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The inside story of how Dreamworks beat Pixar to the screen

In the entire history of human communications, it's quite possible there has never been a joke made about maggots. So when such jests occur in two different movies released within two months of each other -- and two computer-animated movies, at that -- then there's probably more than coincidence at work.

Indeed, there is an explanation for why both Dreamworks SKG and Pixar Animation Studios (PIXR) both made movies about insects -- and it's not a pretty tale. First came Dreamworks' Antz, a movie about a depressed ant played by Woody Allen, which opened on Oct. 2. On Nov. 25 comes Pixar's A Bug's Life, a more kid-oriented movie -- also starring an ant that saves his colony from disaster.

The story -- although neither Dreamworks or Pixar bring this up much -- starts back at Disney, where Dreamworks co-founder Jeffrey Katzenberg used to work. It seems that as far back as 1988 Disney considered developing a movie called Army Ants, about a pacifist worker ant that teaches important lessons to his militaristic colony through his independent thinking. That's not so important, except to point out that bugs-based movies were in the air.

Cut to the summer of 1994, when Pixar story writer Joe Ranft and Bugs co-director Andrew Stanton come up with a goofy twist on the Aesop fable about the ants and the grasshoppers. Instead of lazy grasshoppers learning lessons from industrious ants, their story would be about courageous ants who liberate themselves from grasshoppers who intimidate them into giving up hard-won food each year. That August, Pixar creative chief John Lasseter pitched the idea to Disney -- coincidentally, on the day Disney announced that Katzenberg is leaving the studio.

HUNKY DORY. Katzenberg declined to comment for this story. But Pixar executives don't believe Katzenberg found out about the Bugs project while at Disney. Indeed, some are even willing to believe Dreamworks' version of the facts: that Katzenberg got the idea for Antz from Nina Jacobsen, a former Disney executive (now back at Disney) who pitched the idea while working for Dreamworks at the time.

Indeed, Pixar executives say that as of 1995, relations with Katzenberg were fine. After all, Katzenberg had been the one who had championed Toy Story, Pixar's blockbuster 1995 film. "He's the one who had believed in us when we wanted to be up here [near San Francisco] making movies for Disney," says Lasseter. While Katzenberg had left Disney half-way through that production, Lasseter still counted Katzenberg as a friend. Indeed, after Lasseter won an Oscar for Toy Story in early 1996, he says he received a chocolate Mr. Potato Head (a character in Toy Story) with an inscription that read "You've Got a Friend in Me" (the title song from Toy Story) from Katzenberg.

What's more, Lasseter -- an affable, some say naive, sort of fellow -- wasn't going out of his way to be secretive. Given a standing invitation to drop by, he and Stanton visited Katzenberg in his offices at Dreamworks in the fall of 1995 while in Los Angeles to do post-production work on Toy Story, which came out that November. "We told him all about Bugs," says Lasseter. After all, Lasseter had been pushing for more than a decade to get computer animation on the map as a respected medium. And given his high hopes for Toy Story, he was telling friends throughout the tight-knit computer-animation business to get cracking on their own movies. "If this hits, it's going to be like space movies after Star Wars" for computer-animation companies, he says he told various friends.

Thinking back, Lasseter says he should have seen trouble coming. When told about Bugs, Katzenberg seemed to do some calculations in his head and asked when it would be released. When Lasseter said probably in Thanksgiving of 1998, Katzenberg said: "Hmmm, that's when [Dreamworks'] The Prince of Egypt is coming out." Still, Lasseter and Stanton left the meeting with no sense of concern. In fact, Lasseter says he was thrilled when he heard later that year that Dreamworks had purchased 40% of Pacific Data Images, another computer-animation pioneer. Pixar had had close ties with this company, which had come upon hard times. Indeed, Pixar and PDI had for years co-hosted a party at the annual SIGGRAPH trade show for graphics professionals.

'BETRAYED.' Sometime later, Pixar learned it had been "betrayed," to use Lasseter's words. Pixar sources say PDI chief Carl Rosendahl set up a lunch with Lasseter to tell him some news that was weighing on him: that Katzenberg had agreed to do the deal with PDI only if PDI committed to deliver Antz before Pixar's Bugs came out. Neither Lasseter or Rosendahl could be reached for comment on this meeting.

Lasseter does say, however, that he smelled a rat when he began reading about Dreamworks' Antz project in trade magazines. He claims he called Katzenberg and said: "Jeffrey, how could you?" He claims Katzenberg "hemmed and hawed," and then admitted he was making Antz. "I couldn't believe it," says Lasseter. "He started talking about all this paranoid stuff about conspiracies -- that Disney was out to get him.... He said he had to do something. That's when I realized, it wasn't about me. We [Pixar] were just cannon fodder in his fight with Disney."

Pixar sources say Katzenberg later called Lasseter with an offer: Convince Disney to move the release date of Bugs, and he would stop development of Antz. Lasseter, outraged, slammed down the phone and stormed into the office of Pixar CEO Steven P. Jobs. "I've rarely seen John angry, but he went bullshit," says Jobs. "I told him: 'There's a word in the dictionary for this. It's called extortion,'" says Jobs. Later, Katzenberg called Jobs to repeat his offer, but Jobs said he couldn't influence Disney's schedule. Sources close to Dreamworks say Katzenberg never offered such a deal.

Thus ensued a fast deep-freeze between Pixar and the Dreamworks/PDI team. Says Lasseter: "The saddest thing is that it's completely changed the [computer-animation] community.... If their movie had been about anything other than insects, we would have bought tickets for all of Pixar to go see it." Instead, Lasseter says he still hasn't seen Antz.

BOFFO ANTZ. If Pixar appears to have the moral high ground, Katzenberg seems to have played his cards beautifully. Whether or not it's true that he always planned to release Antz before Bugs -- until this this June, the plan was to release it in spring of 1999 -- the movie clearly hasn't been hurt by the extra press this controversy has created. Antz has already done $75 million at the box office, breaking the record for a non-Disney animated film, and insiders expect total revenues to approach $100 million.

Maybe more important, Dreamworks has lifted PDI's reputation dramatically. Long thought of as a geeky special-effects house -- one without the creative spark that enabled Pixar to make Toy Story -- a revived PDI has somewhat leveled the playing field. "The whole idea was to draw us into a bugs vs. bugs war, so they'd get compared to us," admits Lasseter.

By that criteria, the first round in the Bug Wars goes to: Jeffrey Katzenberg.

By Peter Burrows in San Mateo, Calif.


COVER IMAGE: Steve Jobs, Movie Mogul

TABLE: A Bug Farm's Life

TABLE: Pixar's All-Star Team

TABLE: Just How Big Will ``A Bug's Life'' Be?

CHART: Thriller

PHOTO: Pixar Animated Characters

PHOTO: ``Tin Toy'' from Pixar

GRAPHIC: How Flik Comes to Life




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Updated Nov. 12, 1998 by bwwebmaster
Copyright 1998, Bloomberg L.P.
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