Walt Disney announces $7.4 billion purchase of Pixar

Walt Disney announces $7.4 billion purchase of Pixar

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By the end of 2005, Pixar had become a giant in the world of movie animation, and on January 24, 2006, the company that brought the world the blockbuster hits Toy Story (1995), A Bug’s Life (1998), Monsters, Inc. (2001), Finding Nemo (2003) and The Incredibles (2004) was sold to the Walt Disney Company, their longtime distributor, for a staggering $7.4 billion.

Since 1993, when Disney and Pixar signed their first three-picture deal, Pixar’s films had won 19 Academy Awards and grossed more than $3 billion at the box office. Their pioneering techniques in digital animation–Toy Story was the first animated film to be completely computer-generated–had set a new standard, blazing a trail that other companies had struggled to follow. In the same time period, Disney’s own animation unit had released more traditional animated films that were either modest successes, such as Lilo & Stich (2002), or flops, such as Home on the Range (2004). Its first completely computer-generated effort, Chicken Little (2005) was profitable, but had nowhere near the success of The Incredibles, which grossed $200 million domestically and won the Academy Award for Best Animated Feature Film.

Despite the success of the Pixar-Disney collaboration, Pixar CEO (and Apple co-founder) Steve Jobs had reportedly clashed with Disney’s longtime chairman and CEO, Michael Eisner, and in January 2004, Jobs announced that Pixar would begin talks with other distributors. Roy Disney, the nephew of Walt Disney subsequently led a shareholder revolt, and in the spring of 2004 Eisner received a 45 percent no-confidence vote from shareholders and was stripped of his chairmanship.

Eisner announced he would step down as CEO in September 2005, one year before his contract was set to expire. His replacement was the company’s president, Robert A. Iger. One of Iger’s first moves was to work on repairing the relationship with Pixar, whose latest contract with Disney was set to expire in June 2006, with the delivery of its next film, Cars.

Under the deal announced that January, and formally completed on May 5, Jobs would serve as a director on Disney’s board, while John Lasseter, a former Disney animator and the leading creative force behind Pixar’s films, would become chief operating officer of the animation studios, as well as the principle creative adviser at Walt Disney Imagineering, which designs and builds the company’s theme parks. In a conscious effort by Pixar to maintain its unique creative process and non-traditional corporate culture, the two companies remained physically separate, with Pixar maintaining its headquarters in Emeryville, California (Disney is based in Burbank).

Disney, Pixar agree to $7.4 billion deal

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LOS ANGELES (MarketWatch) - The on-again, off-again relationship between entertainment giant Walt Disney Co. and computer animation specialist Pixar is officially on again - in a big way.

Disney on Tuesday agreed to acquire Steve Jobs' Pixar for $6.3 billion in stock plus $1.1 billion of the company's cash. The deal also gives Pixar and Jobs unprecedented access into what is perhaps the world's most renowned entertainment brand.

Jobs, who doubles as chief executive of Apple Computer Inc., will take a seat on Disney's board. He also becomes Disney's largest individual shareholder. Further, several Pixar executives will oversee Disney's animation unit along with their own operations.

The deal concludes months of negotiations in which Pixar and Disney first resumed discussions of renewing their distribution agreement in mid 2005. That evolved into takeover talks with Disney Chief Executive Robert Iger after Jobs concluded such a deal was better than another distribution arrangement with a different studio.

"Disney is the only company with animation in their DNA," Jobs said on a conference call with analysts. "They're also the only company that has Bob Iger, who we've grown to like a lot, and trust."

Pixar PIXR shareholders will get 2.3 shares of Disney DIS, +0.24% stock for every Pixar share they own. Based on Tuesday's closing prices, that amounts to $59.77 a share.

The deal combines two companies that have been partners for more than a decade and offers Disney a leg up in animated films, where it has struggled in recent years.

Disney has distributed all of Pixar's six films, including "Toy Story," "Finding Nemo" and "The Incredibles." Every Pixar film has been a blockbuster, scoring at least $350 million in worldwide receipts.

Pixar rises in after hours

In after-hours trading, Pixar shares climbed 2.5% to $59, while Disney was largely unchanged at $25.96.

Many company watchers are waiting to see how the deal affects Apple. AAPL, -0.22% The computer and personal recording device maker recently signed a deal with Disney to put reruns of Disney television shows on its iPods.

Pixar will be combined with Disney's animation department in a new operation headed by Pixar's current president, Ed Catmull, who will report to Iger and studio chief Dick Cook.

John Lasseter has been tapped to become chief creative officer of the animation studios as well as principal creative adviser at Walt Disney Imagineering.

Pixar will retain its brand and continue to work out of the company's Emeryville, Calif. operation in northern California.

Iger stressed several times in a call with analysts his desire to preserve Pixar's culture.

"It is such an incredibly important ingredient to the making of these movies," Iger said. "Not only is the environment right to work in, it's an incredible magnet for talent."

Iger added: "I am really deeply committed to seeing that Pixar exists in the form that has existed."

The deal drew applause from one key corner. Roy Disney, the nephew of the company's namesake and who engineered a shareholder revolt against former CEO Michael Eisner, praised Iger for his "embrace" of the company's animation roots.

"This clearly solidifies the Walt Disney Company's position as the dominant leader in motion picture animation and we applaud and support Bob Iger's vision," Roy Disney said in a written statement. Roy Disney and partner Stanley Gold were instrumental in ousting Eisner as Disney's chairman and his eventual retirement last year.

Two years ago, Pixar sought to sever ties with Disney, with Eisner getting the blame for souring the relationship. Disney-Pixar talks resumed after Eisner left Disney last year, giving way to Iger, who immediately sought to improve the company's relationship with Pixar and to continue their distribution arrangement.

'Obvious' acquirer

Industry watchers called the deal a good fit for both companies. Robbert Van Batenburg, head of global research for Louis Capital Markets, said the deal gave Jobs the opportunity to unload his more than $3 billion in Pixar stock.

"Who else could buy?" Van Batenburg said. "Disney was the most obvious candidate."

Josh Grode, a merger expert with Liner, Yankelevitz, Sunshire and Regenstreif's entertainment business in Los Angeles, said the companies should work to preserve and expand the Pixar brand.

"It gives Pixar that much more a worldwide presence," Grode said. "Hopefully, it won't take away any of Pixar's entrepreneurial spirit."

But at least one analyst is concerned that computer animation may be fading. Spencer Wang of J.P. Morgan said in a note to clients that it may have reached a peak with the 2004 release of DreamWorks Animation's DWA "Shrek 2," the top-grossing animated film of all time with $881 million in worldwide results.

"It appears that CG animation hit its peak with "Shrek 2," which appears to have maxed out at the same attendance peak that [Disney's] "The Lion King" did in 1994, Wang said.

Profitable partnership

Disney has distributed Pixar's films over the past 11 years. Other films in Pixar's library are "A Bug's Life," "Toy Story 2" and "Monsters Inc." The two companies formed their profitable partnership in 1991.

One more film remains to be released under the current Disney-Pixar arrangement: "Cars," due in June.

Jobs said Pixar's future release slate would be revealed in coming days, and possible sequels would be decided on jointly by Pixar and Disney executives.

Sequels had been a point of contention under Eisner, as Disney had threatened to produce them regardless of whether Pixar stuck with the company or not.

Jobs said this deal allows the same creative executives to have a say in the making of any sequels.

The Disney acquisition is subject to regulatory conditions and is expected to be approved later this year.

Jobs, who owns 50.6% of Pixar's stock, has agreed to vote 40% of the outstanding shares in favor of the transaction.

In a separate matter, the Disney board approved the repurchase of 225 million of its shares, bringing its total buyback authorization to 400 million shares.

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Already there is fallout within Disney regarding the announcement. David Stainton stepped down as president of Walt Disney Feature Animation on Tuesday, but it is expected he will be offered another role at the studio. He did not return a call seeking comment. At Pixar, said a Pixar executive, employees were subdued though many of them had known an acquisition was imminent.

Protecting Pixar's culture will be left to the two men who, aside from Mr. Jobs, have had the most significant impact on Pixar. The company's president, Edwin E. Catmull, will lead the Pixar and Disney animation studios, reporting to Mr. Iger and Richard W. Cook, chairman of Walt Disney Studios.

Mr. Catmull will be one of the executives to review Disney's operations in Burbank and its slate of animated films, which includes "American Dog" and "Meet the Robinsons."

John Lasseter, the director of "Toy Story" and the dominant creative force at Pixar, will become chief creative officer of the two studios and the principal creative adviser at Walt Disney Imagineering, where he will help design attractions at Disney's theme parks. In an unusual arrangement given the hierarchical nature of Disney, Mr. Lasseter will report solely to Mr. Iger.

"We both wanted it to be that way," Mr. Iger said. When asked to elaborate, he added, "I don't want to really go into that."

Whatever the reason for the arrangement, it is clear that Mr. Lasseter will play a significant role in Pixar projects within Disney.

"Obviously, Bob is the C.E.O. and the buck stops with him," said Mr. Jobs, "but John is working directly for Bob and has always had strong feeling about the exploitation of the characters."

Both Mr. Iger and Mr. Jobs said Pixar's animators would create their own sequels. That calls into question what Disney will do with a unit in its own animation group that has begun making sequels, including "Toy Story 3." Analysts expect the moneymaker at Pixar, for Disney, at least in the short term, to be sequels.

"While Disney can make them," Mr. Iger said, "Pixar making them is totally different."

The Walt Disney Company History Timeline

This often leaves me shaking my head, but it got me thinking that many people actually know very little about the Walt Disney Company. Sure, every knows there are a couple parks- one in California and one in Florida- but how much do you actually know about the timeline of Disney history?

Look no farther! I’ve got a Disney timeline right here!

The Beginning

1923 – A 22-year-old Walt Disney is living in Kansas City, Missouri, when he lands a contract with Margaret J. Winkler, the first female animated film producer, saving Disney from bankruptcy. This effectively was the beginning of The Walt Disney Company then known as Disney Brother’s Cartoon Studio.

Walt started his first business in Kansas City.

1927 – Walt and his chief animator, Ub Iwerks, create their first animated cartoon character, Oswald the Lucky Rabbit. On September 5th, 1927, Oswald appears in Trolley Troubles, which is Disney’s most successful animation ever.

1928 – Walt travels to New York City to meet with his producer, Charles Mintz. Since the studio is struggling financially, he plans to negotiate a better contract. Mintz has the upper hand and ends up stealing Oswald and most of Disney’s animators. Defeated and disappointed, Walt takes the train back home. During this ride, he conceives the idea of Mortimer. His wife Lillian suggests a friendlier name: Mickey Mouse. They didn’t know it yet, but Mickey would become the most successful cartoon character in history and the basis for a massive empire.

Charles Mintz steals Oswald, but it turned out OK in the end.

When Walt arrives back to the studio, his animators, including Ub, get to work on the details of Mickey Mouse. Steamboat Willie is released becoming the first animated film to show Mickey Mouse. It is also the first animated film with synchronized sound effectively ending what is known as the “silent era.”

The Walt Disney Company Flourishes

1929 – Walt and his brother, Roy, separate their partnership into four divisions: Walt Disney Productions, Ltd., Walt Disney Enterprises, Liled Realty and Investment Company, and Disney Film Recording Company. This allowed for the growing company to better manage each section of operations.

1932 – Flowers and Trees, the first film to use the tri-Technicolor process, is released in theaters and wins Disney’s first Academy Award for Cartoon Short. Disney loves the quality, so he negotiates a one-year deal for exclusive rights to the process.

1937 – Walt Disney releases his first full-length feature film, Show White and the Seven Dwarfs. Moviegoers come in droves spending a record $8 million, making the film the highest grossing sound film for a short time at a time when people were struggling through the Great Depression.

Snow White as a blockbuster for the Disney Company.

1940 – Disney goes public by releasing its first stock. If you would have invested at this time, your stock would be worth about 48,000 times your initial investment.

With the company’s success on the stock market and in the theaters, Disney decides to move his company to Burbank, California, where it remains today.

1950 – Treasure Island, Disney’s first live-action film, and One Hour in Wonderland, Disney’s first television show, are released. Both are hugely successful and open new roads for The Walt Disney Company.

1952 – Walt Disney Inc. is renamed WED Enterprises. Although Roy and other stockholders object, Walt pushes ahead. WED Enterprises is the division we’ve come to know as Imagineering. WED became a very important part of The Walt Disney Company, and it is now one of the most highly respected parts of the company.

1955 – Disneyland opens after many years of dreaming and planning. Walt wanted to create a park where children and families could have fun together. Walt expresses this feeling in his dedication when he says, “Here age relives fond memories of the past, and here youth may savor the challenge and promise of the future.”

While opening day, July 17th, 1955, was by invitation only, about 28,000 people attended. Most of these people purchased fake tickets or snuck over the fence.

1964 – Mary Poppins, Disney’s most successful live-action film, is released. Julie Andrews and Dick Van Dyke perform songs written by the Sherman Brothers including “Chim Chim Cher-ee”, which won an Oscar for Best Original Song. Disney also won Oscars for Best Film Editing, Best Visual Effects, and Best Original Score. Julie Andrews won an Academy Award for Best Actress, and the film was nominated for Best Picture.

Mary Poppins won award after award.

1966 – After the huge successes in both the theme park and film industry, Walt decides to expand his theme park empire in Florida. While Walt laid the groundwork for the “Florida Project,” a code name for Walt Disney World, he never got to break ground. He was diagnosed with lung cancer and died on December 15th, 1966.

The Walt Disney Company Expands

1967 – After years of searching for the perfect location for Walt Disney World, Imagineers begin construction on Walt Disney World under the supervision of Roy O. Disney, Walt’s brother who delayed his retirement to oversee the project.

1971 – On October 1st, 1971, Walt Disney World opens charging $3.50 admission for adults, $2.50 for children ages 12-18, and $1.00 for children under 12 years old. Magic Kingdom is the only park, and Disney resort hotels include Disney’s Contemporary Resort, Disney’s Polynesian Resort, and Disney’s Fort Wilderness Resort and Disney’s Fort Wilderness Campground.

Just three months after Walt Disney World opened, Roy passed away.

Walt’s brother Roy pushed through the construction of the Walt Disney World Resort.

1982 – When Walt originally planned Disney World, he also planned an Experimental Prototype Community of Tomorrow, which would be a real community where people would live and work. When EPCOT Center opens in 1982, it doesn’t have new residents, but it does give a nod to Walt’s original idea with technical and engineering feats as the main concentration of Future World.

1983 – Tokyo Disneyland, Disney’s first park outside the US, opens with a dedication from then CEO E. Cardon Walker. He expresses a desire for Tokyo Disneyland to be “an enduring symbol of the spirit of cooperation and friendship between the great nations of Japan and the United States of America.”

Also in 1983, Disney Channel appears on cable television for the first time. The first show is Tiger Town on October 9th, 1983.

1984 – When Walt’s nephew became dissatisfied with the way the company was being run, he comes up with a plan to replace his cousin-in-law with Michael Eisner and Frank Wells as Disney Chairman and President, respectively. Under Eisner’s leadership, Disney was set to enter the Disney Decade, which would include a ton of new attractions and movies plus huge steps forward for the company. While it didn’t turn out quite as good as planned, Disney blossomed under Eisner’s leadership.

Prior to Eisner’s takeover, Ron Miller, Walt’s son-in-law, was Chairman and CEO of The Walt Disney Company. During his term, he created Touchstone Pictures, which allowed Disney to make movies with adult themes without damaging the reputation of Disney’s family-oriented films. After Eisner took over, the first Touchstone film, Splash, was released. It almost paid for itself in the opening weekend and was ranked as the tenth highest-grossing film of the year.

1986 – Walt Disney Productions is renamed The Walt Disney Company.

1987 – The first Disney Store opens in Glendale Galleria in Glendale, CA. Within three years, The Disney Company opens 49 more locations. Today, there are almost 400 locations worldwide resulting in hundreds of millions of dollars of profit each year.

1989 – On May 1st, 1989, Disney-MGM Studios opens as a dedication to Hollywood “…not a place on a map, but a state of mind that exists wherever people dream and wonder and imagine…” Today, we know this park as Disney’s Hollywood Studios.

Hollywood Studios – the Hollywood that never was and always will be.

1996 – The Walt Disney Company purchases Capital Cities/ABC and changed the name to ABC, Inc. This merger effectively expanded the Walt Disney Company to include such divisions as ABC News, Sports, Entertainment, Daytime, and Children’s Programming, ABC Radio Network, ESPN Inc, A&E, and Lifetime.

1998 – Disney’s Animal Kingdom opens as Disney World’s fourth and final theme park. It is accredited by the Association of Zoos and Aquariums and the World Association of Zoos and Aquariums because it provides education, conservation, and research elements at an excellent level.

2005 – Eisner is booted, and Bob Iger takes over as CEO. Under Iger’s leadership, Disney is named the World’s Most Reputable Company by Forbes Magazine and Barron’s, one of American’s Most Admired Companies by Fortune Magazine, and one of the best places to work by BusinessWeek.

2006 – Iger leads Disney’s acquisition of Pixar for $7.4 billion in an all-shares transaction, which made Steve Jobs Disney’s top shareholder.

Iger also reacquires ownership of Oswald the Lucky Rabbit, which really impressed Roy E. Disney as a commitment to honor his uncle’s legacy.

2009 – Another major acquisition for Iger is Marvel, which gives Disney primary ownership of all of the Marvel characters. However, Disney still has some restrictions regarding building attractions in its Florida theme park based on a contract with Universal Studios from the 1990s.

2012 – The third acquisition for Disney in recent history is Lucasfilm. This gives Disney access to Star Wars and Indiana Jones, both of which are represented in Disney’s Hollywood Studios.

Star Wars joins the Disney family.

2013 – Disney’s MyMagic+ is rolled out in Disney World only. MagicBands become the newest Disney accessory giving guests one-key access to hotel rooms, park tickets, FastPass, PhotoPass, and payment.

2015 – CEO, Bob Iger announces that Hollywood Studios will undergo a massive renovation project during which Hollywood Studios will receive a new name and two new themed lands including Toy Story Land and Star Wars Land.

The Legacy

Disney has changed with the times, but it always builds on its history.

In Magic Kingdom, Snow White’s Scary Adventures delighted guests for over 30 years. Now, the Seven Dwarfs Mine Train entertains families in the largest expansion in Disney history with New Fantasyland, completed just a few years ago. Both of these rides are inspired by Walt’s classic movie.

When EPCOT Center opened, Imagination Pavilion, The Land Pavilion, Communicore East and West (now Innoventions East and West), Spaceship Earth, Universe Of Energy Pavilion, and World of Motion (now Test Track) opened to guests. Most of these pavilions still teach visitors about engineering and technology and some still have the original rides.

World Showcase opened at the same time as EPCOT Center with nine countries on opening day: Canada, France, Japan, Mexico, China, Italy, Germany, United Kingdom, and The American Adventure. Morocco and Norway weren’t completed until 1984 and 1988, respectively, but that is mostly because they were sponsored by their host country.

Animal Kingdom is finally fulfilling its original purpose of hosting animals “…real, ancient, and imagined…” with the addition of Pandora: The Land of Avatar. Now, mythical characters will be part of the park’s attractions.

While Hollywood Studios hasn’t been the most popular Disney World theme park, Disney is working hard to change that. It does, however, have a Disney flair with a fantastical view of real life.

If not for Walt’s dream, Disney World would not exist. Walt said, “I only hope that we don’t lose sight of one thing – that it all started with a mouse.” Maybe it’s good to go back to the roots sometimes!

A Timeline of Disney’s Media Acquisitions

Disney is the final boss you must defeat after beating out all other media companies. Most major things we consume today, from Marvel to Sportscenter, have been rooted in the powerhouse that Disney has become. While we can appreciate the fact that our favorite movies and shows are being kept alive, and most importantly fully funded, Disney’s overbearing power has taken much control over what we watch and how we watch it, leaving a lingering question of how other companies can compete.

Over the past 50 years, Disney has cut deals that not only extended its opportunity to continue making and streaming original content, but has also allowed them to oversee full production companies like Pixar, cable channels like ABC, and streaming services like Hulu. Their new streaming service਍isney+ has officially launched, featuring an abundant catalog of Disney-created (and Disney-bought) classics for people to watch. In direct competition with streaming services Netflixਊnd Apple TV+, Disney+ falls on the cheaper side with a singular price of $6.99 per month and a bundle of Disney+, ESPN+, and an ad-supported version of Hulu for $12.99 per month. 

When Disney started announcing its featured content, the price was the last thing people were talking about. Rather, the discussion surrounded the idea that Disney’s screen blackout is fully in motion. Here’s how it happened.

April 18, 1983: The Disney Channel launches

Disney has always been ahead of the curve. As cable TV increasingly grew in usage back in the 1980s, Disney rightfully launched its own network that was marketed to families and children. In just a couple of years, Disney Channel reached nearly two million subscribers, adding a competitive television component to its already successfully laid movie foundation. In the late 1990s, Disney Channel began marketing toward teens by emphasizing its music programming that included music videos, and creating more relatable Disney Channel original movies. As the content continued to prosper, the groundwork was laid for teen stars like Hilary Duff to become the faces of the network, and franchises like The Cheetah Girls and High School Musical to be some of most-known and most profitable Disney Channel series to ever premiere. Due to the inevitable success, movies like High School Musical 3 have even made it to the big screen. And that’s all simply because at that point, the big screen was the only one left to conquer.

June 30, 1993: Miramax acquisition

Miramax was created to be a home for independent films that were deemed as 𠇌ommercially unfeasible," which they were until things started to change at the top of the 1990s. Shortly after the $60 million acquisition which also gave Disney access to Miramax’s film library before 1993, Miramax launched two of its most successful films to date: Pulp Fiction and Chicago. Even after selling the rights to Lord of the Rings in 1997, Miramax still found its niche. Throughout the mid-2000s, Miramax operated under the name Dimension Films, and was said to specialize in teen and horror films that’s how we got gems like Scream and the Scary Movie series, so oddly, the job was well done.

Due to the circumstances of alleged improper accounting between Miramax founders Harvey and Bob Weinstein and Disney, it was announced in 2005 that their contract would be ending. The Weinsteins started their own company, but the name Miramax remained with Disney for the next few years. After cutting the staff by 70 percet and only agreeing to release three films per year, Miramax eventually fell and Disney pulled their support in 2010. Miramax&aposs Disney era still gave us some classics, though.

July 31, 1995: Capital Cities/ABC/ESPN acquisition

Apparently, no one saw this coming. In 1995, the Walt Disney Company announced its merger with Capital Cities/ABC Inc. for a whopping $19 billion. Along with the already-powerful network that was ABC, Capital Cities also had 225 stations they were affiliated with, eight TV stations, and 80 percent ownership of ESPN. Extending their reach even further, the merger meant that Disney now had ownership in the A+E and Lifetime cable channels as well, propelling its reign on cable TV and radio networks across the world. Most importantly, this merger allowed Disney to soak its hands into the world of sports, and what better way could they have done that other than buying the company who covers it all and your families go-to TV station.

October 24, 2001: Fox Family Channel acquisition

Despite classics like Hawaii Five-O, the airing of Major League Baseball, and holiday-themed marathons, the viewership for Fox began to decline in 2000 as a result of competitors like Nickelodeon, Cartoon Network, and Disney Channel. The word is that when Fox changed its name to The Family Channel, it lost a core of its viewership. Just a year after nearly folding, Fox Family Worldwide announced that it had been sold to The Walt Disney Company for $2.9 billion, resulting in the name change to ABC Family Worldwide, Inc. It took some years after the acquisition for things to fall in place as the network struggled to find original content. But changing the name to ABC Family, the network finally found its lane, promoting content that catered to both teens and young adults as opposed to just kids on Jetix. With the debuts of series like Lincoln Heights, Kyle XY, and The Secret Life of the American Teenager, ABC Family started a run that would later produce shows like Pretty Little Liars, Make It Or Break It, and The Fosters. In 2014, the network was officially relaunched as Freeform, which interestingly kept its signature campaign of the � Nights of Halloween” and � Days of Christmas” holiday specials. This was just the start of the extensive relationship between Disney and Fox.

April 2004 (undisclosed date): Muppets acquisition

In 2004 Disney scooped in yet another classic, buying the rights to the Muppets. Although the price tag of the deal was never disclosed, considering The Muppet Show, multiple movies, and Bear in the Big Blue House, we’re sure Disney threw them a major bag to acquire this franchise. At the time, the deal was said to have been discussed 14 years prior in 1990 but fell through once Muppets creator Jim Henson died. Even though Disney couldn’t scoop Sesame Street characters Big Bird and Elmo, which were sold separately, the deal was finally done a decade later. Whether it’s spawning Kermit memes or box office films starring Tina Fey, The Muppets haven’t been written out of media history just yet, still living as one of the longest-running major franchises.

May 5, 2006: Pixar acquisition

In a deal that was worth $7.4 billion in stock, Disney acquired Pixar Animation Studios, which was already setting the tone with films like Toy Story and A Bug’s Life. Pixar executives like Steve Jobs took a share and leadership with the Disney brand and they started pumping out hits immediately. We could sit here and name all of the films that came after to cement the new run Pixar and Disney went on, but it still hasn’t ended. Their next highly anticipated film Soul is set to release in 2020, and after a list of hits that include Monsters Inc., Finding Nemo, and The Incredibles, we don’t see them dropping the ball anytime soon. We will continue to see them drop that lamp on those letters.

April 30, 2009: Disney becomes part-owner of Hulu

The way in which we’re consuming TV is changing right in front of our eyes, and the new version of cable is now subscription-based streaming services. In 2006, Hulu partnered with AOL, NBC Universal, Comcast, Facebook, MSN, Myspace, and Yahoo! to distribute its content, amassing a reach so big that Hulu could actually compete with Netflix. Well after becoming a multi-million dollar company, Disney, of course, wanted parts and joined Hulu as a stakeholder in 2009, giving the service rights to content from both ABC and Disney Channel. Hulu’s stake was split between a number of companies, but not for long. 

December 31, 2009: Marvel Entertainmentꂬquisition

Consider the competition deceased. In 2009, Disney made a move that would dominate box offices for the duration of the next decade. For $4 billion, Disney purchased Marvel Entertainment, which probably houses all of your favorite superheroes and their franchises—that is unless you’re a DC fan. Since its origins in the 1990s, Marvel has become a superhero conglomerate that’s home to The Avengers, X-Men, and the Fantastic Four. Over the past two years alone Marvel has been all over the box offices with Black Panther,—which was the highest-grossing movie of all 2018—Avengers: Infinity War, Ant-Man and the Wasp, Captain Marvel, and Avengers: Endgame. This Marvel move made it extremely hard for other companies to compete, making it seem as if with every major release, there was a Marvel movie that was out at the same time. Figures in Hollywood have been vocal about Marvel’s takeover, including vets like Martin Scorsesee. And while those sentiments seem personal, they are true in the instance that Disney has arguably gained so too much control over the industry. Since the Marvel acquisition, the Marvel Cinematic Universe has opened tremendously and with that, so have our wallets.

October 30, 2012: Lucasfilm acquisition

Right when it couldn’t get any bigger than the acquisition of Marvel, Disney copped another lucrative series Star Wars. For over a year, Disney had been plotting on the idea of calling Luke Skywalker and Han Solo characters of their own, and in 2012 they pulled it off. As Disney CEO Robert Iger claimed, Lucasfilm is one of the greatest entertainment properties of all time, making it also one of the most valuable. In fact, this is Disney’s fourth biggest deal to date behind the acquisitions of Capital Cities/ABC, Pixar, and Fox Family. Disney didn&apost plan on taking the acquisition lightly, rolling out a trilogy of films as well as two prequel stories in theaters. Since the late 1970s, Star Wars has continued to grow across film, magazines, animated shows, and television series. But even after 50 years, the Lucasfilm acquisition by Disney means that we’re just getting started.

August 9, 2016: Disney purchases stock in BAMTech

Like we said earlier, when it comes to streaming, Disney has been ahead of the game. Just a few years ago, Disney announced the acquisition of its $1 million, 33 percent stake in BAMTech. As a part of the acquisition, BAMTech was separated from the MLB, which housed it previously. But behind such a reputable technology company comes the additional help with Disney’s products that now also include ABC and ESPN. BAMTech already works with a huge roster including HBO Now, the National Hockey League, Major League Baseball, the PGA Tour, and the WWE Network. With this deal, Disney aimed to broaden its reach, specifically with sports, across more platforms than it previously had access to.

April 12, 2018: ESPN+ launches

When Disney acquired BAMTech, the idea to provide a more in-depth streaming service for ESPN became a reality. ESPN was already being used to back WatchESPN, proving that live sporting events had a home on these streaming applications. Even though ESPN doesn’t have sports rights to the NFL or NBA, they do have rights within the MLB, NHL, and MLS. In 2018, ESPN+ officially launched with a subscribed fee of $4.99 per month.

March 20, 2019: 21st Century Fox acquisition is complete

Earlier this spring, Disney leveled up once again, acquiring 20th Century Fox. The deal was first teased in 2017, with Disney seeking the rights to 21st Century Fox, the company that houses shows like The Simpsons, cable channels like FX that houses hits like Atlanta and Archer, and National Geographic. The deal would’ve also given Disney the rights to Fox Television Stations, Fox Sports, Fox News, and official rights to the Fantastic Four and X-Men. That alone sounds crazy, right? But a bidding war persisted between Disney and Comcast. A few years later, Disney won and ended up cutting that deal for over $71 billion and more than a few shares in the company. Disney also received an additional 30 percent share in Hulu, matching the percentage they already owned. While many praised the deal, it also received backlash. Many thought that Disney was doing too much. It is a little scary if we’re being honest. Who would’ve thought that Disney would have their hands in shows like Family Guy? But at least this way there’s hope that Deadpool, the X-Men, the Fantastic Four, and the Avengers will all be fighting in some type of superhero armageddon sometime soon. Other than that, it’s a lot to grasp.

November 12, 2019: Disney+ launches

This is the moment we’ve all been waiting for. With everything that Disney has acquired over the past few decades, the announcement of such a content-rich application didn’t seem like it would match the expectations. When Disney+ began announcing its list of original and acquired shows and movies, people instantly subscribed early off of combined feelings of nostalgia and excitement. In its efforts to provide a home for children, families, teens, adults, sports-lovers, and comic book fanatics, Disney+ will be one of the few destinations that have all of the above.

These past deals and acquisitions have led to this moment. With everything available on the app today, you can scroll through and see all of the content਍isney has had its hands in. How could you not be glued to your screens? Disney’s screen blackout was persistent and successful. As a brand, they’re not only looking to take the crown from Netflix, they’re looking to wipe cable TV clean.

It’s official: Disney acquires Pixar for $7.4 billion, Steve Jobs joins Disney Board of Directors

Furthering its strategy of delivering outstanding creative content, Robert A. Iger, President and Chief Executive Officer of The Walt Disney Company, announced today that Disney has agreed to acquire computer animation leader Pixar in an all-stock transaction, expected to be completed by this summer. Under terms of the agreement, 2.3 Disney shares will be issued for each Pixar share. Based on Pixar’s fully diluted shares outstanding, the transaction value is $7.4 billion ($6.3 billion net of Pixar’s cash of just over $1 billion).*

This acquisition combines Pixar’s preeminent creative and technological resources with Disney’s unparalleled portfolio of world-class family entertainment, characters, theme parks and other franchises, resulting in vast potential for new landmark creative output and technological innovation that can fuel future growth across Disney’s businesses. Garnering an impressive 20 Academy Awards, Pixar’s creative team and global box office success have made it a leader in quality family entertainment through incomparable storytelling abilities, creative vision and innovative technical artistry.

“With this transaction, we welcome and embrace Pixar’s unique culture, which for two decades, has fostered some of the most innovative and successful films in history. The talented Pixar team has delivered outstanding animation coupled with compelling stories and enduring characters that have captivated audiences of all ages worldwide and redefined the genre by setting a new standard of excellence,” Iger said in the press release. “The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses. This investment significantly advances our strategic priorities, which include – first and foremost – delivering high-quality, compelling creative content to consumers, the application of new technology and global expansion to drive long-term shareholder value.”

Pixar President Ed Catmull will serve as President of the new Pixar and Disney animation studios, reporting to Iger and Dick Cook, Chairman of The Walt Disney Studios. In addition, Pixar Executive Vice President John Lasseter will be Chief Creative Officer of the animation studios, as well as Principal Creative Advisor at Walt Disney Imagineering, where he will provide his expertise in the design of new attractions for Disney theme parks around the world, reporting directly to Iger. Pixar Chairman and CEO Steve Jobs will be appointed to Disney’s Board of Directors as a non-independent member. With the addition of Jobs, 11 of Disney’s 14 directors will be independent. Both Disney and Pixar animation units will retain their current operations and locations.

“Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders,” said Jobs in the release. “Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world.”

“Pixar’s culture of collaboration and innovation has its roots in Disney Animation. Our story and production processes are derivatives of the Walt Disney ‘school’ of animated filmmaking,” said Dr. Catmull in the release. “Just like the Disney classics, Pixar’s films are made for family audiences the world over and, most importantly, for the child in everyone. We can think of nothing better for us than to continue to make great movies with Disney.”

The acquisition brings to Disney the talented creative teams behind the tremendously popular original Pixar blockbusters, who will now be involved in the nurturing and future development of these properties, including potential feature animation sequels. Pixar’s 20-year unrivaled creative track record includes the hits Toy Story, Toy Story 2, A Bug’s Life, Monsters, Inc., Finding Nemo and The Incredibles. Disney will also have increased ability to fully capitalize on Pixar-created characters and franchises on high-growth digital platforms such as video games, broadband and wireless, as well as traditional media outlets, including theme parks, consumer products and live stage plays.

“For many of us at Pixar, it was the magic of Disney that influenced us to pursue our dreams of becoming animators, artists, storytellers and filmmakers,” said Lasseter in the release. “For 20 years we have created our films in the manner inspired by Walt Disney and the great Disney animators – great stories and characters in an environment made richer by technical advances. It is exciting to continue in this tradition with Disney, the studio that started it all.”

“The wonderfully productive 15-year partnership that exists between Disney and Pixar provides a strong foundation that embodies our collective spirit of creativity and imagination,” said Cook in the release. “Under this new, strengthened animation unit, we expect to continue to grow and flourish.”

Disney first entered into a feature film agreement with Pixar in 1991, resulting in the release of Toy Story, which was hailed as an instant classic upon its release in November 1995. In 1997, Disney extended its relationship with Pixar by entering into a co-production agreement, under which Pixar agreed to produce on an exclusive basis five original computer-animated feature films for distribution by Disney. Pixar is currently in production on the final film under that agreement, Cars, to be distributed by Disney on June 9.

The Boards of Directors of Disney and Pixar have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antritrust Improvements Act, certain non-United States merger control regulations, and other customary closing conditions. The agreement will require the approval of Pixar’s shareholders. Jobs, who owns approximately 50.6% of the outstanding Pixar shares, has agreed to vote a number of shares equal to 40% of the outstanding shares in favor of the transaction.

The Disney Board was advised by Goldman, Sachs & Co. and Bear, Stearns & Co. The Pixar Board was advised by Credit Suisse.

Separately, the Disney Board approved the repurchase of approximately 225 million additional shares, bringing the Company’s total available authorization to 400 million shares. Since August 2004 through the end of December 2005, Disney has invested nearly $4 billion to purchase nearly 155 million shares. Disney anticipates further significant share repurchases going forward, reflecting Disney’s continued commitment to returning value to shareholders over time.

* Based on Disney’s closing share price of $25.52 as of 1/23/06.

About The Walt Disney Company:

The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products. Disney is a Dow 30 company, had annual revenues of nearly $32 billion in its most recent fiscal year, and a market capitalization of approximately $50 billion as of January 23, 2006.

Walt Disney announces $7.4 billion purchase of Pixar - HISTORY

NEW YORK ( - Mickey Mouse and Nemo are now corporate cousins. Walt Disney has announced that it is buying Pixar, the animated studio led by Apple head Steve Jobs, in a deal worth $7.4 billion.

Speculation about a deal being imminent raged on Wall Street for the past few weeks. Disney has released all of Pixar's films so far, but the companies' current distribution deal was set to expire following the release of this summer's "Cars." The merger brings together Disney's historic franchise of animated characters, such as Mickey, Minnie Mouse and Donald Duck, with Pixar's stable of cartoon hits, including the two "Toy Story" films, "Finding Nemo" and "The Incredibles."

"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Jobs in a statement. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."

As part of the deal, Jobs will become a board member of Disney, the companies said. And John Lasseter, the highly respected creative director at Pixar who had previously worked for Disney, will rejoin the House of Mouse as chief creative officer for the company's combined animated studios and will also help oversee the design for new attractions at Disney theme parks.

"The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses," said Disney CEO Robert Iger in a written statement.

During a conference call with analysts Tuesday, Iger said that acquisition discussions had been going on for the past several months. Jobs added that after a "lot of soul searching," he came to the conclusion that it made the most sense for Pixar to align itself with Disney permanently instead of trying to distribute films on its own or sign with another movie studio partner.

According to the terms of the deal, Disney (Research) will issue 2.3 shares for each Pixar share. Based on Tuesday's closing prices, that values Pixar at $59.78 a share, about a 4 percent premium to Pixar's current stock price. Shares of Pixar (Research) fell slightly in regular trading on the Nasdaq Tuesday but gained nearly 3 percent in after-hours trading. The stock has surged more than 10 percent so far this year on takeover speculation.

Disney's stock gained 1.8 percent in regular trading on the New York Stock Exchange and was flat after-hours.

Prior to the deal's announcement, some Wall Street observers had speculated that Disney may be paying too much for Pixar. A source tells FORTUNE that some Disney board members also thought the price was too high.

To that end, Disney chief financial officer Thomas Staggs said during the conference call that the deal would reduce Disney's earnings slightly in fiscal 2006, which ends this September, as well as fiscal 2007. He added though that Pixar should add to earnings by fiscal 2008 and that Disney was still on track to post annual double-digit percentage gains in earnings through 2008.

But one hedge fund manager said that the risk of Disney losing Pixar was too great.

"The question isn't did Disney pay too much but how expensive would it have been for Disney if Pixar fell into someone else's hands," said Barry Ritholtz, chief investment officer with Ritholtz Capital Partners, a hedge fund that focuses on media and technology stocks.

Jeffrey Logsdon, an analyst with Harris Nesbitt, agreed with that assessment. He said that Pixar's "success quotient" justified the price of the deal.

Pixar has yet to have a flop with its six animated movies. They have grossed more than $3.2 billion worldwide, according to movie tracking research firm Box Office Mojo.

Disney, however, has struggled in the computer-generated animated movie arena. Even though its most recent CG-animated film, "Chicken Little" performed better than many had expected at the box office, it was not as big a hit as any of the Pixar films.

"Robert Iger has made no secret of the fact that he wanted to get the animated business back to where it was. It's what Disney has known for but the movies they did in-house did not do as well as the ones they did with Pixar," said Michael Cuggino, a fund manager who owns about 100,000 shares of Disney in the Permanent Portfolio and Permanent Portfolio Aggressive Growth funds.

Pixar has yet to announce what movies it is working on after "Cars," however. It is believed that Pixar's next film about a rat living in a fancy Parisian restaurant, tentatively titled "Ratatouille" may be released on 2007 and that a "Toy Story 3" may be in the works as well. Jobs said during the conference call that nothing has been decided about future Pixar releases yet, but added that the company feels strongly about making sequels to some of its previous hits.

And Iger said that announced plans for Disney-produced animated films, including the release of "American Dog" in 2008 and "Rapunzel Unbraided" in 2009, are still on track.

It would have been unthinkable to imagine Disney and Pixar teaming up just a few years ago. The two companies broke off talks to extend their current distribution agreement in 2004 due to a strained relationship between Jobs and former Disney CEO Michael Eisner. But since Iger succeeded Eisner last year, he has extended an olive branch to Jobs.

Disney and Apple have already announced several online programming deals during the past few months. Disney now has agreements in place to sell hit ABC prime time shows, such as "Desperate Housewives" and "Lost", as well as content from ABC Sports and ESPN on Apple's popular iTunes music and video store.

Cuggino said the addition of Jobs, who will also become Disney's largest individual shareholder, to Disney's board could mean that more innovative digital deals could be in the works. "Jobs is a dynamic personality who knows consumer electronics. It's an opportunity to bring some youthful energetic thinking to Disney's board."

Disney, like many other large media companies, has seen its stock price stagnate during the past year as investors have flocked to more rapidly growing digital media firms such as Apple as well as search engines Google (Research) and Yahoo! (Research)

But Logsdon said the acquisition of Pixar could help Disney increase revenue throughout all of its business lines. So even though some may be quibbling in the short-term about how much Disney had to spend, he thinks Disney made the right move.

"It's a smart strategic deal," Logsdon said. "The benefit in theme parks, consumer products and cable will probably make this deal look a lot smarter a year or two from now."

Meet the Simpsons

In March, Disney closed on its biggest acquisition yet: a $71 billion deal for 20th Century Fox.

Buying the studios behind "The Simpsons" and X-Men allows Disney to better compete with companies such as Amazon and Netflix for viewership and dollars as the streaming competition intensifies.

Disney is set to release its own streaming service, Disney+, in November. Along with its own library of content, Disney now has all of Fox's entertainment assets.

The company has already said all episodes of "The Simpsons" will appear on the services on day one. Other 20th Century Fox titles on Disney+ will include "The Sound of Music," "The Princess Bride" and "Malcolm in the Middle."

"The coin of the realm is IP," Squire said.

Little is known about how Disney plans on using Fox properties in the future. It has added films that were already in production or set for release to its box office slate, but hasn't announced any Disney-made Fox films or TV shows as of yet.

However, Disney has revealed that it will produced all four "Avatar" sequels which were green lit by Fox several years ago.

Outside of the film space, Disney has faced headwinds in recent years, including at cash cow ESPN. Viewership has been on the decline, relationships between cable operators and networks are tense, and the situation remains unstable as more people ditch cable for streaming services.

Disney has created ESPN+, a streaming version of its TV network. The company has said that it will bundle ESPN+ with the upcoming Disney+ and Hulu, but the company is being forced to invest heavily in streaming without an immediate path to profits. It has seen fast growth in the ESPN+ service since launching last year, adding more than two million subscribers.

Disney shares fell when it reported earnings after the close on Tuesday. While revenue was up from the year-ago quarter in Studio Entertainment (+33%), Media Networks (+21%), and Parks (+7%), the direct-to-consumer segment saw revenue of $3.86 billion but operating losses increased to $553 million from $168 million. Disney cited Hulu and increased investments in ESPN+ and Disney+ streaming services, and Iger said on a call with analysts that the bundle will cost $12.99 and launch in November. Even the movie studio's impressive performance took a hit on the disappointing box office results for "Dark Phoenix."

Disney Buys Pixar for $7.4 Billion

Disney issued a press release today announcing that they were acquiring Pixar in an all-stock transaction valued at $7.4 billion. According to the press release:

Pixar President Ed Catmull will serve as President of the new Pixar and Disney animation studios, reporting to Iger and Dick Cook, Chairman of The Walt Disney Studios. Pixar Executive Vice President John Lasseter will be Chief Creative Officer of the animation studios, as well as Principal Creative Advisor at Walt Disney Imagineering, where he will provide his expertise in the design of new attractions for Disney theme parks around the world, reporting directly to Iger.

Meanwhile, Pixar Chairman and CEO Steve Jobs will be appointed to Disney's Board of Directors.

Steve Jobs is the present CEO of Apple Computer and there has been speculation about what consequences his new ties to Disney may have. Indeed, bringing Apple and Disney closer together with Jobs' involvement may cause some friction in future potential deals between Apple and other studios.

Disney Sets $7.4 Billion Pixar Deal

With Walt Disney Co. 's $7.4 billion deal to acquire Pixar Animation Studios , the combined animation powerhouses face a tricky task: how to revive Disney's animation efforts without disrupting the formula that has made Pixar one of the most successful moviemakers in Hollywood history.

The stock deal announced yesterday represents a quick fix for Disney's lagging animation business, which relies on movie characters that can be spun across its theme park, merchandise and television empires. Pixar has in the last decade become the gold standard in animated filmmaking with computer-generated hits like "Finding Nemo," while Disney's own efforts have tailed off in popularity, and its pipeline is uncertain. Disney has benefited from Pixar's success by co-financing and distributing Pixar films, but that arrangement was set to expire this year.

The proposed deal comes with risks. Disney is acquiring Pixar in the midst of a profitable winning streak -- all six of its movies have been blockbusters -- in a business where failure is considered an inevitability. It also comes when revenue from DVD sales, a key movie-industry driver, may have passed its peak. And the companies face a cultural challenge in trying to maintain Pixar's esprit de corps.

As part of the deal, Pixar Chairman and Chief Executive Steve Jobs will become Disney's largest individual shareholder and a key adviser at a time when the entertainment industry is scrambling for ways to reinvent itself in a digital era. Mr. Jobs, who also heads Apple Computer Inc. will join Disney's board and take a stake of around 6.5%. He ruled out becoming Disney's chairman in future, however, saying: "that's not on my radar. Being chairman of a public company is an awful lot of work."

Regardless, even Mr. Jobs' Pixar colleagues expect him to become a potent force on the Disney board. "They're going to have to install seat belts in that board room because when Steve gets in there, he'll be a ball of fire," said John Lasseter, the Pixar creative guru who will play a pivotal role in the combined company. (See related article.)

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Watch the video: Official Trailer. Disney and Pixars Turning Red. Disney Studios Africa (July 2022).


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