If You Can't Beat 'Em, Eat 'Em

Who needs homegrown success when you already have 8 billion in cash? Not Disney, where, after ten years of lagging sales and poor releases from its own animation studio has decided to give up trying to outdo the competition and simply buy them out. Last Friday the heirs of Walt put together some 7.4 billion in its own stock (there's always lots of Disney stock to move around, apparently) and bought up control of Pixar Animation Studios.

Pixar, the computer animation film company which boasted Apple Corporation founder, Steve Jobs, as majority shareholder and Chief Executive, had been the one bright spot in an otherwise grim period for Disney imagineering. Practically all of Pixar's releases, including such hits as "Finding Nemo," "Monster's Inc," and "The Incredibles" have been dubbed critical and financial successes. Disney's partnership with the company, which began with Disney helping to finance the first major Pixar release, "Toy Story" over 10 years ago, allowed the magic kingdom to reap some of the benefits of Pixar's glory. However, that relationship was threatened by the rocky relations between former Disney CEO Mike Eisner and Jobs, culminating in Pixar's decision to not renew the partnership once the last film currently under contract for co-production, "Cars," was released in theaters.

Faced with the prospect of losing the one still-gleaming jewel in Disney's sagging entertainment crown, Eisner's replacement as CEO, Robert Iger was faced with decision to either let Pixar go its way and concentrate on rebuilding his own house or doing whatever it took to keep the digital animation pioneers in the fold. Perhaps given the current dilapidated state of Disney's own animation studios and current loss of faith by investors in its film releases, Iger opted to convince Jobs and the remaining Pixar shareholders of the fruits that a takeover might glean for both companies. The deal makes Pixar a wholly-owned auxiliary of Disney, and while the Pixar brand and studio location will remain the same, many of Pixar's head honchos will be finding new positions for them in the Disney behemoth. So, basically, the rich get richer. Woohoo!