The Disney-Pixar Merger Essay

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Table of Contents

Disney – Pixar Merger 3
Introduction 3
Aggressive cost cutting 3
Co-production agreement 4
The Financials 5
The Investment decision 5
How had this merger worked in the long run 7
Advantages 8
Disadvantages 8
Bibliography 10
Appendix 11
Exhibit 1 11
Exhibit 2 12
Exhibit 2a 13
Exhibit 3 14
Exhibit 4 & 4a 15
Exhibit 8 16
Exhibit 9 17
Exhibit 11 18

Disney – Pixar Merger
Introduction

The Walt Disney Company was established by the brothers Walt and Roy Disney on October 16th 1923 and is one of biggest entertainment and media’s company’s throughout the world. It is the largest of a number of television networks such as the American Broadcasting company together with 7 theme parks. Also in the 1930’s, Disney started to
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Pixar’s contribution represented 10% of revenue and over 60% of total operating income over the period.
The dynamics of theatrical and financial success changed completely, and new revenue streams were generated by other sectors (see Exhibit 3). By 2005, a structural change in profits occurred with the largest revenue sources was home video and not the theatrical box office.
As for Pixar, the company was established in 1979, originally as a graphics group to form part of the computer division of Lucas Film Limited by John Lasseter and George Lucas. In 1986, Steve Jobs - who had left Apple Computer the year before—bought the Lucas Film computer business for $10 million. Later Steve Jobs established it as an independent company co-founded with Dr. Edwin E. Catmull and renamed the company to Pixar.
Although it would be worth knowing that initially, Jobs intended Pixar to be a computer hardware and software company (see Exhibits 4 and 4a). Nonetheless, as an American computer animation film company, Pixar became an award winning company, best known for its creation of a string of animated films. It’s most popular films include the likes of Toy Story, The Incredibles and Finding Nemo, amongst others. Also on a side note, the release of Toy Story on November 22, 1995 was the biggest impact on the future of film making industry. In fact in 1995, Toy Story was the film which generated the highest earnings of

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