The Web has been awash lately with lots of rumors about a new Disney / Pixar deal. One of the more prominent stories involves Steve Jobs selling upwards of a third of his personal holdings in that animation studio to the Walt Disney Company. And — in return for agreeing to do this — the Mouse would then supposedly reward Steve by giving him a seat on Disney’s board of directors. Or even make Mr. Jobs the next chairman of the Disney Company.
Which I know would be just the sort of deal that Wall Street would love to see happen. But — for those of us who have actually been paying attention to what’s been going at Pixar these past 20 years — I have to tell you that giving Steve Jobs a significant role in deciding what Disney’s future might be could prove to be disastrous for that corporation.
Why for? Let me blunt here. Pixar Animation Studios became an enormous success in spite of Steve Jobs did. Not because of anything that Mr. Jobs did.
Don’t get me wrong. I’m not saying that Steve Jobs isn’t a brilliant businessman. After all, it was Jobs (And only Steve Jobs) who realized — ‘way back in 1986 — what a gem Lucasfilm’s computer animation unit really was.
By that I mean: George Lucas (who — thanks to his divorce from his wife, Marcia, and Calfornia’s community property laws — was caught in a real cash crunch at the time) desperately needed to sell off Lucasfilm’s CG unit. You know? Those folks who created the ground-breaking Genesis effect sequence for “Star Trek II: The Wrath of Khan“?
Anyway, George was hoping to get $30 million for that particular Lucasfilm unit. And EDS & Phillips Electronics came close to actually meeting that price, only to suddenly back out of the deal.
Then the Walt Disney Company came sniffing around. Stan Kinsey, the then-head of new technology at Disney
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Studios, realized that — given that Lucas was now getting desperate for money — that the Mouse could actually scoop Lucasfilm’s entire CG unit for just $15 million. But it was Jeffrey Katzenberg, the then-head of Walt Disney Studios, who reportedly put the kibosh on that deal. Lightly dismissing Kinsey’s idea, insisting that ” … CG isn’t what Disney does.”
Meantime, Steve was just standing by. Carefully watching as the price for Lucasfilm’s CG unit got lower and lower. Until Jobs was finally able to swoop in and snag the entire computer animation production group for $10 million.
But why exactly did Jobs buy Lucasfilm’s CG unit? Not because he wanted to make cartoons. But — rather — because Steve wanted to sell software & machines to other people who wanted to make computer animation.
Seriously. Jobs first gave his new company a name (It was initially called Pixer. As in to pix, to make motion pictures). He then beefed up the unit’s staff, augmenting Lucasfilm’s 45 staffers with 75 sales & support personnel. Who staffed a half dozen offices around the country that were selling Pixar Image Computers.
Meantime, deep inside Pixar, there were only 5 employees who were actually working on computer animation. These folks were the ones who actually churned out “The Adventures of Andre & Wally B.,” “Luxo, Jr.,” “Red’s Dream” and “Tin Toy.”
As for Mr. Jobs … During this period, he was (at best) an absentee landlord for Pixar. By that I mean: During 1986 and 1992, Steve visited Pixar’s offices no more than five times. And — during those rare times when he did talk about Pixar — Jobs actually complained about the company’s animation unit. Which he reportedly saw as an unnecessary drain on Pixar’s financial resources.
1989 was a particularly difficult year for the company. In a desperate attempt to keep Pixar afloat, Steve cut its hardware division, shut down all of the sales offices and cut Pixar’s staff back from 120 to 60. As for the company’s animation unit … The only reason that Jobs didn’t get rid of those people is because “Tin Toy” had just won the Academy Award for best animated short.
During this period, Walt Disney Studios was virtually Pixar’s only customer. The Mouse bought dozens of the Pixar Image Computers to run Disney Feature Animation’s new CAPS computer coloring system. But — as they’re doing this — officials at Disney Studios were constantly trying to lure John Lasseter back into the fold. To get him to come back to the Mouse Factory and direct films for Disney.
But because Lasseter believed so strongly in the promise of Pixar, he kept saying “No” to Disney. Which is why studio execs eventually gave in. Rather than continuing to pursue John, Disney then began to negotiate with Pixar. With the idea of having the computer animation company produce a half hour TV show and/or a full length feature for the studio.
Which you’d think would have been the time when Jobs would finally relax. Realize that Pixar Animation Studios was actually going to become a success. But no. Worried about never being able to recover the $60 million that he’d already spent on Pixar (I.E. $10 million to George Lucas for Lucasfilm’s CG unit, plus $50 million that was spent on Pixar’s salaries and film-making), Steve kept cutting the company’s staff level. Shaving its head count back from 60 to 50 people.
And even when “Toy Story” was actually in production, Jobs was still looking to unload Pixar. Meeting with officials at Hallmark and Microsoft. Trying to get someone — anyone — to agree to cover the $60 million that he’d poured into the company. But since no one would meet Steve’s price, he stubbornly held onto Pixar.
Which turned out to be a pretty lucky break for Steve Jobs. For it wasn’t actually ’til January 1995, when Jobs attended a “Pocahontas in the Park” promotional event in NYC and saw the mayor of New York as well as the press corps go nuts when they saw a clip from “Toy Story”, that Steve finally realized what he had with Pixar.
And once he saw that this film really was going to be a success, Jobs leapt into Pixar with both feet. Pushing aside Ed Catmull, the animation studio’s then-president and claiming his job title. Then going on to appoint himself Pixar’s CEO as well.
From that point forward, Jobs didn’t really make a mis-step. (Okay. So he supposedly tried to get John Lasseter to get rid of the songs that Randy Newman had written for “Toy Story.” Reportedly because Steve felt that they really slowed the film down.) He was the one who masterminded Pixar going public just one week after “Toy Story” opened in theaters nationwide.
It was that one move that allowed Pixar to go from being a company that was $47 million in the red to a studios that was $76 million in the black. And only Jobs had the guts to call Disney execs back to the negotiating table in 1996 after “Toy Story” had become such a huge success and insist on a new deal. One that would give Pixar a much bigger cut of its films’ revenues.
So — yes — if you want to talk about that Steve Jobs, the guy who actually got Disney to back down and agree to revise Pixar’s original three picture deal to its current co-production agreement … I can understand why that man might be Wall Street’s darling.
But me? I can’t help but remember the other Steve Jobs. The man who saw Pixar not as an animation studio, but as a software & hardware company. The guy who was constantly looking for a way to shut down John Lasseter’s animation unit, who kept trying to find someone who’d pay him $60 million and finally take Pixar off his hands.
Is that really the sort of guy you want on Disney’s board of directors? Or even as Chairman of the Walt Disney Company?
Your thoughts?