Chicken Little Box Office Estimate Thread

[DancingBear]

I believe Jobs failure to secure a Lucas deal with another studio had an impact on his ego.

Jobs never failed to do anything. He bided his time waiting for Eisner to leave. He always held all of the cards.

Meanwhile Jobs used Iger's desire to please him to get ABC shows on his new Ipod, to great effect. Now who's the one pulling the strings in Hollywood?

All the while, DWA has nothing but Shrek. And when was the last time Katzenberg was in the papers?

And again, Pixar pulls off a deal that keeps a substantial amount of autonomy for itself, AND puts Pixar folks in direct control of its former competitor.

 

[crusader]

Unless I've missed somewhere that Jobs turned down an offer for a distribution deal the likes of what Katz secured that card was either held too long or folded.

And again, Pixar pulls off a deal that keeps a substantial amount of autonomy for itself, AND puts Pixar folks in direct control of its former competitor

Sounds great doesn't it? There are volumes of literature published on how to successfully maneuver a takeover. Rule no. 1 - promise autonomy.

I see Pixar employees becoming Disney employees and producing movies as the newly formed Disney/Pixar animation division. But who's kidding whom here? Disney simply permanently installed Pixar instead of revamping itself. It's still the Walt Disney Company and the new hires will be Disney employees.

 

[Another Voice]

It's still the Walt Disney Company and the new hires will be Disney employees.

Read the merger agreement. Disney isn't even allowed to change the name on sign on the facility to read "Disney Pixar". John Lasseter and friends are going to far more autonomy and less communication with Disney than the Wiensteins did when they were at Miramax.

 

[crusader]

Yeah.

They get to keep the name on their building and all future releases are under a new Disney Pixar label. All of which I view as vital in the preservation of trust and morale for the former Pixar employees. But Disney is really who they ultimately work for.

And the compromise has already begun:

from Reuters today

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

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

That's a pretty big difference from what Pixar is used to.

 

[DancingBear]

Sounds great doesn't it? There are volumes of literature published on how to successfully maneuver a takeover. Rule no. 1 - promise autonomy.

But this isn't Bank of America. Pixar had no meaningful assets other than its creative folks. If the creative folks (who, other than Lasseter, are not under contract, and specifically under the terms of the deal may remain so) don't get enough autonomy and decide to stay, Iger's just paid $7.4 billion for $1 billion in cash and some residual income stream from the first seven movies.

But then again, if you're really claiming that Jobs had lost the opportunity to get a Lucas-type distribution deal, then Iger must really be a huge idiot to have cut this deal. Methinks that the Disney folks (and "Hollywood" for that matter) had a different perception that you of what cards Jobs held.

 

[DancingBear]

Yes, Pixar sold out to Disney.

But how often does a newly-acquired subsidiary get to name half of the members of the committee that controls their budgets?

Of course Lasseter now reports to Iger and not to Jobs. Of course Pixar won't be quite the same. The point is how much the terms of this deal indicate what Pixar's negotiating power was.

 

[raidermatt]

Crusader, your entertaining spins are one thing. But it has been put forth many times that Disney NEEDED to maintain the Pixar relationship, either through a purchase or a distribution deal.

But this isn't Bank of America.

Exactly. BofA didn't get anything in writing. There were no committees required to meet to maintain their culture. They did not have the right to follow their own strategy with regard to employment contracts. They didn't have the right to maintain their own compensation and human resources policies. They didn't even maintain the right to keep any particular facilities open. In short, Dave Coulter got steamrolled by Hugh McColl, and didn't realize it until it was too late.

THAT was a complete and utter sellout.

The amount of autonomy Pixar is retaining here is extremely rare. This isn't a case of a company turning an acquisition into a new division because they didn't have overlapping operations. Iger has essentially turned over the keys. At least as much as could be considered remotely reasonable.

Industry analysts and insiders have been saying for months that yes, Pixar needed Disney, but Disney needed Pixar even more. Especially given Iger's new status as head of the company. Losing Pixar would have been viewed an extremely poor way to start things off, and he would have immediately moved into the hot seat.

Again, the only viable options were purchase or sign a new distribution deal. But since Jobs was sticking to his guns on the distribution deal, that option was all but gone. That allowed Pixar to dictate portions of the terms that would normally not even be considered in an acquistion like this.

Look, given the position Disney had gotten itself into, they made the right move. They gave up what they had to. Iger did what Eisner couldn't, or wasn't willing to do. He did wait, hoping CL could give him some extra leverage, but when that didn't happen to any significant degree, he did what he had to do. He more or less made the best of a situation Disney should never have let themselves get into, but unfortunately did.

Whether its a good move in the long run depends on where things go from here.

 

[crusader]

The amount of autonomy Pixar is retaining here is extremely rare. This isn't a case of a company turning an acquisition into a new division because they didn't have overlapping operations. Iger has essentially turned over the keys. At least as much as could be considered remotely reasonable.

I believe Disney still owns that car. So in essence, Iger's allowing his newly acquired Pixar animation division to borrow it.

It's funny how I'm being accused of spin and Jobs and Iger are heralded here. Excellent PR.

 

[DancingBear]

You've missed the point entirely again. Yes, obviously, Disney was the acquiring company here. But what we were arguing about was the relative bargaining position of the parties, and in particular whether Jobs had been somehow outplayed by Dreamworks.

So we look at the deal, and see that not only did Pixar get a premium above an already-inflated P/E, but also the Pixar guys got an unusual level of autonomy and power (including over the competing portion of the acquiring company's deal). Seems pretty clear that it was Pixar's folks that held most of the cards.

I sure don't see how Iger is being "heralded" when the argument is that his motivation to do the deal was external, and he paid a sweet price for the acquisition. As for Jobs, I'm just arguing that he played his cards well.

 

[raidermatt]

I believe Disney still owns that car. So in essence, Iger's allowing his newly acquired Pixar animation division to borrow it.

Whatever analogy makes you most comfortable. The faults aren't worth the trouble. The point is, even lending the keys to this extent in a case like this is extremely rare. Its still an indication of the relative level of leverage involved.

It's funny how I'm being accused of spin and Jobs and Iger are heralded here. Excellent PR.

As DB said, Iger is not being heralded. Again, he did what he had to do. The point is, he had to do it.

And yes, Jobs did cut a pretty sweet deal. His company was strong in an area critical to a Disney that intends to thrive and grow, while Disney was weak in that area. He exploited his advantage well. Further, even if your premise that he had nowhere else to go was right, it would make the deal look all the better for Jobs and all the worse for Iger. That would change it from Iger did what he had to do, to Iger gave up far more than he should have had to.

But I'm still sticking with Iger did what was necessary.

 

[All Aboard]

Boiling down my thought...


A - Eisner was convinced that Disney Feature Animation was failing because hand drawn animation was dead and they hadn't invested in computer animation.

B - Pixar, an all-computer animation outfit, was producing blockbuster after blockbuster (in the $200m - $340m range).

C - Eisner was convinced that if Disney jumped into the CGI game, they too could make movies that would generate Nemo-Shrek money at the box office.

D - Then, he'd have much more bargaining power at the negotiations table. To drive more dollars from the next Pixar deal into Disney's pockets. Or, better even, telling Jobs, "we don't need no stinkin' deal, we can do it ourselves."

E - Chicken Little was supposed to be the evidence that would prove A, C & D to be true.

F - Chicken Little does $130million in domestic gross.

G - Therefore, no evidence exists on any of the three counts.

H - Disney changes course and pursues an aquisition, which is VASTLY different then either abandoning negotiations or sealing a sweet distribution deal.

I - The deal includes some lucrative concessions for Pixar executives that include a great deal of control.


From all this, its seems very clear that Chicken Little didn't perform as well at the box office as Disney had hoped, but also needed it to. That's my only point, my only conclusion.

 

[paulh]

as long as the films are good who cares
Paulh