NEW YORK (Reuters) – Pixar Animation Studios Inc. may have
assumed risks and disadvantages when lengthy negotiations to renew
its movie distribution deal with Walt Disney Co. broke down last
week, according to a report in the latest edition of Barron’s.
Shares of Pixar rose 3.4 percent to $66.39 on Friday while those
of Disney fell 1.8 percent to $24, a day after the firms announced
they had failed to extend a pact that has yielded such blockbusters
as “Finding Nemo” and “Toy Story.”
Barron’s said Pixar has probably capped its earnings power for
the next three years because its next two movies, “The Incredibles”
and “Cars,” will be released under the existing deal, which
effectively gives Disney more than 60 percent of any profits.
The report cited a Morgan Stanley analyst who said the
possibility of negotiating more favorable terms on those two movies
is now off the table.
Pixar will face Disney as a rival in the increasingly
competitive animated film business and Pixar’s new partner is
unlikely to be as strong as Disney in family entertainment,
In the future, starting with its as-yet unnamed 2006 movie,
Pixar will probably bear all the production and marketing costs,
Talks between Disney and Pixar, which is run by Apple Computer
Inc. co-founder Steve Jobs, broke down Thursday after 10