 in 1999 down to just 600.

Also add to the mix the rising force of Dreamworks' animation studio.
They had a little movie called Shrek bring in $267 million in 2001 and
will have its sequel this year. That's all thanks to former Disney
animation head Jeffrey Katzenberg--a.k.a. the "K" in Dreamworks SKG.

So who will court Pixar now? Place a heavy bet on Warner Bros. Even the
studios' number one property of Bugs Bunny and gang could only manage a
dismal $20 million late last year with Looney Tunes: Back In Action.

Fox is a good possibility too. Especially when you consider that Pixar
started as an off-shoot of Lucasfilm and George Lucas has his own
distribution-only deal with Fox for the Star Wars prequels.

You can even consider Paramount a dark horse in the running. Imagine
the synergy it could have between Pixar and Paramount/Viacom's
Nickelodeon property.

No matter the future, this stands to be a big-time faux pas on Disney's
part. Roy Disney -- the nephew of Walt who was recently booted off
Disney's board of directors by head mouseketeer Michael Eisner for his
differing opinions on the future of the company -- has to be laughing
his butt off.