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Steve Jobs bio reveals how Michael Eisner actively tried to derail Disney's 2006 acquisition of Pixar

Steve Jobs bio reveals how Michael Eisner actively tried to derail Disney's 2006 acquisition of Pixar

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It's kind of a long drive from the woods of New Hampshire to northern Georgia. 1075 miles to be exact. But you can do in 19 hours & change if you drive straight through.

That's what I wound up doing late last week. I climbed into our Ford Explorer just before 11 a.m. on Thursday and eventually reached my destination at 6:30 on Friday morning.

Mind you, I wasn't alone in the car that whole time. I had the actor Dylan Baker with me ... sort of. To explain: Dylan was the narrator of the unabridged audio version of "Steve Jobs," Walter Isaacson's great biography of Apple's co-founder. And as I cruised down 95, I kept throwing disc after disc in the car's dashboard CD player and listening as Mr. Baker read me Mr. Isaacson's well-crafted prose.


Copyright 2011 Simon & Shuster. All rights reserved

There's a lot to like about "Steve Jobs" (the book). Even though this highly-detailed bio doesn't always put Steve Jobs (the man) in the best possible light. At times, between Steve's reality distortion field and his (early in his career, anyway) personal hygiene issues (which were all related to his weird dietary habits), Jobs truly sounds like the boss from hell. On the other hand, this is the man who -- through charm, guile and sheer force of will -- helped bring about the creation of the Mac, the iPod, the iPhone and the iPad

And Isaacson ... He strikes just the right balance in this 656-page hardcover, cataloging many of Steve's foibles & feuds while -- at the same time -- celebrating his numerous accomplishments. Which is what makes "Steve Jobs" (Simon & Shuster, October 2011) such a fascinating read ... listen ... whatever.

Of course, for Disney & Pixar fans, the most interesting passages in "Steve Jobs" can be found in the sections which deal with Bob Iger's attempts to mend fences with that animation studio. Ever since August of 2002, when that Michael Eisner has written a confidential memo which stated that ...


Copyright 2003 Disney Pixar. All rights reserved

"Yesterday we saw for the second time the new Pixar movie, Finding Nemo, that comes out next May. This will be a reality check for those guys. It's okay, but nowhere near as good as their previous films. Of course they think that it's great."

... had deliberately been leaked to the Los Angeles Times, Michael and Steve had been openly fighting in the press. With Jobs telling reporters that all of the films that Walt Disney Animation Studios had produced over the past 5 years had been " ... embarrassing duds." While Eisner claimed that Disney didn't really need Pixar anymore, since the Mouse already legally had the right to make sequels to Toy Story and all of the other films that this Emeryville, CA-based animation studio had produced.


Bob Iger, President and CEO of the
Walt Disney Company

As Iger explained in an exclusive interview with Isaacson for this book:

"Michael didn't understand that Disney's problems with animation were as acute as they were. That manifested itself in the way he dealt with Pixar. He never felt that he needed Pixar as much as he really did."

Whereas Iger ... Well, he became acutely aware of just how much Disney truly needed Pixar when Bob joined the Company's soon-to-be-exiting CEO at the September 2005 grand opening of Hong Kong Disneyland. As Iger watched ...

...  the usual Disney parade down Main Street. Iger realized that the only characters in the parade that had been created in the past decade were Pixar's. "A light bulb went off," he recalled. "I'm standing next to Michael, but I kept it completely to myself, because it was such an indictment of his stewardship of animation during that period. After ten years of The Lion King, Beauty and the Beast, and Aladdin, there were then ten years of nothing."


Michael Eisner, Mickey Mouse and Bob Iger at the
September 2005 grand opening of Hong Kong
Disneyland.
Copyright Disney Enterprises, Inc.
All rights reserved

Iger went back to Burbank and had some financial analysis done. He discovered that (The Walt Disney Company) had actually lost money on animation in the past decade. At his first meeting as the new CEO, he presented the analysis to (Disney's board of directors), whose members expressed some anger that they had never been told this.

"As animation goes, so goes our company," he told the board. "A hit animated film is a big wave, and the ripples go down to every part of our business -- from characters in a parade, to music, to parks, to video games, TV, Internet, consumer products. If I don't have wave makers, the company is not going to succeed." 

(Iger) presented (Disney's board) with some choices. They could stick with the current animation management, which he didn't think would work. They could get rid of management and find someone else, but he said he didn't know who that would be. Or they could buy Pixar. "The problem is, I don't know if it's for sale, and if it is, it's going to be a huge amount of money," he said. The board authorized him to explore a deal.


Steve Jobs and Bob Iger at the October 2005
announcement that select ABC programs will
be available via iTunes.
Copyright Apple.
All rights reserved

It was at this point that Iger reached out to Jobs. And according to Isaacson, Steve was charmed by how forthright Bob during that initial discussion.

"That's why I just loved Bob Iger," recalled Jobs. "He just blurted (that Disney badly needed Pixar) out. Now that's the dumbest thing you can do as you enter a negotiation, at least according to the traditional rule book. He just put his cards on the table and said, 'We're screwed.' I immediately liked the guy, because that's how I work too. Let's just immediately put all the cards on the table and see where they fall." 

And given that Iger was so obviously respectful of Pixar's past efforts and genuinely seemed to want to do right by both companies, Jobs agreed to speak to John Lasseter and Ed Catmull on Disney's behalf. 


Ed Catmull, Steve Jobs and John Lasseter. Copyright Pixar. All rights reserved

... so (Steve) asked (John & Ed) to come over to his house. He got right to the point. "We need to get to know Bob Iger," he told them. "We may want to throw in with him and help him remake Disney. He's a great guy ... It's night and day different from Eisner's Disney. He's straightforward, and there's no drama with him."

And once Steve had plowed the road for Bob ...

... (Iger) flew from Los Angeles to Lasseter's house for dinner, and stayed up well past midnight talking. He took Catmull out to dinner, and he visited Pixar Studios, alone, with no entourage and without Jobs. "I went out and met all the directors one on one, and each of them pitched their movie," he said. Lasseter was proud of how much his team impressed Iger, which of course made him warm up to Iger.


Ed Catmull, Steve Jobs, Bob Iger and John Lasseter. Copyright
Disney Pixar. All rights reserved

 

The only problem was ... Given the hefty price tag that Jobs had proposed for Pixar (i.e. $7.4 billion in stock), Disney's board of directors was going to need a little persuading. Which is why Bob arranged for Steve to bring John & Ed to Century City, Los Angeles one Sunday morning. So that Lasseter & Catmull could then meet in secret with members of the board and explain how they planned on reviving Walt Disney Animation Studios.

Unfortunately, Michael Eisner -- as the largest individual shareholder The Walt Disney Company had at that time (Eisner owned 1.7% of the company's stock versus Roy E. Disney's 1%) got wind that this acquisition was in the works. And ... 

... Before the Disney Board got a chance to approve the merger, however, Michael Eisner arose from the departed to try and derail it. He called Iger and said it was far too expensive. "You can fix animation yourself," Eisner told him. "How?" said Iger. "I know you can," said Eisner. Iger got a bit annoyed. "Michael, how come you say I can fix it, when you couldn't fix it yourself?" he asked.


Michael Eisner, Mickey Mouse and Bob Iger at Disneyland's
50th anniversary celebration.
Copyright Disney
Enterprises, Inc. All rights reserved

Eisner said he wanted to come to a (Walt Disney Company) board (of directors) meeting, even though he was no longer a member or an officer, and speak against the acquisition. Iger resisted, but Eisner called Warren Buffett, a big shareholder and George Mitchell, who was the lead director. The former senator convinced Iger to let Eisner have his say. "I told the board that they didn't need to buy Pixar because they already owned 85% of the movies Pixar has already made," Eisner recounted. He was referring to the fact that for the movies already made, Disney was getting that percentage of the gross, plus it had the rights to make all the sequels and exploit the characters. "I made a presentation that said, here's the 15% of Pixar that Disney does not already own. So that's what you're getting. The rest is a bet on future Pixar films." Eisner admitted that Pixar had been enjoying a good run, but he said could not continue. "I showed the history of producers and directors who had X number of hits in a row and then failed. It happened to Spielberg, Walt Disney, all of them." To make the deal worth it, he calculated, each new Pixar movie would have to gross $1.3 billion. "It drove Steve crazy that I knew that," Eisner later said.

After he left the room, Iger refuted his argument point by point. "Let me tell you what was wrong with that presentation," he began. When the board had finished hearing them both, it approved the deal Iger proposed.

It's these sorts of behind-the-scenes, inside-the-boardroom stories that make "Steve Jobs" a must-read ... er ... must-listen. Which is why I now can't wait to climb into our Explorer early next week so that I can then listen to the last 5 discs of this fascinating unabridged audio book.

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  • Wow, too bad Eisner couldn't have prevented the Pixar debacle.  In 2006 Cars was released under the Pixar-Disney label, generating, according to the New York Times, only "$460 million in global ticket sales and has sold 27 million DVDs. Related retail products have generated $5 billion in sales."

    Plus you got Lasseter tinkering with Imagineering, spearheading Carsland, as well as breathing life back into the traditional animation department.  Eisner would have put in another delapitdated Ferris Wheel where fancy-smancy Carsland now sits, no respect for the classics!

    Word on the street is that Pixar's 2012 release, Brave, is going to be just another Nemo in terms of box office and critical success.  When Pixar finally makes a critical and financial dud, like maybe around 2031, then Eisner wil be rightly justified!

    I also wish they'd have torn down Disneyland and moved it closer to L.A., like how Eisner wanted to do.

  • I had to do a review of this for my blog- I usually hate biographies, but this kept me turning pages when I was in the Bay Area in December (visited the Schulz museum, Disney museum, the entrance of ILM, and went to Pixar for a CAM fundraiser). When I wasn't traveling, I was in my hotel room reading this bio on my iPad. The tv stayed off my entire trip, and in one night, I read 3 hours straight through a couple chapters.

  • Long book.

    Sounds interesting!

  • This just reiterates that Bob Iger is SO much better than Eisner. I will be sad to see Mr Iger leave Disney. :-(

  • I DO wonder how the Board of Directors could have missed 10 years of animated flops (in total) when it was pretty obvious to anyone who watched them or knew what was going on there.  None of the artists were being listened to on any level.  Each of the films had elements to admire, but none had a very sincere core.  And they didn't make money.  How could anyone on the Board of Directors been so IGNORANT of this?

  • Scott  -  Never underestimate peoples' powers of self-delusion.  WDAS had been at the top of the heap so long that it was easy to make excuses for the occasional failure... until they had so many failures that they couldn't make excuses anymore. How many years did it take GM to realize that nobody was buying GM cars anymore, even though the freeways were full of  Toyotas and Hondas?

  • I really appreciate what Michael Eisner did for the Resorts (DCA aside).

    The "Disney Decade" was fantastic, and the new Resorts he had built have changed the nature of visiting Disney.

    But on everything else...........he was a bit of a disaster.

  • Bob Iger is one of the most impressive CEOs in history.  The Pixar acquisition, mending fences with the Disney family, and even the acquisition of Marvel.   Few have accomplished what he has, incluidng picking up the pieces of a dillusional, self-centered, ego maniac like Eisner.  Go Bob!

  • A lot of that information is also in James Stewart's book, Disney War. I read them back-to-back and would suggest that anyone else do the same. The two books compliment each other very well.

  • I knew about what Eisner tried to do in regards to the Pixar merger before Jim Hill reported. What a crook. I would like to read more about how Iger refutued Eisner's argument point by point!

  • 4 words that confirm this entire story:

    Brother Bear

    Chicken Little

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