A confused hush fell over San Jose’s California theater yesterday after Disney’s new CEO said:
“It’s great to be able to announce an extension of (our) relationship with Apple …”
This room full of reporters — who were there to attend what they thought would be just the unveiling of the latest version of the iPod — quickly began murmuring among themselves. “Did he say what I think he just said?”
Sensing some confusion, Bob Iger quickly clarified his remarks. “Not with Pixar. With Apple …” Then — almost as a comic aside — Disney’s new Big Cheese said “Maybe another time, we’ll see …”
And then — after Iger dropped this anvil-sized hint — word flew around the entertainment industry that the Walt Disney Company was getting very close to closing a new deal with Pixar Animation Studios.
Of course, those who have been paying close attention to what’s actually been going on at the Mouse House have known for weeks now that something big is in the works. Take — for example — that special after-hours meeting that was held on the Disney lot back on Sunday, October 2nd. Literally hours after Bob had officially taken over as the head of the Mouse House. When town car after town car rolled up to the Team Disney Burbank building under cover of darkness. So that the rank-and-file employees wouldn’t know that company execs were burning the midnight oil in an effort to come to some sort of agreement over the Pixar deal
The way I hear it, the executive branch of the Walt Disney Company is split right down the middle when it comes to the Pixar negotiation. There are those who reportedly want to wait until after “Chicken Little” debuts before Disney puts its final offer on the table. While still others insist that it is absolutely crucial that the company make this deal before this CG film actually hits theaters.
According to those who are on the wait-and-see camp, the Walt Disney Company will be a much better
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negotiating position if “Chicken Little” turns out to be a success. If this Mark Dindal film quickly becomes a blockbuster (I.E. Earning $100 million and above during its domestic release), then Mouse House officials can turn to their counterparts at Pixar and say: “See? We can make successful CG pictures too.”
This would (in theory) make it that much easier for the Mouse’s negotiators to hammer out a deal with the Emeryville-based animation studio where the terms might not be so onerous for Disney. After all, a Pixar Animation Studio that views Walt Disney Feature Animation as a real competitor, perhaps even a serious threat, might then be willing to bend on a few issues. Maybe even put a little money back on the table.
Of course, the sign-the-deal-NOW people have an entirely different view of this equation. They’re worried that — if “Chicken Little” rolled into theaters on November 4th and winds up under-performing … Well, that then puts Pixar in an almost impossibly strong position. In effect making it possible for Steve Jobs to ask anything of Iger. Up to and including surrendering sequel rights to earlier Disney/Pixar co-productions. Maybe even asking that the ownership of certain titles (EX: “The Incredibles“) be turned back over to Pixar.
Now picture poor Bob Iger right in the middle of all this. Trying to decide what the best possible thing to do is in this particular situation. Knowing that — if he jumps the gun and makes this deal before “Chicken Little” opens — Bob could wind up paying far too much for the privilege of doing business with Pixar. Which the business community may then take him to task for, in much the same way that Michael Eisner was endlessly harassed for paying a billion too much for the Fox Family Channel when Disney acquired that cable network back in July of 2001.
If — on the other hand — Iger waits ’til this Randy Fullmer production opens up and “Chicken Little” lays an egg … Well, then the financial press might then attack him for that. Waiting far too long to make this deal. Which would then effectively force Mickey to give away the farm in order to stay in business with Pixar.
Then — of course — there’s the question of what sort of deal Pixar will actually be willing to make with Disney. I’m told that there are at least two variations of an agreement floating back and forth between the two studios. One calls for a three picture deal (Similar to the one that Pixar originally cut back with Disney back in May of 1991). Which would consist of the following titles: “Toy Story III,” “Monsters, Inc. II” and “Rataouille” (I.E. Pixar’s Summer 2007 release which has been in active development for over two years now).
While still another version of this proposed agreement would mirror the revised co-production/distribution deal that Eisner & Jobs worked out in February 1997. It would be a five picture deal featuring sequels to “Toy Story,” “Monsters, Inc.” & “Finding Nemo,” plus “Rataouille” and a picture to be named later.
Please note that — in both the three picture version as well as the five picture version of this proposed deal — that sequels do count toward the number of films that Pixar would owe Disney. More to the point, that “Toy Story III,” “Monsters, Inc. II” and “Finding Nemo II” would then be produced by Pixar. NOT by Disney’s new “sequel lab,” Circle 7 Animation.
The big question now is … Which deal does Steve Jobs want to make? Will he favor the three picture version or the five picture version? Earlier this year, the Motley Fool reported that Pixar Animation Studios wants to be producing two films a year by 2009. So — were Steve to agree to the three picture deal — he could then release “Rataouille” in 2007, “Toy Story III” in 2008, “Monsters, Inc. II” in 2009. And then — in 2010 — after building up an even larger war chest, Pixar could then strike out on its own. Releasing two new titles every year.
But then there are those who are suggesting that Steve may opt for the five picture deal. Preferring to spend the next six years tucked away in Disney’s safe harbor as the whole digital-projection-and-distribution question as well as the rapidly-collapsing-release-window issue all sort themselves out.
That way, by the time Pixar’s next deal with Disney actually runs out, Jobs may wind up dealing with an entirely different film industry. Where there are no such things as physical film prints anymore. Where movies are beamed directly by satellite to your local multiplex, then projected digitally up onto the screen. Where the theatrical release of a film, its pay-per-view debut as well as the in-store sale of its DVD would all occur on the very same day.
I know, I know. That last bit may sound kind of unlikely. But not to someone like Disney’s new CEO. Who actually angered theater owners earlier this summer when he said:
“”I think windows in general need to change. They need to compress. I don’t think that it’s out of question that a DVD can be released in effect in the same window as a theatrical release … ”
Given that this is one issue that Steve Jobs and Bob Iger actually seem to agree on … Well, “Maybe another time …” will actually get here a whole lot sooner than you think.
But what do you folks think? Should Disney wait ’til “Chicken Little” comes out before it make its final offer to Pixar? Or should the Mouse move now?
Your thoughts?