Steve Jobs to Sell Pixar and Join Disney Board?

mikeisme77 writes "According to the Washington Post, Pixar Studios is in discussions with Disney for a possible merger/buy out. Disney would own Pixar in exchange for $6.7 billion worth of stock in the Walt Disney Corp. Speculation has also arisen that such a deal may lead to Steve Jobs earning a position on Disney's board of directors. He would likely become Disney's largest individual share holder. Further speculation sees Jobs using his new found power to leverage Disney into releasing more content to the iTunes media service." Details also available from the Time Magazine site. We touched on this issue near the end of last year as well.

Comments

Another reverse takeover?

[chriss]

It's funny that most speculation is about how well Apples digital media distribution would fit to Disneys movie and merchandising franchise, when Disney is considering Pixar, not Apple. And there are a number of interesting things Disney could gain from Pixar besides the movie franchise. People.

When Apple went looking for a new operating system to replace the classic Mac OS, they ended up (after looking inhouse and at BeOS and even WinNT) with NeXTSTEP from Steve Jobs new company NeXT. They did not license NeXTSTEP (or the OpenStep Specification NeXT developed in corporation with Sun), instead they bought NeXT for $US 400 million. Steve Jobs came onboard as a consultant, but shortly after that replaced Gibert Amelio as CEO of Apple. He was not the only one, NeXTs Avi Tevanian became President of Software technology (I think), in charge of Apples OS development, other NeXT employees (Jon Rubinstein, Bud Tribble etc) got top positions at Apple. A lot of people considered this Apple paying money NeXT to take over Apple.

Disney is worth about 60 billion. If they buy Pixar for seven, the new Disney + Pixar should be worth about 67 billion (mind my non-existent knowledge about company evaluation), about 5% of which would belong to Steve Jobs (he owns 50% of Pixar). Apple was worth more than 20 times the $400 million they payed for NeXT when they bought it, they had seven billion in cash reserve alone, and they payed in cash, not stocks.

So maybe we will see another reverse takeover. I do not believe that Steve Jobs would want to become CEO (but will most likely join the board), but Edwin Catmull could become head of the animation and feature film branch or John Lasseter could become Disneys "creative director". He already worked there before joining Pixar (than Lucasfilm Computer Graphics Group). The quality of Disneys productions could only go up.

Re:Another reverse takeover?

[AKAImBatman]

The first thing I thought of when I saw the headline: Will Steve Jobs soon be the new CEO of Disney?

I wouldn't put it past him, though I'm sure that many would think it a strange idea. He's already shown that he can be very charismatic, and that he knows how to run a company. IHMO, having Jobs at the helm of Disney might actually be an improvement. Disney's been dying for years due primarily to poor leadership. Unfortunately, they're just to big to completely die off. So getting Jobs to inject some of his own magic back into the Kingdom might just be what the doctor ordered. :-)

Re:Another reverse takeover?

[Edmund Blackadder]

If Disney is worth 60 bill and buys pixar for 7 billion then they will still be worth 60 billion. They pay 7 billion and get a company that is presumably worth 7 billion so their total market valuation does not change.

And no Steve will not take over Disney. The corporate culture there is so tight, it is very unlikely they will let any outsider in. Disney shareholders have been trying to get rid of Eisner unsuccesfully for ages.

Re:Another reverse takeover?

[PortHaven]

I believe the set-up is as follows:

- Disney gains Pixar (the vast majority of hit (bread & butter) Disney films in the past decade have been from Pixar).

- Steve Jobs loses control of Pixar but gains a seat on the board + becomes #1 share-holder.

- Steve negotiates sweet deal with Disney (and don't ABC or something), for said movies to be made available on Apple iPod. (And you know that Yuppieville will start filling their 8 yr old's iPods with with Pixar films before every road trip). Lots of $$$ for Apple and even more cash for Disney.

- Disney's stocks increase, meanwhile Steve jobs acquires additional stock 5% to approx. 6-8%. The increased success of Disney stock builds near unanimous support for Steve Jobs to be CEO of Disney. (If you know anything about Steve Jobs his IDOL is Walt Disney! So this has likely been his life dream/goal since being young.

- Steve Jobs as CEO re-vitalizes Disney. Disney theme parks return to being places full of wonder, awe, amazing new technologies on Display for the common people to see. (And yes, all the displays have little rainbow colored Apples on them.)

In truth, I think Disney greatly needs an eccentric visionary like Steve Jobs to return it back to "dreams". To Steve Jobs, Disney is not just about $$$. It's about dreams. And for the past few decades Disney's dream has solely been $$$. The end result, no vision, no dreams. Nothing to stir up the human sole. Less interest and love for Disney. Equating to less $$$. Steve Jobs has the philosophy the $$$ will come as a by-product of the vision. And I believe he's right. In truth, I think there is an opportunity to see Disney re-vitalized in a kinda second birth. Steve Jobs loves show-casing. Loves grand-standing (in the style of a circus leader). A revitalized Disney allows him to do such. And would bring back a central character for the first time since the passing of Walt Disney himself.

I actually hope this all goes thru....

- Saj

Re:Another reverse takeover?

[Anonymous Coward]

There's definitely extrabiblical references to Jesus. You might as well say Julius Caesar likely didn't exist.

Would be a great move.

[Mahkno]

Open up Disney's huge catalogue of short animations pieces, sell em for a $1. Nice... When is the last time you saw a short Mickey Mouse cartoon? Exactly.

Re:Would be a great move.

[AKAImBatman]

While I don't like what Disney did with the Mickey Mouse Protection Act, I can understand why they did it. Some property is so valuable that letting its rights lapse could do irreparable harm to its owners. Obviously, the founding fathers had intended for everyone to suck it up and deal with it, but modern history has shown that there can be some real value in controlling old property. (e.g. All those Plug 'N Play TV Games rely on old copyrights to compete in the market.) Yet at the same time, there is huge swaths of literature and entertainment that are being lost daily through overprotective copyright protection.

I'm really starting to think that what we need is a default copyright that's shorter than ever before, but is at the same time renewable. My idea is that the auto-copyright should be granted for 10 years. Should the owner of the property wish to extend that protection to 20 years, he must register his copyright. Once that 20 years is up, the current owner of the copyright must file for an extension every 5 years thereafter. The final cap on the copyright would be the life + 75 years used today.

That would allow for all the property that would otherwise be lost to be reclaimed. e.g. If a company goes out of business, you only have to wait a few years before you can start sharing an archive of their work. But at the same time Mickey Mouse gets the protection he needs to prevent freeloaders from misusing a copyright that is still very much alive. I'm not sure we could ever convince lawmakers, but it would solve a lot of problems.

Re:Would be a great move.

[rjstanford]

If a company goes out of business, you only have to wait a few years before you can start sharing an archive of their work

The only thing here is that someone always owns the copyright - either an individual or a corporate entity, that is. When a company goes out of business its assets (and a (c) is an asset) are divided up amongst its creditors and owners (shareholders). There's no telling who ends up with it, but someone does, and they would have the right to renew.

Personally, I'd like to see the fees double every five years as well with no expiration. That way, if there was a pressing economic reason to deny the public copyright, someone like Disney could keep the Mouse to themselves forever. That economic burden would get pretty large though, to compensate the country as a whole for the cultural denial (well, in theory) that the corporation is extending.

Re:Would be a great move.

[AKAImBatman]

When a company goes out of business its assets (and a (c) is an asset) are divided up amongst its creditors and owners (shareholders). There's no telling who ends up with it, but someone does, and they would have the right to renew.

To clarify, my point was that if the copyrights went into limbo (as they often do), they would actually have a chance to expire. Today the copyrights go into limbo and no one can afford the cost of tracking down the real owner until someone else starts making money off the property. (Even in an indirect fashion.) Then some slimeball finds the original creator, buys the rights, and sues the pants off everyone.

A renewable copyright would force one of two things to happen:

1. The copyright would expire and enter public domain.
2. The current owner would renew the copyright every five years, thus making it clear who the current custodian is for licensing deals.

It's not a perfect system (nothing is), but it's a heck of a lot better than what we have now. How many early computer programs have been lost to rot? :-(

Re:Would be a great move.

[richie2000]

I like to think about extending copyright to 500 years.

Retroactively.

After all of Disney's execs had a massive group-orgasm, one of the brighter ones would crawl out from under the sea of cum and realize the implications, ruining the party. They'd have to find each and every living heir to the guy who wrote Cinderella and negotiate the movie rights for the derivative work. For millions and millions. Per heir.

Add Snow White, The Hunchback and even Buster Keaton's Steamboat Bill to the mix and you'd be looking at an instant bankruptcy.

After that's done, we could revoke copyrights altogether.

But, first you need to read this book: Lawrence Lessig - Free Culture. You'll love it.

This Is Why Mac Hardware Doesn't Matter Anymore

[Anonymous Coward]

The huge growth Apple has enjoyed is all because of the iPod/iTMS/media side of the company.

I would not be surprised if the Mac hardware using Intel chips is nothing more than a way for Apple to ease out of the computer hardware market over the next couple of years. Much better than outright dumping Apple computer hardware which would cause massive problems for the stock.

No matter what silly claims Jobs is making about the new Intel based Macs, he has to know that a luxury x86 OEM is the last thing the computing world is looking to for right now.

So-called "synergy" never works

[OnTheWay]

We'll all lose out if Jobs sells Pixar to Disney. Here's one reason: I heard Albert Brooks talking about his new movie "Looking for Comedy in the Muslim World" on the radio. Sony was his original distributor, but they wanted him to avoid using the word "Muslim" in the title, probably because they didn't want to offend any potential buyers of their cameras, TVs, AV Gear, etc. So he took his film to another distributor, one who didn't have to worry about TV/camera sales etc. So much for "synergy" - just shows the bigger you are, the *less* you can do, 'cause you're always worried about how one subsidiary's actions will affect the biz of all the other subsidiaries. That's what's going to happen to Pixar if Disney englobs it. "Toe the line and cover all of our sizeable asses!"

Not gonna happen.

[DysenteryInTheRanks]

Guess what -- If this was going to happen, no one would be leaking it.

Now, to figure out what is really going on, think about who is incentivized to leak. Disney? Well, considering how incredibly weak this makes them look, and considering how expensive their supposed acquisition of Pixar just got due to this news breaking, I think we can safely rule them out.

On the other hand, Pixar in general and Steve Jobs in particular come off looking pretty great. There are all kinds of inflated numbers being thrown around about how much Disney will pay, which helps Pixar win concessions from other suitors who want to distribute its movies. Also, Jobs is practically crowned new king of Disney in these stories, which helps his public image.

Most importantly, all this chatter brings Pixar even with or above Disney in the public mind in terms of brand quality. If Disney is offering so much, Pixar must be their creative equal or superior, the thinking goes.

Only slightly less important, any big Pixar executives of shareholders (*cough*Jobs*cough*) just saw their stock options get even more valuable.

So by a wide margin, this leak appears to benefit Pixar and hurt Disney.

I wonder if Steve Jobs has the sort of media access and pull to do a leak like this? /sarcasm.

Re:Not gonna happen.

[clifyt]

"suddenly he looks like a threat."

???

Haven't you been paying attention...this is already what happened.

He had some streetcred and two little companies that folks liked -- but no real control over the market from either (i.e., Apple 2.5% market share and Pixar's endentured servitude to Disney) and thought they'd give him a shot just so they can claim they tried and it failed.

And Jobs outperforms everyones expectations on both sides and scaring the living shit out of content providers -- they've already got the momentum and to deny content to them would be suicide at this point. The video store was practically nothing at first and other than the Pixar shorts I had no interest in it -- but again, the momentum was gained where as to not get on board was to look like you were 'old media' -- even if you knew doing so would be your eventual demise.

Jobs has been a real threat to this industry for a few years now and the industry knows it. This isn't reality distortion logic, ask Sony why they wouldn't get on board with Japan or Oz's iTMS for so long (and finally relented to the exact same terms he had offered even the little guys with a dozen albums on their lable).

Personally, if I were working for an opposing company (and I gotta check to see if I am these days...I never pay attention to the parent companies :-) I'd actually be less worried if he were endentured to a giant media company needing stability in a real sort of way (i.e., he could easily sell Pixar for $$$ to someone and it wouldn't hurt the brand, but selling $6B in stock is a sign of weakness and would KILL its value -- if he sells for a stock trade, he's stuck for some years).

I think it depends on access

[Dark Paladin]

If you're Steve Jobs, you have to be thinking "OK, if I own 5% of Disney, what will that get me?"

Better opportunities for Pixar movies and resources? Check.
Better control to keep Disney from making Toy Story 3 horrible? Check.

But more importantly, will this really give him what he really wants at this stage: media control. I think his goal now is to set up iTunes and Apple as the next Sony - make itself the "one stop portal" for all things music/tv/movie, so no matter what you want, you click iTunes and for over that credit card number to get it, then play it on your iPod/computer/Apple TV (or whatever they may call the rumored "Plasma TV's with OS X").

In this way, Apple can truly become the next Sony, including a strong movie/music lineup in its back pocket.

On the other hand, will 5% of Disney really get him there? It's a hard question. It will get him influence, but my bet it that he would want control of the whole pie so he can say "We *will* be putting these movies on iTunes at $9 a pop, and if you don't like it, go form your own animation studio".

It might also buy more problems with Sony, which has its own music/movie center. Right now, Apple is independant enough that it can go to Sony and say "Look, let us sell your music and movies on iTunes - we're not your competitor in the movie space". But if Jobs teams with Apple, how long until Sony decides its better to cut off its own nose rather than allow their entertainment rival to make money off of their products?

He may hold out for a little more, as in "5% of stock plus extra voting powers", and some control over the technology (which would let him walk into the software development area and say "See this stuff? Make it Mac compatible before the next version of 'Disney Horse Adventures' ship.").

I'm betting he won't take it - he's got what he wants on both sides of technology and entertainment, he has control, and it keeps him just independant enough where he can work with either side.

Of course, that's just my opinion - I could be wrong.

On Balance, Not a Nice Idea

[ewhac]

The idea of Steve Jobs as the biggest single shareholder on Disney's board is certainly entertaining to think about but, on the whole, I think Pixar is better off remaining an independent animation studio (and, to a lesser extent, graphics research company).

Among people in the entertainment industry, Disney is not well thought of. They have a reputation of being the most ruthless and shameless exploiters of talent. They are one of the loudest and most shrill voices in support of pervasive media copy protection (DRM), and have been instrumental in ram-rodding regressive copyright statutes through Congress. Frankly, I can't see Jobs doing much to change that. (It's also not clear that's something he would want to change.)

Schwab

Taking a Disney board seat is unwise

[__aadkms7016]

If Pixar is sold to Disney, Steve should consider closing the door on that chapter of his life and moving on. The history of maverick outsiders taking a seat on the board of companies like Disney is that the maverick gets shunned until he throws up his hands and leaves. Yes, having such a big investment in Disney with no board seat is a dangerous thing for him ... but maybe the best way to solve that problem is for him to diversify out of his Disney holdings as quickly as legally permitted.

same way "NeXT bought Apple"

[peter303]

In 1996 Apple ostensibly acquired NeXT, but in reality it was the reverse. Jobs became a large shareholder again (he had sold all but one share after he was fired from Apple). The Jobs gang took back control from Apple.

Ten years later Jobs could effectively control Disney, if he thought it was worth his time.

Wait a minute...

[Cutting_Crew]

Wasnt pixar trying to get out from under Disney after "Cars" so they could continue to make their own animations and keep all the profit? I guess i am just confused about why Pixar would want to all of a sudden sell out and change their company strategy when they could stay status quo and not selling to the likes of Disney. Why such a turnaround ? could someone please explain this to me from both a business model and common sense strategy(if there is one)? i just dont get it.

Re:Jobs never liked PIXAR anyways...

[hondo77]

He knows they dont like him there, so they're just a cash cow for him.

Who modded this as interesting? This completely ignores the fact that Pixar hasn't always been a cash cow. In fact, Pixar was quite a cash sinkhole until their deals with Disney. If they hated Jobs and he was in it for the money, he would have dumped them a long time ago. Steve's not welcome at Pixar? He doesn't have the same kind of relationship with Pixar that he does with Apple but to say he's not welcome is just wrong.