Could a reconciliation be in the cards?

Disney, Pixar Talks Seen Likely After Eisner Exit
LOS ANGELES (Reuters) – Pixar Animation Studios Inc. likely will reopen talks on a distribution deal with the Walt Disney Co. now that Disney CEO Michael Eisner is set to depart in September, analysts said on Monday.
Eisner, who will be replaced by Disney President Robert Iger, was seen as the main stumbling block for Disney to renew its lucrative partnership with Pixar because of his turbulent relationship with Pixar Chief Executive Steve Jobs.
Pixar, which produced such blockbuster films as “Toy Story,” “Finding Nemo” and “The Incredibles” in its partnership with Disney, was also seen as holding a better bargaining position with Iger at Disney’s helm.
“I just think this puts a lot of pressure on the Walt Disney Company,” Fulcrum Global Partners analyst Rich Greenfield said. “Bob Iger, once he takes over, will be faced with this negotiation as one of his first acts as CEO … Disney needs (Pixar) very badly.”
Greenfield said Jobs would likely press his advantage to get better terms than he could have squeezed from Eisner. Pixar films have taken in about $3 billion at the box office worldwide, and Disney has had the bigger share of profit.
“The pressure is on Disney, not Pixar,” Greenfield said.
Last month, Jobs told analysts that Pixar “likely … will not forge a new relationship with Disney beyond our current deal,” but did not elaborate about how far talks with Disney had progressed or where else Pixar might look for a partner.
Pixar has pushed back its target date for finding a new distributor a number of times and said that “musical chairs” in Hollywood was part of the reason, giving some hopes that a new Disney deal was possible.
Anthony Sabino, a business and law professor at St. John’s University in New York, warned that Pixar would play an important part in helping Iger win the board’s confidence.
“One of his top priorities and maybe his top priority has got to be to reach out to Pixar and negotiate with them again,” Sabino said.
Lehman Brothers analyst Anthony DiClemente called the development at Disney “not … a huge surprise to Pixar investors” and in a research note said a deal was “less likely” between the two companies.
Pixar’s partnership with Disney expires with the June 9, 2006, release of its seventh film, “Cars,” and it must have a new distributor in place before its eighth film is released in summer of 2007.
Pixar spokesman Tom Sarris on Monday said the company had no further comment on the distributor search or about developments at Disney. Sarris would not say whether Jobs and Iger had ever met.
Shares of Pixar closed up $1.98, or 2.2 percent, at $90.96 on Nasdaq.