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Behold, the power of Bob Iger

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Published: February 7, 2009 at 9:49 PM

Let's hop back in the Wayback Machine here at Theme Park Insider, back to an ancient time when Pixar was looking to break from Disney, DreamWorks was challenging both Pixar and Disney for kid-movie supremacy, and NBC was hooking up with Universal to take on Disney/ABC.

And then... Bob Iger replaced Michael Eisner.

Since then, not only has Pixar come back to Disney, but Pixar managers are now running the animation division at Disney. DreamWorks broke up with Universal, then left for Paramount, only to come back to Universal, and to then break up again.

So where's DreamWorks heading next?

Disney, that's where. Yes, Steven Spielberg's company is tipped to be entering a distribution deal with Disney, arch-nemesis of Universal (Spielberg's longtime professional home). If the deal is done, the man who gets a cut of every single admission ticket sold at a Universal theme park would be leaving the distribution of him films to... Disney. Wow.

(Let's not forget that DreamWorks Animation remains a separate company, thanks to a stock IPO a few years back. So don't go looking for "Shrek" and "Madagascar" characters to be moving into "It's a Small World" alongside the new Disney and Pixar toons.)

Still, let's give a tip of the hat to Bob Iger and his management team, who have managed to bring Steve Jobs and now, possibly, Steven Spielberg into Walt's house. That Disney and Pixar would get back together seemed unlikely in the last days of the Eisner era. That DreamWorks would end up at Disney would have been inconceivable back then.

So what could a Disney/DreamWorks marriage mean? Well, Spielberg and Disney are on speaking terms again, might we dare to dream of... "Roger Rabbit 2"?

Readers' Opinions

From Corey Romberg on February 8, 2009 at 1:55 AM
WOW!!!!!

Bob Iger, you are amazing!! Disney owning or distributing Pixar, Miramax, Touchstone, and now Dreamworks??!!! We will be an unstoppable force in the movie industry! And the fact that creative geniuses Spielberg (who along with Walt is one of my heroes) and John Lasseter will be on the same team...the team I happen to work for, is a dream come true!

And another interesting story in this is the K in Dreamworks SKG, Jeffrey Katzenberg, who used to be an animator for Disney and when he was let go by Eisner, he teamed up with Spielberg and one other to form Dreamworks...now it looks like Katz wil be back with the Mouse!

A side note on the amazingness of Mr. Iger..I absolutley LOVE the first move Bob made as CEO of the Walt Disney Company, trading Al Michaels to NBC for Oswald the Lucky Rabbit...this just shows his commitment to the heritage of the company, for Oswald was Walt's first true cartoon character, until he lots the rights to him thanks to shady dealings by Charles Mintz of Universal, Walt's distributor at the time (yes, Disney films were once distributed by Universal if you can believe it), and Oswald remained a property of NBC/Universal for decades, even though he was never use...I do not anticipate Disney using him, however it was a great symbolic gesture on Iger's part....the aquisition of Dreamworks however, is a great financial and creative gesture

From TH Creative on February 8, 2009 at 6:27 AM
Here's the story ...

LOS ANGELES (Reuters) -- DreamWorks SKG, the movie company controlled by Steven Spielberg, and Universal Pictures Friday severed their film distribution pact, sending DreamWorks into advanced talks with Disney where it expects to get more funds to spur production.

Universal, a unit of the NBC Universal media division of General Electric Co (GE, Fortune 500), said it broke off "several weeks" of talks on a distribution deal after the smaller DreamWorks "demanded material changes to previously agreed upon terms."

A Universal spokeswoman declined to comment beyond their statement. DreamWorks also declined to talk, and a Disney representative could not be reached to discuss reports that a Disney/DreamWorks tie-up could come soon.

Distribution deals can be lucrative with the distributor taking a percentage of a film's box office for sending movies to theaters and mounting a promotion and marketing campaign.

For a smash hit like "Transformers," which had worldwide ticket sales of $708 million, the distribution fee easily runs into the tens of millions of dollars.

From Robert Niles on February 8, 2009 at 1:34 PM
To clarify (or reinterate): Disney's not buying DreamWorks. It would distribute DreamWorks' movies (similar to the arrangement, in concept, that Disney had with Pixar before Disney bought Pixar). A distribution deal creates a close working relationship, as well as a strong financial tie, between the studios.
From TH Creative on February 8, 2009 at 4:42 PM
It also means a lot of cabbage for the mouse.

This is a very big deal.

From Corey Romberg on February 8, 2009 at 5:27 PM
True, but when Disney simply distributed Pixar films and didnt own them, not only did Disney make lots of money from the Pixar films, they also had the rights to merchandise products from the films, and use the characters and stories in their theme parks..right now Dreamworks' films are represented at Universal Studios: the upcoming Transformers ride, Shrek 4D, Madagascar character meet and greets, but thats because Universal was their distributor....now that Disney will be the distributor, its concievable to see Dreamworks characters at Disney parks, and rides based on future Dreamworks movies, however, I really hope that is not the case

Either way, Disney will make bug bucks from this deal, especially Transformers 2..other big Dreamworks movies upcoming that Disney will make tons of cash from: Puss in Boots, Shrek goes Fourth, Lincoln (Spielberg's next directorial film), The Soloist, and Adventures of Tin Tin...just imagine the merchandise from Transformers and Shrek....the distributor makes more money than the production company in the long run,...so I LOVE this for my company!!

From Tim W on February 8, 2009 at 7:26 PM
Disney will own an animation monopoly of sorts. Kudos for them. Its a little strange that they are getting Dreamworks however being one of pixars main competetors.
From Raul Araoz on February 8, 2009 at 7:38 PM
This will be a good deal for Disney. However, the distribution deal for Transformers 2 is already in place so Disney will not benefit from that. Also, as Robert said, Dreamworks animation will still be separate. As far as Touchstone films goes, it has been pretty much rebranded as Walt Disney Pictures since the success of the Pirates films.
From TH Creative on February 8, 2009 at 7:53 PM
Corey writes: True, but when Disney simply distributed Pixar films and didnt own them.

I Respond: OH YES THEY DID! Disney held a sizable ownership of (I belive) seven of the first Pixar films, beyond simple distribution.

Toy Story
Bugs Life
Monsters Inc.
The Incredibles
Finding Nemo
Cars
Toy Story 2

Wiki: In 1991, after substantial layoffs in the company's computer department, Pixar made a $26 million deal with Disney to produce three computer-animated feature films, the first of which was Toy Story. Despite this, the company was costing Jobs so much money that he considered selling it. Only after confirming that Disney would distribute Toy Story for the 1995 holiday season did he decide to give it another chance.

From Corey Romberg on February 8, 2009 at 8:30 PM
Yes, but Pixar was still its own company...Disney was the Distribution Company and Pixar the Production Company....now that Disney owns them, the production and distribution are one in the same...the relationship with Dreamworks will be like the former relationship between Disney and Pixar...which means Dreamworks will be its own company, but as distributors, Disney will have some ownership in the films...which is why this pertains to the theme park industry...Disney could put future Dreamworks films in the parks, but not the Animated Films

And btw, Wikipedia isn't the best, most trusted source out there...even though your information was correct

From Joshua Counsil on February 9, 2009 at 12:31 AM
Gotta love Bob.

If Disney is distributing these films, I wonder if they'll end up in the "Disney vault" ... God, I hate that thing.

From TH Creative on February 9, 2009 at 6:21 AM
Mr. Romberg writes: "the relationship with Dreamworks will be like the former relationship between Disney and Pixar."

I Respond: That's not correct. In their initial partnership (BEFORE Disney bought the company), Pixar was responsible for creation and production, while Disney handled marketing and distribution. However, while the profits and production costs were split 50-50, Disney owned all story and sequel rights and also collected a distribution fee. (Wiki)

The division of story, character likeness and sequel rights that were part of Disney's agreement with Pixar (BEFORE Disney bought the company) would not be included in a Dreamworks deal. Disney would earn only a distribution fee -- and have no claim on profits, likeness, story or sequel rights.

From Corey Romberg on February 9, 2009 at 8:21 AM
Ok, thats sounds right. Im sorry, I just figured it would be the same, but that makes sense. As long as the relationship with Spielberg brings about a Who Framed Roger Rabbit sequel, I'll be happy
From Raul Araoz on February 9, 2009 at 9:35 AM
I would adore a sequel to Roger Rabbit. However, getting it off the ground would be a lot more complicated than just Spielberg's cooperation. Today, getting the rights to use all of the cartoon characters(including Warners) would be astronomical. They tried once and the preliminary price for the film made Titanic's production cost seem like chump change. I hope it can still get done, but I am not holding my breath.
From Raul Araoz on February 9, 2009 at 11:25 AM
It is official.

According to Entertainment Weekly: "Just days after Universal issued a statement that all discussions of an alignment with Steven Spielberg's DreamWorks Studios had been finished, Walt Disney Studios has agreed to enter into an exclusive long-term distribution arrangement with DreamWorks. Disney will handle distribution and marketing for approximately six DreamWorks films each year -- the first to be released under the Touchstone Pictures banner will hit theaters in 2010. Reliance BIG Entertainment, a partner in DreamWorks, will distribute the new company's projects in India."

From James Rao on February 9, 2009 at 8:27 PM
In 1995, Disney looked like it was done with animated films. Then along comes Pixar, John Lasseter, Steve Jobs, and a little film called Toy Story. And now, a little over a dozen years later, along comes Dreamworks and Steven Spielberg.

Pixar and Dreamworks.....wow. That should help Disney with the downturn in the theme park business.

And the rich just keep getting richer.

In a cryogenic chamber somewhere in the Midwest, a man with the initials W.D. just broke into a smile.

From jesse dominguez on February 9, 2009 at 12:36 PM
"..right now Dreamworks' films are represented at Universal Studios: the upcoming Transformers ride, Shrek 4D, Madagascar character meet and greets, but thats because Universal was their distributor.."

Universal was not the distributor on those films - Paramount Pictures was. Some franchises will stay with Paramount (Transformers), while other films in development will go with DW. The distribution deal with DWA is up I believe in 2012 (distributed by Paramount).

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