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Disney and Pixtar
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Posted 8/10/2004 4:17 PM Updated 8/10/2004 9:45 PM
Disney dangles film library over Miramax, Pixar
By Michael McCarthy, USA TODAY
Steve Jobs of Pixar Animation Studios (PIXR) and Harvey Weinstein of Miramax Film can huff and puff about ending their relationships with Walt Disney (DIS). But Disney CEO Michael Eisner reminded them Tuesday that he still controls one of their most valuable assets: their film libraries.
As Disney reported a 20% rise in fiscal third-quarter earnings, Eisner told analysts on a conference call that the company is moving full speed on sequels to films from the Disney/Pixar partnership.
The Magic Kingdom has the right to produce its own sequels to the seven films, under a current deal, if Pixar declines to co-finance or produce them. The computer-animated hits include five films that have generated total box office revenue of $2.5 billion: Finding Nemo, Monsters, Inc., Toy Story, Toy Story 2 and A Bug's Life. And there are two still coming: The Incredibles later this year and Cars in 2005.
Walt Disney over 5 days ...
and year to date.
Eisner noted the big bucks generated by sequels such as DreamWorks' Shrek 2 could bode well for Disney sequels. His leverage over Pixar's library could help bring Jobs back to the negotiating table with Disney, despite Jobs' announcement in January that he was breaking off contract renewal talks and would seek a new distribution partner for 2006 and beyond.
"Pixar is much more important than Miramax," says analyst Paul Kim of Tradition Asiel Securities. "Pixar has still not picked a new distribution partner. It probably makes sense for both sides to come back together somewhere in the middle."
Meanwhile, Eisner is negotiating with Miramax's Weinstein brothers, whose contracts have an out clause in 2005, over whether they'll remain at the company they founded and sold to Disney. No matter the outcome, Disney owns the company and its library. With an estimated value of more than $2 billion, Miramax has nearly 600 flicks ranging from Best Picture Oscar winners Chicago, The English Patient and Shakespeare in Love to cult hits such as Pulp Fiction.
Eisner might be willing to sell the Miramax name back to the Weinsteins, who named the art-house studio after their parents. But he would charge the Weinsteins an "almost impossible" price if they want the library, says Kim Masters, a National Public Radio correspondent and author of Keys to the Kingdom: The Rise of Michael Eisner and the Fall of Everybody Else.
Says Masters: "Eisner holds all the cards here. He can elect not to renew their contracts."
Driven by stronger attendance at its theme parks, Disney's third-quarter net income rose 20% to $604 million. Revenue rose 17% to $7.47 billion.
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Posted 8/10/2004 4:17 PM Updated 8/10/2004 9:45 PM
Disney dangles film library over Miramax, Pixar
By Michael McCarthy, USA TODAY
Steve Jobs of Pixar Animation Studios (PIXR) and Harvey Weinstein of Miramax Film can huff and puff about ending their relationships with Walt Disney (DIS). But Disney CEO Michael Eisner reminded them Tuesday that he still controls one of their most valuable assets: their film libraries.
As Disney reported a 20% rise in fiscal third-quarter earnings, Eisner told analysts on a conference call that the company is moving full speed on sequels to films from the Disney/Pixar partnership.
The Magic Kingdom has the right to produce its own sequels to the seven films, under a current deal, if Pixar declines to co-finance or produce them. The computer-animated hits include five films that have generated total box office revenue of $2.5 billion: Finding Nemo, Monsters, Inc., Toy Story, Toy Story 2 and A Bug's Life. And there are two still coming: The Incredibles later this year and Cars in 2005.
Walt Disney over 5 days ...
and year to date.
Eisner noted the big bucks generated by sequels such as DreamWorks' Shrek 2 could bode well for Disney sequels. His leverage over Pixar's library could help bring Jobs back to the negotiating table with Disney, despite Jobs' announcement in January that he was breaking off contract renewal talks and would seek a new distribution partner for 2006 and beyond.
"Pixar is much more important than Miramax," says analyst Paul Kim of Tradition Asiel Securities. "Pixar has still not picked a new distribution partner. It probably makes sense for both sides to come back together somewhere in the middle."
Meanwhile, Eisner is negotiating with Miramax's Weinstein brothers, whose contracts have an out clause in 2005, over whether they'll remain at the company they founded and sold to Disney. No matter the outcome, Disney owns the company and its library. With an estimated value of more than $2 billion, Miramax has nearly 600 flicks ranging from Best Picture Oscar winners Chicago, The English Patient and Shakespeare in Love to cult hits such as Pulp Fiction.
Eisner might be willing to sell the Miramax name back to the Weinsteins, who named the art-house studio after their parents. But he would charge the Weinsteins an "almost impossible" price if they want the library, says Kim Masters, a National Public Radio correspondent and author of Keys to the Kingdom: The Rise of Michael Eisner and the Fall of Everybody Else.
Says Masters: "Eisner holds all the cards here. He can elect not to renew their contracts."
Driven by stronger attendance at its theme parks, Disney's third-quarter net income rose 20% to $604 million. Revenue rose 17% to $7.47 billion.