The Pixar Buy - Disney’s Creative Mojo?

Disney’s acquisition of Pixar would make Steve Jobs (Jobs) the largest shareholder of Disney as Pixar’s shareholders would receive 2.3 Disney shares for every Pixar share they owned. Commenting on the deal, Jobs said, “Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders. Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world.”^[2] Analysts also felt that the deal with Disney would also benefit Apple a great deal.

Jobs could now exert his influence at Disney, one of the largest media and entertainment corporations in the world, to bring more content for iTunes, Apple’s digital music and video download service. For Disney, this was indeed a sign of changed times. The world famous studio, set up by Walt Disney and his brother Roy O. Disney, will now be under the creative control of Pixar’s creative heads Ed Catmull and John Lasseter.

The Walt Disney studios was a pioneer in animation movie making and responsible for world famous cartoon characters like Mickey Mouse, Donald Duck, Goofy, Pluto, and Snow White. However, after the demise of the Walt Disney, the company went through difficult times during the early 1980s and was almost bought up by corporate raiders. It was then that Michael Eisner was brought in by Roy Disney to give the company a new direction.

For the first ten years, Michael Eisner successfully turned around Disney’s performance in animation films with super hits like The Lion King. The acquisition of ABC network (ABC) by Disney in 1996 was one of the highpoints of Eisner’s career. But a spate of high profile exits by top executives like Katzenberg and Ovitz and the multi-million dollar severance packages they received hit Eisner’s reputation severely.

Eisner’s tussle with Roy E. Disney, Walt Disney’s nephew, also gave bad press to Disney and had a negative impact on the company’s culture. To make matters worse in February 2004, Comcast Corporation, the largest cable-television operator in the US, sought to takeover Disney.

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^[2] “Disney to Acquire Pixar,” http://corporate.pixar.com/releaseDetail.cfm?ReleaseID=185239, January 24, 2006.

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