The Disney-Pixar Merger

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 make films with their first ever animation; being Snow White and the Seven Dwarfs. Other few of their primary films include Bambi, Dumbo and Pinocchio which were all targeted as kid’s fairytales. Furthermore, prior to 2006 Walt Disney had created some of the best cartoons in the industry that had generated a lot of revenue for the company such as Lion King, Beauty and the Beast and the Little Mermaid.

After the Lion King in 1994, Disney-produced animated films fell below expectations (Exhibit 1). Disney was employing 275 employees in 1988 and later increased this to 950 in 1994 due to the release of The Lion King. It later expanded to 2,200 in 1999.

Competition for animators in the 1990s also caused salaries, which accounted for 80% of each film’s cost, to expand, with animators’ pay rising from $125,000 in 1994 to $550,000 in 1999. Such increases in pays affected the whole sector.

Aggressive cost cutting

The first movie made under a new cost cutting environment was Lilo & Stitch. The feature-...

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... Acquire?. Available: http://www.economics.neu.edu/dana/strat6200/Strategy_6200/14_-_Disney_files/Disney%20and%20Pixar%20-%20Clean%20-%20709462-PDF-ENG-3.pdf. Last accessed 08/04/2014.

Kaitlyn Alvino. (2013). Disney-Pixar Merger. Available: http://prezi.com/vgdyprhbfveb/disney-pixar-merger/. Last accessed 08/04/2014.

Pankaj Baid. (2012). Disney & Pixar. Available: http://www.slideshare.net/pankajbaid17/disney-pixar-14616932. Last accessed 08/04/2014.

Rajesh Rikame. (n/a). Case Study of Disney & Pixar. Available: http://www.scribd.com/doc/56711406/Case-Study-of-Disney-Pixar. Last accessed 08/04/2014.

The Big Cartoon Database. Available: http://www.bcdb.com/cartoons/Other_Studios/C/Cambria_Productions/. Last accessed 08/04/2014.

Appendix

Exhibit 1

Exhibit 2

Exhibit 2a

Exhibit 3

Exhibit 4 & 4a

Exhibit 8

Exhibit 9

Exhibit 11