Slashdot Mirror
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.
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.
memomo: free web based language trainer DE-EN-ES-FR-IT
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.
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!"
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.
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.
52 Weeks, 52 Religions with John Hummel
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
Editor, A1-AAA AmeriCaptions
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.