Newspaper article The Evening Standard (London, England)

Superegos Do Battle in Disney Deal Feud

Newspaper article The Evening Standard (London, England)

Superegos Do Battle in Disney Deal Feud

Article excerpt


From Lauren Chambliss in New York

IT HAS all the makings of a good movie script - a clash of titans, colourful characters and a great deal of money at stake. A brewing battle between two chiefs - Walt Disney's Michael Eisner and Pixar Animated Studio's Steve Jobs, who also heads Apple Computer, is lighting up radar screens from Hollywood to Wall Street as a long-running contract between the two comes up for renewal at a time when both are under shareholder-pressure.

Disney helps make, distributeand share in the profits of Pixar's animated feature films. Merrill Lynch estimates Pixar has contributed $682 million (pound sterling423 million) to Disney studio profits since 1999, about 35% of earnings.

Pixar's string of hits, including Toy Story, Monsters Inc and A Bug's Life grossed a combined-665 million in US box-office receipts, nearly three times what Disney managed with its latest in-house animated movies, Atlantis: The Lost Empire, Lilo and Stitch and Treasure Planet. Of those, only Lilo and Stitch pulled in more than $100 million.

Eisner, under pressure to revive a moribund share price, needs to keep profit-making Pixar in the Disney Kingdom but, after Pixar's next movie is released in May, Jobs' hit-making animators have the right to begin shopping around for a new home.

Pixar is counting on its new release, underwater adventure Finding Nemo, to achieve blockbuster status and keep profits rolling in.

Yet shareholders are sceptical as to whether Pixar can keep generating hits, even though the company reported net income of $17 million, or 31 cents a share, in the fourth quarter against analysts' estimates of 22 cents. Some institutional investors are anxious because Disney's marketing is one reason Pixar's movies have been such hits.

Jobs is under contract to deliver three more films, including Nemo, to Disney before the end of 2005 but is being courted by Sony Pictures, Warner Bros and other Hollywood studios.

Analysts say both companies would profit from staying together but, with the two leaders at odds, nothing is certain. …

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