Deal could bring Pixar and Jobs to Disney for $6.8 million

http://www.iht.com/articles/2006/01/20/business/disney.php

Deal could bring Pixar and Jobs to Disney for $6.8 million
By Laura M. Holson and John Markoff The New York Times

FRIDAY, JANUARY 20, 2006

LOS ANGELES Steve Jobs could be considered the Walt Disney of his era, breathing new life into animated movies with hits like "The Incredibles" and "Toy Story," and reinventing Apple Computer as a media darling with its hugely popular iPod.

Now Jobs is in negotiations to join forces with Walt Disney itself.

A deal would involve the sale of Jobs's Pixar Animation Studios for more than $6.8 billion to Disney, according to three people apprised of the negotiations. The sale, whose terms are still being negotiated, would make Jobs a major shareholder and director at Disney, which has been trying to find its footing in the changing world of animation.

And the merger could give Jobs a pivotal role, if he wants one, in helping shape the convergence of new media and old at Disney. "He's one of the handful of people who has shown the ability to guide both technology and entertainment companies and that might be quite useful to Disney," said Bran Ferren, a former Disney Studios Designer and technologist, who is now co-chairman of Applied Minds, a technology consulting firm based in Glendale, California. "What he has that is rare is taste, and that's a very valuable commodity if you can focus it and harness it."

But the move is also potentially risky for Jobs, because it ties his fortunes to an old media company that, like other entertainment giants, is trying to navigate a difficult course these days.

For Disney, the acquisition would help by lifting the company's lagging computer animation ambitions. But it would also bring on board a visionary who has already done what Robert Iger, Disney's chief executive, has been trying to do in his first year running the company - be a major player in the entertainment world while using technological advances to distribute movies, music and television shows through multiple sources.

"Investors may hope that Jobs's successful track record at Pixar and Apple will rub off more broadly on Disney," said Richard Greenberg, a media analyst at Pali Research in New York.

Disney's board was expected to meet this weekend to discuss whether it wanted to proceed, according to the people apprised of the talks. Two of those people said Disney and Pixar executives had not agreed on a price, and the deal could still be scrapped.

But if the two sides are able to agree on a price, something that those involved say is likely, Iger will recommend to the board that Disney buy Pixar. An announcement could come early next week.

Many of the terms have been worked out. The new animation division would be overseen by John Lasseter, Pixar's chief creative officer and a former Disney animator, who would work with animators in Burbank.

While Pixar under Lasseter has thrived in recent years, Disney's animation division has floundered, burdened by its storied past and its inability to adapt to an environment where pens and paper are being replaced by computer screens and software.

Analysts say a Disney-Pixar combination would only be successful if Pixar took the reins of animation at Disney, because the cultures are vastly different. "John Lasseter's role in any new incarnation of Pixar will be crucial," wrote Katherine Styponias, a media analyst at Prudential Equity Group.