Friday, January 20, 2006

Can Disney acquire Pixar

Is it Disney – Pixar… or… Pixar – Disney?

According to a report by Reuters on Thursday, Disney is in talks to buy Pixar for $6.7 billion in stock. If the acquisition goes through, Steve Jobs could soon become the largest shareholder in the Mouse House, but interestingly enough, it's unclear whether The Walt Disney Company is wooing Pixar Animation Studios or visa versa.

Here’s a little background on Jobs and Pixar: It was a small animation company originally established by George Lucas to support his needs in the growing Star Wars movie franchise. Jobs purchased it in ‘86 for $10 Million (after he was ousted as Apple’s CEO). Based on the current offer on the table, the company is now worth about $7 billion. If Disney acquires Pixar in an all share deal, Jobs will hold 6.8% of Disney which makes him the largest shareholder and perhaps the next chairman. When Apple acquired Jobs' Next, it was like Apple paying Next to make Jobs the CEO of Apple. Could this repeat with Disney too?

The move could potentially have massive implications for Internet media, to which Disney and other media giants like News Corp and Time Warner, have recently turned their full attention. Such a move would give Jobs the power to break down the barriers between Disney and Pixar's content, and Apple's computer hardware and digital distribution through iTunes. Disney's long list of lucrative content partners includes Walt Disney Studios, ABC and ESPN. Analysts said the move could give Disney the edge over its competitors, which are also looking to sync online content with technology and digital distribution. This could be great for Disney, but also presents new challenges to ABC affiliates, who are already dissatisfied with the company selling its programming through new venues that go around the affiliates.

An announcement could come as soon as Monday. Links:
Reuters Jan 19, 2006 – Pixar, Disney deal could change the digital landscape, Jan 20, 2006 – Tomorrowland: Apple Chief Set for Disney Role

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