Disney aims to schmooze Pixar

LOS ANGELES - Walt Disney president Robert Iger, who will replace Michael Eisner as the company's chief executive, said he wants to talk to Pixar animation studio chief executive Steve Jobs about renewing their film distribution partnership.

"I'd love to open a dialogue with Pixar about a continued relationship," Iger said. "But as I've cautioned a number of people, any relationship we have has to be the right one for the shareholders."

The comments by Iger signal Disney will take a more conciliatory tone with Pixar, which cut off negotiations in January, 2004, amid tension between Eisner and Jobs. Disney, the second-biggest US media company, has co-financed and distributed all of Pixar's feature-length films, including Finding Nemo and The Incredibles.

"Iger has got to offer Pixar an olive branch," said Delphi Management president Scott Black, who owns 348,000 shares of Disney among the US$1.1 billion [$1.5 billion] under management. "Disney needs Pixar more because its animation isn't very good."

After Jobs decided to split with Eisner, the two engaged in a war of words, with Eisner calling computer animation of human figures "pathetic" and Jobs saying he wrote that comment off to "Michael being a loose cannon".

Iger said that while he doesn't know Jobs well, the two have a "cordial" relationship. "Turning to the outside is a good thing, and I hope to continue to do that," he said.

One of Iger's challenges as CEO will be to "reconstruct Disney's relationship with Pixar", said Merrill Lynch analyst Jessica Reif Cohen.

Pixar has contributed as much as 50 per cent of Disney's film profit in some years, Reif Cohen said in a 2003 report.

Pixar films including Monsters, Inc, A Bug's Life and the Toy Story movies have generated more than US$3 billion in worldwide box-office sales, helping to buoy Disney's film division.

When Jobs cut off talks with Eisner, Disney said Pixar's final offer would have required the company to forgo "hundreds of millions of dollars" it's entitled to under their agreement.

In November, Jobs told investors and analysts that Eisner's departure and other executive changes in Hollywood might change Pixar's choice of new partner.

The companies' contract ends with Pixar's June 2006 release of Cars. Disney and Pixar will split costs and profits equally after Disney receives a distribution fee. Jobs has said he wants a new partner in place this year.

Eisner scored a coup in negotiating the original contract with the then-unproven Pixar, arranging the deal so that Disney has the right to make sequels and use Pixar characters at its theme parks.

Separately, Iger yesterday said Disney would not renew its employment contracts with Miramax film unit co-chairmen Harvey and Bob Weinstein.

- BLOOMBERG