Disney and Pixar - Make Nice Now!

Fabled Film Company May Get a Reanimator - Los Angeles Times

I suppose this goes in the "If you can't renegotiate with em, buy em" file. Anyone who pays passing notice to this industry would have seen the following:

1- Pixar is a money printing press for Disney.
2- Pixar felt burned by Eisner over Toy Story 2.
3- Pixar's contract was expiring.
4- Pixar was interested in exploring life without Disney, in the George Lucas model.
5- Disney had yet to do what Pixar does well with any other partner.

So, you're Bob Iger at Disney. Knowing the score, as presented above, what do you do? Well, you certainly explore anything you can to keep the relationship going. Including giving a chunk of the company away and handing over the keys to the car to some outsiders and former insiders.

While I think this is a pretty good move by Disney, those in the know will wonder if it will work. Forget the finance aspects. The big brained investment bankers will figure that junk out. The marketing is similarly easy. Probably most of the world thought that Pixar was part of Disney already. The operations probably aren't going to chance very much. And strategically, this is a money play. You keep your cash cow and don't let them free agent for your rivals. So, where's the problem?

Astute observers of M&A activity will have pegged it already, because it's the problem in most M&As. The culture. There are about a billion questions for the organizational consultants here. Here are a couple of them:

1- How do you fit a bunch of Hawaiian shirt wearing computer guys into a VERY straight laced, suit and tie company like Disney? At the senior management level.

2- How do you keep Pixar sharp in the Disney Behemoth? There is debate about the feasibility of maintaining two separate corporate cultures in one company. I think it can be done and I think Disney is well suited to do it, but just can it can doesn't mean it will. After all, look at Disney's non-Pixar animation lately.

I think the big winner here is Steve Jobs. He gets a big role in Disney to go with his big roles in Pixar and Apple. I like visionary leadership, even though I'm not a big Jobs fan, and I think Disney hasn't had good visionary leadership since Walt died (I think of Eisner as a mean bean counter with two key insights {Synergy and Big Slate} that turned out to be a very mixed bag). Plus, it's a big platform for Jobs to selfpromote from.

As with all business deals, time will tell.