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Author Topic: Disney+Pixar news
Mike Blakesley
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 - posted 01-16-2006 06:26 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
Analysts: Disney Deal With Pixar Likely

By GARY GENTILE | AP Business Writer
Posted January 10, 2006, 6:17 PM EST

Orlando Sentinel article

LOS ANGELES -- The more time that passes without a new distribution deal between The Walt Disney Co. and Pixar Animation Studios, the greater the speculation, including a theory that Disney is angling to buy Pixar and install its chief executive, Steve Jobs, as Disney's chairman.

Analysts believe a new distribution deal is likely -- and soon. But they dismiss the notion that Disney would buy Pixar. An outright purchase would be too expensive, analysts say, and would not be wise for either company in the long term.

"I think it's absurd," said David Miller, an analyst with Sanders Morris Harris. "It would have to be an enormously compelling offer to even have Mr. Jobs stop and consider it for maybe more than five seconds."

Still, guessing the terms of a deal has become a bit of a sport on Wall Street, with speculation pushing Pixar shares higher in recent days.

Most analysts who cover both companies believe Pixar will soon announce a new deal that has Disney distributing its highly popular -- and profitable -- animated films. It's current agreement with Disney expires later this year when Pixar delivers its latest film, "Cars."

During an earnings conference call last November, Jobs said of Disney: "We will know if we are going to continue our relationship with them by the end of this year."

That target date has come and gone with no elaboration from either side on the status of the talks, thus fueling the current rumors.

Renewed speculation about a deal helped drive up shares of Pixar nearly 8 percent to $58.16 last Wednesday. Another possible trigger for the sudden jump was the expansion of an earlier deal between Disney and Jobs' other company, Apple Computer Inc., to provide more entertainment for download on Apple's iPod.

Shares dropped back to $56 the next day and have been trading around that price since. Shares fell 37 cents to $56.04 at the end of regular trading Tuesday on the Nasdaq Stock Market.

"Something has to happen soon," Marla Backer, an analyst at Research Associates Llc, wrote in a recent report.

The current Disney-Pixar deal expires with the June 9 release of "Cars." Marketing plans for Pixar's 2007 release, tentatively titled "Ratatouille," must be made soon.

"We continue to believe that a deal gets done with Disney that offers Pixar better economics and greater control of its characters," Backer wrote.

The most likely reason for the delay is that a new deal with Disney is complex, despite the mutual respect that has developed between Jobs and Disney CEO Robert Iger. Animosity between Jobs and former Disney CEO Michael Eisner led to the two sides breaking off talks in 2004.

"There are a lot of moving parts here," Miller said. "It's not as simple as slapping together an extension of the current agreement."

Under the existing deal, Disney co-finances each of Pixar's productions, and the two companies split the profits evenly after Disney takes a distribution fee. The two companies also share ownership of the films, and Disney has the right to make sequels on its own if Pixar refuses to participate.

That has led to some conflict, especially over Disney's announced plans to produce "Toy Story 3."

Pixar has said it wants to own 100 percent of its own films after "Cars" and wants to pay a straight distribution fee, without splitting any profits -- an arrangement similar to the one George Lucas had with Twentieth Century Fox for his "Star Wars" films.

Pixar has more than $1 billion in cash, enough to finance its own films.

Analysts believe Pixar also wants to regain control of its film library from Disney and might also be pushing to keep more of the profits from "Cars" than the current deal allows.

Perhaps the most intriguing bit of speculation is that Disney will buy Pixar and make Jobs its chairman.

Not likely, several analysts say.

"We reaffirm our view that a Pixar acquisition by Disney makes no sense," Doug Mitchelson, an analyst with Deutsche Bank Securities Inc. wrote last month.

Disney would have to pay a hefty premium for Pixar, anywhere from $70 per share, or $8.4 billion, to $100 per share, or $12 billion, analysts believe.

Such a large deal would depress Disney's stock, saddling it with enormous debt and lowering its earnings, some analysts have said.

Jobs owns 50 percent of Pixar stock and would stand to make a fortune if he sells.

But Miller believes something more than money drives Jobs.

"He looks at Pixar like you and I look at our children," Miller said. "Our children aren't for sale."

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Daryl C. W. O'Shea
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From: Midland Ontario Canada (where Panavision & IMAX lenses come from)
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 - posted 01-16-2006 10:16 PM      Profile for Daryl C. W. O'Shea   Author's Homepage   Email Daryl C. W. O'Shea   Send New Private Message       Edit/Delete Post 
quote: Mike Blakesley
speculation, including a theory that Disney is angling to buy Pixar and install its chief executive, Steve Jobs, as Disney's chairman.
Now that's funny.

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Bobby Henderson
"Ask me about Trajan."

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 - posted 01-17-2006 12:22 AM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
Nah. What's funny is Disney paying Mike Ovitz a quarter billion dollars for a few months work. Given that history Disney probably does have a serious and highly lucrative offer on the table for Jobs.

Of course, um, this is just me spitballing here, but shouldn't Disney be looking for an executive with experience in making and marketing movies? Just an idea. Last time I checked I think Steve Jobs was running some kind of computer company or something.

Disney and Pixar will probably agree to some kind of deal -perhaps even the deal Jobs wants: a straight distribution deal with full creative control on the content. Jobs will make a decent amount of money, keep control of Pixar and still be able to spend most of his time running Apple. He sure doesn't need to waste a ton of his time trying to run Disney's movie studios. That's a extremely demanding full time job in and of itself.

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Monte L Fullmer
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 - posted 01-17-2006 01:55 AM      Profile for Monte L Fullmer   Email Monte L Fullmer   Send New Private Message       Edit/Delete Post 
..'sides, if Jobs joined Disney and become their "chairman" Disney will have the biggest 'fish" out of the pond, stuffed and mounted on the biggest plaque hanging in the main office and Jobs knows this.

Jobs will then lose some of his independency if he joins Disney and eventuallybecome just one of their "employees" and under the Disney "system" - to be gradually told what and how to do it and be ensnared in the Disney web of operations. Jobs is too far ahead to let him get ensnared into something like this.

This is what happened to Buster Keaton when he joined Fox after being independent shortly after the talkies were the mainstream films - became enslaved with the operations of Fox and his independency and credibility was almost destroyed - save it when he left Fox after three years. But Keaton never regained what he had lost after going to Fox.

Laurel and Hardy met the same fate after leaving Hal Roach Studios and signed up with MGM - they were almost destroyed as well by that studio in the mid 40's.

Then, when they accomplish ensnaring Jobs in their little web, then Disney will go after APPLE - for the iPOD market.

Nope, if Jobs is smart as he is, he'll stay independent and keep Pixar by itself since the operating capital is there within the company - no matter how high the price offers can be from any film company.

-Monte

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Steve Scott
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 - posted 01-17-2006 11:45 AM      Profile for Steve Scott   Email Steve Scott   Send New Private Message       Edit/Delete Post 
quote: Mike Blakesley
Jobs owns 50 percent of Pixar stock and would stand to make a fortune if he sells.
That ought to read 'another fortune'

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Bobby Henderson
"Ask me about Trajan."

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From: Lawton, OK, USA
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 - posted 01-24-2006 12:03 PM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
Update, January 24.

Apparently Disney's board will allow Disney CEO Robert Iger to make an offer to buy Pixar Animation Studios.
Story Link

quote:
NEW YORK (REUTERS) - The board of Walt Disney Co. has authorized Chief Executive Robert Iger to make an offer to buy Pixar Animation Studios Inc. and is expected to do so by Tuesday, a source familiar with the matter said late on Monday.

Pixar's board is expected to consider the offer on Tuesday as well, said the source, who did not disclose financial terms.

Pixar (Research) shares closed at $58.27 on Monday on Nasdaq, putting its market value at just under $7 billion. The shares have risen about 12 percent in the last month, partly on speculation that Disney (Research) would buy the computer animation company behind such hits as "Toy Story," "Finding Nemo" and "The Incredibles."

The Wall Street Journal has reported that Disney is considering an all-stock offer, which would make Pixar Chief Executive Steve Jobs its largest individual shareholder.

The Journal reported late on Monday that the offer under consideration would give Jobs, who has a controlling stake in Pixar, a set on the Disney board.

Disney shares closed 0.78 percent lower at $25.52

I don't know about all this consolidation. These huge corporations can try to buy out and control as many creative outlets as they can. But their push to convert theaters over to video projection and the relentless improvement in Internet bandwidth could turn around and bite many of these companies in the backside.

With how difficult Hollywood has made life for the computer industry, you can bet those larger businesses won't be very sympathetic to Hollywood concerns in the long term. They're going to keep improving technology, including creative technology, at a relentless pace whether Hollywood likes it or not. ATI just launched a new X1900 graphics chip that does more than half a trillion floating point operations per second.

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Richard Fowler
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 - posted 01-24-2006 02:13 PM      Profile for Richard Fowler   Email Richard Fowler   Send New Private Message       Edit/Delete Post 
Monte....MGM messed up Buster...20th Century Fox messed up Laurel and Hardy [Smile] Steve Jobs making a few billion profit and a Disney board seat should not drive him to drink or cuss at his screenwriters.

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Steve Scott
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 - posted 01-24-2006 03:44 PM      Profile for Steve Scott   Email Steve Scott   Send New Private Message       Edit/Delete Post 
The other shoe drops...

Link
quote:
Jan. 24, 2006 — The Walt Disney Company took a big step today toward bolstering its position in the film business. It has agreed to purchase Pixar Animation Studios for $7.4 billion. The deal combines Pixar with Disney's animation unit and represents the union of two huge forces in animation, from the old world of films and the new.

Pixar CEO Steve Jobs will become Disney's largest shareholder, giving him an extraordinary position at the confluence of technology and entertainment, computers and film, as well as a commanding presence in the music industry through Apple's iTunes Music Store. For Disney, and its new CEO Robert Iger, the deal secures what has been a hugely valuable source of animated hits.

In recent years, Disney, the parent company of ABC News, has struggled to produce the types of blockbuster animated movies that the company built its reputation on. Disney hopes the deal will give it the most dominant animation production house in the industry. In past joint productions, Disney and Pixar's films have generated more than $3 billion, including hits like the "Toy Story" series and "The Incredibles."

The partnership between the two companies deteriorated in recent years when Jobs openly feuded with long time Disney CEO Michael Eisner. Robert Iger, who succeeded Michael Eisner as Disney's CEO in October, made a priority of smoothing over relations with Jobs and was in the midst of renegotiating the distribution pact, which expires in June with the release of "Cars."

The new relationship is expected to look similar to the relationship Disney and Pixar currently enjoy, with Disney providing distribution and co-financing for Pixar's computer-animated features.

Pixar shares have risen since late last year, as rumors of a possible merger or distribution deal with Disney attracted traders to the company's stock. Some analysts suggest that much of the "premium" Pixar shareholders could expect from a merger is already priced into the company's market capitalization.


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Mike Blakesley
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 - posted 01-24-2006 06:12 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
So what's their first coproduction -- Chicken Little 2? [Wink]

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Bobby Henderson
"Ask me about Trajan."

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 - posted 01-24-2006 06:22 PM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
Probably to satisfy Robert Iger's desire for straight to video releases, maybe they'll make a bunch of Soderbergh style videos to premiere on iPods.

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Mark Gulbrandsen
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 - posted 01-24-2006 09:01 PM      Profile for Mark Gulbrandsen   Email Mark Gulbrandsen   Send New Private Message       Edit/Delete Post 
It has happened... This is soooo interesting that I can hardly contain myself.....

Da News About It

Disney buys Pixar
House of Mouse is teaming up with Pixar in a $7.4 billion deal. Steve Jobs to become board member at Disney.
By Paul R. La Monica, CNNMoney.com senior writer
January 24, 2006: 7:17 PM EST

NEW YORK (CNNMoney.com) - Mickey Mouse and Nemo are now corporate cousins. Walt Disney has announced that it is buying Pixar, the animated studio led by Apple head Steve Jobs, in a deal worth $7.4 billion.

Speculation about a deal being imminent raged on Wall Street for the past few weeks. Disney has released all of Pixar's films so far, but the companies' current distribution deal was set to expire following the release of this summer's "Cars." The merger brings together Disney's historic franchise of animated characters, such as Mickey, Minnie Mouse and Donald Duck, with Pixar's stable of cartoon hits, including the two "Toy Story" films, "Finding Nemo" and "The Incredibles."



Steve Jobs, the CEO of Apple and Pixar, will become a board member of Disney following the closing of Disney's purchase of Pixar.

"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Jobs in a statement. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."

As part of the deal, Jobs will become a board member of Disney, the companies said. And John Lasseter, the highly respected creative director at Pixar who had previously worked for Disney, will rejoin the House of Mouse as chief creative officer for the company's combined animated studios and will also help oversee the design for new attractions at Disney theme parks.

"The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses," said Disney CEO Robert Iger in a written statement.

During a conference call with analysts Tuesday, Iger said that acquisition discussions had been going on for the past several months. Jobs added that after a "lot of soul searching," he came to the conclusion that it made the most sense for Pixar to align itself with Disney permanently instead of trying to distribute films on its own or sign with another movie studio partner.

According to the terms of the deal, Disney (Research) will issue 2.3 shares for each Pixar share. Based on Tuesday's closing prices, that values Pixar at $59.78 a share, about a 4 percent premium to Pixar's current stock price. Shares of Pixar (Research) fell slightly in regular trading on the Nasdaq Tuesday but gained nearly 3 percent in after-hours trading. The stock has surged more than 10 percent so far this year on takeover speculation.

Disney's stock gained 1.8 percent in regular trading on the New York Stock Exchange and was flat after-hours.

Prior to the deal's announcement, some Wall Street observers had speculated that Disney may be paying too much for Pixar. A source tells FORTUNE that some Disney board members also thought the price was too high.

To that end, Disney chief financial officer Thomas Skaggs said during the conference call that the deal would reduce Disney's earnings slightly in fiscal 2006, which ends this September, as well as fiscal 2007. He added though that Pixar should add to earnings by fiscal 2008 and that Disney was still on track to post annual double-digit percentage gains in earnings through 2008.

But one hedge fund manager said that the risk of Disney losing Pixar was too great.

"The question isn't did Disney pay too much but how expensive would it have been for Disney if Pixar fell into someone else's hands," said Barry Ritholtz, chief investment officer with Ritholtz Capital Partners, a hedge fund that focuses on media and technology stocks.

Jeffrey Logsdon, an analyst with Harris Nesbitt, agreed with that assessment. He said that Pixar's "success quotient" justified the price of the deal.

Pixar has yet to have a flop with its six animated movies. They have grossed more than $3.2 billion worldwide, according to movie tracking research firm Box Office Mojo.

Disney, however, has struggled in the computer-generated animated movie arena. Even though its most recent CG-animated film, "Chicken Little" performed better than many had expected at the box office, it was not as big a hit as any of the Pixar films.

"Robert Iger has made no secret of the fact that he wanted to get the animated business back to where it was. It's what Disney has known for but the movies they did in-house did not do as well as the ones they did with Pixar," said Michael Cuggino, a fund manager who owns about 100,000 shares of Disney in the Permanent Portfolio and Permanent Portfolio Aggressive Growth funds.

Pixar has yet to announce what movies it is working on after "Cars," however. It is believed that Pixar's next film about a rat living in a fancy Parisian restaurant, tentatively titled "Ratatouille" may be released on 2007 and that a "Toy Story 3" may be in the works as well. Jobs said during the conference call that nothing has been decided about future Pixar releases yet, but added that the company feels strongly about making sequels to some of its previous hits.

And Iger said that announced plans for Disney-produced animated films, including the release of "American Dog" in 2008 and "Rapunzel Unbraided" in 2009, are still on track.

It would have been unthinkable to imagine Disney and Pixar teaming up just a few years ago. The two companies broke-off talks to extend their current distribution agreement in 2004 due to a strained relationship between Jobs and former Disney CEO Michael Eisner. But since Iger succeeded Eisner last year, he has extended an olive branch to Jobs.

Disney and Apple have already announced several online programming deals during the past few months. Disney now has agreements in place to sell hit ABC prime time shows, such as "Desperate Housewives" and "Lost", as well as content from ABC Sports and ESPN on Apple's popular iTunes music and video store.

Cuggino said the addition of Jobs, who will also become Disney's largest individual shareholder, to Disney's board could mean that more innovative digital deals could be in the works. "Jobs is a dynamic personality who knows consumer electronics. It's an opportunity to bring some youthful energetic thinking to Disney's board."

Disney, like many other large media companies, has seen its stock price stagnate during the past year as investors have flocked to more rapidly growing digital media firms such as Apple as well as search engines Google (Research) and Yahoo! (Research)

But Logsdon said the acquisition of Pixar could help Disney increase revenue throughout all of its business lines. So even though some may be quibbling in the short-term about how much Disney had to spend, he thinks Disney made the right move.

"It's a smart strategic deal," Logsdon said. "The benefit in theme parks, consumer products and cable will probably make this deal look a lot smarter a year or two from now."

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Mike Blakesley
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 - posted 12-19-2006 08:41 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
Here's the latest in Disney animation news, from imdb.com on 12/19/06:

Disney Returning To 2-D Only, Says Report

John Lasseter and Ed Catmull are planning to return the Walt Disney Co.'s studios in Burbank to its roots as a "traditional" (hand-drawn) animation company exclusively, while Pixar will continue to turn out computer-animated (CG) features, Disney watcher Jim Hill reported on his website www.jimhillmedia.com today (Tuesday). In doing so, Lasseter, the chief creative officer for Disney Animation, and Catmull, the unit's president, will be reversing Disney's efforts over the past three years to, in Hill's words, "retrain that studio's staff as well as to change Disney Feature Animation into a state-of-the-art CG operation." Hill observed that the plan has not yet been "entirely embraced" by Disney CEO Robert Iger. One result of the about-face, Hill noted, has been the cancellation of Disney's plans to produce the computer-animated American Dog, a movie conceived and supervised by Chris Sanders, who ironically was responsible for Disney's last big hand-drawn hit, Lilo and Stitch.

========================

Personally I think this could be a good thing. Now that everyone else is putting all their money into CG cute-animal (or ogre) pics, Disney could be positioned to launch another "Lion King" or something. Do I think they'll pull it off? Well, I'm not holding my breath. But it would be great if they did.

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Bobby Henderson
"Ask me about Trajan."

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From: Lawton, OK, USA
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 - posted 12-19-2006 08:54 PM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
I think this is a good, positive move.

There is no substitute for well executed, hand drawn traditional animation. There is a certain life to it that no other type of animation possesses. It gains a kind of magic to it by way of a purely human touch.

3D animation in the form of cartoon style movies is still really fun, but only when well executed.

The problem is the talent pool for that kind of thing has been worn down really really thin. Movie productions don't really pay very well for top notch 3D animation talent. That's very true. If you are a great 3D animator, well versed in programming and animation, you are far far better off getting a job with a video game development company than any movie company. You'll make more money and not be quite so constrained by time deadlines.

Hand drawn animation is still wonderful when it is well done. If Disney can execute movie like The Lion King or Tarzan I'll show up to buy a ticket.

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Mike Blakesley
Film God

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From: Forsyth, Montana
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 - posted 12-19-2006 10:41 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
quote: Bobby Henderson
If Disney can execute movie like The Lion King or Tarzan I'll show up to buy a ticket.
Same here. Tarzan in particular is under-rated...it didn't do Lion-King size business but was really good, IMHO.

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Monte L Fullmer
Film God

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From: Nampa, Idaho, USA
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 - posted 12-20-2006 12:40 AM      Profile for Monte L Fullmer   Email Monte L Fullmer   Send New Private Message       Edit/Delete Post 
..yea, Bring back Robin Williams to do ALADDIN again - for the third time..

..now, that was a good flik...

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