It's a problem common to both Silicon Valley and Hollywood. The assets, folks like to say, walk out the door each night. And now that Walt Disney (DIS) has clinched its $7.4 billion deal to buy Steve Jobs's Pixar Animation Studio (PIXR), job No. 1 for Disney executives will be making sure Pixar's top creative folks don't head out the door.
That won't be easy: For many in the movie industry, Disney is the big, bad, and faded ogre that once ruled the animation business. But since the mid-90s, it has been the upstarts -- companies like Pixar and PDI, the Northern California computer-animation unit of Dreamworks Animation SKG (DWA) -- that have been the most daring, creative and, yes, successful of the cartoon companies.
No wonder, then, that Disney Chief Executive Bob Iger, in a conference call with investors after the deal was announced, said his outfit will work overtime to make sure "Pixar is allowed to exist in the form that it has existed in the past." Iger says he knows first-hand that when a company is acquired, employee morale and creativity can suffer.
"MAGNET FOR TALENT." Hired at ABC in 1974, Iger was there when CapCities bought the network in 1985, and when Disney bought CapCities in 1996. "Steve and I spent a lot of time talking about that," Iger says. "One of the really important things will be to continue to protect Pixar and allow its culture to continue. It is such an important part of their success...and as a magnet for talent."
That may explain why, as part of the deal, Pixar's two top executives, President Ed Catmull and top creative executive John Lasseter, were given new and more important jobs with the company. Catmull, who has been with Pixar since it was started by George Lucas in the early 80s, will become president of the Pixar and Disney animation studio. Lasseter, a one-time Disney animator and the director of Toy Story, A Bug's Life, and the soon-to-be-released film Cars, will be chief creative officer of the animation studios as well as the lead creative adviser for Disney's Imagineering unit, which devises new rides for the theme park.
Both executives are likely to stay in northern California, says Disney Studio Chairman Dick Cook, no doubt to buoy morale at Pixar, which will maintain its separate identity. That's crucial, because Disney expects that Pixar will increase its current production to make one film every year, says Disney Chief Financial Officer Tom Staggs. Pixar currently makes movie about every 16 months.
BRAIN POWER. Even before the deal, Pixar was in the process of ramping up production, and films were being directed by folks like Brad Bird (The Incredibles) and Andrew Stanton (Finding Nemo), who worked closely with Lasseter on the films.
In a world where Fox (NWS), Sony (SNE), and even former Miramax co-chairs Harvey and Bob Weinstein are rushing to make computer animated films, Disney and Pixar need to retain that brain power. That means keeping Pixar's Emeryville, Calif. studio the same haven of ping pong tables, Frisbee playing, and even the annual Halloween costume contests that have lured so many folks like Lasseter from Disney's far more rigid environment.
One way that Iger intends to make that happen is to turn the job of making sequels to Pixar films back to Pixar animators. Disney had begun entrusting that task to its own animators.
"ONE OF US." "When you have the characters inside you, like they do at Pixar, you can make the sequels so much better," Iger said. That should be welcome news to Pixar animators who chafed under the notion that Disney would make sequels that weaken the value of the characters they had created. That's a way of churning out films along the lines of the first Godfather sequels or The Empire Strikes Back, says Jobs. "We don't see any reason why they can't be better than the originals."
No one is likely to know for months, maybe years, whether the two animation cultures can mesh. It will likely take fresh discipline from a Disney hierarchy that has cut costs and laid off employees in the past.
Having Lasseter around should help. The 49-year old Pixar creative guru, raised in Southern California, swept streets at Disneyland as a teenager and started out in animation working on Mickey's Christmas Carol at the Disney animation studio. Lasseter decided to leave in 1984 to pursue computer-generated animation at a new animation startup by George Lucas. He's the natural bridge between the two cultures. "He is one of us," says Disney's Cook. And maybe his return will sprinkle some of Pixar's dust around the Magic Kingdom.
Grover is Los Angeles bureau chief for BusinessWeek
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