January 24, 2006 4:29 PM PST
Pixar to lead Disney's animation business
But the deal also raises questions for movie fans who have flocked to Pixar films, and who are now worried that the company's unique vision might be diluted. Only time will tell, but here's a quick rundown of the deal's high points.
How much is Disney paying?
According to the companies, Disney will issue 2.3 of its own shares for each outstanding Pixar share to acquire Pixar outright. That comes out to about $7.4 billion, but Disney will also inherit the roughly $1 billion in Pixar's bank accounts.
Who will run Pixar now?
It will be part of the Disney Animation Studios, but Pixar President Ed Catmull will now be president of the combined Disney and Pixar groups. John Lasseter, who has directed most of Pixar's movies, will be chief creative officer of the combined animation group and will advise other groups including Disney's theme park division.
Catmull will report to Dick Cook, the overall head of Walt Disney Studios, while Lasseter will report directly to Disney Chief Executive Officer Bob Iger.
When will the deal close, and could anything stop it?
The deal is subject to regulatory approvals as well as the OK from Pixar shareholders, but there has been no hint of any opposition to the deal. The companies said the merger is expected to close this summer.
What role will Jobs play at Disney?
As majority owner of Pixar, he becomes the largest shareholder in Disney, and will take one of 14 board seats.
Won't Pixar get lost inside Disney's huge corporate structure?
In a conference call following the deal, both Iger and Jobs said they have had many conversations on exactly that issue and agree fully that Pixar's unique culture can and must be maintained. Whether that is realistic remains to be seen.
Will this affect the release of "Cars?"
It shouldn't. "Cars" is the final movie that falls under Pixar's previous distribution relationship with Disney, and it's still on target for a June 9 release date in the United States. Iger noted on the conference call that he has already seen a preview of the movie.
Does this mean Apple will get to distribute Disney films through iTunes?
There's no public mention of this in the deal. As a board member and the largest shareholder in Disney, Jobs is clearly in a better position to lobby for this. However, he will have to be careful of stepping over corporate governance lines, because he will technically be responsible to the shareholders of two separate companies that don't necessarily have identical interests.
What about other online video companies? Could this make it harder for them to get Disney or ABC content?
It can't make companies like Microsoft, Sony or Google happy. All of those companies want to distribute movies online, and seeing Jobs, a key rival, as the major shareholder and board member of Disney should make them nervous.
That said, most content companies have in the past avoided exclusive distribution deals. If Disney declines to distribute its work online through anybody but Apple, it--and Jobs--could feel pressure from shareholders.
What new films will they produce?
Pixar has to date declined to say what films it has planned after "Cars." Jobs said Tuesday that the company is still holding that information close to the vest, pending conversations with Disney executives. Some sequels to earlier Pixar movies are likely, since Jobs adamantly defended the idea of sequels that were "as good as or better than the originals."