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Another Voice
09-11-2003, 02:28 PM
The rumor about town this morning is that Michael Eisner will annonuce at the next meeting of the Disney Board (in about two weeks) that a new deal with Pixar can not be reached. Various mouse-suited executives are already spinning out the "we won't make a bad deal for the company" line.

Pixar has already arranged financing for its film in 2006 and is telling potential distributors that will retain all rights to the movie.

KNWVIKING
09-11-2003, 02:57 PM
***"Pixar has already arranged financing for its film in 2006 and is telling potential distributors that will retain all rights to the movie.***

Why would Pixar need to seek financing ? I thought Jobs had cash on hand for his next project. Is it simply the way things or done ? Just curious.

DIGGER68
09-11-2003, 03:30 PM
Very intereting..

That's a lot of revenue walking out the door. Curious if anyone has hints on how they plan on moving forward with annimation?

JD

hopemax
09-11-2003, 04:23 PM
There is an article about the Pixar/Disney relationship in the LA Times today

http://www.latimes.com/business/la-fi-pixar11sep11,1,7007687.story?coll=la-home-todays-times

crusader
09-11-2003, 08:24 PM
I'm going to play a little wait and see on this. Not that I don't believe it. Nemo's success delivered an opportunity to Pixar which may not be available again for a very long time. They have to capitalize on it

HB2K
09-11-2003, 08:24 PM
I'm just shaking my head.....

This is what happens when you stop MAKING something and start selling other people's work....

Sad day for Disney.

Keyser
09-12-2003, 09:47 AM
I know Disney is working on at least some computer-generated movies - I saw some of the work for "Chicken Little", plus some work from another CG movie (the name escapes me now) Disney is developing, at a conference a month ago. Does anyone know more details, though, such as: Has a target release date for Chicken Little (or the other movie) been set? Is this from the same group that did Dinosaur, or a different part of Disney? Are there more movies in the pipeline?

I guess my point is that Disney is at least working on their own CG stuff. I imagine they'll have a couple of in-house movies out before Pixar has their first solo one.

DancingBear
09-12-2003, 10:04 AM
duplicate post

DancingBear
09-12-2003, 10:05 AM
Interesting. Why the rush by Eisner to tell the Board they CAN'T get to a deal, when the existing deal still has two more films to go? (My first thought was it makes more sense if Eisner is trying to get the deal done so he can proudly announce it to the Board). Possibilities:

---They are just WAAAAAAAYYYYYY too far apart now to see any hope of coming together.

---Pixar is ready to announce some other affiliation (which they are now free to do).

---Eisner wants the two-movie lead time to get in-house CG up and running (or to cut a deal with another CG house), and wants to get the Board committed to funding that now.

Another Voice
09-12-2003, 02:09 PM
Pixar has been free to seek alternate distribution since they delivered Finding Nemo back in March. Since it takes two or more years to produce an animated film, they're right on schedule to figure out how to handle a summer 2006 release.

The first rule in Hollywood is never make a movie with your own money. Moives are too risky a business and you can always find some smuck to buy their way into the glamour (by writing you checks). And the way the finanances work any - you pay everything up front to make the movie and only get cash back when it's released - it make sense to borrow to fund a movie. That way you can pay off the loans with the box office reciepts (Hollywood worked this way for a century and was the reason why Disney was so tied to Bank of America).

Disney has already announced CGI deals with three outside production companies. Disney shut-down the group that made Dinosaur and fired all those people. At the moment they are forcing all existing traditional animators into training to become computer artisits - but all that's doing is driving the good people away.

It's been "rumored" that the offical decree is Disney will no longer produce animation in house. Everything will be produced completely by out side houses, or storyboards will be shipped overseas to animation houses that will produce the completed film.

Eisner has seen the future and it looks exactly like Pokeman on Saturday morning.

crusader
09-12-2003, 02:18 PM
At the moment they are forcing all existing traditional animators into training to become computer artisits - but all that's doing is driving the good people away.

It shouldn't. CGI is an added tool not a replacement. You still need the artist so where are all these "good" people going - Cartoonland? Sounds like a career limiting choice.

Keyser
09-12-2003, 04:19 PM
Originally posted by Another Voice
It's been "rumored" that the offical decree is Disney will no longer produce animation in house. Everything will be produced completely by out side houses, or storyboards will be shipped overseas to animation houses that will produce the completed film.


OK, I'm confused. As I said, I saw some presentations (at SIGGRAPH - the major computer graphics conference) from some folks at Walt Disney Feature Animation at the end of July. They were mainly describing some software techniques they developed, but in the process, they showed models and animations that they said were from two movies they were working on. Most was from "Chicken Little," the rest was from something I don't remember now. This was definitely beyond the storyboard stage, and from all affiliations stated was "in-house."

I'll admit I don't know how the business end of this stuff works, but I would have thought that if they were not from Disney, they wouldn't have listed their affiliation as WDFA. Also, I don't know much about the movies themselves - maybe they are shorts? They seemed to have too much work invested (in Chicken Little, in particular) to just throw it away, though.

KNWVIKING
09-12-2003, 04:33 PM
***"The first rule in Hollywood is never make a movie with your own money. Moives are too risky a business and you can always find some smuck to buy their way into the glamour (by writing you checks). And the way the finanances work any - you pay everything up front to make the movie and only get cash back when it's released - it make sense to borrow to fund a movie. That way you can pay off the loans with the box office reciepts (Hollywood worked this way for a century and was the reason why Disney was so tied to Bank of America)."***

This makes sense, and it's kinda the answer I expected, but how would this kind of financing differ from what Disney was already doing. Pixar was using Disney money to cover half the production costs, Disney in turn got half the profits. If Pixar finds a Joe Wannabe to come up with the production costs of it's first non-disney product, why won't Wannabe be entitled to a similar profit ?

meowthew2
09-12-2003, 08:14 PM
Good riddance to Pixar, I say. Their formula is becoming pretty stale, and if their future films are in the vein of what "The Incredibles" appears to be, I think their winning streak will be coming to an end. Disney will be fine without them.

HB2K
09-12-2003, 10:12 PM
Good riddance to Pixar, I say. Their formula is becoming pretty stale, and if their future films are in the vein of what "The Incredibles" appears to be, I think their winning streak will be coming to an end. Disney will be fine without them.
Spoken like a true snowglobe shaker.

Yeah it's a wonderfull thing for Disney to throw away millions of dollars of profit....yeah who cares about that! We got our snowglobes!

The Incredibles will do big box office numbers based on Pixar's brand name alone. I personally wasn't too interested in Nemo from the original trailer i saw, but kept an eye on future trailers and went to see the movie no matter what because it was a Pixar film and they've yet to let me down. (co-incidentally I felt the same way about Monsters).

Guess what. Not only was I pleased with what I was given, I went two more times to see the movie.

Pixar has earned my benefit of the doubt....kinda like what Disney used to have....

Planogirl
09-13-2003, 12:44 AM
Yep, a company that just made the number one animated film of all time certainly has a stale formula. Pixar has never made a film that even comes close to being bad or formulaic, and I'm a devoted fan now. And I even own a snowglobe.

d-r
09-13-2003, 03:48 PM
snow white is the number one animated film of all time

Planogirl
09-13-2003, 08:03 PM
Originally posted by d-r
snow white is the number one animated film of all time
OK, let me rephrase that. The number one animated film in UNADJUSTED dollars. My point is that it is a heck of a moneymaker for a movie with a stale formula.

d-r
09-13-2003, 08:41 PM
that's true.

ThreeCircles
09-13-2003, 11:20 PM
Originally posted by Planogirl
OK, let me rephrase that. The number one animated film in UNADJUSTED dollars. My point is that it is a heck of a moneymaker for a movie with a stale formula.

The number one CGI animated film. NOT the number one animated film.

DancingBear
09-14-2003, 06:28 AM
Just saw Nemo yesterday for the first time. The theater was full at a 1:00 showing (rainy day, and it was in one of the smaller theaters in a 22-theater multiplex, but still...) Great fun! The animation of the water was superb, as I had heard. Loved the "whalespeak."

lucky_bunni
09-16-2003, 12:58 PM
IMP, Disney has screwed Pixar for all it's worth, and for all Steve Jobs is going to let them. How fair has it been for Disney to first expect 90% of the profits, then 50%, with having no labor in the making of the film. Sure, Disney has really shown us what they can do on the CGI side... Dinosaur... hehe!! Steve Jobs is no dummy, he knew exactly how this all would play out , and he is one tough mother when it comes to negotiations. Just look at the deal he pounded out with the music industries BIG 5 to get iTunes up and running. No other MP3 site had been able to do what he did before, and they are still trying and can't get a deal close to what Jobs has got.

As I see it, Disney can either take what Jobs wants to give them, or let him go off to some other studio to make somebody else money. ME should have saw this coming from Toy Story and bought a stake in Pixar, instead of just doing deals with them.

Maybe at this point, Pixar/Apple should just buy out Disney. Think, Jobs has always been an expert on reinventing his company, and insane about the quality of his products. I say kick ME out and put Jobs in charge of Disney/Pixar/Apple.

DancingBear
09-16-2003, 01:41 PM
Originally posted by lucky_bunni How fair has it been for Disney to first expect 90% of the profits, then 50%, with having no labor in the making of the film.They entered into a long-term deal with a fledgling company which required them to bear 50% of the risk.

Steve Jobs is no dummy, he knew exactly how this all would play out....(1) If Job$ knew that Pixar was going to have a string of tremendous hits, then he was an idiot to enter into such a long term deal. (2) If Job$ knew exactly how it would play out, why was he trying to renegotiate the deal and make Toy Story 2 count toward the minimum commitment? (3) If Jobs knew how it was going to play out, then just what are you proposing that ME should have done differently? Give Job$ what he wanted earlier?

As I see it, Disney can either take what Jobs wants to give them, or let him go off to some other studio to make somebody else money.Nope, Job$ isn't going off to make some other distributor big money, but he's going to keep more of the money in Pixar (which is his right).

ME should have saw this coming from Toy Story and bought a stake in Pixar, instead of just doing deals with them.Why?

I don't understand the concept that Disney "screwed" Pixar. Because they held them to the original deal? This isn't a morality play, it's big business between grown-up businessmen.

Another Voice
09-16-2003, 09:06 PM
The original deal envisioned that all sequels would be direct-to-video or television based. That how Toy Story 2 started out life – as a direct to video. However, Pixar hated the story line that Disney was trying to force on them (signing Mexican bandits and all), so Pixar did their own script. It quickly became apparent that the new film was going to be special and – after a battle with Disney – went ahead and made it a feature film. Since the expense and effort in making a feature is so much greater than a direct, Pixar ask if they could consider part a "feature" in terms of the contract. They had, after all, just delivered a mega hit to the Mouse.

While Disney is technically right in holding to the contract, they've come off as the cop who gives you a ticket for going 46 mph in a 45 zone. Hollywood doesn't much follow contracts to begin with – it's all about the relationship. By being a stickler Disney destroyed its working relationship with Pixar (they was almost no Disney input into Monsters or Nemo from what I've heard) and their treatment of Pixar has been noticed by everyone else around town. It's gotten very, very expensive for Disney to keep people around.

No one knew how much money was going to be involved when the first deal was signed (it was mostly so Disney could get software cheap). When the first two movies produced so much, Jobs tried to renegotiate for a longer deal at terms closer to industry standards. Eisner refused. The rumor is because Eisner was confident in Disney's ability to turn out direct-to-video traditional animation and the all the millions he was pouring into The Secret Lab. Dinosaur was going to be a major bargaining point (as in "we don't need you") to squeeze even more money from Pixar.

But things didn't turn out that way.

"…Big business between grown-up businessmen" is more than watching lawyers argue over the tiny print. It's knowing what's in the best interest of the company – even if that means changing things and writing new agreements; it's giving up a little to gain a lot. Eisner endangered Disney's long term interest for the sake of short term gains. If you're interest is to sell-off Disney as quickly as you can, it's a good move. But if want to see Disney grow and thrive, than it was a really stupid thing to do.


P.S. Pixar was hardly "fledgling" when Disney signed the deal - they were making a nice living off making commericals and selling software. They need Disney to get their movies into theaters. Disney put up nothing for Pixar's films (all that Disney spends on marketing they subtract from Pixar's check) and they got all that fancy computer software used in traditional animation since Beauty. There was never any risk whatsoever on Disney's part.

DancingBear
09-17-2003, 07:04 AM
Originally posted by Another Voice The original deal envisioned that all sequels would be direct-to-video or television based.This is simply not true, as I showed in the sequence of quotes from Pixar's 10-K in this thread:

http://disboards.com/showthread.php?s=&threadid=423709&highlight=pixar+sequel

Those quotes--again, from Pixar itself--show that even when Toy Story 2 was still being developed as DTV, the contract--again, as summarized by Pixar itself--clearly contemplated that sequels might be theatrical releases.

Hollywood doesn't much follow contracts to begin with – it's all about the relationship.Well, the string of highly-publicized business litigation coming out of Hollywood indicates that at least some people deem contracts to be important. In any event, however, every business I've worked with is about relationships, and most of them only rely on written contracts for major transactions. I find it hard to believe that long-term development deals and such are just ignored. [And just what are all those "entertainment lawyers" in Century City doing all day, anyway.]

Again, we're not really talking here about screwing around with "talent," but really just how much Job$ gets to put in his pocket. ME may have screwed around too much with animators, actors and directors, but that's a separate issue. I mean, if ME had renegotiated the deal at Job$ request, wouldn't animators still want to work for Pixar instead of Disney?

No one knew how much money was going to be involved when the first deal was signed (it was mostly so Disney could get software cheap).What deal are you talking about here? Prior to the Production Agreement? 'Cause I don't see how the Production Agreement (signed post Toy-Story) was for the purpose of getting software cheap----it's a content deal. They had prior relationships involving software, including the technology they co-developed that won a technical Oscar.

"…Big business between grown-up businessmen" is more than watching lawyers argue over the tiny print. It's knowing what's in the best interest of the company – even if that means changing things and writing new agreements; it's giving up a little to gain a lot.The problem with this is I don't see any indication that Job$ was offering any significant quid pro quo for counting TS2 toward the minimum commitment---he was just trying to get out of the commitment sooner. I also don't see any indication that if ME had been nicer to Job$ back then, Disney would be in any better position right now.

Eisner endangered Disney's long term interest for the sake of short term gains. If you're interest is to sell-off Disney as quickly as you can, it's a good move. But if want to see Disney grow and thrive, than it was a really stupid thing to do.Assuming that ME's goal is to sell off Disney, explain to me how losing the relationship with Pixar now helps achieve that goal.

P.S. Pixar was hardly "fledgling" when Disney signed the deal - they were making a nice living off making commericals and selling software.They were certainly fledgling in the feature film business, and after they signed the Production Agreement they quickly made feature films the focus of their business. Read the 10-Ks and you see this progression clearly. There's a big difference between making a nice living and where they are now.

They need Disney to get their movies into theaters. Disney put up nothing for Pixar's films (all that Disney spends on marketing they subtract from Pixar's check) and they got all that fancy computer software used in traditional animation since Beauty. There was never any risk whatsoever on Disney's part.Stay with me here. Disney pays half of the production costs. Then they pay all of the marketing costs. If the film isn't successful, they lose money. That's the definition of risk in business. As it happens, the films have all been successful, and have more than paid back the production and marketing costs, but Disney definitely took on shared risk in the Production Agreement. Why do you think Pixar wanted the production contribution in the first place---why didn't they just borrow the money?

According to boxofficemojo.com, Finding Nemo had a $90 million production budget, and $40 million in marketing costs. That's $85 million that Disney fronted for that picture.

KNWVIKING
09-17-2003, 08:11 AM
***" Eisner endangered Disney's long term interest for the sake of short term gains. "***

When the last film is complete and all the profits have been divided up, won't this relation have lasted about twelve years ? That's not considered "long term" ?

Disney is still reaping profits ToyS and Monsters. They will be reaping profits on Nemo for years to come. These are considered "short term gains" ?

crusader
09-17-2003, 08:12 AM
The basic reality is simple:
Pixar tried to get disney to restructure the deal with TS2. When they failed, there was a wave of ill-will within the company. So why then does Pixar produce an excellent sequel? Why not put the ball back in ME's court and walk?

If the answer was "emotional attachment" and an underlying fear that a mediocre sequel could prove detrimental to Pixar's value then how does it become the fault of disney?

If the answer is also - that they wanted the money - then it becomes difficult to argue that they are solely in it for the art.

Pixar had an agenda from day 1. There is no evidence in the reports to indicate a willingness on the part of their organization to make a sustained long-term commitment with disney. They were always vying for an exit strategy and continued to produce exceptional quality features in order to achieve that goal.

ME can't afford to trust Jobs any more than Jobs can afford to trust ME. A handshake and "forget about the language" backhanded sidedeal is not going to cut it when you're two corporate bigwigs with equally matched negotiable skill. The writing is what governs not the smoke - particularly in a town where talk is cheap and inevitably scripted.

KNWVIKING
09-17-2003, 09:01 AM
**"They both just wanted as much cash as possible. And, in this case at least, Eisner had better lawyers."**

After reading the info posted by DancingBear, I don't think ME had or needed better lawyers. He had a better contract.

Walt's Frozen Head
09-17-2003, 10:05 AM
The only major difference is that Jobs is occassionally adept enough to get out of the way of the creative types while Eisner isn't so adept

Your understatement borders on disingenuousness.

Jobs has very often,nearly always, in success and failure, been at the cutting edge of creative innovation. Eisner has very often, nearly always, in success and failure, been the cutting edge that hacked off Disney's creative arms.

In my opinion, the only thing that will prevent Pixar under Jobs from taking the same approach that Disney did under Eisner is for Jobs to be gone.


What killed Disney was that Eisner stopped investing in his company's creativity. Jobs' biggest failure to date, the Next box, failed mostly for being to ahead of its time.

Disney doesn't make good stuff anymore... they have to buy it from someone. Jobs' companies, by and large, make very good stuff. Good enough stuff that Disney can't afford to buy it anymore, it would appear.

And it doesn't take tea leaves, eight balls, or even Miss Cleo to see that real potential...

It only takes ignoring Steve Jobs' history as a business decision maker.

Another Voice
09-17-2003, 10:17 AM
I kinda like that the magic snow globe has come back with an answer that says "Steve Jobs' been out to rip-off Michael Eisner from the beginning - we're better off without Pixar".

As much as I really want to believe that someone stagged a multi-year, billion dollar business deal from the beginning just to get Eisner, sadly it isn't the case.

It's a case of two self-appointed alpha males strutting about to gain the best leverage for their business. Eisner took advantage of a small company (one he intended to gobble up one day); Jobs knows that he has the stronger position and wanted to align the deal to his advantage.

Shake that snow globe as hard as you can - it won't change the fact that Disney can't make a movie and Pixar can. Everyone at Disney knows it, everyone in Pixar knows it, everyone in Hollywood knows it.

It's why every studio in town has been wining and dining Pixar, and why Disney has been chasing to signs deals with anyone that might get a line of credit from Office Max to buy a computer.

Scream about "we're just following the contract" as they take the talent out the door. There were lots of deals signed for Treasure Planet and Atlantis and Piglet's Big Movie and Jungle Book 2 and that meant nothing to those movies. You can be smug about "having the better contract", but I've seen a bunch of lawyers try to write a script.

It ain't pretty.

Eisner's dealing with Pixar is short sighted. Toy Story has a revenue life of probably thrity years - the franshise could have been longer than that. They alredy went to court over TS and Disney lost signifacnt rights; imagine what the ligiation is going to be when a liberated Pixar tries to stop Disney's TS3. Instead of working together on a movie that would have made everyone some nice coin, Eisner wanted it all for himself. He'd rather have nothing than share.

Monsters, Inc., Nemo everything else could have lasted a long time too. And what about all those films beyond the first five? Think about all those movies. Imagine if Pixar animators helped Disney with Treasure Planet - think of what the film would have looked like then! (Better yet, think about if they hepled on the script!). Disney got where it was because of a body of work - not just a couple of hits. Eisner straggled a few more pennies up front and gave up potential big bucks later on.

It's also inaccurate to hold up Eisner as a champion of contract rights. Both Katzenberg and Ovtiz are extremely wealthy men today becasue Eisner intentionally violated their contracts. We have yet to hear the final on 'Pooh', but that little contract dealing will probably soak up all the profits Disney ever made from Pixar.

Pixar has the goods. Rather than facing reality Eisner settled on squeezing whatever he could in the shortest amount of time.

But then, that's how's he treating everything associated with Disney these days, isn't it.

DancingBear
09-17-2003, 10:33 AM
A-V, it's still unclear to me exactly what you think Eisner should have done? Do you really think Jobs was saying, "Just ignore the contract and count TS2 toward the minimum, and we'll enter into a mutually profitable extension of the Co-Production Agreement, on terms you'll be happy with."?

Eisner's dealing with Pixar is short sighted. Toy Story has a revenue life of probably thrity years - the franshise could have been longer than that....Instead of working together on a movie that would have made everyone some nice coin, Eisner wanted it all for himself. He'd rather have nothing than share....Monsters, Inc., Nemo everything else could have lasted a long time too.Isn't this equally applicable to the Pixar side of the deal?

DancingBear
09-17-2003, 10:38 AM
Originally posted by Another Voice
[B]Eisner took advantage of a small company (one he intended to gobble up one day)...Hmmmm. A couple of posts ago, "Pixar was hardly "fledgling" when Disney signed the deal - they were making a nice living off making commericals and selling software." Now they were a small company being taken advantage of by big, bad Disney.

Just how were they taken advantage of? Did they not have high-priced lawyers of their own? Did they not understand the concept that signing a long-term contract was a hedge bet, and that they might make more money (but at higher risk) without a long-term deal?

raidermatt
09-17-2003, 10:57 AM
The only major difference is that Jobs is occassionally adept enough to get out of the way of the creative types while Eisner isn't so adept (unless you consider Breck one of the creative types...). The Head's already pointed out how vast an understatement this is, but even if it weren't, it would still be enough to put Jobs at least a couple of levels above Eisner.

You (not just you, Scoop) can deflect all you want, but the bottom line remains that Disney has been moving out of the business of creating, and into the business of distributing, relying solely on the name value that was built up over decades.

It won't work over the long term.

Another Voice
09-17-2003, 11:21 AM
"Do you really think Jobs was saying, "Just ignore the contract and count TS2 toward the minimum, and we'll enter into a mutually profitable extension of the Co-Production Agreement, on terms you'll be happy with."?

It was pretty much along the lines of "let's count TS2 as a feature film under the contract and we'll work out a deal for films #6 and on out."

Give a little, get a lot.

Imagine a Pixar short running in front of Disney movies? Imagine Pixar taking over the aged Muppets spots in the parks. Imagine a real Pixar television series. Imagine happy Pixar workers teaching Disney Feature Animation how to use a computer, imagine Glenn Keane teaching Pixar animators how to draw out even more emotion from the characters.

Grab a little, loose a lot.

Imagine business papers filled with Ben-J'Lo type gossip about the future relationship between the two companies. Imagine the two stars of Disney's mega hit films both being intereviewed on Entertainment Tonight and saying "We really want to make a third one, but the studio can't get it's act together". Imagine a bunch of Disney suits bad mouthing Nemo in hopes the film would flop and Pixar would come crawling back. Imagine those same suits watching their "we'll show them who's boss" Treasure Planet die such a gruesome death at the box office that it causes Disney to restate earnings. Imagine Disney giving up on animation, turning over all poduction to Korean pencil shops and Irish state-supported computer mills.

Yup - I think Eisner should have checked his ego just a little bit.

DisneyKidds
09-17-2003, 11:27 AM
Pixar has the goods. Rather than facing reality Eisner settled on squeezing whatever he could in the shortest amount of time.
You make some very good points AV. This whole Disney/Pixar thing is a mess.............for Disney. Unfortunately, is there really any proof that, whatever ME did with respect to TS2 or renegotiated contracts, the outcome would be any different? Whether this outcome comes about in 2003, or 2005, or 2007 is really irrelevant. Sure, there might have been a few more years of benefitting from Pixar's successes, but as you and others have pointed out the only way for Disney to return to the glory days and real success is to start creating something again, not living off of the crumbs of those who are doing it right now. Pixar has the goods. Everyone knows that. Is it realistic to think that these goods would ever have been considered joint Disney/Pixar goods? I don't really know, but is it possible that ME in a way did face some of this reality and squeezing out what he could when he could was the best he thought he could do given that reality? You paint a picture that if ME wasn't such an idiot Pixar and Disney would sail happily into the sunset as partners until the end of time. Maybe that would be the case.......................but given Pixars talent and successes I don't think they ever would have settled for that, do you? I'm not trying to excuse Ei$ners actions and the results they have led to today as I'm sure he could have handled some of this stuff better, but I can't just agree with you that ME had a sure long term thing in Pixar and foolishly shot the goose that was going to lay all those golden eggs and share them with Disney.

crusader
09-17-2003, 11:51 AM
Gates used Jobs like a Ziploc baggie from day one.

And he's never gotten over it.

One could also argue that Jobs lack of creativity is clearly evident in the failed projects which came from his own hands.

Not surprising he packed up his charisma and went to hollywood where you really don't need to be the talent - you just need to control it.

DancingBear
09-17-2003, 12:23 PM
Originally posted by Another Voice
It was pretty much along the lines of "let's count TS2 as a feature film under the contract and we'll work out a deal for films #6 and on out."

Give a little, get a lot.

Imagine..... Just what do you call "a little." Just what do you call "a lot." Just what kind of a deal do you think Job$ was willing to "work out"?

d-r
09-17-2003, 12:35 PM
'What killed Disney

Disney doesn't make good stuff anymore"


Come on, Jeff. Let's see, what, 10 of the top 50 movies this year are from Disney, now of those ten, one (OK, yes the #1 film of the year) is Disney-Pixar - yet Disney doesn't make good stuff anymore? Disney has been killed? Come on.

I've said it before, and I'll probably end up saying it again, but next year will belong to Dreamworks and there will be much screaming and gnashing of teeth on here, and I imagine that someone will proclaim Disney "dead" = but right now when three of the top 10 movies (2 of the top 5) are Disney? The number one album? The number 2 cable channel? The highest attended theme park in the world? If someone said "what killed ABC" I would listen, but "what killed Disney?" That is over the top.

DR

Walt's Frozen Head
09-17-2003, 01:02 PM
Now, my friend, please. I hope the above doesn't result in an angry response because I'm making no comment about you

Not angry, just frustrated. I believe you talk out of both sides of your mouth.

It appears to me that you knock Jobs as being a businessman just like Eisner, then when that statement was questioned you knock Jobs' career on the basis that he wasn't a businessman like Eisner.

Sometimes it seems as though you say "business" as a positive thing when you are trying to rationalize short-sighted cash grabs by certain executives, but as a negative thing when you are trying to suggest the folly of creative innovation by other executives.

Jobs, Disney (Walt and Roy), Eisner... they are/were all businessmen, and that is inherently neither good nor bad. As far as I can see, Jobs' career has long been associated with creating new and innovative products; whereas Eisner's rise to power is demonstrably associated with creating less but marketing more.

To that extent, I believe Jobs is a relatively good businessman and Eisner is a relatively bad one... particularly for a company like Disney or Pixar.

As far as this topic in particular is concerned... hey, it's not like I haven't been telling you this would probably happen for literally years. Eisner and Jobs both want money, but Jobs is the only one of the two that believes creative innovation is the way to do that. Jobs is behaving exactly as his business history suggested, and Eisner is behaving exactly as his business history suggested.

It was my belief, back then, that Jobs' approach would be the better, from a business perspective. It is my belief, now, that that has been borne out.

The Disney/Pixar deal is a symptom of a disease, not an unforeseeable accident. There will always be some X factor to blame, but the root cause was and remains the business decision Michael Eisner made, makes, and likely will make.

Eisner's still in charge and things take time in business... losing Pixar is not the sign that Disney has hit bottom. You can bank on that.

gtrist4life
09-17-2003, 01:13 PM
I know this is the rumor forum, and from the start of the thread, are we absolutely sure that what Eisner said to the board has been confirmed? or is this an info "leak" to influence negotiations?

Negotiations are an art and perceptions on both sides will be used to leverage for postitioning to each sides' wants and desires. Both have said, "We'd PREFER to stay with Disney/Pixar".

If there's so much bad blood from the attempted re-neg around TS2, then why the preference? Success.

People are naturally inclined to stay with a proven partnership......it's just Pixar wants more of their fair share. Rightly so.

Eisner has said that he knows Pixar deserves a better deal.

We'll just have to wait and see if they both can agree on "better"

Peace,
G4L

Walt's Frozen Head
09-17-2003, 01:16 PM
Disney doesn't make good stuff anymore?

That's exactly what I said.

I believe that there is a difference between making something and buying it. I believe that the differences between making something yourself and buying it from whoever will sell it to you the cheapest are the very kinds of things that pay off in the long term, in business.

Disney didn't "make" PotC a good movie any more than they "made" Pearl Harbor a bad one. Disney bought a couple lottery tickets from the same convenience store and did better on one than on the other. Pearl Harbor's relative lack of success bore no effect on Pirates' relative success... and Pirates' relative success will have no bearing on how fares the next multi-million dollar lottery ticket.

Michael Eisner's Disney is not abouting creating products, it is about buying lottery tickets. Creating products was the heart and soul and skeleton of the Disney Company... at least the one that succeeded.

DisneyKidds
09-17-2003, 01:44 PM
Disney bought a couple lottery tickets from the same convenience store and did better on one than on the other.
All I can do here is quote you once again and say........................
Your understatement borders on disingenuousness.
Despite what you may think about some in the organization, or the motivations or lineage or history behind the making of a movie, fact of the matter is that there were indeed some people at some level who took the concept and worked hard to make it a success. To dismiss that so that you can say Disney's success comes from nothing more than a random throw of the dart by an inept Ei$ner does many people an injustice. It amazes me how Disney gets all the blame for the flops and mistakes, but none of the credit for the successes.

Another Voice
09-17-2003, 02:02 PM
From my point of view, Eisner simply gave up Disney's ability to control its own destiny and now he's paying the price.

Eisner handed over CGI animation to Pixar and killed off Disney's inhouse abilities. Now he's beholden to the whim of Steve Jobs and is left scrambling to buy moives on the open market to counter Pixar's growing dominance in the field Disney started. Eisner is playing catch-up to the company he shoved out in first place.

Eisner has given over live action to Bruckheimer (and a deal that makes Jobs weap with envy). The lottery ticket metaphor is very accurate - Eisner signs over big bucks to Bruckheimer and hopes to buy a winner. Pearl and Bad Company were big time stinkers; they hit it with Pirates - and now Einser's gone back and thrown all that money into two new tickets, King Arthut and National Treasures. Eisner has little control over the films, and even less control over Bruckehimer (you'll notice that his 'CSI' shows aren't on ABC).

In the short term it's cheaper to buy stuff on the open market - you get to fire all those people that made products, all those expensive creative types, make someone take all the risk. But that kind of short-term thinking comes at a price.

And if you're a company that basis its reputation on "quality" it's very dangerous. You've gone from a position that says "we produce good products" to "we're a better shopper than the next guy". Sometimes what's out on the market just isn't any good and "quality" does not mean best-available.

Yes, Eisner did make a better short term deal by getting Toy Story 2 "for free". But in the long term he ticked off the very people that hold the keys to Disney's future success. If someone wants to argue that Brother Bear is going to got gorss Finding Nemo than perhaps you can say Disney is better off without Pixar - but I don't think even the anyone really beleives that.

DisneyKidds
09-17-2003, 02:26 PM
But in the long term he ticked off the very people that hold the keys to Disney's future success.
But hasn't one of the points been that so long as someone other than Disney is holding that key long term success, or success like Disney had in the past, is a pipe dream?

Not that Disney is better off without Pixar, but if this provides some kind of springboard to Disney grabbing hold of their own keys this change could be some help in the long term..........maybe?........hopefully? If all Disney does is head to the mall then the troubles may continue.

crusader
09-17-2003, 02:40 PM
Eisner is playing catch-up to the company he shoved out in first place.

Sure he is. The question is - how far behind is disney really? Pixar's been developing CGI for close to 20 yrs and has spent the past 12 or so working with the mouse. There is a shared amount of capability between the two players. Meanwhile, the competition (ie Dreamworks) has already demonstrated proven success with a comparable product.

If the claim is - Disney lacks the in-house resources - I agree. This is exactly where the company's animation division needs to concentrate its' efforts. But they do know how to make these types of features - and certainly have the capability.

I wouldn't be so quick to solely blame Ei$ner as the reason Disney failed to successfully renegotiate the joint venture when TS2 came about. Realistically, when Job$ pitched Ei$ner they undoubtedly took it a few steps further and began drafting up some language. That's where the greed came in. Job$ wanted more - sooner and probably wasn't committing to very much on the back end. The deal was destined to fail. Pixar wasn't in it for the long haul and didn't really want to be in it for the duration of the existing contract.

Disney managed to reap the benefits of a young talented company and helped build their success by assisting them financially and reputably in launching their products. It may have run its' course which means now they have to go back to doing what they know best - within their own company. And believe me, this had better be a solid implemented plan of action or Wall Street won't buy it.

Another Voice
09-17-2003, 02:45 PM
That's the bind Eisner has put The Company in - they are no longer able to create their own product and are unable to form stable relationships with people who can create product for Disney to market.

Eisner could have gone in two directions. He had The Secret Lab and Feature Animation - all the ingredients to build a tremendous in-house organization that would have been tops in the field.

Or he could have coziest up to Pixar and locked them into a good and long term relationship. They could have become partners; each company contributing to the success of the joint prodjects.

Either way would have worked. But either way would have required effort and investment. Once again, the easiest path was choosen to the detriment of the company.

It's the same as scheduling your one hit show four nights a week instead of creating new shows. It's the same a copying rides from park to park to park rather than creating unique destinations. It's the same as filling the stores with mounds of the few items that are selling rather than trying to recapture the customers that left.

Business rarely rewards the lazy.

Walt's Frozen Head
09-17-2003, 02:46 PM
You think he's dedicated to creativity.

Actually, I think his business decisions have consistently shown that he will choose a creative and innovative path rather than the commodities mover path.

I evaluate future production, positively and negatively, based on what people have produced in the past.

Jobs is just an advanced version of an Eisner clone.

Their respective histories suggest this is simply not the case. Jobs has consistently been associated with technical and aesthetic innovation, Eisner has consistently been associated with lowering creative standards and commoditizing ancient creativity.

All I can do is look at what the guys have done before and guess that they'll behave pretty much the same way in the future. Based on that, Eisner is a businessman that sacrifices his own company's creativity and innovation in the hopes of making money, Jobs is a businessman that invests in his own company's creativity and innovation in the hopes of making money.

I do not feel all businessmen are clones... I feel their approaches to business are as distinct as fingerprints and retina scans.

Compare Jobs to Wells, or Roy, or Walt, and we can talk about the differing levels of the individual's "commitment to creativity" because there's the evidence of history that all those individuals will draw some line as being a minimal creative investment.

Michael Eisner has not shown any evidence that there is sone minimal line he will draw. All his decisions suggest that we should expect less, in Disney's future products, than we are getting now.

However, it's simply lazy arguing to find a problem and blame it on Eisner everytime.

What you call "lazy," I call "consistent." It may offer one more exercise to spin Eisner's latest buffoonery into being the fault of Jobs, or Walt, or terrorists, or War, or Katzenberg, or Pressler, or whoever earns Car #1 Acceptable-Target-O-The-Day t-shirt, but I prefer the logical consistency of saying "buying instead of creating is bad business" up front and following up with "buying instead of creating was bad business" in hindsight.

crusader
09-17-2003, 03:39 PM
That's the bind Eisner has put The Company in - they are no longer able to create their own product and are unable to form stable relationships with people who can create product for Disney to market.

A very disconcerting situation, indeed. What was the plan here? They had to have seen this coming. If you're correct and it was grab what you can now - handle the loss later then that was extremely shortsighted. If it was more along the lines of: "hey we have several fires to put out and this is the least of our problems" then that was a potentially grave mistake as well.

I am curious about the extent of the initial investment in the secret lab? If it gained the ability to create this product years ago, why wouldn't a newer innovative technological system be accessible today?

Gaining the trust and commitment of qualified talent is predominantly one of the biggest obstacles they have. Fortunately, re-invention in Hollywood is the golden principle and Disney has quite a history in that department. They probably could bring in the right people - provided they were willing to make the necessary investment.

d-r
09-17-2003, 05:21 PM
Oh come on, scoop. You are saying that this argument is inconsistent? Don't you see the consistency? All you have to do is say "I hate Eisner, so everything he does must be bad, so everything Disney does must be bad" and you have the key to all the consistency you need. It really is that simple.

Another Voice
09-17-2003, 06:00 PM
Actually the "lottery ticket" metaphor holds up very well.

You have to buy the movie before it's even made, so you are buying blind. You're also betting that the movie is something the public is going to want to see, and see when you put it in the theaters. The odds of making a good moive times the odds the public is going to accept it - most casinos on Vegas would shy away from offer those kinds of bets.

I too think it would have been better for Disney to make their own movies. Eisner was unwilling to do that and so they shipped all the CGI work off to Pixar. To offset the "quality" issues, Disney did try to insert themselves into the creative process. If you can't make it yourself, you can at least supervise and add your input in a sort of grey area between "creator" and "buyer".

But here too things went sour. The suggestions that Disney tried to force on Pixar were not well recieved (you'll hear constant complaints that Disney demanded the early films follow the Beauty/Aladdin musical formulas). Added to that the rancor over TS2 and Disney was very much on the outside looking in.

On the flip side of the contract, Disney has to distribute Pixar's product. If Pixar turns out a stinker (as Disney was chorterling happened with Nemo) then Disney is stuck with a lemon. They don't even have the buyer's option of walking away from the deal.

The Pixar affair is the end result of a long string of short sighted decisions. Neither Disney or Pixar expected to end up here and remain in a state of denial. Pixar fears going it along, Disney sees the only creative element of their hollow empire declaring their independence.

AKemel
09-17-2003, 09:45 PM
PIXAR is a company. It owns buildings, chairs, and computers. It owns rights to the movies it has made in the PAST. It also owns contracts of the creative people who will make movies in the FUTURE.
When signing a new contract, will that contract include those creative people? I would be very surprised if those creative people at PIXAR are not considering leaving the company and starting something on their own.
PIXAR want more from Disney, so why shouldn’t those creative people at PIXAR want more from PIXAR.

In my opinion, a smart move would be to negotiate with those creative people .

Another Voice
09-17-2003, 11:16 PM
"I would be very surprised if those creative people at PIXAR are not considering leaving the company and starting something on their own."

"Those people" did exactly that when the created Pixar - they left Disney and others to start "something of their own".

It's their company - why would they want to leave it? And why would they ever consider going back to Disney after watching what's happened to Disney Feature Animation?


P.S. - Rumor is Disney dangled both money and power in front of Lassiter to come back. He told them he's wants to make good movies, not 'Robin Hood, Part 5'.

Walt's Frozen Head
09-18-2003, 10:04 AM
It's just that I find it inconsistent to complain that Disney is outsourcing creative--but then to make an exception for Pixar.

It was only you who suggested Pixar was to be given a pass.

I said at the time I thought counting on Pixar for "Disney" movies was a bad idea, long-term. More recently, I've said that I thought PotC was just as bad a business decision as Pearl Harbor... because there was zero difference in "Disney business as usual" among the two. The fact that one made money and the other didn't had _nothing_ to do with Disney's process of acquiring it.

I have consistently make the conversation about the decisions made while building a business... not about which lottery ticket paid off the best.

Buying Nemo was and is exactly as good for Disney's creativity, it's life-blood, as was buying Pokemon. Hell, if I was going to bother to change my tune in hind-sight, I'd get to say it was even worse... once you count the bad blood between Disney and a company that seems to be the industry leading producer of CGI animated features.

I have been consistently in favor of Disney building Disney's creative talent and capacity... and the deal with Pixar did not build that talent or capacity, and worse, even provided a distraction/cover story while that talent and capacity was actively decimated.

There were good movies made, that made money. But Disney's creative heart is in significantly worse shape post-Pixar than pre-Pixar... assuming it hasn't already been sold on eBay.

And that perfectly fine. Heck, I agree

I just don't understand why you won't stop there... why you make up statements to take a stand against.

I didn't write this post to argue with you: As far as I can tell, you agree with what I've actually said. I only posted because I feel you responded to a statement no one ever made, and wanted it to be clear that at least I never made it.

crusader
09-18-2003, 11:08 AM
More recently, I've said that I thought PotC was just as bad a business decision as Pearl Harbor... because there was zero difference in "Disney business as usual" among the two. I happen to respectfully disagree with this. To say Disney has lost the creative edge vital to its' core business is ok if you are referring to the migration of great talent in the animation division. But I get the distinct impression this comment is being applied to everything the company sells.

The motion picture division is not lacking in talent or creativity. Disney is a producer of motion pictures - which means they hire people to make movies. If the movie lacked talent and creativity it would not fare well beyond the opening weekend at the box office. Pirates of the Caribbean is a great movie because of the effort put forth to produce it. There is a tremendous amount of creativity alive in that film. Disney may have hired Bruckheimer to make sure it was a success - but that's exactly what they are supposed to do. What is it in your opinion that would have been the proper course of action here?

I don't slight you for your opinion of ME, but I do think the premise that Pixar's dominance is particularly his fault is one theory that obviously cannot be applied to Lasseter, given he left the company prior to the CEO's arrival.

Walt's Frozen Head
09-18-2003, 12:08 PM
In your view, do you view a Disney/Pixar divorce as being a long-term good move (if Disney were to replace it with its own CG department like the Secret Lab was--remember this is all just a hypothetical of course) even though it would cause short term financial harm to Disney?

In general, I absolutely agree with you: particularly for a company like Disney whose foundation was a singular approach to creation, the more and better you can do it in house, the more solid your brand following and the more stable your customer base.

Of course, we've already seen what Eisner's Disney can do with a world-class CGI facility. I was upset about The Secret Lab because it was unceremoniously and short-sightedly padlocked, not because one movie underacheived at the box office. So while in general I'd think a Disney-type company rolling-their-own would be a better business decision than buying off-the-shelf (for the reasons you specify), I'm not convinced that would be true for Eisner's Disney today and tomorrow. I mean, as you say, I just don't think it would ever cross his mind to attack the problem that way... and in my experience, people often struggle doing things they never wanted to do in the first place.

But then, at some level, that's just agreeing with you that it really doesn't matter at this point... that's a side-effect of my believing the deed was done years ago and what we're seeing now is just the logical playing out of the tune Eisner selected, way back then.

I don't like your term "short term financial harm." I think it carries a negative connation; peculiar, I feel, as it appears to be used as a synomyn for "investing in your own business," which is a positive thing in most contexts I'm aware of.

Walt's Frozen Head
09-18-2003, 12:22 PM
I don't slight you for your opinion of ME, but I do think the premise that Pixar's dominance is particularly his fault is one theory that obviously cannot be applied to Lasseter, given he left the company prior to the CEO's arrival.

"Pixar's dominance" is largely the "fault," if that's what you want to call it, of Lasseter and Jobs and the creative company they built... and doesn't have anything to do with Eisner, at all.

The fact that Disney has no CGI studio of their own and appears to have stopped dealing with the industy-leading CGI studio at a time when CGI animation seems to be all the rage... it is that Disney animation problem that is the direct result of Michael Eisner's business philosophy, approach to creativity, and business decisions.

The problem is Eisner made less of Disney, not more of Pixar.

Walt's Frozen Head
09-18-2003, 02:28 PM
I still don't understand why you won't give Jobs any credit for playing the part of Roy or Frank well enough to keep Pixar (and Apple) an economically viable creative entity.

It seems to me that one of the things we've been able to agree on in the past is that pure creative drive is no more practical a philosophy to a creative business than pure profit motive... that the real Magic was located, in a practical way, in the person that drew the line between the two as far as what got created and what got pocketed.

By no means do I paint Steve Jobs as a creative _visionary_ (I state the obvious when I say Woz and Lasseter largely filled that vacancy in Jobs' business plans), but as a creative _businessman_, I think Jobs has done a remarkable job of making money off of continued creative innovation.

I think it's important that Jobs has consistently had folks manning the "Creative Visionary" office during his tenures... as opposed to Eisner, who I believe first turned that office into a revolving door, and then boarded it up, entirely, with the business decisions he made.

It's because of the creative and innovative history of Jobs' businesses that I suggest he might have been a better CEO of Disney than Eisner, five or ten years ago. I do not believe Jobs would actively campaign to reduce his company's creativity and innovation, as Eisner clearly has.

I find your evaluation troublesome, because if Jobs' is "just as bad" as Eisner, I don't think "good" stands a chance in hell in the real world.

mrtoadslastride
09-18-2003, 04:56 PM
Originally posted by thedscoop
To me, that's the essential reason why I call Jobs nothing more than an advanced version of Eisner: He's just using a different means to get to the same ends.

I don't really care what Jobs motivations are. His companies' make great products consequently I believe he is entitled to reap a benefit from the success of his companies. On the other hand, Eisner produces crap and takes every cent he can get out of the Disney.

By the way, the first 3 or so years Jobs was running Apple (when he came back in the mid 90's) he only made $1 per year. I am sure he received other compensation, but if he was just in it for the money he would have demanded the world to come back

MelissathePooh
09-18-2003, 06:44 PM
So I will ask again as I did on an entire thread a while ago...

Who do y'all think Pixar will actually go with if not Disney?

BTW - has the/any official announcement be made yet of a split?

mrtoadslastride
09-18-2003, 10:09 PM
Originally posted by thedscoop
Dangerous thinking once you consider that The Lion King, Little Mermaid, Wilderness Lodge, Tower of Terror, and Splash Mountain among other things were made on Eisner's watch.

Under Eisner's watch there have been some positives, but when you look at the whole product I don't think you can compare Eisner's successes with Jobs'. Name 3 Jobs failures as big as California Adventure, Treasure Planet, and the disasterous state Disneyland is currently in (not to mention DisneyLand Paris, The Decades Resort, DinoRama, Pearl Harbor, Atlantis, Animal Kingdom).


If you are saying that only the "ends" matter and the "means" used is irrelevant then I'm sure I'll once again find myself in rare agreement with Mr. Head and Mr. Voice on the same thread.


The point I was trying to make is that all CEO's are out to make as much money for the company (and for themselves) as possible. I think Disney's next CEO will be primarily concerned with making as much money for the company and himself as possible. Consequently, I can accept someone who makes a ton of money, but still produces a great product. Jobs at least seems to understand that people will pay big money for a quality one of a kind product.

Corporate history is full of this prank. 1 buck in salary and another million in options. Now, I'm not saying that happened exactly here with Jobs, but the guy wasn't living on a buck a year for three years.

At the time Jobs was living off of Pixar money and the money Apple gave him for Next. However, if money was all he was after he would taken the million dollar salary plus the options.

Peter Pirate
09-19-2003, 08:19 AM
Not wishing to defend Eisner, I still can't help but get anxious over the blatent lies and complete dismissal of what he has accomplished.

He did save Disney from numerous hostile takeovers upon his arrival and Eisner is given this credit, not Wells.

While it is true that recent Disney seems to be wallowing and certainly the Disney that some posters want will never return. In my opinion that Corporate Disney never actually existed. But lets just look at two numbers to indicate just what has transpired during his watch.

1984 Disney revenues: $1.65 billion.
2003 Disney revenues: $6.33billion.

1984 Disney Net Income: 98 Million.
2003 Disney Net Income: 229Million.

Pretty startling numbers, aren't they? So it is easy to see that something has transpired here. All of the money has not gone into Eisners pocket although he certainly must be credited with on of the best personal contracts in business history, I'd guess.

He obviously isn't a theme park guy or an animation guy. He's obviously not an internet guy or a tv guy or a sports owner guy. He does seem to be a movie guy at the moment, however. Whats the point? well, quite obviously this is not Walts' Disney.

With regard to Jobs. He may parellell Eisner in some ways as a CEO but quite obviously running Pixar hardly resembles the task of running Disney.

mjstaceyuofm
09-19-2003, 10:08 AM
While Apple is nowhere near the size scope or magnitude of Disney, I canName 3 Jobs failuresthat hurt Apple/Jobs on par or worse than the ones listed above for Disney: Lisa, Newton and Next.

Peter Pirate
09-19-2003, 11:53 AM
Allow me to backpeddle a bit...I am not defending the current decision making of Eisner and I do not have much faith in his strategic plan, as it looks to me like he's not following one, other than in his publicity spin...I only seek to defend what I think he has done in the past, which I believe merits some positive consideration. I only bring it up because IMO it is simply cheap to bash, to say he never got it, to say he's never done a positive thing.

The other side of this particular argument is that while it may be true that Jobs hasn't made the big blunders that Eisner has on his tally sheet, the fact that the breadth and scope of current Disney, right or wrong, makes much of a comparison moot unless you're in the camp that says all of Disney's growth was in error and they should have tried to remain "Walt's" company even after he died...Which to me is a waste of time argument because (1) it didn't happen, (2) it can't happen now and (3) IMO it couldn't have happened ever. Walt was the only Walt.

IMO, a company of the scope idolized here isn't possible today. Sure quality can be given, Pixar IS a good example, but they are only one facet of what Disney deals with. There is no live action division, no theme park division, certainly no ESPN or ABC. How could any modern day company run a shop consisting of so many different arms, creating different content with a similar theme, do it all in house and keep track of it all AND maintain the expectation levels Walt had set up way back in its infancy? I don't believe anyone, save a creator could ever hope to pull it off because no matter how great the head may be. No matter how creative minded he may be. A company of this breadth has to have layers and layers of creative and management levels and these are human beings looking to get ahead. Sure some will have the art at heart but most won't and it will always fall to management at some level to sort it out. BUT that management person has the exact same dilemma and his goal may not exactly match the creative goal either...The quality for art cause is admirable but in the scheme of a multinational conglomerate it just isn't doable.

I read that in one year not long after Eisner took over, Disney created OVER 100 new companies! This was in the growth to avoid being lunch years, but can you imagine?

Eisner clearly is out of touch and the BTMRR incident proves just how serious this path can be. Let's hope he retires and a new leader with interest in the maintaining as much of a Disney legacy as possible is able to be found...Otherwise, as much as I hate to admit it, the Disney as even we 'Johnny Come latley's' know it could be in serious jeopardy...

Off topic...Well, I guess.

Another Voice
09-19-2003, 12:42 PM
"He did save Disney from numerous hostile takeovers upon his arrival and Eisner is given this credit, not Wells."

What really saved Disney from numerous take-overs was the Bass Brothers and Roy Disney buying enough stock to take Disney out of play. Eisner gets credit only because he shoved his way in front of the cameras; he did nothing on the business end.

If you want to say that he personally animated The Lion King, wrote the script for Ruthless People and did the enginnering for 'Star Tours' - then you can probably say "he saved the company" creativity. But he did, he was the one that just happened to be around when thousands of hard working and talented people that really saved the company.

Projects that were Eisner's idea to start with or that he played a major role in have been unmitigated disasters. Everything from the Capital Cities/ABC merger to hotel situation at Euro Disney; from Go.com to Fox Family; from over saturation of The Disney Stores to design concepts for California Adventure.

It wouldn't be the first time in American corporate history that a great staff covered-up an inept boss.

Sure, it's not Walt's company anymore. The serious problems that Disney faces today happened because they abdandoned the fundemental principles that made Disney a strong company to begin with. Whether Walt was around or not - moving into broadcast television, becoming a "brand name" instead of focusing on quality and pretending to be a big swinging Eisner to join the Big Swingers club (through airplane leases, overpaying for cable stations, and expensive and stupid Internet policy) - that's the root of the problem.

Walt couldn't have run Disney/ABC - nobody can run Disney/ABC because it's a rotten idea for a company. Just because it happened doesn't excuse the fact that the errors were made in the first place and no attempt has been made to fix them.

Some people see MegaDisney® as a good thing and clamour to buy all those branded snowglobes. In reality, it was the death of Disney and the beginning of just another consumer products company.

DisneyKidds
09-19-2003, 01:16 PM
nobody can run Disney/ABC because it's a rotten idea for a company.
AV - I happen to be in agreement with you on this point. Disney has been pulled in too many directions and stretched too thin. Would that have been the case if Cap Cities, Go.com, Family, etc., etc. were all winners? I really don't know.

Anyway, regarding Disney/ABC being a rotten idea for a company......apparently Disney's MBA's aren't the only one's who would disagree with you. GE/NBC has their own set that thinks GE/NBC/Universal is a winning proposition. It will be intersting to see how they make a go of it.

crusader
09-19-2003, 01:17 PM
You're kidding yourself if you honestly believe a publicly held company can remain status quo without losing market share; becoming stagnant to the consumer and ultimately ripe for takeover.

The need to expand and diversify was necessary and inevitable for a mature company during the mergers and acquisitions era. Otherwise, we'd now be discussing the harsh reality of how Walt's dream became the next RJR Nabisco Disney or whomever else you'd like to fit together.

I don't think MegaDisney is the problem. They can securely operate as that invisible giant hiding behind the themeparks and every other division within their empire. To argue that a corporate giant shouldn't become a conglomerate of holdings is unrealistic and out of touch with today's commerce.

You cannot blame the fact that the company is large on what everybody preferably finds individual fault with, in their own uniquely tailored consumer world.

There is a real lesson to be told about the habits of the consumer - we buy what we want and watch what we want according to our own standards - not what anyone else decides we should.

If you want to stereotype this as the snowglobe mentality than you'd have to place everyone in the same category with the exception of those who have Edison's original lightbulb in their house.

mrtoadslastride
09-19-2003, 01:20 PM
Originally posted by mjstaceyuofm
While Apple is nowhere near the size scope or magnitude of Disney, I canthat hurt Apple/Jobs on par or worse than the ones listed above for Disney: Lisa, Newton and Next.

I think Newton came out while Jobs was away from Apple. The big difference I see with Jobs failures are that they were attempts at greatness. Maybe they came out before their time, or failed to capture market share, but in the end they were still good products. Eisner's failings haven't been good products that failed to find their place in the market. They were/are products that noone wants because when making something as cheap as posible is the number one priority the products are doomed to fail.

DancingBear
09-19-2003, 02:50 PM
Originally posted by Another Voice
"He did save Disney from numerous hostile takeovers upon his arrival and Eisner is given this credit, not Wells."

What really saved Disney from numerous take-overs was the Bass Brothers and Roy Disney buying enough stock to take Disney out of play. Eisner gets credit only because he shoved his way in front of the cameras; he did nothing on the business end.I disagree. The Bass Brothers stepping up, and Roy hiring Eisner and Wells held off Steinberg and Jacobs in 1984, but Disney remained a takeover target as long as its stock was seen as undervalued. Eisner unlocked the value of the corporate library and the Florida real estate. He also did something, even if it was just getting out of the way of Roy and Katzenberg, to reinvigorate the animation department. These actions boosted the stock value tremendously.

Then, to make sure that nobody saw Disney as a big cash cow, he went on an acquisition binge that created a lot of corporate debt.

And the company is still independent.

Bstanley
09-19-2003, 04:00 PM
Actually Mr. Steinberg had already been bought off before The Big ME was offered the job, and The Bass Bros bought Mr. Jacobs (and friends) holdings before his employment contract was signed - so odds are he had little to do with either. Once 35% of the stock was in the hands of The Basses and Roy Jr the idea of another takeover evaporated.

Then, to make sure that nobody saw Disney as a big cash cow, he went on an acquisition binge that created a lot of corporate debt.

Ah the old Wharton school of business ploy.

Borrowing to make an acquisition to turn your present corporation into your new bigger corporation has been around at least since The Fuggers lent the money to Philip so that he could mount his hostile takeover attempt of British Mercantilism.

The key has always been to not overestimate yourself and over-extend. Still is apparently.

-bruce

DancingBear
09-19-2003, 04:26 PM
Originally posted by Bstanley
Actually Mr. Steinberg had already been bought off before The Big ME was offered the job, and The Bass Bros bought Mr. Jacobs (and friends) holdings before his employment contract was signed - so odds are he had little to do with either.I didn't mean to imply otherwise, only that bringing in the new management team was part of the strategy of the Bass Bros./Roy strategy, and that the actions of Eisner/Wells in the early years corrected the undervaluation problem that made Disney an attractive takeover candidate in the first place.

Another Voice
09-20-2003, 02:12 PM
" Eisner unlocked the value of the corporate library and the Florida real estate"

Actually no.

Eisner dragged his feet to a huge extent on moving into the home video. Remember he was the one that sued all the way to the U.S. Supreme Court in an attempt to make VCRs illegal. Once he lost the suit they had no choice and the home video business boomed.

The growth in Florida had little to do with uncovering the value of real estate – it came from raising prices. The smart thing he did was to take the money made during the boom of the eighties and plow it back into the property. Granted, it wasn't for the purest of business reasons (hotels happened because Eisner saw himself as a patron of architecture and Disney/MGM Studios happened because he hated the people running MCA/Universal), but good things did happen.

The business side of the company was changed by Frank Wells who reorganized the company and the company's finances. The single most important change was the creation of the film partnerships which brought in huge amounts of capital to fund Disney movies.

The other "big changes" were already in process. Disney had already successfully moved in to Hollywood style live action films through Touchstone Pictures before Eisner; 'Little Mermaid' was already into pre-production as well. Eisner did try to step in with such things as 'Oliver and Company', but the damage was minimized.

Eisner did bring two things of value to the company – Jeffrey Katzenberg on a lease and the hot line number to the Betty Ford Clinic. Disney's film division recovered through a series of small budget, well made films that turned an immense profit.

Disney wasn't so much an organization that had been rotted from top to bottom – instead it as a company that had been suppressed by an uncertain and unambiguous management at top. Removing that cap unleased a lot of potential that was already inside the company. Is not accurate to say that Eisner stepped in and set the place on fire. A lot of what was accomplished happened without his involvement, some even happened despite his involvement.

A large measure of today's problem is that the sense of individual ability and "Disney" has been ground out of the company. So much more is controlled through the top than in the past, so much of what happens at Disney is no longer creative but merchandising.

There is a vastly different mindset in people who sit down and say "I have to make this good" and those that sit around and say "which one of these will make the most money".

It's the difference between Pixar and Disney.

DancingBear
09-20-2003, 07:01 PM
A-V, I think there is a certain amount of absurdity in parsing your post, as you're essentially saying: "Pay no attention to the man on the cover of all those magazines through the late '80s--sure, he was the CEO, but he really had nothing to do with the dramatic stock increases after he was hired. I, Another Voice, know what Roy Disney, the Bass Brothers, the Disney Board (even the 1980s board), and the financial press, and the stock analysts, didn't know---Eisner had nothing to do with any of it."

Of course, I will go ahead and parse anyway:

Originally posted by Another Voice
[B]" Eisner unlocked the value of the corporate library and the Florida real estate"

Actually no.

Eisner dragged his feet to a huge extent on moving into the home video. Remember he was the one that sued all the way to the U.S. Supreme Court in an attempt to make VCRs illegal. Once he lost the suit they had no choice and the home video business boomed.Are you talking about Sony v. Universal (with Walt Disney Productions as co-respondent)? The Betamax case? Hmmmm, that case was commenced in Federal District Court in California in 1976, decided by that trial court in 1979, had a 9th Circuit Court of Appeals decision in 1981, was argued before the Supreme Court in January, 1983, reargued in October, 1983, and decided in January, 1984. Just how was this Eisner's case?

I have no way to verify this quote right now, but found this in a quick search:

Eisner may have had the most early success in home video. He accomplished this in spades by packaging and proffering the "classics" of Disney animation in the expanding home video market. These video revenues provided an immediate boost to the corporate bottom line. In 1986 alone, home video revenues added more than $100 million of pure profit. In October, 1987 when Lady and the Tramp was released on video, the Disney company had more than two million orders in hand before it ever shipped a copy. http://www.museum.tv/archives/etv/E/htmlE/eisnermicha/eisnermicha.htm

The growth in Florida had little to do with uncovering the value of real estate – it came from raising prices. The smart thing he did was to take the money made during the boom of the eighties and plow it back into the property. Granted, it wasn't for the purest of business reasons (hotels happened because Eisner saw himself as a patron of architecture and Disney/MGM Studios happened because he hated the people running MCA/Universal), but good things did happen.Hotels happened because Eisner (and whatever smart people were working for him) realized that they could make a lot more money by keeping people on the property rather than creating profit for all the off-site hoteliers. The hotels got architects like Michael Graves and Robert A.M. Stern because of Eisner's architectural ambitions. It wasn't just about raising prices, it was about turning WDW from a 2 or 3 day visit where you likely stayed at a hotel off-property, to staying for a week and keeping your dollars in-house. Leaving aside the obvious resorts, etc., don't forget about Typhoon Lagoon and Blizzard Beach, the Disney Vacation Club (huge success selling prepaid hotel reservations), and even the cruise line. And then there's Celebration, definitely an Eisner project, and a success.

The other "big changes" were already in process. Disney had already successfully moved in to Hollywood style live action films through Touchstone Pictures before Eisner; 'Little Mermaid' was already into pre-production as well. Eisner did try to step in with such things as 'Oliver and Company', but the damage was minimized.Wasn't Touchstone's first feature "Splash", which came out in 1984? I'd hardly say that means Disney was established in live action films. Down and Out in Beverly Hills, Ruthless People, and Three Men and a Baby followed in the Eisner/Katzenberg era. And Little Mermaid may have been in pre-production in 1984, but it wasn't released until 1989.

Eisner did bring two things of value to the company – Jeffrey Katzenberg on a lease and the hot line number to the Betty Ford Clinic. Disney's film division recovered through a series of small budget, well made films that turned an immense profit.

Disney wasn't so much an organization that had been rotted from top to bottom – instead it as a company that had been suppressed by an uncertain and unambiguous management at top. Removing that cap unleased a lot of potential that was already inside the company. Is not accurate to say that Eisner stepped in and set the place on fire. A lot of what was accomplished happened without his involvement, some even happened despite his involvement.I don't get it. Does he get credit for hiring Katzenberg or not? If the company had "uncertain and ambiguous management at the top" before Eisner, just what did it have afterwards? Even if all he did was unleash potential which was already inside the company, does he get no credit for that?

It's fine to say that you don't like the direction the company has taken under Eisner, particularly over the last 8 years or so, but to deny Eisner's effect on the company in his first 8 years is revisionist history.

airlarry!
09-24-2003, 04:36 PM
DB:

I truly do not understand your points:

Video: I found this book site, which claims Disney was involved with Universal in the suit against Sony at http://www.utexas.edu/utpress/excerpts/exwasven.html
However, film companies were not yet recognizing the value of video in reaching an increasingly mobile population. Universal and Disney sued Sony, and the case went all the way to the Supreme Court. The American film companies lost the case.

Hotels: AV argues that Cou$in Mikey's input was in raising the prices, something I am pretty sure he admits to doing in his own autobiography. Check it out sometime, mine is holding up the back leg of my trash can...err...safely in storage. He lauds the fact that the property was underutilized and underpriced (something LandBaron would no doubt attest to).

Movies: AV gives credit to the Cou$in for doing what he did at Paramount (again from his autobiography)--where he brought in movies at or below budget, with relatively good stories, small budgets, actors on the rebound who are willing to sign for less money, and look at the record of the early movies Touchstone did...their all with up and coming people or people willing to work for less. It is only when he went Big Hollywood that his lack of skills at that segment showed.

Additions to the company: Seriously, name one project sprung from his brain that has flourished. Read the autobiography first, and you will see that he had a direct hand in the European project, including overbuilding on the hotels, and underwhelming the Europeans with food and attractions. He has, over the years, taken credit for The Disney Institute (flop), the impetus behind the acquisition of Go.com (superflop), the purchase of ABC/CapCom (megaflop EXCEPT for ESPN properties et al), the building of the Swalphin (heck he made Arch Digest for his 'patronage' for that one.)

Look, it is okay to disagree with The Voice. But, let's inject some reality into this discussion. Ei$ner's personal pet projects (usually stemming from his trips to Idaho) like ABC, Fox Family, The In$titute, and Go.com have been his Hindenbergs.

Did he save Disney from the pawnshop, split apart? Yep. But, then he cunningly became the pawnshop owner himself. That is really the difference between us and them. Do you think Ei$ner is a knight or a worm

DancingBear
09-24-2003, 05:45 PM
AV said Eisner didn't deserve credit for unlocking the value of the corporate library because he was slow to embrace home video, as evidenced by his involvement in the Betamax case.

If you'll read my post more carefully, you'll see that I clearly stated that Disney was a co-respondent with Universal in the Betamax case; however, my point was the case well preceded Eisner's hiring at Disney.

If you'll read your own link, it says such things as:

"William Mechanic was named the president and chief operating officer of Twentieth Century Fox on September 27, 1993. The item on his resume that clinched the appointment? It was Mechanic's nine-year stint leading the Walt Disney Home Video division. He had built on the natural advantages of Disney product to take a dominant market position in the sale of prerecorded videos."

9 years? That would be back until 1984, right?

Also:

"Here the exemplary studio is the Walt Disney Company, which was uniquely positioned to take advantage of video. After initial hesitation, the company decided to plunge ahead and rose to dominance. Disney was the one film studio that was not purchased."

So, thank you for posting support for my giving credit to Eisner for (1) exploiting home video, and (2) avoiding takeover of Disney.

AV also took issue with my giving Eisner credit for unlocking the value of the FL real estate. He said: "The growth in Florida had little to do with uncovering the value of real estate – it came from raising prices." He also said, "hotels happened because Eisner saw himself as a patron of architecture."

I took issue with this, as I believe that Eisner built hotels as part of a strategy to more fully utilize the revenue-producing potential of the Florida real estate, not just as a patron of architecture. This building boom, and the raising of prices, seem consistent with my claim that Eisner "unlocked the value of the FL real estate," particularly when you also consider a project like Celebration. (Does Celebration count as "one project sprung from his brain that has flourished"? And just what was such a flop about the Swan and Dolphin?).

[Oh, and BTW, although "Oliver & Company" is clearly not part of the Disney pantheon of great films, it grossed $53 million plus. As a point of reference, the megahit "The Little Mermaid" came out one year later and grossed $84 million plus. I don't see any production cost numbers for Oliver & Co., but it hardly seems the massive failure that AV implies.]

I don't think you'll see anything in my post defending the acquisition of CapCities and such as good business decisions. I did mention that major acquisitions put the company into debt, which made it a less attractive takeover target, but that's different than saying it was a good idea.

I also haven't taken issue with assertions that Eisner screws around with creative types, or with the argument that Disney would have been better off to develop/keep CGI and creative animation capacity in-house rather than do the deal with Pixar.

As I said, "It's fine to say that you don't like the direction the company has taken under Eisner, particularly over the last 8 years or so, but to deny Eisner's effect on the company in his first 8 years is revisionist history."

As far as "injecting reality" into the discussion, I've just been trying to keep AV honest in his posts. In this thread alone, he's made at least the following factual errors:

--"The original deal envisioned that all sequels would be direct-to-video or television based."

--The Co-Production Agreement was "mostly so Disney could get software cheap."

--"There was never any risk whatsoever on Disney's part."

--"Eisner dragged his feet to a huge extent on moving into the home video."

--"[Eisner] was the one that sued all the way to the U.S. Supreme Court in an attempt to make VCRs illegal"

Another Voice
09-24-2003, 10:03 PM
Lawsuit
As far as I know there was the Sony v. Universal case (pre-Eisner, although he was running Paramount at the time and supporting the lawsuit), lawsuits against dual deck VCRs, lawsuits and lobbying to prevent video stores and consumers from transferring purchased tapes and much more recent attempts to require the government to force electronic manufactures to prevent "copying". Some of the details of these cases may have become jumbled in my faulty memory.

I apologize for any misstatements.

However (you knew that was coming), Eisner retains a long track record of disliking any new technology. Hardly one to "unlock the value" he is mostly fighting to keep what already exists. How long did it take Snow White to come on out VHS? And why are there so many holes in my Disney DVD collection? My faulty memory does not recall him bursting into Bill Mechanic's far-off-the-lot office demanding that he put the classics out on tape to raise money. And exactly how quickly has jumped into DVD? And the new digital technology - http://www.larta.org/pl/NewsArticles/14March02NYTIMES_Piracy_hightech.htm. Not exactly the statements of someone looking for new ways to bring in the bucks.

Home video has become a tremendous revenue source for Hollywood. [B]All[/I] of Hollywood. Disney got late to the party but still reaps the benefits. Eisner is simply doing what everyone else was doing. What real innovation has Disney accomplished in home video? What real "unlocking the value of Disney" did Eisner perform that any of the others didn't do? What did he do that someone else running Disney won't have done either?


Pixar

The reason Disney contacted Pixar was to seek software support for Feature Animation's CAPS project. Disney was going to use computers to reduce the cost of animation by a)having computers render backgrounds (getting rid of background artists), b) having computers create the "in-between" frames (getting rid of the inbetweeners) and c) having computers create electronic "cells" for final rendering (getting rid of inkers and painters). Pixar was already marketing software. Since Disney didn't want to develop everything in house they bought software for CAPS and hired Pixar to help with some of the technical development. Already having an association (and helping Disney with a few films already), the relationship went into "we'll work for free if you'd like to distribute this little movie we have?" At no time does my faulty memory recall Eisner bursting into Roy Disney's office screaming "I just found this great company that makes great movies and I demand we sign a deal!!!".

The relationship with Pixar broke down exactly because the sequels were supposed to directs. That's who Toy Story 2 started life; when it became a theatrical release Pixar want it counted as a "real" movie under the contract. That's the way Hollywood works – I don't think Jerry Bruckheimer is going to lower his take from irates 2 because it's a sequel.


Other Animation

When little girls want to dress up like characters from Oliver and Company then perhaps you can claim it as a "success". There's a lot more in "unlocking the value of Disney" than champing an instantly forgotten movie that made 37% less than a movie that was almost killed. The secret of "unlocking the value of Disney" is the company's ability to cross market products – theme parks, TV shows, consumer products, etc. Little Mermaid earned much, much more for Disney than its box office number implies. Perhaps a quick count of the Oliver and Mermaid related items at the Disney Store would give a quick read.


Hotels

Eisner's contribution to the hotels at WDW was to agree with what people had been saying for a long time – "why don't we do it ourselves". And it was a good move on his part to finally get Disney rear in gear on the issue. A deal had already been signed for a large hotel and convention center on property. Eisner came in and tore up the deal and said "we can do it ourselves" (unfortunately what he did was a tad illegal and the outside company sued and won the right to build what became the Swan and Dolphin).

Yet it's very clear from the Euro Disney fiasco and the massive overdevelopment at WDW that people were more interested in building hotels than actually making money at it. It was Eisner's personal direction to increase hotel occupancy at EDL (and his selection of the architects) and a near similar situation at WDW (and we won't even start on the Team Disney out there). And if you have any doubt that playing Patron of the Art is more important than "unlocking the value of Disney", please come out to Burbank and see the temple he built to himself.

Disney already owned Arvida – a huge Florida land developer – before Eisner showed up. Celebration (which is really a housing development) was simply selling off property and nothing but a one-shot "unlocking". I suppose I am still "unlocking" the value of the Plymouth I sold back in college if that's the criteria. But to me "unlocking" implies a way of continuing to receive value, not a grab-the-cash-and-run mentality. Most of development work at WDW is simply duplicating off-property businesses – mini-golf, water parks, strip malls, McDonalds. Yes, Eisner gets points for putting in a business plan, but it's rather shallow and unimaginative.


Pay No Attention to the Crowd Behind the Curtain!!!

What really "unlocked the value of Disney" was not one man. It was the hard work and efforts of thousands of people. I'm glad you mentioned Bill Mechanic's name. He was the one that transformed Home Video from a stepchild into a major profit center. He and a lot of people in that organization.

Egos are powerful things, it's rather intoxicing to think of oneself as the master of all. And for the public it's easier to asscribe all things to one source - especally when the company already had a long history of doing that with its founder.

Eisner gets credit simply because he was the hired public face for the company. It's much like the way Walt got credit for a lot what the company did as well.

What either really deserve credit for is something much harder to see.

DancingBear
09-25-2003, 07:33 AM
Originally posted by Another Voice What did he do that someone else running Disney won't have done either?Well, he did what the people who were running Disney immediately prior to his coming there did not do.

The reason Disney contacted Pixar was to seek software support for Feature Animation's CAPS project. Disney was going to use computers to reduce the cost of animation by a)having computers render backgrounds (getting rid of background artists), b) having computers create the "in-between" frames (getting rid of the inbetweeners) and c) having computers create electronic "cells" for final rendering (getting rid of inkers and painters). Pixar was already marketing software. Since Disney didn't want to develop everything in house they bought software for CAPS and hired Pixar to help with some of the technical development. Already having an association (and helping Disney with a few films already), the relationship went into "we'll work for free if you'd like to distribute this little movie we have?" At no time does my faulty memory recall Eisner bursting into Roy Disney's office screaming "I just found this great company that makes great movies and I demand we sign a deal!!!".Not sure of your point here. Here's the chronology, according to Pixar's 10-K:

"Pixar's relationship with Disney dates to 1986, when Pixar and Disney entered into a joint technical development effort that resulted in the Computer Animated Production System ("CAPS"), a production system owned and used by Disney in certain of its two-dimensional cel-based animated feature films. Disney first used CAPS for The Rescuers Down Under and subsequently used it for other animated feature films, including Beauty and the Beast, Aladdin, The Lion King and Pocahontas. In 1992, certain employees of Pixar and Disney were jointly awarded an Academy Award for Scientific and Engineering Achievement for CAPS."

"In May 1991, Pixar entered into a Feature Film Agreement with Walt Disney Pictures, a wholly-owned subsidiary of Disney, which provided for the development, production and distribution of up to three feature-length motion pictures (the "Feature Film Agreement"). It is pursuant to that Feature Film Agreement that Toy Story and the Toy Story home video were developed, produced and distributed."

[Not "would you distribute our little movie," but "would you help finance, market and distribute movies with us (and give us creative input as well)."]

"In August 1995, Pixar entered into a non-exclusive CD-ROM
development and publishing agreement with Disney Interactive, Inc. ("Disney Interactive"), a wholly-owned subsidiary of Disney, for the development, production and distribution of CD-ROM titles based on Toy Story (the "CD-ROM Agreement"). It is pursuant to the CD-ROM Agreement that the two Toy Story CD-ROM products were developed, produced and distributed. Both the Feature Film
Agreement and the CD-ROM Agreement were superseded by the Co-Production Agreement."

"On February 24, 1997 Pixar and Walt Disney Pictures and
Television entered into the Co-Production Agreement pursuant to which Pixar, on an exclusive basis, will produce five computer animated feature-length theatrical motion pictures (the "Pictures") for distribution by Disney over approximately the next ten years."

There is nothing in the description of the Co-Production Agreement about further software sharing.

The relationship with Pixar broke down exactly because the sequels were supposed to directs.Wrong again. From Pixar's own 10-K filed in March, 1997 (just after the Co-Production Agreement was signed):

"Derivative works include theatrical sequels, made-for-home video sequels, television productions, interactive media products and other derivative works as more specifically provided in the Co-Production Agreement (collectively, "Derivative Works")."

"A Derivative Work that is a theatrical motion picture would not count towards the five Pictures to be produced under the Co-Production Agreement."

How much clearer could it be?

That's the way Hollywood works – I don't think Jerry Bruckheimer is going to lower his take from irates 2 because it's a sequel.Pixar didn't lower its take on the sequel. Cost and revenue sharing were treated exactly like the other pictures. It just didn't count toward the minimum.

Note that Pixar was not required under the Co-Production Agreement to produce Derivative Works, they were just given the opportunity to do so.

The secret of "unlocking the value of Disney" is the company's ability to cross market products – theme parks, TV shows, consumer products, etc. Little Mermaid earned much, much more for Disney than its box office number implies. Perhaps a quick count of the Oliver and Mermaid related items at the Disney Store would give a quick read.Well, I didn't mention Eisner's successes at increasing merchandising revenue, thanks for doing so. Since you've clearly blamed Eisner for all the excesses of merchandising in other threads, I assume this is one revenue stream you'll be willing to give him credit for.

Celebration (which is really a housing development) was simply selling off property and nothing but a one-shot "unlocking"...But to me "unlocking" implies a way of continuing to receive value, not a grab-the-cash-and-run mentality. Most of development work at WDW is simply duplicating off-property businesses – mini-golf, water parks, strip malls, McDonalds. Yes, Eisner gets points for putting in a business plan, but it's rather shallow and unimaginative.Yes, developing and selling off a piece of real estate can be unlocking its value, particularly when it's a piece of real estate that is somewhat detached from the main hunk of land at WDW, and when the Company was facing a loss of its agricultural tax treatment of the property. Sure, it's not an evergreen source of revenue, but, in a sense, neither is putting The Lion King on DVD.

Whether the plan is shallow and unimaginative or not is debatable, but it has certainly been successful in making WDW more of an all-inclusive resort destination, notwithstanding the odd Pop Century slowdown, Port Orleans FQ shutdown, etc.

What really "unlocked the value of Disney" was not one man. It was the hard work and efforts of thousands of people. I'm glad you mentioned Bill Mechanic's name. He was the one that transformed Home Video from a stepchild into a major profit center. He and a lot of people in that organization...Eisner gets credit simply because he was the hired public face for the company. It's much like the way Walt got credit for a lot what the company did as well...What either really deserve credit for is something much harder to see.Of course the success of any large company rides on its many employees--so what? Where were these thousands of employees before Eisner got there? You admit that the prior management was ineffective, but you refuse to give Eisner credit for any changes. How, under your system, does Eisner get no credit for the things the many Disney employees did (including those like Katzenberg whom he brought on board), and yet he gets the blame for a tragic accident on Big Thunder Mountain?

Honestly, AV, I generally find your comments to be thought-provoking on the direction/destruction of the company philosophy and such, but it seems like your venom for Eisner is so strong that you refuse to give him credit for anything at all.

And for the record, I certainly don't think the man is infallible. The attempted screwing of Katzenberg (I'm no fan of the midget, and I don't think he should have been promoted to President, but it was poor judgment not to work out the severance properly), the hiring of Ovitz, etc., certainly speak to that. But, as one critical article I read said of him, "Eisner wasn't always an empty suit."

airlarry!
09-25-2003, 09:25 AM
DB:

Errors, errors, let's point out errors:

Video-- DB, you claimed that the VCR case was not Ei$ner's. This is not true; he was instrumental both before Disney and after in attempting to shut down the very market that has made Disney tons of money since. Remember, I am not necessarily criticising Ei$ner for this move--but I'm not going to whitewash the fact that he did reverse his thinking somewhat by allowing the company to be dragged into the video market. The query here is why Ei$ner did not have the foresight to see the exploding video market. It is not necessarily a criticism of Ei$ner, because there were arguments back then that the video tape market would kill the theaterical release market. I admit that, but it still does not change Ei$ner's history. Oh yeah, it is not what Mechanic did, as you say, but what Ei$ner's thoughts were. Remember, the discussion here is what Ei$ner can take credit for, not what happened despite him.

Hotels--Sigh....I guess I could cf this site for an extensive discussion as to why the Swalphin is considered by most here to be a less than stellar addition to the resort. First, Disney does not own the hotels, and missed out on an opportunity to maximize revenue at a crucial, key piece of real estate (again, Ei$ner himself was extremely upset about this, as per his autobiography). Second, the architecture intrudes upon the sight lines at EPCOT's World Showcase background. Third, they were not included in the EPCOT monorail transportation background, showing again a lack of foresight and resort management contributing to the underwhelming traffic planning measures undertaken in the last ten years.

Movies--Hard to add to what AV said, but when I read this,
I don't see any production cost numbers for Oliver & Co., but it hardly seems the massive failure that AV implies.] I actually coughed up my Mickey Head buttered breakfast roll. ;) I take this as an implication that one could compare the success of Oliver & Co to Little Mermaid. That dog won't hunt. The lifeblood of any creative empire is so much more than the raw number of tickets sold on a first theatrical run. Heck, by that count, Pearl Harbor is a smash, and The Princess Diaries is a waste of Disney's time. Toy Story is so-so, and Finding Nemo is the bigger movie of the two (that may well come true, but I'll bet you right now that Toy Story is bigger in the consumer's mind than Nemo).

Pixar--Are you saying that Disney agreed that Toy Story 2 was part of the deal? That is the interpretation I get from reading your statements, that the parties agreed that TS2 was part of the five. This is simply not true. Pixar developed TS2 as a DTV production, and ramped it up when everyone agreed the story was so strong it had to be released to theatres. Any good lexis/nexis search will show you newsarticles from that time when Disney and Pixar argued that TS2 should have been or should not have been part of the five picture deal.

The five "wrong" statements don't seem so "wrong" after all.

Give Ei$ner his due. He prevented that corporate raider from taking over the company. What you still haven't answered is, did the takeover happen anyway, just with a different scenario? And will Disney be sold off in pieces at the end?

Another Voice
09-25-2003, 09:58 AM
I don't have time for a detailed discussion, so for the moment let me just post the introduction…

I will admit I see things from a different perspective than most on these boards – it is very much a "back stage" view of things. My view is that his real talent is in playing politics. He can manipulate people and situations to his advantage with amazing skill. Working in Hollywood is, of course, a huge advantage to people like this because the town is nothing but illusion and the reality is carefully hidden from view. Give people enough money and they'll beleive anything.

Eisner is someone who accumulated credit for the work of others to such an extent he began to believe that he had talent himself. This was helped by a company and public culture of "one man does everything", a culture that fit Eisner like emperor's robes*.

The problem is whatever talents that made him a successful suit in Hollywood (the ability to pick middle-of-the-road semi-successful projects and bully people into working cheap all the while surrounded by buffering layers of management and creative people) have turned into a curse when he began to push forward large scale efforts on his own. Eisner used to be a suit at Paramount and an executive-on-a-lease at Disney. One helicopter ride and some board room politics later he's now running everything by himself. His true character is coming out.

It's the Peter Principle played in public on a massive scale. But with the amount of money involved (from the company side) and personal involvement (from the fan side) there is tremendous incentive to view the emperor's robes as dazzling as ever. While everyone tries very hard not to see the naked man, Disney is being marched down the path of oblivion.

Eisner is best at exploiting – people, contracts, properties (intellectual or real) – but he's not a creator. If you're view of Disney is for them to be a repackager of other people's ideas and products, then he's your guy. But I wish for Disney to remain a creative enterprise with the ability to generate new wonders, new ideas, new magic. I want the artists, not the wholesalers.

* Eisner would always tell the story about how Walt kept a photographer on staff just to take pictures of Walt. Eisner would use it as an example of ego gone wild, of vanity, of wasting the corporate money, and of "how things are different now". I'd always remember that story when I watched him scurry across the lot to get his toupee fitted in Make-up before he shot the introductions to 'The Wonderful World of Disney'. Another prefect fit.

Walt's Frozen Head
09-25-2003, 10:51 AM
Eisner is best at exploiting – people, contracts, properties (intellectual or real) – but he's not a creator. If you're view of Disney is for them to be a repackager of other people's ideas and products, then he's your guy. But I wish for Disney to remain a creative enterprise with the ability to generate new wonders, new ideas, new magic. I want the artists, not the wholesalers.

I agree... but would add that I believe the creative enterprise is the logically and demonstrably superior business plan for the long haul.

No one cares what "you want," you know. It's all about the money.

BRERALEX
09-25-2003, 11:15 AM
As usual i have nothing to contribute just need to get my post count up.

I just finished Keys To The Kingdom ( the rise of ME and the fall of everyone else) last night and i think it's something every hardcore disney fan needs to read.

DancingBear
09-25-2003, 11:15 AM
Originally posted by airlarry!
[B]DB:

Errors, errors, let's point out errors:

Video-- DB, you claimed that the VCR case was not Ei$ner's. This is not true...How is this not true? What Supreme Court case re VCRs was Eisner involved in? Perhaps you could convince me if you provided some facts. The only case I could find was the Betamax case, and I showed that case greatly preceded Eisner coming to Disney.

I admit that, but it still does not change Ei$ner's history. Oh yeah, it is not what Mechanic did, as you say, but what Ei$ner's thoughts were. Remember, the discussion here is what Ei$ner can take credit for, not what happened despite him.And how did Mechanic accomplish all of this despite the CEO? Didn't Mechanic come to Disney at about the same time as Eisner?

Hotels--Sigh....I guess I could cf this site for an extensive discussion as to why the Swalphin is considered by most here to be a less than stellar addition to the resort. First, Disney does not own the hotels, and missed out on an opportunity to maximize revenue at a crucial, key piece of real estate (again, Ei$ner himself was extremely upset about this, as per his autobiography). Second, the architecture intrudes upon the sight lines at EPCOT's World Showcase background. Third, they were not included in the EPCOT monorail transportation background, showing again a lack of foresight and resort management contributing to the underwhelming traffic planning measures undertaken in the last ten years.I am quite confused here again. As you put it, the hotels, and their non-Disney ownership, were planned before Eisner's arrival. So, even accepting your subjective judgment that the Swan and Dolphin are bad, what part of that is Eisner's fault? I guess it was that he hired a world-class architect to design the buildings that destroy your Epcot sightlines. Would you rather have another bland hotel box there? I mean, the Hyatt Regency is a wonderful hotel, but would you rather that it be sitting there in the Swan and Dolphin spot?

I take this as an implication that one could compare the success of Oliver & Co to Little Mermaid.Why would you take it that way, when I said O&C "is clearly not part of the Disney pantheon of great films....but it hardly seems the massive failure that AV implies." All I was saying was that O&C wasn't Eisner's "Gigli," but just a somewhat successful, if unmemorable, animated movie.

Pixar--Are you saying that Disney agreed that Toy Story 2 was part of the deal? That is the interpretation I get from reading your statements, that the parties agreed that TS2 was part of the five. This is simply not true. Pixar developed TS2 as a DTV production, and ramped it up when everyone agreed the story was so strong it had to be released to theatres. Any good lexis/nexis search will show you newsarticles from that time when Disney and Pixar argued that TS2 should have been or should not have been part of the five picture deal.AV said the Co-Production Agreement did not contemplate theatrical sequels, only direct-to-video. I've showed that the Co-Production Agreement very clearly contemplated that there may be theatrical sequels, and that such theatrical sequels WOULD NOT COUNT toward the 5-picture minimum.

What you still haven't answered is, did the takeover happen anyway, just with a different scenario? And will Disney be sold off in pieces at the end?I didn't know I was being asked that question.

DancingBear
09-25-2003, 11:21 AM
AV, I really enjoyed reading your last post--many interesting thoughts there. Gives me some basis for trying to understand how Eisner the Paramount whiz kid became the post-Wells egomaniac.

crusader
09-25-2003, 11:25 AM
One helicopter ride and some board room politics later he's now running everything by himself. His true character is coming out.

Culture breeds this behavior in our society. Eisner is half of what a media empire needs to survive - politically unscrupulous with the ability to demand without question. Hollywood demands a leader to negotiate, contemplate and manipulate and like it or not "somebody has to be the son-of-a-b----h"! I'm sorry if that sounds too harsh, cold, and ugly for this company but it happens to be reality. Disney is not impervious to cutthroat wheeling and dealing in fact it has become a prerequisite for the job.

The "Creator" (as noted by AV) is the other half. As I've stated before, creativity and talent still lives within this company. I don't agree that this is all you need to have a "successful business model" or that unknown artist down the street wouldn't have his work stolen after he pitched it to a corporate exec.

You need both and both need to be equally effective.

airlarry!
09-25-2003, 11:48 AM
DB:

Okay, I see your point now. We need more concrete proof of Ei$ner's involvement in the suit. That's a fair analysis, and a good point that needs more research. Well said.

However, regarding Pixar and AV's assertion that the parties envisioned that all sequels would be TV or DTV, you said this:
-----------------------
"Wrong again. From Pixar's own 10-K filed in March, 1997 (just after the Co-Production Agreement was signed):

"Derivative works include theatrical sequels, made-for-home video sequels, television productions, interactive media products and other derivative works as more specifically provided in the Co-Production Agreement (collectively, "Derivative Works")."

"A Derivative Work that is a theatrical motion picture would not count towards the five Pictures to be produced under the Co-Production Agreement."

How much clearer could it be?
------------------------
Okay, you have established quite clearly how clear it is in the contract that TS2, as a theatrical sequel, should be counted in the five picture agreement. Now tell us, if the the contract is so clear, then what exactly was Disney's argument against it? You do realize that there was this giant argument between Disney and Pixar over this contract and the release of TS2, right? And wasn't the contract changed because of this?

As for your assertions that I have to choose between a boxy Hyatt and the Swalphin, or between Oliver & Company and
Gigli, I refuse to do so. I want to choose between the Swalphin and the Venetian, and between Oliver & Co and Beauty & the Beast. I refuse to thank Ei$ner for giving me a 'somewhat successful, if unmemorable, animated movie.' I want the company to try and make history with every big event feature.


And how did Mechanic accomplish all of this despite the CEO? Didn't Mechanic come to Disney at about the same time as Eisner?
Rent Lilo & Stitch, and then ask Dean and Chris (who no longer are company employees with Disney) how they accomplished all of this despite the CEO. They'll tell you.

DancingBear
09-25-2003, 01:42 PM
Originally posted by airlarry!
However, regarding Pixar and AV's assertion that the parties envisioned that all sequels would be TV or DTV, you said this:
-----------------------
"Wrong again. From Pixar's own 10-K filed in March, 1997 (just after the Co-Production Agreement was signed):

"Derivative works include theatrical sequels, made-for-home video sequels, television productions, interactive media products and other derivative works as more specifically provided in the Co-Production Agreement (collectively, "Derivative Works")."

"A Derivative Work that is a theatrical motion picture would not count towards the five Pictures to be produced under the Co-Production Agreement."

How much clearer could it be?
------------------------
Okay, you have established quite clearly how clear it is in the contract that TS2, as a theatrical sequel, should be counted in the five picture agreement.No, NOT counted!

DisneyKidds
09-25-2003, 01:51 PM
Disney is not impervious to cutthroat wheeling and dealing in fact it has become a prerequisite for the job.
You may have a point crusader. Disney, as a media conglomerate, probably needs the cutthroat SOB business leader. While ME may be cutthroat, and may be an SOB, I'm just not sure ME makes a good leader of the likes you mention. It just seems that ME has often been a day late and a dollar short. He doesn't ever seem to be the one who decides what steps the cutthroat SOB business leaders of the conglomerate world should be taking and follows in others footsteps. The cutthroat SOB leader required by such organizations may not be a "creator", but that doesn't mean he shouldn't be a "visionary". I don't think ME is such a thing and that has hurt the company. Is it because he is stupid, perhaps affraid...........I don't know, but too many of his cutthraot SOB decisions have subject to question.
Okay, you have established quite clearly how clear it is in the contract that TS2, as a theatrical sequel, should be counted in the five picture agreement.
Larry - it seems you are a bit bolixed up on this one. DB is right that his evidence shows TS2 should NOT be counted. TS2 is a derivitive work. TS2 was a theatrical release. Derivitive works that are theatrical releases would not count. Better?

airlarry!
09-25-2003, 02:20 PM
Oops, that was a typo. Obviously, it should have read:

"Okay, you have established quite clearly how clear it is in the contract that TS2, as a theatrical sequel, should not have been counted in the five picture agreement."

Again, so you have claimed that it was very clear why TS2 should not be part of the contract. So why was there a big fight between Disney and Pixar over TS2?

I'll answer., since I haven't seen one here yet.

Either because Ei$ner was greedy despite the clear language of the contract, or both parties envisioned that sequels would go straight to Video and would not warrant the attention TS2 rightly received.

Exactly what I thought AV was trying to say.

DancingBear
09-25-2003, 02:34 PM
I don't understand your confusion on this issue. Let me try to explain again.

1--The Co-Production Agreement clearly contemplated that sequels might be either theatrical releases or direct-to-video releases. Either type of sequel would be a "Derivative Work."

2--The Co-Production Agreement says if Disney wants to do a Derivative Work, Pixar can choose whether it wants to produce the Derivative Work, under the terms of the Agreement, or not.

3--The Co-Production Agreement says that if Pixar agrees to produce a Derivative Work which is a theatrical sequel, that sequel would NOT count toward the 5-picture minimum, but the sequel would be treated for other purposes (sharing of the costs and revenues) like any movie under the Agreement.

It was Job$, and not Ei$ner, who "was greedy despite the clear language of the contract" and wanted to have TS2 count, and created the dispute.

DisneyKidds
09-25-2003, 02:42 PM
Either because Ei$ner was greedy despite the clear language of the contract, or both parties envisioned that sequels would go straight to Video and would not warrant the attention TS2 rightly received.
I hate to comment here as I don't want to get sucked in and have anyone think it is my goal to defend Ei$ner, but what have you been smoking my friend? :crazy: How can you say that both parties envisioned that sequels would go straight to video when the contract clearly contemplates that there may be derivitive works (sequels) that are theatrical releases and clearly stipulates how they are to be treated under the agreement? Trust me, there is NO language in these kinds of contracts that isn't there for a specific reason. Your read just doesn't make sense and I'd say the opposite........both parties realized that derivitive works might possibly be theatrical releases and they wanted to establish up front, before anybody signed on the dotted line, how such films would be treated. If anything I only see, in spite of clear language in the contract, greed on the part of Pixar, not Ei$ner. I don't see living up to one's contract as being greedy. For Ei$ner to deviate from that contract and count TS2 as one of the five would actually have been quite generous. We can discuss whether ME should have exercised such generosity for the long term good (which I'm not convinced the upside potential of doing so was as great as some other do), but you can't call Ei$ner greedy on the basis of this.

airlarry!
09-25-2003, 03:21 PM
So according to your idea, Ei$ner could have pushed for TS3,4,5,6,7,8,9,10 ad infinitum, and if all were agreed to be produced by Pixar, and all were of equal strength of story and animation as TS2, and all were released in theaters with the fanfare of Disney's Newest Masterpiece, Pixar still owes Disney the remainder of the films under that contract.

And according to you, Lassiter et al knew this when they signed the contract.

Sure....

It makes great business to shift Pixar time, energy, money and talent from making future features and instead concentrating on ramping up production for TS2....and then telling them, Aha! your contract says this is not one of the five, thanks for the print, here's your check, get back to work on one of the contracted five pictures. ;)

The more I think about it, the more I hate that I've pulled the curtain back on what Ei$ner was doing here. As CEO, his duty is not short term profits, it is long term thinking. And the decision to hold Pixar to this 'technical' crap might have worked if you were producing widgets (where some states are throwing money left and right to attract the next big auto plant), but if I were Pixar, and I dealt in a creative medium where there is no real guarantee that five pictures will all be as big as TS2, I'd be p'd off too. Disney has made fortunes over Pixar with no real risk of investment, and that's the gratitude they showed John L.

crusader
09-25-2003, 03:35 PM
It just seems that ME has often been a day late and a dollar short.

I'll give you some room here - but given that things are not always what they seem I typically avoid jumping on the ME bashwagon.

You mentioned something very significant:

The cutthroat SOB leader required by such organizations may not be a "creator", but that doesn't mean he shouldn't be a "visionary". I don't think ME is such a thing and that has hurt the company.

He (or she) is typically a visionary when they arrive - equipped with a wealth of untapped ideas, which certainly sounds great when you're trying to land the job in the first place. It takes a talented individual with a proven track record, or invaluable resources or both but there has to be an obvious fit. Ei$ner fit whatever it was Disney needed - whether that was to prevent a hostile takeover or advance the company doesn't really matter. There was an obvious need for a "visionary" so to speak.

He spent the first 10 years engaging and executing a plan. He spent the next 10 years running what should have been a well oiled machine. Unfortunately for Corporate America, Top Talent - Stock Options - Leveraged Buyouts - IPO's and Dot.com's became the craze and you couldn't get in line fast enough. Everybody had a pitch for the Venture Capitalist or the "Angel" investor to finance their start-up and the money was flowing like water.

So, Yes! Ei$ner/Disney made grave errors and is now regrettably left to deal with them along with everybody else. If Disney remains intact and survives this round all I have to say is BRAVO! to the whole damn company - Because many of the best have fallen like Goliath.

DancingBear
09-25-2003, 03:47 PM
Originally posted by airlarry!
So according to your idea, Ei$ner could have pushed for TS3,4,5,6,7,8,9,10 ad infinitum, and if all were agreed to be produced by Pixar, and all were of equal strength of story and animation as TS2, and all were released in theaters with the fanfare of Disney's Newest Masterpiece, Pixar still owes Disney the remainder of the films under that contract.

And according to you, Lassiter et al knew this when they signed the contract.

Sure....

It makes great business to shift Pixar time, energy, money and talent from making future features and instead concentrating on ramping up production for TS2....and then telling them, Aha! your contract says this is not one of the five, thanks for the print, here's your check, get back to work on one of the contracted five pictures.What's the "Aha!" I don't know what Lasseter knew, but yes, Steve Jobs and whoever negotiated the Co-Production Agreement knew exactly what it said. Again, they said so, very clearly, in their 10-K filed less than one month after the contract was signed (and while TS2 was still a DTV project). Jeez, you act like Eisner and his high-priced lawyers were negotiating with a bunch of simple-minded yokels, not a public company with one of the most high-profile CEOs in the country.

And, yes, Eisner could have ASKED Pixar if they wanted to produce TSAdInfinitum, and as I said, it would be Pixar's OPTION as to whether they wanted to produce them or not. If they thought they would make tons of money on TSAdInfinitum, as they did with TS2, they could say yes. If they thought that their "time, energy, money and talent" could be used better on some other project, they could say no. The agreement even provides that if Pixar chooses not to produce a Derivative Work, they get a participation in any profits therefrom.

KNWVIKING
09-25-2003, 05:50 PM
***". I don't see living up to one's contract as being greedy. For Ei$ner to deviate from that contract and count TS2 as one of the five would actually have been quite generous. We can discuss whether ME should have exercised such generosity for the long term good (which I'm not convinced the upside potential of doing so was as great as some other do), but you can't call Ei$ner greedy on the basis of this."***

Had Eisner been "generous" and said "no problem Steve, sure we'll count it towards the deal", this thread would be about how ME was an idiot for giving away 100's of millions of dollars because he thought it MIGHT allow Disney and Pixar to sign a new deal. It's what's happening now on this thread. Every positive ME performed was actually the hard work of others, but the missing chicken finger is entirely ME's fault because as the CEO he sets the standard. Sorry Mikey, you're damned if you do,and damned it you don't.

airlarry!
09-25-2003, 07:28 PM
All right, I will not be so pig headed as to say that Scoop, DB, and Vike haven't made good points here. You all have.

But this reminds me of the expert witness who gave every explanation as to why the oil rig couldn't fall down.

The room got quiet as the lawyer asked the expert if he knew that the reason he was here was because the rig did fall. And people were hurt. And everybody wanted to know why it fell, not why it couldn't have.

You have all, especially M. DB, explained very professionally why the relationship between Ei$ner and Job$ couldn't have soured, why the dispute over the TS2 status couldn't have happened. ;) But the rig did fall, people.

Scoop made a good analogy to sports.

When Sports Star signs a contract and then holds out the next year cause his best friend got more, he looks bad to the fans. But when a good up and coming player averages 35 homers his first two years, a good club will quietly approach said player about keeping him around, especially if he is playing for his dream club.

Because waiting till the contract plays out only means that the GM has to look at the fans square in the eye and say the usual, "It didn't make economic sense to resign him."

Yeah. Whatever, Mr. GM. You should have thought about that before the Yankees came calling. Back when Sport Star HomeTown Hero still considered it a dream to be playing for his boyhood favorite team.

Lassiter loved Disney. He probably still does. Ei$ner made the gamble, not Pixar. He gambled that Pixar needed Disney more than Disney needs Pixar.

Anybody still think Ei$ner was right?

If you do, I've got tickets to "Atlantis: The Broadway Show" I could sell you real cheap. ;)

DisneyKidds
09-26-2003, 12:16 AM
So according to your idea, Ei$ner could have pushed for TS3,4,5,6,7,8,9,10 ad infinitum, and if all were agreed to be produced by Pixar, and all were of equal strength of story and animation as TS2, and all were released in theaters with the fanfare of Disney's Newest Masterpiece, Pixar still owes Disney the remainder of the films under that contract.
Well......uh...........yeah. Of course, Pixar would only agree if they deemed it to be in their best interest. I hardly think Pixar was hoodwinked by the contract they signed. Anyway, DB seems to have covered the bases quite well in response to your query. This is interesting though..............
You have all, especially M. DB, explained very professionally why the relationship between Ei$ner and Job$ couldn't have soured, why the dispute over the TS2 status couldn't have happened. But the rig did fall, people.
First off, nobody has said there was any reason that the relationship couldn't have soured. Nobody is saying that there wasn't some wrangling regarding TS2. However, I'd put that more on Pixar than ME. As for falling rigs............I see no conclusive evidence that the TS2 situation is the reason the relationship might be finito. In fact, I think it has very little to do with it. I've said it before, and I agree with Scoop............
I just don't buy the notion going around that if Disney had not been so strict in enforcing the contract regarding TS2 that they'd have a better chance with Pixar now.
To be honest, to buy this notion would seem to me to be quite foolish.

To carry out that sports analogy one more step.................many times teams won't renegotiate a contract for a star player or give that star free agent the big lucrative contract because it is not in the best long term interest of the team. Happens all the time. Perhaps a paltry distribution deal sans any profit sharing or rights to the characters just isn't all that attractive to those who are sitting at the table for Disney right now. Sure, we can argue if the wrong people are at the table or whether or not it should be attractive to them, but you have to admit that it is possible they aren't looking at it that way.

Crusader...............
He spent the first 10 years engaging and executing a plan. He spent the next 10 years running what should have been a well oiled machine.
Here is the problem I see. Sure, ME was fit at the time and fulfilled a purpose. He may have been great for that purpose, at that time. But to lead a company this big, for this long, he needed to be more if the company was going to avoid the problems of the recent past. After that first ten years Ei$ner had no arrows left in his quiver. He had no well to go back to. He had no choice but to sit back and run what he hoped would be a well oiled machine. Unfortunately, I don't think Disney was ever intended to be, or should have been put in the postion to be, a well oiled machine that should be run from a control room. Disney needed to continue to be about innovation, to be on the forefront of change in the industry, to be a leader...........and I'm not sure ME was equipped for that in the long term.

Another Voice
09-26-2003, 12:27 AM
Again, very breifly...

All this talk about Eisner's noble defense of contract law is rather interesting.

For all those years when he was taking in hundreds of millions of dollars in compensation we were told that "he deserves to reap the gains of the good times because according to his contract he could end up with nothing in the bad times - shared risk and all".

Funny how that when the bad times hit, Eisner had the board rip up his old contract and write him a new one that let's Eisner get however much money his handpicked board is willing to give him. Hey, the company tanked but he still got a $5 million bonus because "he tried really, really hard".

Somehow all that talk about Eisner rightly defending Disney's prinicipled stance rings a little bit hollow. Or, as a stockholder, I wish the board had held Eisner to his end of contracts (his payment, Katzenberg's, Ovtiz's, Pooh, etc.) with the same zeal that Eisner is holding others theirs.

Playing the "tough nosed" mega media Wall Street darling might work in the short term, but it destroys the business relationships that any company needs to remain in business.

crusader
09-26-2003, 06:57 AM
I don't profess to endorse the contract modification issue. If it were a privately held company the top brass wouldn't have their feeding tube attached to a performance based pumping station but that's not what we have here. So, I agree - it is a disgraceful gesture which clearly demonstrates failure on the part of the Board.

That's one issue but it's not the main reason they're suffering. Even if ME's compensation plan is not linked to the solvency of the company, he needs the company to perform in order to stay alive. I've heard the theories that the plan isn't to remain intact but to dismantle for a sheriff's sale - I don't buy it. That's the "final straw" so to speak and a worst case scenario designed to cause widespread panic.

It reminds me of a similar plight plaguing Jobs before his first exit from Apple - he downsized, cut, and shelved projects looking to free up as much cash as he could and was accused of trying to position the company to be put on the auction block. What I find most interesting is that after all was said and done, he was brought back.

Why was that? If you want to get into the "business is bad long term if you screw your buddy" routine, then explain how Jobs winds up sitting where he is.

The reason is: There are no relationships in business beyond making money. It's nothing personal when you win it's strictly a game of survival. Young companies have a better approach in the "short term" but quickly learn resiliency once they get a hard dose of the reality in practice. You better be sharp, talented, quick-witted, and more intelligent than the next guy or you're in for a rude awakening. Especially in Hollywoodland where the red carpet is being rolled up in front of you while you're trying to walk in the door.

DancingBear
09-26-2003, 07:49 AM
Originally posted by airlarry! You have all, especially M. DB, explained very professionally why the relationship between Ei$ner and Job$ couldn't have soured, why the dispute over the TS2 status couldn't have happened. ;) But the rig did fall, people.As DisneyKidds said, I said no such thing. I have merely shown that it was Job$, and not Eisner, who got greedy and wanted to deviate from the contract.

Scoop made a good analogy to sports.

When Sports Star signs a contract and then holds out the next year cause his best friend got more, he looks bad to the fans. But when a good up and coming player averages 35 homers his first two years, a good club will quietly approach said player about keeping him around, especially if he is playing for his dream club.A better analogy would be that up and coming player, contract, after his first very good season, goes to management and says, "I had a good year in 2003, and I'm working on having a good one again this season. So, I want you to let me out of my option year so I can become a free agent sooner and play for the highest bidder.

What were Eisner's options when Job$ wanted to change the deal for TS2?

1--Give Job$ what he wanted, without anything in return. Then he would have been giving up the fifth original feature (Cars) in exchange for TS2, which Disney was already entitled to (if Pixar chose to make it). Then, he would hope that this created tremendous goodwill which would lead to Pixar later agreeing to extending the deal with Disney, at terms less favorable to Pixar than Pixar could get elsewhere. Do you really believe that would have happened? That Job$ wouldn't now be just as aggressive negotiating for the best deal possible for Pixar?

2--Give Job$ what he wanted, and, in exchange, extend the 5 (which would then be really 4) picture deal, on terms somewhat more favorable to Pixar than the original deal.

The first problem with this scenario is there is little evidence that Job$ would have extended the deal----after all, the whole point of having TS2 "count" was to get out of the deal faster.

Second, what sort of extension do you think might have been negotiated? Cars (which Eisner would have just given up) plus 2 more? 3 more?

Lassiter loved Disney. He probably still does.Lasseter isn't calling the shots on the Disney deal, Job$ is. And if Lasseter loves Disney so much, why did he cut them out of the creative process after the TS2 dispute? That wasn't any sort of creative difference, it was just about $$$$$. Seems kind of petty to allow that to carry over to their working relationship.

Ei$ner made the gamble, not Pixar. He gambled that Pixar needed Disney more than Disney needs Pixar.

Anybody still think Ei$ner was right?Does Disney need Pixar at any price?

If you do, I've got tickets to "Atlantis: The Broadway Show" I could sell you real cheap. ;)Hey! Thanks for reminding me of yet another successful Eisner brainchild! We hadn't mentioned the incredible successes of Disney's venture into live musicals!

crusader
09-26-2003, 07:59 AM
Mr. Kidds -

Unfortunately, I don't think Disney was ever intended to be, or should have been put in the postion to be, a well oiled machine that should be run from a control room. Disney needed to continue to be about innovation, to be on the forefront of change in the industry, to be a leader...........and I'm not sure ME was equipped for that in the long term.

The well oiled machine analogy wasn't meant to imply anyone besides the CEO (and a second "creator" type Chief Operating Officer) sit back and manage the control room. In order for it to be running smooth and efficiently there have to be those within the company who possess the innovation and creative drive to fuel it. That doesn't mean simply maintaining the status quo, it means sustaining positioning as the industry leader by continually moving forward with new ideas.

ME can be equipped to run this but not without that equal at his side and not without relinquishing the micro-management style he is purported to exercize. Trust and ability are key (not to mention cash to afford skill and talent in imagineering and entertainment production)

DancingBear
09-26-2003, 08:00 AM
Originally posted by Another Voice
All this talk about Eisner's noble defense of contract law is rather interesting....Somehow all that talk about Eisner rightly defending Disney's prinicipled stance rings a little bit hollow. Or, as a stockholder, I wish the board had held Eisner to his end of contracts (his payment, Katzenberg's, Ovtiz's, Pooh, etc.) with the same zeal that Eisner is holding others theirs.

Playing the "tough nosed" mega media Wall Street darling might work in the short term, but it destroys the business relationships that any company needs to remain in business. This isn't a morality play, it's just business. I'm not saying Eisner had the moral high ground in the TS2 dispute, but that the contract was on Disney's side, and it was Job$ who didn't want to live up to his end of the deal. Job$ is playing the game just as much as Eisner.

As I've said before, every business I've worked with runs on relationships, but that doesn't mean they don't negotiate hard and live with their major contracts.

As I've also said (and it's another distinction from the ballplayer analogy), I think the Co-Production Agreement, which is really about divvying up the costs and revenues, is a different situation from dealing directly with "talent," when you have to make more judgments about the psychological effect of the deal.

And, as I've also said, Eisner screwed up big-time with Katzenberg and Ovitz.

jlambrig
09-26-2003, 08:30 AM
Originally posted by DancingBear


And, as I've also said, Eisner screwed up big-time with Katzenberg and Ovitz.


But so did the board. I understand that most are in place because they are Eisner's evil henchmen but the problems with Disney do not lie solely with Eisner, it is the board of directors that let this continue. We can talk ad infintum, and often do, about what Eisner does or doesn't do but this is a totally ineffective board that is enabling him to dictate Disney policy. And I don't see the new addition to the board, though advertised as independent, stirring things up at all.

One would think, that with the corporate governance efforts in place throughout the country, there would be a greater focus on Disney, especially with the Ovitz fiasco, and their ineffective board practices, but this has barely popped up on the radar screen. And that was only briefly.

There is many opinions on this board that Eisner needs to go and I am in agreement with that. I recognize that he has had some significant accomplishments and don't share the view that everything he does is without merit (or that everything that happened during his watch was someone else's doing). But there needs to be a greater shake up at Disney. The house cleaning needs to include the board as well. A dissident stockholder with a large stakeholder position in the company, a Kirk Kerkorian type, may be the only thing that will be able to put a halt to the inertia this board and Eisner have built up.

CasualObserver
09-26-2003, 08:51 AM
2--Give Job$ what he wanted, and, in exchange, extend the 5 (which would then be really 4) picture deal, on terms somewhat more favorable to Pixar than the original deal.

Bear, I noticed you really glossed over this one. This is the option that Voice had been saying would have been better in the long run for Disney. Remember, "Give a little, get a lot". What you are not wanting to acknowledge is that it is in Disney's best interest to keep a relationship with Pixar. No one has said that they expect Disney to give away the store as you have implied. However, had they been willing to negotiate they could be looking at revenue from more films rather than the well drying up rather quickly.

As I said, this scenario makes sense. Unfortunately, it makes your boy, Ei$ner seem foolish for not taking it. His "My way or the Highway" attitude cost Disney. Now he's crying to the board about how he can't make a deal when it was his belligerence that is making it next to impossible to come to terms.

You will probably say is Jobs fault for wanting to renegotiate. Ei$ner didn't want to budge, now he's paying the price by having the best animation studio take their business elsewhere. His history is riddled with these miscalculations.

Casual Observer

KNWVIKING
09-26-2003, 09:14 AM
This theory of "give a little,get a lot" sounds good, but why should we believe the "get a lot" would ever materialize ? If Jobs is pissed and holding a grudge now because he felt he shouldn't have to honor the existing contract over TS2, why do you believe he would suddenly become Mr Generous with a new contract with Disney now ?

If Jobs had any idea back in '94 of the magnitude of Pixar's success, do you think there would have been a contract at all between Dis and Pix ?

This time Jobs doesn't need a crystal ball, he has ten years of history to rely on. He has the software and the hardware. He has the creative force. He has the cash. All he needs is a distributor willing to work for whatever he deems is fair. What would be his motivation to offer Disney a few extra bones ? He showed his greed when he tried to rewrite the contract for TS2. For the most part Disney has no bargaining power unless Pixar believes a sizeable portion of their success had something to do with being associated with Disney. Unless Jobs is bluffing, apparently they don't.

IMO giving Jobs TS2 back then would not give Disney an advantage now.

DisneyKidds
09-26-2003, 09:59 AM
The well oiled machine analogy wasn't meant to imply anyone besides the CEO (and a second "creator" type Chief Operating Officer) sit back and manage the control room. Fine...........but I would still disagree with you. I think that top men who are figureheads who sit in a control room are the wrong answer for any compnay. The CEO, the COO, the top guys...........they need to be shrewd business men, but they also need to understand their industry, they need to have ideas for the future, they need to know what is going to generate revenue and be in the long term interest of their company. It is a mistake for the top guys to rely on the guys below them to do all of that, IMHO.
I'm certainly not lauding Mr. Eisner for being a defender of contract rights.
I'd say the same thing Scoop, but apparently AV only wants to see this situation, and us, one way. Oh, well.....................

Walt's Frozen Head
09-26-2003, 10:18 AM
Regardless of which mega-millionaire ends up getting stuck in this little game of "pin the tail on the failure of Disney/Pixar," Jobs' company has demonstrated a commitment to creativity and, at first blush, appears to be poised for immediate improvements in their financial results coming out of the Disney deal. Eisner's company has demonstrated a commitment to cutting costs and, at first blush, appears to be left wondering where to find a quick replacement for "Disney-quality" feature animation and record-setting numbers of ticket sales, upon separating company with Pixar.

Another Voice
09-26-2003, 10:22 AM
"This theory of "give a little,get a lot" sounds good, but why should we believe the "get a lot" would ever materialize?"

And such is the inherent problem with Eisner's long term strategy of turning Disney from a producer of product into an wholesaler of product.

Disney is at the mercy of others - the company can no longer control its own fate.

And when at the fate of others that puts you in a very weak position and sometimes that means you have to pay. And pay big. What if Pixar had turned out flop after flop after flop - Disney would have had no option but to release a long string of money-losing films (because, of course, they would have thought themselves strictly bound by the contract and wouldn't think of refusing).

In normal business, the company with the more expensive legal drones usually wins. But Hollywood ain't a normal business. Hollywood relies on people, extremely tempertmental people. General Motors can always find someone else to make fuzzy dice for them, there is an extremely limited pool of taleneted film makers there. Unless you're careful you're soon left without options.

Eisner moved Disney into a position where Disney would not make CGI movies. He had to rely on an outside contractor to provide those items. He promptly turned around and ticked off that supplier and they, as any company with a successful product would, started to explore their options.

Now that the traditional animation facilities have been gutted, and 2D animation declared as dead as Beastly Kingdom, suddenly Eisner is left without the "future of Animation".

How are the few dollars he squeezed from getting one extra film worth becoming a bit player in a field they created?

KNWVIKING
09-26-2003, 10:47 AM
"This theory of "give a little,get a lot" sounds good, but why should we believe the "get a lot" would ever materialize?"

***"And such is the inherent problem with Eisner's long term strategy of turning Disney from a producer of product into an wholesaler of product.

Disney is at the mercy of others - the company can no longer control its own fate." ****

I absolutely agree. Disney should be "Pixar". They should be on the cutting edge of CGI. In that regard Eisner failed. But back when TS2 came out CGI was still relatively new to the industry, Disney was trying to develope its own CGI devision- which ME closed prematured based I imagine soley on Dino- so your "give a little" theory isn't relative. I'd imagine that back then the plan was to use Pixar as a gap filler until Disney's own CGI business took off. With those assumptions, ME would have no reason to offer Jobs a break on the contract.

Now if there was no TS2 then but today the issue were Nemo 2, given Disney's current CGI status, it could possibly be in ME's best interest to suck up to Jobs and let Nemo 2 count towards the total. But of course we'll never know.

Now a question for you AV. Disney still has a couple years worth of cash cow business with Pixar. How long would it take for Disney to get it's own CGI devision back up and running ? I can't believe every talanted writer & artist will reject an offer from Disney. What would it take and do you feel Disney can do it quickly enough to fill the void left by Pixar ?

HB2K
09-26-2003, 10:54 AM
Now a question for you AV. Disney still has a couple years worth of cash cow business with Pixar. How long would it take for Disney to get it's own CGI devision back up and running ? I can't believe every talanted writer & artist will reject an offer from Disney. What would it take and do you feel Disney can do it quickly enough to fill the void left by Pixar ?
If you were a CGI Animator, knowing Disney's history with the secret lab, would you be chomping at the bit to go work there? How would you be able to believe Eisner that this time around he won't grow impatient and fire you to hire some other third party?

KNWVIKING
09-26-2003, 10:59 AM
... People gotta work,feed their families,buy AP's. Not everybody out there has a personal grudge with ME. The talant pool didn't suddenly stop produce bright,new,energetic animators & writers when Disney closed up the secret lab.

HB2K
09-26-2003, 11:44 AM
You're avoiding my question...

If you have this skill, would you choose the Walt Disney company as your employeer knowing what happened the last time they wanted to produce in house CGI feats?

As you said, people have families to feed, bills to pay, etc. Does it make sense to go to work for a company where you're one cost cutting whim away from unemployment...and that company has already had the whim once? What would make you think this time will be different?

crusader
09-26-2003, 11:50 AM
HB2K

You're talking about job security which has become a thing of the past. Would someone laid off from a company consider re-employment there? Depends on the job market.

KNWVIKING
09-26-2003, 11:55 AM
I didn't avoid your question, I just don't agree that every writer/animator out there has the distaste for Disney that AV makes it sound like does.

If I'm an animator that is confident I can do the job, put out the quality required to produce a money making hit, then I'll go to work for whoever I feel can provide the means to do so. To avoid Disney because of past failures is almost like admitting I'm not good enough to do the job so when the flick fails I'm getting the axe. Potential hires can look at the success of the non animated film makers and know that Disney is serious.

Hey, maybe I'm dead wrong. Maybe Disney puts out a want add for animators and only hacks show up. But my gut tells me otherwise.

raidermatt
09-26-2003, 12:03 PM
Its not really about job security.

Its about two things:

One, you can't always count on finding top notch talent from the pile discarded by other companies. That doesn't mean that talented people don't get axed, it just means that somebody like Pixar or Blue Sky isn't kicking their best people out the door.

Two, I'm guessing most animators realize they aren't going to get job security in the traditional sense. Most likely, what they are looking for is someone who is committed to the product. I'm sure they understand that if things don't go well, they won't be kept around forever, but I think they would be much more apprehensive of a company who slashes entire departments on a whim vs. one who is either going to succeed in the genre or go bankrupt trying.

Usually, the best people have a choice, and certainly Disney's recent moves with The Secret Lab and the Animation division would not score them any points.

Doesn't mean it can't be done, but it will require a true committment on Disney's part, one that has not yet surfaced. Instead, they continue to look to other third parties.

Peter Pirate
09-26-2003, 12:17 PM
Particularily in this pop culture we live in, I think the best talent (that Disney would need to hire) is the new, young talent looking for their first jobs. Older appeals to older and seldom will the experienced talent be the innovators. As proof, Bob Dylan give us anything lately? Has Spielberg given us anything other than Spielberg? Meryl Streep pushing the envelope anymore? Still great acting but... Is the Boss still the 'Boss'? Robin Williams? Still a hoot, but anything new?

If you want to see the same old stuff keep the same old guys doing it...Otherwise make way for the young turks, which traditionally happens anyway, but this means Disney has as good of shot as any at attracting the next really "great one" or the next great team...Just like Pixar did...

This 'Chicken Little" syndrome is really silly. The sky is not falling no matter what happens...It's just another day.

jlambrig
09-26-2003, 12:52 PM
Originally posted by Peter Pirate
Is the Boss still the 'Boss'?

Yes

DancingBear
09-26-2003, 12:53 PM
Originally posted by CasualObserver

"2--Give Job$ what he wanted, and, in exchange, extend the 5 (which would then be really 4) picture deal, on terms somewhat more favorable to Pixar than the original deal."

Bear, I noticed you really glossed over this one. This is the option that Voice had been saying would have been better in the long run for Disney. Remember, "Give a little, get a lot". What you are not wanting to acknowledge is that it is in Disney's best interest to keep a relationship with Pixar.I don't see how I "glossed over this one." After that paragraph, I said:

The first problem with this scenario is there is little evidence that Job$ would have extended the deal----after all, the whole point of having TS2 "count" was to get out of the deal faster.

Second, what sort of extension do you think might have been negotiated? Cars (which Eisner would have just given up) plus 2 more? 3 more?

And I would add, at what price would such an extension have been obtained? Just what sort of a deal do you think was out there?

raidermatt
09-26-2003, 01:26 PM
You're right, Pete, the sky is not falling.

But if everything we discussed had to be a falling sky, the boards would be pretty slow.

Should the relationship end, its a negative for Disney. We can all agree on that, since we have already agreed that a new deal would be good for Disney.

IF Disney truly commits to creating their own CGI, with a goal of being the best in the Biz, I agree that its possible they could do it.

Its just that I haven't seen anything to make me believe they will make that committment. On the contrary, most of what I see indicates they have no intention of making such a commitment. Doesn't mean it CAN'T happen, just that the odds are against it.

crusader
09-26-2003, 01:37 PM
The truth is Matt, that if they don't re-sign with Pixar Disney has to seriously consider producing CGI animation in-house and competing directly against them.

I have the same question as Mr. Viking which is: what would it realistically entail at this point? Even if Pixar has proprietary rights to certain software applications, hasn't Dreamworks already proven this market isn't a monopoly? That tells me the technique exists within the public domain and Disney certainly has the capability to tap it.

If this deal does go South, Pixar begins that inevitable transformation of moving in the direction of the money - and they're going to need it.

DancingBear
09-26-2003, 02:09 PM
Originally posted by crusader
Even if Pixar has proprietary rights to certain software applications, hasn't Dreamworks already proven this market isn't a monopoly?Actually, I believe that Dreamworks uses Pixar's Renderman software. But, Blue Sky has their own technology, and there are others out there.

Edited to add:

Yes, Pixar's latest 10-K says Dreamworks is a Renderman customer. It also says this about CGI competition:

Several movie studios have developed their own internal computer animation capability specifically for the production of animated films and live action films. For example, DreamWorks SKG (with PDI) successfully produced Antz in 1998 and Shrek in 2001. Fox successfully produced, through its subsidiary Blue Sky, Ice Age, which was released in 2002. Other movie studios may internally develop, enter into a co-production agreement with a third party, license or sub-contract three-dimensional animation capability. Further, we believe that continuing enhancements in commercially available computer hardware and software technology have lowered and will continue to lower barriers to entry for studios or special effects companies which intend to produce computer-animated feature films or other products. For example, SGI’s Alias/ Wavefront subsidiary licenses “Maya,” which is its next generation three-dimensional software for creating high quality animation and visual effects. “Maya” incorporates many new features and could be used to make a computer-animated feature film.....

Computer Graphics Special Effects Firms. We also expect to compete with computer graphics special effects firms, including ILM, Rhythm & Hues/VIFX, Tippett Studios, Digital Domain, and Sony Pictures Imageworks. These computer graphics special effects firms may be capable of creating their own three-dimensional computer-animated feature films or may produce three-dimensional computer-animated feature films for movie studios that compete with us. For example, ILM has already created and produced three-dimensional character animation which was used for several central characters in the live action film Star Wars Episode II: Attack of the Clones, and ILM has a royalty-free, paid-up license to use our RenderMan® software and to obtain at no cost all enhancements and upgrades thereto. Other computer graphics special effects firms have licensed or may license RenderMan®. Accordingly, our RenderMan® software may not provide us with a competitive advantage. We also compete, or may in the future compete, with the above firms with respect to animation products other than feature films. We believe that the primary competitive factors in the market for three-dimensional computer animation for animated feature films and other animation products include creative content and talent, product quality, technology, access to distribution channels and marketing resources. We believe that we presently compete favorably with respect to each of these factors.

Software Publishers. We also experience competition with respect to our RenderMan® software product. In particular, we compete with makers of computer graphics imaging and animation software, principally SGI (which acquired Wavefront Technologies, Inc. (“Wavefront”) and Alias Research, Inc. (“Alias”)), MentalImage GMD and Avid Technologies (which distributes the MentalImage product). MentalImage, Avid and SGI (which through its Alias/ Wavefront subsidiary licenses “Maya”, a three-dimensional software for creating high quality animation and visual effects), are each marketing competing rendering software products, usually at lower prices than ours. SGI has licensed several of our patents that cover certain rendering techniques and may therefore be better able to market products that compete with our RenderMan® software. Under appropriate circumstances, we might elect to license our rendering technology patents to other companies, some of which may compete with us. In addition, as PC’s become more powerful, software suppliers may also be able to introduce products for PC’s that would be competitive with RenderMan® in terms of price and performance for professional users. We believe that the primary competitive factors in the market for rendering software include product quality, price/performance, technology, functionality, breadth of features and customer service and support. We believe that we presently compete favorably with respect to each of these factors.

DancingBear
09-26-2003, 02:19 PM
Read this article a little while ago, which was interesting. Though this technology is not strictly for animation, it could be used for it.

http://millimeter.com/ar/video_creating_virtual_performers/

DisneyKidds
09-26-2003, 02:37 PM
and they, as any company with a successful product would, started to explore their options.
AV, please clarify your position. It seems you are saying that if ME allowed TS2 to count toward the five Pixar would have extended the deal..........to 7?, 9?, 20?, indefinitely?...........and wouldn't be exploring their options for when that extended contract (if it materialized) ended. Is that what you are trying to say?

crusader
09-26-2003, 03:37 PM
Thanks DancingBear...

It's been awhile since I perused that filing. Great reference.

It states Dreamworks and Fox have in-house capabilities and there are many competitors in the works. If that link you provided is accurate, then Disney is also involved with developing certain techniques. I agree the animation bridge seems to be gaping right now which is a concern - but given the options, what would it take, really?

Peter Pirate
09-26-2003, 03:50 PM
Hi Matt...surely I know not everything is about the sky falling but this argument seems to be painting that picture, IMO. I think Disney can and will do whatever they need to do... form other profitable alliances or develop on their own.

I don't necessarily see how a Disney-Pixar breakup can automatically be considered a mistake of Disneys. From reading all of this it seems to me that a likely probability was of the breakup's inevitability. In this case what could Disney do? If Job's despises Eisner or thinks he can do better elsewhere or only offer's Disney a relative pittance of an agreement what else can Disney do?

In the end, this seems like it was a great deal for both companies with Pixar knowing they'd be seeking greener pastures (with or without Disney, given success) and Disney full aware that big Pixar success would mean a good possibility of splitsville...This is why it was absolutely correct and smart for Eisner to get what he could from the original deal (and the TS2 conflict). If a Disney acceptable agreement can be renewed, that'll be great but Disney doesn't need to make a bad deal here...

Another Voice
09-26-2003, 10:04 PM
Almost every job in Hollywood that is involved in actually making movies is freelance. People are hired for a specific movie. They work on that film and then have to go find other jobs. Animation was unique because people were actually employees and not contractors. It made sense – an animated films takes years to make and it's more skill driven than most other film occupations. Becoming a good animator requires years of practice, being a grip or gaffer just takes a union card.

One of the big changes that started at Disney, and accelerated by Katzenberg over at Dreamworks, was to run animated films like "regular" movies. The concept was to hire/fire animators on a project-by-project basis, just like everyone else in town. As both Disney and Dreamworks quickly found out, that process doesn't make a lot of great movies.

Companies like Pixar and Blue Sky are kind of a middle ground. They employee animators, but the company as a whole can be contracted to work at one studio or another. Pixar makes the movies it does because they have a strong team of people who work well together.

I suppose if Disney wanted to rebuild their in house group they could. Jobs hard to come by in any field about town. The real question would be the caliber of people you’d get. What happened to The Secret Lab, Disney's treatment of the traditional animators and the labor camp CGI training routine are all well known. So yes, you'd get people applying but the applicants would show the same loyalty to Disney that Disney showed to them the first time around.

My instinct tells me Eisner was hard nosed with Pixar over Toy Story 2 because a) The Secret Lab was going to blow them away and b) Pixar without a Disney contract would be a shell of a company so that c) Eisner could buy them for pennies on the dollar in the future.

Except Pixar produced a string of mega hits and made them a major player. Disney's own efforts misfired and then were completely abandoned. All Pixar has to do is sign a deal that not's worse than the one they have with Disney and Wall Street will love them even more. Any deal will certainly be financially better, and there are much better distributors around (say GE/NBC/Universal with theme parks, movies, and a prime time series on the #1 network…but you didn't hear that from me). Instead of Eisner having the upper hand, Pixar does.


"AV, please clarify your position. It seems you are saying that if ME allowed TS2 to count toward the five Pixar would have extended the deal..........to 7?, 9?, 20?, indefinitely?...........and wouldn't be exploring their options for when that extended contract (if it materialized) ended. Is that what you are trying to say?"

At the time I think both groups wanted an extremely long term relationship. Pixar wanted to make movies and not worry about distribution and stuff; Disney found a tremendous source of new characters for the parks and merchandise. There was also a great sense of respect between Disney Feature Animation and Pixar. The guys up north wanted Disney's expertise in character and storytelling (like understanding the core of Toy Story isn't "toys come to life", but the relationship between Woody and Buzz), the guys down south wanted all the technical marvels that could make their animation even more spectacular (like the ballroom sequence from Beauty and the Beast where the animation soared).

The relationship soured at the top and spread down. An interesting exercise is to watch all the extras on the DVDs for Pixar movies. There are a lot of Disney people in the material for Toy Story. But by the time you get to Monsters, Inc. Disney is represented by the already fired President of Feature Animation doing a separately filmed in a broom closet far away from Pixar. And the chimp…does the phrase "monkey on our backs" have any relevance?

I think the reason the relationship is so bitter is because everyone had so much hope for it. The worst divorces are always between people who were the most passionately in love with each other when they got married. The same thing happens to companies.

KNWVIKING
09-26-2003, 10:29 PM
That I much prefer reading posts like that one more so then some of your other - shall we see - less then flattering posts aimed at all of us wearing various shades of rosie glasses.

Second: I personally believe ME has learned from his recent string of failures. I see more investment into the parks then I thought I would. I know there are still park hour issues to deal with but I believe that as crowds increase,so will the hours. Financial institutes are looking favorably on Dis again. I'm optimistic. Deep down, personal animosity aside, do you think Disney can and will rebuild the Secret Lab and produce a hit flik in the next couple years ?

lucky_bunni
10-18-2003, 12:43 AM
If Disney does build a secret lab again to produce CG films, they will have to fill it with PowerMacs, and not try to botch it substituting PCs. Cut your affliation with HP Disney! HP is a fat, non-innovating corporate crap pile!