Pixar latest KIA in Disney-less Eisner regime?

[BG Rugger]

Nice to know the trend of sacrificing quality family entertainment for money is continuing to be the Eisner...er..Disney Company's way of conducting business. Now that Pixar has decided not to continue its partnership with Disney because of financial differences on Disney's part after 2006, they've lost the future contributions of the studio that helped produce the majority of Disney's quality films ( Toy Story, Bug's Life, Monsters Inc., Finding Nemo ) within the last years. This hurts even more considering for the first time in who knows how long the Disney Studios do not have a classicly animated film in production. There is speculation that Pixar wants to continue its partnership but is using this to force Disney's hand. I hope this is the case and things will be resolved, but I'm not holding my breath.

Anyone elses opinion or feelings on any of this?

 

[sabian]

Eisner, after reading his autobiography, is a self-serving egomaniac that thinks with his ego and not his head or heart. I believe it is vital that people vote this guy out. i have been a disney fanatic my entire life. Now with my first child on the way, disney trips seem all that much more important to me. This guy seems to be determined to run this company into the ground. If Pixar is doing this at the urging of Roy Disney, so be it. What ever gets this gypsy out of the palace is fine with me.

 

[civileng68]

.ggggrrrr

HOLY CRAP! im not even going to get my opinions on this out..................it just stirs up the Eisner supporters.


This is rediculous. I mean, Pixar is the best thing lately to happen to Disney. In fact, something doesnt make sense, you let Pixar walk away, and get rid of much of your animation department, what are they going to do? Stop Animation and make Lizzy McGwire the new Mickey mouse? geez!

 

[CTXRover]

Re: .ggggrrrr

Originally posted by civileng68
HOLY CRAP! im not even going to get my opinions on this out..................it just stirs up the Eisner supporters.


This is rediculous. I mean, Pixar is the best thing lately to happen to Disney. In fact, something doesnt make sense, you let Pixar walk away, and get rid of much of your animation department, what are they going to do? Stop Animation and make Lizzy McGwire the new Mickey mouse? geez!

This is a lengthy post...I apologize...but I think it brings up some good points to debate

I want Eisner to go just as much as the next person, and I place a lot of blame on him for not fostering the Pixar relationship better so renogatiotions would have been a little more giving on both sides. However, after hearing what Pixar wanted from a new contract with Disney and what Disney would get in return, I can't help but think that Eisner actually did the right thing in NOT accepting Pixar's final offer. Remember, Pixar is the one who called off the negotiations...NOT Disney. Disney didn't accept what Pixar called their "final" offer...and if I'm correctly understanding what that offer was...Disney was right in not accepting it. This is what Pixar wanted from Disney in new contract (from an AP article):

A person familiar with the talks said negotiations broke down because Pixar wanted to reclaim the copyrights to the five films it has produced with Disney so far, plus the two left in the deal. Such an accommodation would have presumably revoked Disney's right to make sequels and potentially denied the company millions of dollars in future profits.

Pixar also wanted to pay Disney a flat distribution fee on all future films, including "The Incredibles" and "Cars." Disney was willing to adjust its compensation on the two remaining films, but would not agree to return the copyrights, said the source, speaking on condition of anonymity.

So basically Pixar wanted from Disney a new deal where they would pay Disney a simple flat distribution fee (around 75 million per film) for all future movies and keep all the profits, which is exactly what they will get from another studio and what Disney apparently was willing to do. I see absolutely no problem with that and if Disney denied doing business with Pixar just because they wanted a bigger chunk of the profit from future movies, that would be a much bigger problem. But that isn't the reason a new deal wasn't struck.

Pixar also wanted the next two movies, Incredibles and Cars, to fall under the new contract where Pixar would pay Disney a simple distribution fee instead of the current 50/50 split of profits. Disney was even willing to do this. Where Disney wouldn't bend was Pixar's third demad that if they would stay with Disney they wanted the copyrights from all the movies currently under the Disney-Pixar deal back. Under the inital contract they signed together (where Disney basically took an unknown studio and used their marketing clout to make them one of the most profitable), Disney basically got all copyrights to the films and characters, including their use in future projects such as TV shows, sequels, etc (future $$$ makers). Apparently, asking for such changes in contracts is a "no-no" in Hollywood. Don't you think Disney at least deserved the rights to Toy Story, Bug's Life and Monsters? I think Disney should have agreed to give up those copyrights to Cars and Incredibles, but even that alone didn't sound like it would have pleased Pixar.

Let's put this into perspective for both sides of the deal (from what I understand....I could be wrong as I wasn't actually involved in the negotiations ):

Disney
-Take Pixar's "final offer" and lose all rights and future profits from the use of characters from Toy Story to Cars, lose the 50/50 split for Incredibles and Cars and in return get a simple, flat distribution fee from all future projects (how they wanted to split merchandising profits, etc., I don't know).

-Don't take Pixar's offer and get to keep the 50/50 split of Cars and Incredibles and keep all the rights to all the characters from Toy Story through Cars, including potential huge profit makers like Nemo 2 and Toy Story 3 (whether or not they could be as good and have the same heart without Pixar involved is a whole other debate). In return, lose Pixar as a profitable partner, but more importantly, as a partner that provided Disney with very valuable and quality entertainment.

Pixar
-Walk away from Disney with no rights or holdings to all the characters from their first seven movies. Walk away and receive no 'additional' profit from Cars or Incredibles (Disney was willing to do re-do this) and in return have to find a new partner that could provide "Disney's marketing muscle, which includes its mammoth theme parks, the Disney Channel, and radio and TV stations, which can't easily be duplicated, even by Warner Bros (from Business Week Online)." In return, get all profits from all future projects (this Disney was willing to do also). I don't know where Disney stood on the copyright issues on those future projects though....obviously that is something Pixar deserved.

-Stay with Disney, receive additional profits from Cars and Incredibles (something another studio can't provide), retain the rights and basically all profits from all future endeavors (something Disney was willing to provide) and keep Disney's marketing clout and expertise. In exchange, still not keep any rights to their first projects under the current deal (something another studio can't provide either).

So when you break it down, it really looks like both sides lose here. I think an interesting question is, what does Pixar anticipate getting from a new deal elsewhere? It was sounding like Disney was willing to give them what other studios will for future projects, but not in exchange of giving up what they already had....which I think is reasonable. Pixar now will get what Disney would have provided them, but now they take the risk of finding a studio that can do for them what Disney did. (I hope that makes some sense.)

(Disclaimer: From what I've read, it sounds like Disney was willing to do the distribution fee thing on future projects....but I don't know 100% if that is true or not.)

 

[imagineerfan]

Thanks for the thorough explanation.

 

[colliera]

Walking away doesn't = nothing

Pixar doesn't loose what they have now under the existing terms of the contract at all.

"Under the terms of the existing agreement, Disney will retain the rights to distribute Pixar's first seven films, with Pixar continuing to receive its current share of the profits in perpetuity; and Disney will have the rights to solely finance and produce sequels to the films if Pixar declines to co-finance and produce them under the terms of the current agreement. " - Source Pixar press release of January 29, 2004.

The funny (funny ha ha) thing about the press release is Flik waving goodbye. Or was that hello?

Apparently they both do hold interest in the copyright. I checked the Monsters, Inc. DVD and it is listed as (C) Disney Enterprises, Inc./Pixar Animation Studios.

If Disney does exercise its rights to produce a sequel and Pixar declines to co-finance and produce that sequel leaving Disney to go it alone would Pixar still receive a share of the profits? Non-participation does not relenquish their claim to copyright.

As for what they would gain with a new parter Warner was readly to sign on to a 20/80 split.

 

[Shaman]

Rumors are circling that Roy E. Disney, was in talks with Pixar (planning for post Eisner)...and that he agreed to most of the terms Jobs sought (although it is not clear if those terms are the same ones mentioned in the article....I highly doubt it)...rumors indicate that Jobs is on Roy's side, for the very reason that they both dislike Eisner...(its a--the enemy, of your enemy, is your friend-- type of deal) :animwink:

True or not, Roy sure has a louder voice with the negotiations failing (something he warned us about in his resignation letter), I have to say Eisner dug his own grave; if his relations would have been better with Jobs, maybe things would be different.

The Walt Disney Company needs a fresh breath of air, Eisner needs to go.

 

[CTXRover]

Re: Walking away doesn't = nothing

Originally posted by colliera
Pixar doesn't loose what they have now under the existing terms of the contract at all.

Apparently they both do hold interest in the copyright. I checked the Monsters, Inc. DVD and it is listed as (C) Disney Enterprises, Inc./Pixar Animation Studios.

If Disney does exercise its rights to produce a sequel and Pixar declines to co-finance and produce that sequel leaving Disney to go it alone would Pixar still receive a share of the profits? Non-participation does not relenquish their claim to copyright.

As for what they would gain with a new parter Warner was readly to sign on to a 20/80 split.

Yea, they don't lose anything under the existing contract, except had they agreed to a new deal, Disney as willing to alter the split for profits for the upcoming two films from 50/50 to something as low as 20/80 or less (this would have been Pixar's gain and the 'additional' profit I mentioned above). Walking away though from what Disney was willing to give does cause a loss for them in the short-term with these two films.

I don't know about the copyright thing. It sounds like the main reason Disney wouldn't accept Pixar's final offer is because Disney DOES hold the copyrights to those characters and thus their future should Pixar not want to "help". It sounds like Pixar will be allowed to help if they want, but I don't think they can say Disney can't do such sequels if they don't want to have them made or if they don't want to be involved. If Disney goes on by themselves and makes sequels, I really don't know how much Pixar will get from that.

What I still find bewildering is that Pixar will get from another studio for its future projects starting in 2006 what Disney was willing to do too, plus Disney was willing to give them a bigger chunk of Cars and Incredibles. But they turned it down because Disney wouldn't ALSO give back the copyrights to the characters for those movies. But by leaving, they now have left the fate of those characters solely in the hands of Disney with no real say (had they stayed partners, I can't believe Disney would make Toy Story 3...which they are in fact currently working on...without Pixar) AND Pixar will stay with the 50/50 split from the next two movies. I must be missing something because the more I think about it, the more I think Pixar lost.