Disney/Pixar no more

[WDWHound]

Originally posted by kenman
Pixar didn't exist before the DISNEY partnership !!!!!!!

Wrong. Animation fans have known about Pixar for 20 years. Pixar was founded in early 80's as an extension of Industrial Light and Magic. Their first short subject, the Adventures of Andre and Wally Bee, was released in 1984. They made a ton of shorts before Disney partnered with them (Luxo Junior and Red's Dream are my favorites). Yes, they were untested at feature film making when Disney first partnered with them, but they proved themselves right from the beginning of that partnership.

Disney needed Pixar, pixar no longer needs Disney. Ei$ner screwed up.

By the way, you can watch many of the Old original Pixar shorts on your computer via Quick time. here is the link:
http://www.pixar.com/theater/index.html

 

[Bob O]

Only a blind person could consider this good news for disney(or one of our regular aplologists).
Disney's animated films have done horrible in comparsion to Pixar since Pixar started to make THEIR OWN movies and disney distributed them. Disney has failed so bad that except for CA they have had to shut down their animation facilities and laid off hundred of valued CM's.
Now that their deal is done with Pixar(which is probably better for pixar anyway) where is their any evidence to believe that disney will again create animated films that can compete with Pixar, or even movies like Ice Age and Shrek??
Now disney gets a part of nothing due to eisners ego rather than being able to part of a partnership where both sides create excellant films and make money which both sides benefit from.

 

[KNWVIKING]

***"Disney CFO Tom Staggs said in the release that Pixar's proposed new contract would have cost Disney hundreds of millions of dollars it was entitled to under the existing pact."***

Gee, where do I sign.

***"Pixar closed regular trading up $1.05, or 1.7 percent, to $64.20, while Disney was up 78 cents, or 3.3 percent, to $24.45. After hours, Pixar fell $3.70, or 5.8 percent, to $60.50, while Disney was down $1.45, or 5.9 percent, to $23."***

Looks like investors weren't to happy with Pixar's decision either.

***"I love it...

Now losing Pixar is actually good for Disney."***

Your sarcasm surprises me Matt. I thought you'd be glad this may force Disney into doing more in-house work.

 

[WDWHound]

Originally posted by KNWVIKING
***"Disney CFO Tom Staggs said in the release that Pixar's proposed new contract would have cost Disney hundreds of millions of dollars it was entitled to under the existing pact."***

Gee, where do I sign.

Right on the dotted line if you want to make money. Yes, Disney would lose those future hunderds of millions under the existing contracts, but it would still have access to make much more in a long term deal with Pixar. Short term (which is all Ei$ner Ever sees) it may look like a bad deal, but the long term profits would more than make up for those short term smaller profits (they really aren't even losses). Yes, there was a small risk involved, but the odds were very good that it would have paid off. Now, after Ei$ner gets his short term profits under the existing deal, the Golden Goose will keel over and die.

As for in house work, if Eisner wakes up and starts doing quality in house work again, he actually could turn this into an opportunity. However, I just don't see that happening.

 

[KNWVIKING]

By "long term deal" you're refering to five films. ME's seven movie deal has been labeled anything but long term... mostly refered to as short sighted and taking short term profits, but I fail to see how profits on a 10 year old TS are short term.... but for this arguement we're to accept five as long term.

It's also not nearly the deal the first one was so on top of losing the 100's of millions you're already owed by the first contract, you have to accept a tremendously smaller portion for the new deal.

again...where do i sign.

 

[WDWHound]

Originally posted by KNWVIKING
By "long term deal" you're refering to five films. ME's seven movie deal has been labeled anything but long term... mostly refered to as short sighted and taking short term profits, but I fail to see how profits on a 10 year old TS are short term.... but for this arguement we're to accept five as long term.

It's also not nearly the deal the first one was so on top of losing the 100's of millions you're already owed by the first contract, you have to accept a tremendously smaller portion for the new deal.

again...where do i sign.

Pixar puts out out roughly 1 flim a year. Lets say Disney would make x millions of dollar more if they stick with the current deal over the next 2 years (any idea what x is supposed to be by the way?). Now, lets say the Disney signed the new Seven year deal. Yes, they would lose that future x million, but the would gain access to 5 more films. The would only need to make 2/7 of what they used to on each film to break even (which admittedly would not be good enough). However, if they made just half of what they used to make on each film, the short term loss investment would pay for itself 1.5 times over over 7 flims.


Example: Lets say Disney would make 100 million less on the next 2 films under the new deal. Lets say the normally make 200 million on each film total under the current deal. Lets also say they would only make 100 million toal under the new deal. That gives us

Current deal - 400 million total profit over 7 years
New deal - 700 million profit over 7 years

Yes, I pulled $ amounts out the air for the example, but the work for any value of that is not negative.

Also, don't forget the value in publicity and theme park added value tha new Pixar characters could provide.

Sign on that dotted line.

 

[raidermatt]

I thought you'd be glad this may force Disney into doing more in-house work.

1- I believe the more likely choice will be another partnership. They already have one with Vanguard.

2- I don't have a lot of confidence in Disney producing quality work as the result of something they were forced into.


It maybe that the proposed deal really would have been a bad financial deal for Disney, but then one has to wonder...

Its pretty clear that, all else being equal, the best thing for Pixar would have been to remain with Disney. So, clearly, something is not equal.

One factor is that other studios don't have the "money in the bank" that Disney does with the next two films. So they don't have to give anything up to ink a deal.

However, that also means Pixar will not gain any financial benefit from the next two films beyond what is already contractually agreed upon. Certainly Disney should have been willing to give some ground, and from Pixar's pov, some ground would have been better than nothing.

So why now? Maybe its a coincidence that this announcement comes only a couple of days after Roy asked shareholders to vote Eisner and others off the board.

Maybe that's what's not equal?

That aside, here's the bottom line. If a Disney/Pixar deal does not happen, then for the first time EVER, Disney will no longer be, or be associated with, the undisputed king of animated features.

For a company that relies so heavily on its reputation and brand name, that's got to be a blow.

Again, this type of partnership will inevitably lead to one of two outcomes:

1- The partner is not all that successful.

2- The partner is successful, resulting in Disney either signing a less lucrative deal at some point, or the partner going elsewhere.

 

[KNWVIKING]

***" However, if they made just half of what they used to make on each film, the short term loss investment would pay for itself 2.5 times over over 7 flims."***

WD, that's a HUGE what if. From all the articles, rumors, speculation, etc, I think expecting a new deal worth anywhere near half the old contract is pretty far fetched. Pixar went into this negotiation pretty confident they held all the cards and were fully expecting Disney to buckle for whatever trinkets they cared to offer.

But of course, none of us will ever know for sure what the real numbers would have been.

 

[WDWHound]

Originally posted by KNWVIKING
***" However, if they made just half of what they used to make on each film, the short term loss investment would pay for itself 2.5 times over over 7 flims."***

WD, that's a HUGE what if. From all the articles, rumors, speculation, etc, I think expecting a new deal worth anywhere near half the old contract is pretty far fetched. Pixar went into this negotiation pretty confident they held all the cards and were fully expecting Disney to buckle for whatever trinkets they cared to offer.

But of course, none of us will ever know for sure what the real numbers would have been.

Just to keep myself honest, I must note that I changed the number to 1.5 from 2,5 after I posted (cant do math in my head these day).
I agree, the percentage is the important factor. 28% (2/7) is the break even point over 7 years (not taking account the added value of access to new Pixar characters, which is huge in my opinoin). If it got much below %35, it might be iffy. Below 30 and I might see Eisners point. Anybody have any idea how much Disney was being asked to give up?

 

[roymccoy]

It was a stupid move on Disney's part. Very arrogant. PIXAR has floated Disney's bottomline for years. There will be no shortage of CEO's who WILL deal with Jobs and Co., though.

http://biz.yahoo.com/rc/040129/media_pixar_warner_1.html

Roy

 

[Bo'sMom]

Why is Pixar's stock price at $64.00 a share and Disney is struggling just to get to $24.00? There is alot more wrong with Disney than just the Pixar deal. Eisner should bow out gracefully. The guy is a joke. He had his chance to grow the company and it has since just run stagnant. Time for new blood. One of the news pieces said Comcast was interested in buying Disney. That would be a great move...NOT!

 

[Mr D]

OK, now that PIXAR is weaned anybody have a guess who they may sidle up with? My guess is Katzenburg still holds a grudge against Eisner and might just jump in to shove the red hot poker home....

But is an SKG/PIXAR team a good idea? Would definately create a unique niche in the film industry.

And my forecast for Eisner is.....

 

[crusader]

It ain't over til it's over.

Pixar just played a big hand and every suitor is salivating while laying low to insure the nest has really been abandoned.

Jobs is playing corporate politics with his little company right now.

Disney was never going to be able to prevent this latest move. The only thing they had any control over was timing and with Roy in the mix that wasn't in their favor either.

It is interesting to hear how this maneuver is now construed as bad for this company by those among us who used the Pixar joint venture repeatedly to exemplify bad business practices of the past.

 

[DVCDAVE]

Frankly...........I LOVE this news !!!!!

1) It is another public blow to Eisner.
2) It gives more ammo to Roy and Stan to publicly accuse Eisner of even more mis-handling the management of Disney (if that is true or not it is debatable, but the public who LOVED these movies won't preceive it as Good news).
3) It may force Disney to do something about its OWN annimation department, and get it baclk on track......OH ! I forgot....they just fired everyone in the FLA annimation department......must be Eisner's great display of vision and management...... NOT !!!!!!!

If this was a movie, it would have to be either a comedy or a Sci-Fi, as it is almost to laughable and unbeliveable to be true.

 

[YoHo]

I find it interesting that pixar made this choice about a month before the Stockholders meeting, right after the board announced Eisner's Salary and right after Roy Disney sent out letters to vote against Eisner and the board in the stockholders meeting.

Remember Roy has strong ties to Lassiter and Pixar. Warner Brothers has already made it clear that they'd like to talk to Pixar. I would lay dollars to doughnuts that who Pixar sides with depends on whether Eisner has a job with Disney in 6 months.

This is a slap at Eisner and the board. I would be willing to bet that if Eisner goes and the board is overhauled Pixar comes back to Disney for less then they currently put on the table.

As for Crusader's comments. I've never been completely against Pixar. I think partnerships have their place, but the problem is right now Pixar is ALL they have. And to be quite honest, I think this is great for Disney, because I think it means Eisner is gone and Eisner getting the boot is the best thing that could ever happen to Disney.

 

[JeffH]

Out fly the Mickey (Eisner) haters...off the handle and out of control.
I just hate to spoil all this bashing with some facts but...
Pixar has released a film every TWO years, not yearly, F-Nemo was the only film to have taken less (18 months).
TS 11/95, BL 11/97, TS2 11/99, MI 11/01, F-Nemo 5/03

”Where the hell do you think Disney's finances would be this past year if it weren't for FINDING NEMO.”
"Disney needs Pixar" and "PIXAR has floated Disney's bottomline for years."

So without Pixar, Disney would be, what, bankrupt? Hardly, based on only 5 films in over 8 years? Disney still would dominate the box office. Last year, Disney won the box office crown by 321M, and would still have won it even if F-Nemo only had made 18M.

”The collapse of these negotiations alone is enough evidence of mismanagement for most corporate boards to eject their CEO.

No, you keep a CEO for NOT making bad deals…giving up big money on a novelty that’s hot NOW, on the GAMBLE that Pixar’s CGI will be stay hot for another 10 years is STUPID. There aren’t many things that stay hot for 20 years.

Disney's animated films have done horrible in comparison to Pixar.

…well except for Shrek, Ice Age (both CGI), and Lilo and Stitch, ALL animated films have done horrible in comparison to Pixar, gee all films have done horrible compared to MI and F-Nemo, I guess all movie studios are dopes, then. Disney’s product hasn’t been bad, it’s just that the novelty of Pixar CGI (done well) is hot…FOR NOW.

Right on the dotted line if you want to make money. Yes, Disney would lose those future hundreds of millions under the existing contracts, but it would still have access to make much more in a long term deal with Pixar. Short term (which is all Eisner ever sees) it may look like a bad deal, but the long term profits would more than make up for those short term smaller profits (they really aren't even losses). Yes, there was a small risk involved, but the odds were very good that it would have paid off. Now, after Eisner gets his short term profits under the existing deal, the Golden Goose will keel over and die.

Gosh, if your predictions were so good you wouldn't be wasting your time on this discussion board, you'd be sailing the world on your yacht. And if I was in business and I had to choose between $400M over 2 years (not 7), or $700M over 7 years, I'd choose the deal where I got $200M a year, not $100M. Furthermore, considering that Pixar could easily become 'old news' any movie now, like 'traditional animation' (TA) seems to have done after Mulan. <I'm sorry, the 'decline' in TA was not due to a poor product, but due to the 'novelty' of CGI>. Throwing away guaranteed money on what is now hot, in the hopes that it is just as hot 7-10 years from now is a pretty stupid gamble...how many things stay hot for over a dozen years?

Disney has failed so bad that except for CA they have had to shut down their animation facilities and laid off hundred of valued CM's.

Disney hasn’t failed, TA has failed…
Aside from Treasure Planet (which failed due to the domination of Harry Potter and Lord of the Rings, not because it was bad), Disney has done pretty good in a TA stagnant market (Lilo and Stitch did over 125M). The fact is that currently CGI is the hot/novel thing and TA isn’t making a good return on the investment (no matter how good), THAT is why they have been cutting back their animation staff (or relocating them to California). And if TA (from anywhere) can no longer compete in the market, these TA CMs aren’t really very ‘valuable’ are they, very talented, but if nobody is buying their product then they are not very valuable.

Sure, I'd love to see Pixar and Disney stay partners, and considering that no other company can give Pixar what they are demanding, I imagine that they will remain partners. What is Pixar going to do, ask another company to give them the money for the next 2 films that Disney didn’t want to give them and then give up some percentage in return? Pixar is worth more to Disney than to any other company, so a Disney offer should be hard to beat, unless some company is willing to sign Pixar just for the name (at a loss). I expected this to happen, because Pixar has to go out there and see what they are worth in order to sanely negotiate

Why is Pixar's stock price at $64.00 a share and Disney is struggling just to get to $24.00? .

Stock cost has nothing to do with the quality of the company. Disney has much more stock out there (at $24 each) than Pixar (at $64). If Pixar’s stock splits, the number of stocks doubles and the value halves ($32)…even though Pixar stock value just lost $32 it’s real value is the same…gee, now I’m giving lessons in the stock market.

 

[wdwfreak]

Originally posted by Mooobooks
The collapse of these negotiations alone is enough evidence of mismanagement for most corporate boards to eject their CEO. Where the hell do you think Disney's finances would be this past year if it weren't for FINDING NEMO.

I'm neither an Eisner apologist, nor happy about this turn of events, but Disney's film division had quite a few profitable films this year, other than Nemo: Pirates, Freaky, Bringing Down the House, Cold Mountain, even BB was a minor hit.

Just setting the record straight ...

 

[crusader]

Pixar wants to retain ownership rights which is a very tall order. If WB is in the game, they'll string the company out knowing how much resource is drained in producing such quality.

Yoho, I agree with you. Denouncing the biggest competitor is not a smart negotiating tactic which leads me to believe timing is relative. But what makes you think ME and Mitchell are leaving? They have more muscle than Roy and Jobs needs political allies.

They're going to continue to fight this.

 

[Sarangel]

At the risk of throwing oil on this particular fire, there are rumors that life inside Pixar is not all wine and roses... A buddy of mine says that there are some serious politics going on over there. What this portends as Pixar strikes out on its own is up for debate, but it is another factor to consider as this story unwinds.

Sarangel

PS. I've edited a couple of posts on this thread for language. Kindly remember to keep your language "G" rated, since there are children that follow this stuff too.

 

[jimmytammy]

If you truly want to make a difference here, go to Roy and Stanleys website at www.savedisney.com

I own at DVC and I am a shareholder. I dont want to see the Disney Co fall to pieces. Corporate America will step in and takeover with hostility.

But most important to me is not seeing Disney crumble because it provides wonderful entertainment for my whole family. Compared to what is out there now in the entertainment industry, Disney still provides a somewhat safe environment for us to be in. I dont want that to go away.

Go to that website, show your support.