Disney Pixar Case

2049 Words Mar 9th, 2013 9 Pages
Date: October 24, 2012
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Re: The Walt Disney Company & Pixar, Inc. – To Acquire or Not to Acquire?

For more than a decade, Disney and Pixar have enjoyed a very profitable and productive partnership. Disney provided rich resources and entertainment business insight, including marketing and distribution acumen, which allowed Pixar to grow far beyond a software producer to the leader in computer-generated animated movies. Conversely, Pixar revitalized creativity into Disney’s output and delivered a stream of successful movies and characters. However, significant disputes formed between the partners in spite of production successes, and the leverage power surrounding negotiations between
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Disney would fund all marketing expenditures and Pixar would receive no revenue share of Disney’s theme parks, cruise ships or other location-based entertainment. Pixar would earn up to net 40% of total movie profits, and Disney would receive at least 60% with exclusive distribution and exploitation rights to all films produced under the agreement. (Exhibit D)
As the relationship with Pixar progressed, Disney began to evaluate an acquisition decision, but needed to consider what this meant for its corporate culture. (Exhibit E) At the time, Disney was losing creative value and emerged as a bureaucratic company in which executives made creative decisions. In contrast, Pixar approached creative development from a bottom-to-top development perspective. Although the companies had many differences, each proved that they could produce box office hits. However, Disney and Pixar had concerns about the merger. For Disney, adding an executive like Steve Jobs to its board could result in personality conflicts and hinder productivity. Disney was also concerned about Pixar’s approach to creative development, as it didn’t align with its traditional perspective on character development. Pixar was concerned that it would relinquish creative control to a top-heavy company, which could potentially alter the corporate culture,

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