Tannerman's take on Pixar/Disney

[Tannerman]

Lately, many folks have been asking for my opinion on Disney's recent news that they were purchasing Pixar Animation Studios for $7.4 billion. All the buzz took place when Amy and I were in Florida, ironically at Walt Disney World, so I sort of missed out on the action. But since others seem to think I have an opinion on the topic given my unique passion for Disney, I guess I'll just babble a little.

Pixar + Disney

When I first heard the news, I felt that it was a bad idea. Instant thought was "hey, here's another company culture that Disney is going to mess up!" Pixar as we all knew it would be dead. But before thinking about this deal too much, I think you need to step back and look at the bigger movement of events happening at Disney in order to see things in context.

Former Disney CEO Michael Eisner

Most folks know that much of the griping from fans, stockholders, and others who follow Disney was tied to one person: Michael Eisner. Sure, he saved Disney back in 1984 with his associate Frank Wells, but after Wells passed away in 1994, Eisner kinda went all crazy at Disney. He had no one to counterbalance his ideas and decisions, and most will agree that Disney from 1994 onward went from good to bad. This is what prompted the whole SaveDisney campaign in 2003 by Walt Disney's nephew, Roy E. Disney. The overall result of that campaign was that Eisner left Disney earlier than he had planned, stepping down in October 2005.

Current Disney CEO Robert Iger

The big wildcard in the Disney soap opera was who was replacing Eisner. It ended up being Eisner's #2 guy, Robert Iger, an executive who came over to Disney after the company bought ABC in 1996. Iger's background was television, but more as a manager, not as a creative guy. This left a lot of people scratching their heads, because for the most part Iger had no personality, wasn't exactly a creative genius, and Eisner never really talked highly of him over the years. Thus it was expected that Disney would continue more of the same... lame animation output, lake of innovation, loss of talent, poor storytelling, cost-cutting, etc.

ABC's "Lost" on the video iPod

Surprisingly, when Iger took over Disney last October, he started putting his fingerprint on the company right away, and delightfully, it was in an anti-Eisner model. First, he disbanded the Strategic Planning unit of Disney, made up of a bunch of pencil necks who did nothing more than create accounting spreadsheets and PowerPoint presentations that crippled the company's risk taking overall (Getting rid of this area was a good thing).

Then he let go of the top management at the Muppets Holding Company, the subsidiary of Disney that watched over the Muppets. Everyone in this division was hand-picked by Eisner (The jury is still out on what to make of this decision). Apparently, Iger had different ideas in mind regarding how to relaunch the Muppets franchise to today's audiences. Next he boldly proclaimed that he was going to push Disney forward by advancing technology and innovative ways to share their vast content (stuff that Eisner was very slow in doing... anyone remember the disaster that was the GO Network?). The decision of ABC to be the first network to put TV shows on Apple's iPod was the bold start to that trend. And it opened the door to many more things (This was also a good thing).

Pixar/Apple CEO Steve Jobs

It was well known that Disney's relationship with Pixar was not good. Mainly, it was a clash of egos between Michael Eisner and Pixar (and Apple) CEO Steve Jobs. Jobs refused to talk with Disney after a while and was determined to make Pixar independent after the studio's deal with Disney ended following the release of this summer's Cars. However, with Iger now at the helm, Pixar and Disney started talking again. At that point, Pixar wanted a better financial deal from Disney, based on their own success. They also wanted the rights to some of their films back. Disney didn't want to give up those rights, and as a public company, taking a weaker financial deal with Pixar would not be in their best interest.

John Lasseter: Chief Creative Officer of Pixar & Disney animation
& Principal Creative Advisor at Walt Disney Imagineering

Frankly, I don't think anyone anticipated Disney making an outright offer to buy Pixar. I know I sure didn't. The two cultures are very different. Pixar is innovative, positive, and promotes creativity and good storytelling. Disney's was heavy-handed, decision-by-committee, and frankly, full of crap.

However, here's where I think it's important to look at who is currently running Disney now. I still haven't made up my mind about CEO Robert Iger, but given his decision making since he took charge, he's a different guy than Eisner. Whereas Eisner saw himself as a creative CEO and micromanaged quite a bit at Disney, Iger is more of a general manager. However, knowing that limitation, it seems his strategy is to put good people in place to run the different aspects of Disney, with him coordinating all those efforts. Enter the Pixar purchase.

Ed Catmull: President of Pixar & Disney animation

In buying Pixar, Disney pretty much admitted that they didn't have a clue on how to be creative or tell stories anymore. Pixar was telling Disney-type stories better than Disney. So Iger went out and bought the one guy who many see as the "new Walt Disney", Pixar's chief creative guy John Lasseter. Lasseter, combined with Pixar's president Ed Catmull, pretty much formed the modern day "Walt & Roy" combination.

Walt & Roy O. Disney

Lasseter was the highly creative guy, Catmull (who's background was in computer science and business) counterbalanced that. Now they both come into Disney, reporting to Robert Iger directly (no middle management here) to take over animation AND contribute to Walt Disney Imagineering (responsible for stuff like theme park attractions). In short, Lasseter has the modern day Walt role at Disney now. To say that those in the company are pretty excited is an understatement. And let's not forget that Lasseter worked at Disneyland as a kid (he was a Jungle Cruise skipper among other things) and also animated for Disney for a while in the late 70s/early 80s (having worked on 1983's Mickey's Christmas Carol among other projects). He's a Disney fan.

The move also propelled Pixar CEO Jobs into a position on the Disney board (which had come under a lot of fire during the SaveDisney era for being packed with Eisner's buddies). He also becomes the largest individual stockholder in the Walt Disney Company (surpassing the current largest holder, Eisner). And let's think what it means for Disney to be loosely aligned with Apple... the technological future is pretty amazing. Oh, and if Iger screws up, don't think for a second that Jobs won't be a candidate to replace him.

So while I'm still skeptical regarding how Pixar will fit within the Disney structure, I have a lot of hope here, as it seems like the mindset at Disney, pushed by the new CEO, is to get back to their roots creatively while taking advantage of the assets that the large conglomerate now has available. Obviously, Pixar and Jobs bought into this. Roy Disney has bought into this. Stockholders are buying into this. It's fun to watch.

1927's Oswald the Lucky Rabbit

And as if you needed another example of how un-Eisner Robert Iger is, he throws a bone to the Disney family by reacquiring the rights to Walt's first character, Oswald the Lucky Rabbit. While I'm not really sure what the company can do with a 70+ year old character, it goes a long way to extending an olive branch to the "Walt side" of the company.

Walt's daughter, Diane Disney Miller

For those who don't know, since the early 80s and the arrival of Eisner, there has been a strong rift between the "Walt side" and the "Roy side" of the family, mainly because the CEO before Eisner was a member of the Walt side of the family (Ron Miller). Things have always been a little tense there.

Walt's nephew, Roy E. Disney

But with the stamp of approval by Walt's nephew Roy on the Pixar deal (Roy: "Animation has always been the heart and soul of the Walt Disney Company and it is wonderful to see Bob Iger and the company embrace that heritage by bringing the outstanding animation talent of the Pixar team back into the fold") and the blessings of Walt's daughter Diane Disney Miller (Diane: "When Bob was named CEO, he told me he wanted to bring Oswald back to Disney, and I appreciate that he is a man of his word. Having Oswald around again is going to be a lot of fun."), it appears that Bob Iger is making all the right moves to right the wrongs of Eisner.

I know that I'm quite encouraged. A lot of this rides on what Lasseter is allowed to do and how open Iger is to allowing for creativity and change. Let's see what happens in the long run! And that's what I think of the Pixar/Disney deal!

[CuriousGeorge]

That was a nice overview of all the events leading up to now, Steve! I'll have to point people here to better understand things. Thanks!

I agree, Iger has proven himself rather unpredictable, hasn't he? And for Disney, I think that's just what we need. I'm happy.

[jasonfletcher]

Could you be considered a professional Disney analyst or what?