Disney Has Its Cake And Eats Nemo, Too

What do you do if you're one of the largest media companies in the world, and your former CEO alienated your cashcow partner so much so that they wanted nothing to do with you any more? You get out the checkbook and buy them.

I know this is old news, but I felt the need to comment on it. What I'm referring to is Disney's purchase of former animation partner Pixar.

This whole thing goes back 10 years, when Disney essentially bailed Pixar out of financial ruin by agreeing to a distribution deal for Pixar-produced movies. Even back then, when no one knew who Pixar was, this was a shitty deal. Production costs and profits would be split evenly between Pixar and Disney, with Disney additionally receiving a distribution fee, as well as the rights to the finished films. (That last part is a clever little bit, because it means that Disney gets all profits from any merchandising, since they own the characters. Don't let anyone tell you Michael Eisner wasn't one smart motherfucker.) So, in simpler terms, Pixar busts their ass to make a movie, Disney hands them a check and takes the movie. "Here's your cut, minus costs. Good work, guys. When's the next one gonna be done?"

Fast forward 10 years, and Pixar has become the premiere animation studio in the world. Its movies have made so much money for Disney, that Disney essentially shuts down their own fabled animation studio. What Disney didn't count on was that maybe Pixar wasn't happy. And they weren't.

When their deal with Disney came open for negotiation, they wanted more control. They wanted to self-finance, wanted all profits, and to retain all copyrights. Disney would get only their distribution fee. Disney was obviously not happy with this deal. Here's this little upstart that they put on the map demanding everything. Of course, Disney was not the company it once was and their CEO, Michael Eisner, was a shell of his former powerful self. So, the whole thing ended with Pixar pretty much going out on their own, and Eisner leaving Disney after a number of other foulups.

So, that's where it stood, until new CEO Robert Iger did something that Eisner should have done 10 years ago: He wrote a $7 billion check, and bought Pixar outright. It's a genius deal for both companies: Steve Jobs, Pixar's CEO, gets a seat on Disney's board, as well as becoming their largest single shareholder; Pixar gets approval of all Disney and Pixar films; and Disney gets all the money. Sure, Pixar has essentially been forced into slavery, and just lost control of their company, but now they have access to all that big Disney money. Good times for everybody.

Congrats to both Disney and Pixar for ironing out their differences, and deciding to continue one of the most successful relationships in history. Now: get back to work on Toy Story 3.