Incredibles 2nd week ... well ... its incredible!

[Bstanley]

Well according to Reuters The Incredibles will do $51M in it's second weekend.

So it is basically running along the same curve as Finding Nemo did.

When Pixar does go independent it is going to be sitting on such a pile of cash...Great Zot...

Oh - Polar Express was a very sad also ran...

 

[Peter Pirate]

I still think Disney & Pixar will reup. There is virtually no buzz, both sides say they aren't talking and even Disney says it appears dead (the last I heard)...A sure sign that they are talking and there will be a deal.

 

[Bstanley]

According to the latest from Jim Hill - the one REAL sticking point is the long term ownership of the Disney-Pixar produced movies so far.

Stevie J says - Pixar must own them

The Big ME says - Disney must own them

There are good points to be made on both sides. Good news is that according to Mr. Hill - Disney does continue to try different angles like offering ownership of some films over time, etc - but so far they have not reached a Treffpunkt (Meeting Place).

 

[KNWVIKING]

Is it common for billion dollar companies to go back and change the rules for existing contracts ?

I don't understand why Jobs can't just get over what is already done. Does he lack confidance that his best films are still waiting to be made ? Is Pixars best work already owned by Disney and the only direction Pixar can go is down ?

Or is his ego just so big that he can't stand the fact that ME bested him 10 years ago ?

 

[DancingBear]

The good news for Disney is that what Jobs wants only Disney can give them. If Pixar goes elsewhere, Disney owns the existing library lock, stock and barrell. Disney knows better than anyone what a library like this is worth.

 

[Bstanley]

Vike - I think companies (even big ones) re-negotiate relationships all the time.

When Pixar was getting started they were nobody so they gave away half of the store to get their chance. Now that they have succeeded beyond anyone's wildest expectations they are simply saying -

1) Pixar has made Disney tons more money than Disney thought they'd get when the deal was signed.

2) Pixar is confident that as they go forward they'll make plenty of money for whoever signs up to distribute their films.

3) Pixar is willing to stay with Disney as their distributor, but part of what Pixar wants is for Disney to give us back the rights we signed away.

So it boils down to simple business - will the money that Disney receives for distribution of future Pixar releases be larger than the money they will lose by not owning the earlier pictures.

: WARNING - Pure speculation follows :
This is where the DEAL comes in - maybe Pixar doesn't care so much about the 50% of the money that Disney gets for every Toy Story DVD that is sold - maybe Pixar would re-up with Disney if Disney was still able to sell those DVDs, but maybe Disney only gets 35% and Pixar actually 'owned' the characters - ie Disney couldn't make a sequel without Pixar OKing it.

I think Stevie J was hoping that The Big ME would get a pink slip so that he could deal with someone else - but now that it's clear that a deal is going to have to be signed with him, who knows what will happen...

 

[KNWVIKING]

***"Vike - I think companies (even big ones) re-negotiate relationships all the time."***

I know they renegotiate, but in this case it seems that Pixar is simply saying " Do "this" or else ....". That's not renegotiating, that's blackmail.

***"2) Pixar is confident that as they go forward they'll make plenty of money for whoever signs up to distribute their films." ***

If that's the case, why make the past a sticking point for moving forward with Disney.

***" 1) Pixar has made Disney tons more money than Disney thought they'd get when the deal was signed."***

Again, that's in the past. Also, the exact same statement could be made by Disney.

***"3) Pixar is willing to stay with Disney as their distributor, but part of what Pixar wants is for Disney to give us back the rights we signed away."***

That just sounds like Job's ego talking to me.

IMO, there is still plenty of time for both sides to try and wrangle the best possible deal for their respective companies. The relative quiet we're hearing now is just another stage in the process.

 

[raidermatt]

There's no renegotiation going on at all. That makes it sound like an NBA player who can't support his family on the $12 million he signed for so he holds out for $14 million.

Pixar is not attempting to renegotiate terms of the current agreement. They are attempting to gain the most favorable terms for any new agreement.

There's no blackmail.

Blackmail: Extortion of money or something else of value from a person by the threat of exposing a criminal act or discreditable information.

This is just negotiation. Pixar has significant leverage from its newly reaffirmed position as the king of animation, and Disney has significant leverage from its marketing capabilities and ownership of previous Pixar creations.

Both are playing up their position, and its pretty clear it would be best for both if they got something done. That doesn't mean they WILL, but it looks like there's still a good chance.

Jobs would be a moron if he didn't use his current significant leverage to try to wrangle control back of his company's previous films.

And, it seems pretty certain that if they sign with Disney, they will get at least part of the ownership they are requesting.

 

[KNWVIKING]

****"There's no blackmail."**** I forgot to include the hyperbole disclaimer.

Maybe threat would have been a better term cause it basically sounds like Pixar is saying "give us back the rights to what you own or else we're going elsewhere". That's not renegotiating.

What have they offered Disney for a concession like this ?

 

[Bstanley]

Both sides are are saying 'do this or else' - that's negotiating.

As to who made money for who - Pixar was going to make a bunch of money with whomever they signed up with - period. Disney may have substantially contributed to the success of Toy Story, but the movie was NOT going to flop no matter what studio released it - Pixar traded that money away in exchange for getting their shot at the big time partnering with the best - and they seem to be fine with that - it's not like they're asking for any money back.

As to whether owning the characters is Stevie J's ego or just Pixar wanting to own their own creations I can't say.

It's interesting to me that the situation is so similar to Walt Disney, Universal and Oswald the Rabbit - except for the fact that Disney didn't make a bunch of money on Oswald like Pixar did on their creations. I wonder if Charlie Mintz ever looked back on playing 'hardball' with Walt and regretted it...

 

[DisneyKidds]

Not sure how I feel on Pixar wanting back the rights for films previously released. Surely, if Disney considers it they better get more than just a Star Wars type low percentage distribution deal.

Sure, Pixar can play the "we gave away the farm but made you a ton of $$$ so give us back what we never should have given away" card, wrapped in the "or else we walk" threat, but that will only get them so far. That requires Disney to give up something of great value, and that won't fly if all Pixar wants to do is give Disney the same kind of distribution deal they could negotiate with someone else. Also, while Pixar can claim they gave too much as a fledgling company, Disney can point out they opened themselves up to a huge amount of risk on said fledgling company and the return was only commensurate with that risk.

There is surely middle ground that could be reached where Pixar gets back some level of ownership of prior films, Disney retains certain rights to those films and their sequels - as well as exclusive character use rights - and both companies make a substantial amount of money on future films (more than what Pixar has previously offered for future films and less than Disney has made on past films. The only question is whether the egos at the top of each company will allow it.

 

[raidermatt]

If they feel they have the leverage, they don't need to offer anything (but the reality is they proabaly are willing to offer something).

We've known all along that if there is a new deal, its not going to be a situation where you can look at the old deal and do gives and takes.

Pixar's leverage in the deal has increased significantly since the first deal, and Disney's has decreased.

Therefore, this deal is going to swing much more favorably in Pixar's favor.

What's likely is that if Disney gives up ownership, they will ask for a 20/80 split instead of 10/90, or whatever is on the table at the time. Or maybe they will ask for better terms in acquiring merhandising rights back from Pixar. We don't really know, and maybe never will.

Really, just 2 points here:

1- There's nothing wrong with putting ownership of the already created films on the table for a new agreement.

2- I'm sure its a gross over-simplification to say that Pixar has drawn a line in the sand on the ownership issue and is not willing to discuss any other issues. But even if they did, that's still negotiating. They are offering a portion of the profits from their future creations.

Whether that's the best tactic is debateable, but its not like Disney isn't skilled in the art of "tough" negotiating.

 

[KNWVIKING]

***"Both sides are are saying 'do this or else' - that's negotiating."***

When did Disney ever make an "or else" statement ? For one, they're not really in a position to make such a comment. Disney is just trying to protect what it already owns and at the same time come to a deal that provides them more then just the crumbs.

 

[DancingBear]

There is much truth in all that is said above, but the deal terms are as much or more dependent on what sort of alternatives are out there (on both sides) than the dynamics between these two players.

There's a lot we don't know about what other distributors have offered to Jobs, but clearly Jobs hasn't been overwhelmed.

Disney's strengths in the negotiations include:

--Perhaps the best international distribution available
--The theme parks, which certainly extend the life of the characters
--The rights to everything through Cars
--Pixar's technology advantage over its competitors has significantly waned

Also interesting is looking at the negotiation in terms of what is Eisner's faith in the ability of the in-house team (and the other co-venturing firms) to create winners in the future vs. Pixar's.

If Disney walks away right now, they lose only the unknown future successes of Pixar (quite likely, but still unknown). If Pixar walks away right now, they lose everything they've done to date. Interesting dynamic.

 

[Bstanley]

When did Disney ever make an "or else" statement

? When they said no to Pixar's requirements of course. Pixar's negotiating position right now is that for Disney to be their new distribution partner Disney must give Pixar ownership of the movies they did together. Personally not having seen the various offers I can only speculate on what Pixar is offering in return (other than the distribution deal obviously). The deal could be structured gajillions of ways - I gave one example previously.

Look - there's no argument that Disney owns whatever it is they own - the characters, the rights to do sequels, whatever. They made a good deal with Pixar and that's that. BUT - whatever those rights are they are simply an asset worth a certain amount of money.

Pixar is trying to decide whether they go it alone, stay with Disney, or find a different distribution partner. Part of what Pixar wants for Disney to be their new distribution partner are those rights - fine - let's figure out what the rights are worth and put it on the table. It's no different than selling the Ducks, The Angels or the Disney Stores. I can't imagine Stevie J is sitting there demanding that Disney just give him an asset worth millions - if so the deal shouldn't be signed - so be it.

Quick - it's 1928 - you've got Walt Disney over a barrel - do you simply say - "sorry dude, you shoulda read the contract more carefully - I own Oswald"?

Or do you work out a deal and cultivate a strategic partner that has yet to do his most valuable work?

 

[KNWVIKING]

***"? When they said no to Pixar's requirements of course. "***

I guess I never interpreted Disney saying "no" to a demand as an act of "or else" on their part. Guess it all depends on which side of the table you're sitting at.

***" I can't imagine Stevie J is sitting there demanding that Disney just give him an asset worth millions "***

Maybe Disney views charactor rights in the same catagory as they see Pooh. What was that worth last year ?? 5.4 bil in sales ?

 

[VA_mouseman]

Don't know how germane this is or not, but here's a Reuters article from today, with an interesting comment from Jobs:

"It looks like Disney's seeking a new CEO could have several outcomes, one of which is musical chairs amongst the studios...who knows where people are going to end up?" Jobs told analysts on Thursday. "We might want to see how some of that turns out before making a final decision."

http://yahoo.reuters.com/financeQuo...tfh98221_2004-11-15_18-43-13_n15142424_newsml

(said he, who happily owns both DIS and PIXR stock)