Roy says ending of Pixar talks bad for Disney

[NemoRocks78]

LOS ANGELES, January 29th (Reuters)-Walt Disney Co. (NYSE: DIS) founding family heir and company dissident Roy Disney on Thursday said the end of the company's lucrative relationship with Pixar Animation Studios Inc. (NasdaqNM: PIXR) would be bad for shareholders in the longterm.

Disney and Pixar said earlier on Thursday that they had ended talks on extending their partnership beyond their next two films. Disney said it refused Pixar's final offer.

Roy Disney and ally Stanley Gold, who both resigned from the Disney board late last year and called for Chief Executive and Chairman Michael Eisner to step down, said they were "dismayed but not surprised" by the news.

"More than a year ago, we warned the Disney board that we believed Michael Eisner was mismanaging the Pixar partnership and expressed our concern that the relationship was in jepoardy" they said.

Roy Disney had been chairman of Disney animation until he resigned in late June.

Roy and Stanley knew it was coming.....OUT WITH EISNER!:fork:

 

[GaryT977]

How the hell is Disney going to make movies now? Ridiculous. Force the head of the animation department to resign, close it, and lose Pixar. Brilliant management.

:brick:

 

[swrdfghtr]

Originally posted by GaryT977
How the hell is Disney going to make movies now? Ridiculous. Force the head of the animation department to resign, close it, and lose Pixar. Brilliant management.

:brick:

How the hell would they make movies if they HAD taken Pixar's proposed deal? Disney would have only made a few mil per movie and wouldn't have any residual rights to sequels, television series, merchandise, theme park attractions and characters, or anything else.

They didn't close feature animation - they closed Florida feature animation. And they have a new 3D animation division to work with that's working on "Chicken Little" right now, along with, perhaps, "Toy Story III." So they'll still make movies.

Will they be Pixar-style hits for Disney, in terms of profit? Maybe, maybe not. But under Pixar's deal, even PIXAR movies weren't high profit from Disney's persepctive.

 

[CTXRover]

I hate the fact that they closed the Florida studio. There were so many talented people there. Luckily some of the leading talent received extended contracts and moved out to Burbank, but the loss of talent, as Roy Disney said, is gut-wrenching. However, during Disney's second golden age in animation with Beauty and the Beast, Lion King, Aladdin, etc., it was all done in Burbank. One could even blame Eisner for over-expanding the animation department with studios in Florida, France and Japan all being added after their huge successes in the 90's, much the same way I think he is overexpanding the theme park division. How many Disneyland's do we need before it loses its uniqueness? But since that expansion in animation, I haven't seen the quality of work come out of there that did when it was just the Burbank studio. Of course, a lot of people back in the 90's have left too (Jeffrey Katzenburg being the most obvious example), but perhaps, putting all the animators back under one roof is a good thing. Its a done deal now and we can only hope the decision turns out to be right.

As for the Pixar deal, the final offer given to Disney would have, from a financial standpoint, both long and short term, been dumb to accept. I believe had Eisner not created such anomosity between Disney and Pixar that Pixar wouldn't have been as demanding in their requests...and that is where Eisner should be blamed. However, under the circumstances now presented, losing Pixar was actually the smarter financial move for Disney. So many think that by losing Pixar Disney is about to become a profit-less studio. The reality is had they taken the Pixar offer, they would have been receiving a flat distribution fee from each movie...about 75 million. The profit chain that Disney is seeing right now with Pixar was going to end with or without Pixar. Disney was actually willing to do this...but not in exchange for also giving up the lucrative copyrights they now have (and keep) to the characters from Toy Story through Cars (7 movies total) to "exploit" them from sequels to merchandising to attractions. And perhaps now WDFA will work even harder to show the world they are still the best in animation. Afterall, Pixar is NOW their biggest competitor since they aren't part of the Disney family anymore.

I really wished Pixar would have stayed with Disney just because I think they belong together. Walt Disney Pictures presents a Pixar animation studios film has a much better ring than Warner Bros. presents a Pixar animation studios film. But unfortuantely, for companies it is about $$$. For Disney, for Pixar and for every other company out there.

 

[swrdfghtr]

Originally posted by CTXRover
I hate the fact that they closed the Florida studio. There were so many talented people there. Luckily some of the leading talent received extended contracts and moved out to Burbank, but the loss of talent, as Roy Disney said, is gut-wrenching. However, during Disney's second golden age in animation with Beauty and the Beast, Lion King, Aladdin, etc., it was all done in Burbank. One could even blame Eisner for over-expanding the animation department with studios in Florida, France and Japan all being added after their huge successes in the 90's, much the same way I think he is overexpanding the theme park division. How many Disneyland's do we need before it loses its uniqueness? But since that expansion in animation, I haven't seen the quality of work come out of there that did when it was just the Burbank studio. Of course, a lot of people back in the 90's have left too (Jeffrey Katzenburg being the most obvious example), but perhaps, putting all the animators back under one roof is a good thing. Its a done deal now and we can only hope the decision turns out to be right.

As for the Pixar deal, the final offer given to Disney would have, from a financial standpoint, both long and short term, been dumb to accept. I believe had Eisner not created such anomosity between Disney and Pixar that Pixar wouldn't have been as demanding in their requests...and that is where Eisner should be blamed. However, under the circumstances now presented, losing Pixar was actually the smarter financial move for Disney. So many think that by losing Pixar Disney is about to become a profit-less studio. The reality is had they taken the Pixar offer, they would have been receiving a flat distribution fee from each movie...about 75 million. The profit chain that Disney is seeing right now with Pixar was going to end with or without Pixar. Disney was actually willing to do this...but not in exchange for also giving up the lucrative copyrights they now have (and keep) to the characters from Toy Story through Cars (7 movies total) to "exploit" them from sequels to merchandising to attractions.

I dunno. Jobs is no fool - now that Pixar is a bona fide "name" of its own, they have no reason not to shoot for a better deal. But I'm betting they were hoping for NEGOTIATION, not just "no," which is what I bet they got. So, yeah, Eisner's aggressiveness is doubtless at play.

I wish they could have a deal, too. Maybe let Px keep more of the money, while giving Dis certain rights they need for synergy, but protecting Px's right to sequels. For example. A "blended" approach. Ah well.

 

[CTXRover]

Originally posted by swrdfghtr
I dunno. Jobs is no fool - now that Pixar is a bona fide "name" of its own, they have no reason not to shoot for a better deal. But I'm betting they were hoping for NEGOTIATION, not just "no," which is what I bet they got. So, yeah, Eisner's aggressiveness is doubtless at play.
.

It sounded like Disney was doing some negotiating on their part. Apparently they were willing to take Pixar's offer to just receive a flat distribution fee for all FUTURE Pixar profits giving Pixar almost all the profit. In addition, Disney was willing to cut back their current 50/50 split of Cars and Incredibles and have those movies fall under the distribution fee thing as well. But Pixar also wanted their copyrights Disney holds under the contract both of them willingly signed a while ago to all of their movies from Toy Story through Cars.

I'm sure their was a lot of bending and demanding on both sides, but from what has been released via the press and such, it kind of makes it sound that Pixar was doing most of the demanding. Since I wasn't really involved though, I can't say for sure what went on in the negotiations.

Still, I have to blame Eisner. Had he not created such tension between him and Jobs, I think both would have been able to come up with a deal that would make both sides happy. Its just the 'final offer' Pixar gave them wasn't good for Disney to accept (lose copyrights to first 7 films and only take a distribution fee for all future projects)