Category: Business

Disney to cut 650 jobs, movie output
LOS ANGELES – The Walt Disney Co. is restructuring its studio division to emphasize blockbuster franchise films over more adult fare, a move that will mean slashing 650 jobs worldwide, the company announced Tuesday.
Among those who will lose their jobs is Disney’s longtime head of live-action production, Nina Jacobsen.
The restructuring will cut Disney’s output from about 18 films a year to about a dozen. Of those, about 10 will be released under the Walt Disney Pictures banner, a proven family-friendly brand that includes the successful “Pirates of the Caribbean” franchise.
Disney’s Touchstone label, which is responsible for more esoteric fare by artists like Joel and Ethan Coen of “Fargo” fame, will be cut back to only two or three releases a year. Recent Touchstone films have included the box-office flops “The Alamo” and “The Ladykillers.”
The shift, the company explained, will allow Disney films to bolster the resources of other divisions. A hit like “Pirates of the Caribbean,” for example, can spawn video games, action figures, cable TV shows and, in the case of “Pirates,” give new life to an old Disney theme park attraction.
“When we do it well, the lift it gives to the entire company is so significant,” Dick Cook, chairman of Walt Disney Studios told The Associated Press.
The shift to more Disney-branded films has been expected for some time, as have staff cutbacks resulting from a reduction in the total number of films.
Surprising, though, was the loss of Jacobsen, who has been head of live-action production for more than a decade.
“Sometimes these things just happen,” Cook said. “She is a fantastic executive, very talented, great taste, very smart. She is so capable, she did so many wonderful things at Disney that will be legacies that will last for years to come.”
Last year, Disney bought longtime partner Pixar Animation Studios to bolster its animated film offerings. That move led to the departure of the veteran executive in charge of Walt Disney Feature Animation.

Getting Chummy
Already the biggest media outlet in Canada, Bell Globemedia will soon appear before the Canadian Radio-television and Telecommunications Commission with another order to ìsuper-size me.î BGM owns CTV and the Globe and Mail, along with 17 TV specialty channels, including TSN, MTV and the Discovery Channel. On Wednesday, BGM announced it had agreed to pay $1.4 billion for control of national rival CHUM Ltd., which owns 33 radio stations and 12 TV stations, headed by the Citytv channels in Toronto, Vancouver, Calgary, Edmonton and Winnipeg. CHUM also owns 21 specialty TV channels and the Muzak background-music operation in Canada.
Will the CRTC approve the BGM acquisition? Industry observers believe so. It is widely assumed that Canadaís media gatekeeper is about to green-light Torstarís recently proposed 20 per cent purchase of BGM (price: $283 million). This means that very soon, the countryís largest city newspaper (the Toronto Star) and national newspaper (the Globe and Mail), along with Canadaís most-watched TV network (CTV), one of our biggest radio chains, 38 specialty TV channels, and even the guys who select the songs we hear on elevators will all be affiliated.
The proposed acquisition looks to be an excellent move for BGM. The Wall Street Journal recently confirmed a widely held industry belief that advertisers are moving from network television; as an example, General Motors halved its network advertising between 2002 and 2005, spreading promotion dollars to TV specialty channels and the internet. By reducing rival CanWest Global Communications ó which owns Global TV, the National Post and the Southam newspaper chain ó to a speck in its rear-view window, BGM has created, in the parlance of industry annual reports, ìa 21st-century multi-media platformî that can reasonably hope to lock up consumers and advertisers.
The BGM takeover of one of its biggest rivals may not turn out to be a chummy deal for Canadians, however. Wednesday’s announcement came with the grim news that 281 CHUM jobs were to be ìeliminated.î How will the TV channels survive with severely reduced staffs? One CHUM franchise, Ottawaís A-Channel, simultaneously announced the implementation of ìOverdrive Automation,î a system that would introduce wholesale robotic equipment to the newsroom. Thatís great news for the currently unemployed C-3PO and R2-D2, but a bad omen for the journalism industry and TV viewers across the country.
In addition to an inevitable lowering of performance standards for existing CHUM affiliates, the emergence of a super-sized multi-media platform like BGM sucks all the air out of the tank of rivals who simply canít compete with an automated conglomerate offering centrally generated programming. Some North American industry analysts believe that the money simply isnít there for local TV anymore. Indeed, in the United States, where network affiliates experienced a nine per cent loss of revenues in 2005, stations in many cities, including Tampa Bay, Cleveland and Denver, have taken to running dating services and charging guests to appear on morning talk shows.
Here in Canada, there is the added danger of news and programming coming from increasingly monolithic content providers. When approving media mergers, the CRTC inevitably introduces ìfirewallî regulations to make sure businesses keep financial and editorial departments separate. Still, compromises are inevitable within media conglomerates.
If nothing else, their emergence makes a lie out of the adage that bigger is better. Just ask anyone old enough to remember when Winnipeg and Ottawa had two daily newspapers, with Winnipeggers enjoying equal access to the Winnipeg Free Press and Winnipeg Tribune, and Ottawa readers able to choose between the Ottawa Citizen and Ottawa Journal. Then, in 1980, in a widely controversial move that prompted the Kent Commission investigation into media monopolies, the Thomson and Southam news chains simultaneously closed down the Journal and Tribune, allowing the respective chains to feast on the profits of non-competitive markets: Southam took Ottawa, Thomson grabbed Winnipeg. The two businesses were bigger and more profitable as a result of the alleged trade, but both cities seemed somehow diminished. The papers became less vigorous in serving their communities.
Today, it is an accepted wisdom that the Globe and Mail became a better product after the arrival of a second national newspaper, the National Post. As in most businesses, competition is good for the consumer in the news and entertainment industries.
BGMís acquisition of CHUM marks the disappearance of a major competitor in Canadaís shrinking media world. There could be more mergers in the near future. Allan Waters, the founder and chief of CHUM, died in December; the industry is rife with speculation that Canadaís aging, first-generation communication moguls ó including J.R. Shaw of Shaw Communications in Calgary, and, in Central Canada, Ted Rogers of Rogers Communications and the Greenberg family of Astral Media ó face similar estate pressures to put their radio and cable TV empires up for sale.
The manner in which CHUM gutted its operation to attract a buyer also represents a troubling sign for Canadian consumers. It seems apparent that truly local, commercial TV stations may be disappearing, with unique affiliates evolving into transfer points for content shaped elsewhere.

Sony BMG deal could be undone; EMI-Warner in doubt
LONDON/BRUSSELS (Reuters) – A European court annulled the European Union’s approval of a 2004 merger between Sony Music and BMG in a surprise decision that could force a break-up of the world’s second-biggest music company.
The unprecedented ruling by the European Court of First Instance on Thursday, upholding a challenge to the deal from independent record labels, also cast doubt on the viability of combining EMI Group and Warner Music, which are engaged in a duel to buy each other.
Warner’s shares tumbled 15.2 percent to $25.24 on the New York Stock Exchange while EMI’s closed down 9.2 percent at 277 3/4 pence in London.
The European Commission said it would have to re-examine the union of Sony and BMG, a 50-50 joint venture between Japanese electronics giant Sony Corp. and German media group Bertelsmann AG. It can also appeal against the ruling.
The decision means Sony Music and BMG, respective home to such artists as Bruce Springsteen and Kelly Clarkson, have seven days to submit the merger plan anew to the EC, which also would have to consider new industry conditions, including the rapidly growing market for online and mobile phone downloads.
The Commission would then have a month to decide whether to approve it, consider remedies or open a four-month in-depth probe, which could lead to a rejection of the deal.
“If we were to give a red light, then the joint venture would have to be reversed,” Commission spokesman Jonathan Todd said during a regular briefing with reporters.
Sony and Bertelsmann said they would review the ruling.
Europe’s second-highest court, overturning an EU-approved merger for the first time, said too cursory an examination was conducted into whether there was already collective market dominance in the music industry and whether that dominance might grow following the Sony BMG deal.
DEAL CHANCES PLUMMET
EMI and Warner, the world’s third- and fourth-largest music companies, respectively, have each offered about $4.6 billion to buy the other, with both bids rejected.
Warner has offered 320 pence a share for EMI, and EMI $31 for each of Warner’s shares.
Two people close to the deal, who asked not to be named, told Reuters that talks between the two companies were likely to be suspended because of the ruling.
“It seems to pile on regulatory risk for EMI and Warner, especially at a time when there was an increasing number of people that would have been backing the inevitability of this deal,” Credit Suisse analyst Simon Baker said.
London-based EMI told shareholders at its annual meeting on Thursday it still believed buying Warner for $31 a share would be good for them, and that it was studying the court decision.
“I said we would not have made the proposal if we felt we could not receive regulatory approval,” EMI Chairman Eric Nicoli said. “There is no reason at this stage to change that view.”
Warner also said it was reviewing the decision.
The case against the creation of Sony BMG was brought by Impala, the umbrella trade group for 2,500 independent labels, which claimed that reducing the industry from five major players to four put too much market power in too few hands.
The EU approved the deal believing there was no monopoly among industry goliaths because of a lack of public fighting among them and the diversity of music available to consumers.
“The elements on which that argument was founded were incomplete and did not include all the relevant data that ought to have been taken into account by the Commission,” the court said. “They were therefore not capable of supporting the conclusions drawn from them.”
A third source close to the deal said the ruling may not be as bad a setback as it looks, and the EU could still clear the Sony BMG deal as well as pave the way for EMI and Warner.
“A merger between any of the players is possible as long as the Commission doesn’t make mistakes in its analysis,” the source said.
Along with Vivendi’s Universal Music, the world’s largest music company, Sony BMG, EMI and Warner account for about three of every four CDs sold globally.
The indies say they would accept a Sony BMG merger only if it included conditions that ensured a level playing field for radio advertising, manufacturing, distribution and other costs.
“The EC had the courage to scrutinize and correct its mistakes,” said Hein van der Ree, Impala’s vice president and the managing director of Epitaph Europe.
“This locks the door for an EMI/Warner merger, thankfully,” he added, “and keeps the doors of market access open for the little guy.”

CTV owner to buy CHUM for $1.7B
TORONTO (CP) – Canada’s broadcasting industry is set to undergo a seismic shift, with the owner of CTV Inc. preparing to buy CHUM Ltd. in a $1.7-billion deal that has the potential to reshape the country’s media landscape.
The friendly takeover offer was announced Wednesday by Bell Globemedia, which in addition to the main CTV network also owns The Globe and Mail newspaper, local conventional television stations and national specialty TV channels.
The bid coincided with the release of CHUM’s latest financial results and announcement of plans to cut 281 positions at TV stations across the country – part of an efficiency drive company management has been working on for months.
Critics of media concentration were quick to lament the loss of so many jobs and the impact the takeover would have on the diversity of news and information sources in Canada.
But Bell Globemedia president and chief executive, Ivan Fecan, said in an interview that news operations at CTV and CHUM will remain independent.
“We’ll have two separate news organizations, one at CTV and one in Citytv, and they won’t report to each other in any way,” Fecan said. “I don’t think there’s any upside in having them being the same. You actually want them to be different because they have different approaches.
“As well, we’re going to do everything we can to maintain the energy and irreverence of the Citytv brand.”
But the repercussions of the buyout could represent another blow to local journalism, which has been eroded over the past decade by private-sector mergers in print and broadcasting and cuts to the CBC.
“It seems to me that no matter how you look at it, it’s going to mean that there will be fewer journalists involved in television coverage at the local level in many of our major cities, and it’s started already,” said Peter Desbarats, former dean of the journalism program at the University of Western Ontario.
“That’s a serious development because it comes on top of a real deterioration of the daily newspaper in many of those same cities.”
A combination of CHUM with Bell Globemedia would face the scrutiny of the Canadian Radio-television and Telecommunications Commission.
Fecan also suggested that the another media company could buy some of the CHUM A-channel and Access television stations that Bell Globemedia plans to sell and use them to create a third private-sector national network in addition to CTV and CanWest’s Global Television.
“Because that will give a new player three big markets – Ontario, Vancouver-Victoria and Alberta. So I think there’s a real opportunity for a new player to join into that was well as we divest those stations.”
Although Fecan said it’s too soon to identify a potential buyer, he noted that Montreal-based Quebecor Inc. and Toronto-based Rogers Communications already have major print and broadcast assets in some parts of the country.
Union leader Peter Murdoch warned, however, that the layoffs announced Wednesday by CHUM hit the parts of its operations that cover hard news, such as local politics and crime.
“It’s that kind of hard news which tends to be more challenging to administration and to the interests of the public than what your local hockey hero has done,” Murdoch said.
Murdoch, a vice-president of the Communications, Energy and Paperworkers union which has 2,000 members at Bell Globemedia and CHUM operations, said the proposed takeover should be stopped in the public interest.
He laughed when told of Fecan’s suggestion that a third national TV network could emerge, saying: “We had another national network that was building and that was CHUM. I don’t understand that logic. But I think it’s going to be a serious question for both the regulator and for government.”
The federal Liberal consumer affairs critic agreed.
“The absolute breadth of the dominance of this takeover would mean that there are very few players left, short of ones that fall under CBC-type establishments – CanWest would be the only effective rival,” said Dan McTeague.
“Based on what is already a staggering level of concentration in old and new media in Canada to begin with. . . I think this particular proposal does little to give any measure of comfort to those of us who are already alarmed at the level of concentration in media in Canada.”
Jay Switzer, CHUM’s chief executive officer, told analysts in a conference call that joining Bell Globemedia will provide financial strength in “what is a rapidly changing media landscape.”
Switzer said the job cuts are part of an initiative CHUM has been working on for months as it redeploys its resources “to areas where we can win.”
Although CHUM remained profitable in its most recent quarter, albeit slightly less so than a year ago, the company maintains it faces tough market conditions for the later part of this year and in the longer term.
CHUM will increase local programming in certain areas, such as its Breakfast Television morning shows across the country, while reducing overhead in other parts of its news and information operations.
“We believe it’s absolutely the right thing to do in terms of putting our resources where we can make a difference locally and it’s where our advantage historically has been,” Switzer said.
CHUM said it plans to cut 191 full-time and 90 part-time positions across the country as it undergoes a complete reorganization of its TV operations to “increase focus on service to local viewers.”
The moves include switching Citytv stations in Calgary, Edmonton and Winnipeg from one-hour evening newscasts to a daily half-hour local news magazine show.
In addition, a morning show at a CHUM-owned A-channel station in Victoria will be discontinued. Citytv Vancouver will cease its traditional newscasts and add resources to Breakfast Television.
Before trading was halted on the Toronto Stock Exchange ahead of the announcement, CHUM had a market valuation of $904.3 million, with the non-voting shares worth $31.25 each and the voting stock at $35.
Bell Globemedia, currently majority owned by BCE Inc., is offering a premium of about 50 per cent above the pre-announcement market prices for the shares.
Apart from the conventional television stations, there is little direct overlap in the two companies’ holdings.
CHUM owns 33 radio stations and 12 local television stations headed by the Citytv channels in Toronto, Vancouver, Calgary, Edmonton and Winnipeg. It also has 21 specialty TV channels including MuchMusic, Space and Bravo, and runs the Muzak background-music operation in Canada.
Bell Globemedia is 68.5 per cent owned by BCE, parent company of Bell Canada, with the remainder held by the Thomson family’s Woodbridge private holding company.
BCE said in December it would sell 8.5 per cent to Woodbridge, raising the Thomson ownership to 40 per cent, 20 per cent to Torstar Corp. and 20 per cent to the Ontario Teachers’ Pension Plan, with BCE retaining 20 per cent. This ownership shift awaits regulatory approval.
Under the deal, CHUM can accept a superior proposal if Bell Globemedia declines to match the offer, subject to break fee of $41 million.

Axe To Fall at Disney
Despite the back-to-back success of Pirates of the Caribbean: Dead Man’s Chest and Cars, the Walt Disney Co. plans to announce within the next 10 days that it will slash the number of films it makes to eight per year from the current 18 and reduce its workforce accordingly, Daily Variety reported today (Wednesday). The trade publication also observed that in the future, all films will bear the Disney brand. Variety indicated that despite the recent successes of Pirates and Cars, they may not have offset some of the studio’s “major misfires” this year, including Stick It, Annapolis, Stay Alive, and The Wild.

Canadians’ entertainment spending on the rise
Canadian spending on entertainment outside the home is increasing faster than other household spending, according to a study by Statistics Canada.
The consumer market for movies, spectator sports, performing arts and visits to heritage institutions expanded from $2.3 billion in 1998 to $3.2 billion in 2003, an increase of 41 per cent, the federal agency reported on Tuesday.
Average household spending over the same period rose 19 per cent. But entertainment spending remains a low fraction of overall spending, about 0.5 per cent.
On average, Canadian families spent $273 on these entertainment services annually in 2003. The report was based on data from Statistics Canada’s Survey of Household Spending from 1998 and 2003.
About 40 per cent of the money went to movies, 31 per cent on performing arts and 17 per cent on sports events.
The biggest increase came in spending on sports events. The average rose 44 per cent over the five years, mainly because of higher ticket prices for spectator sports.
Spending on performing arts was highest in Ontario and Quebec, the provinces with the largest number of dance and theatre companies, and lowest in the Maritimes, where there are fewer opportunities to see the performing arts.
The biggest spenders overall on entertainment were in Ontario, British Columbia and Alberta, where average family income is highest. Couples with children spent the most.
Residents of Ontario and Alberta were the most avid movie-goers in 2003, spending about $120 per household, compared with households in Saskatchewan that spent just $62 each at the cinema.

Same old Courtney – still sponging off Kurt
Courtney Love said she plans to sell part of her stake in Nirvana’s catalog, according to NME.com. Love, in London last week for meetings about a new record deal, a TV documentary and a role in a stage production, said she’s not sure exactly how she will proceed, explaining, “I have decided that I need some co-management and a strategic partner (to help me) as it’s such a huge responsibility. This is the right thing to do for my family…whoever I do this deal with, I really have to like.”
Love was quoted in this past weekend’s (March 12) edition of the Sunday Mirror as saying she was possibly going to sell “25 percent of the catalog for quite a lot of money.”
Love is the widow of Nirvana singer, guitarist and principal songwriter Kurt Cobain, who committed suicide in April of 1994. In recent years, Love has battled with the other surviving members of Nirvana over the use of the band’s material in various box sets and reissues.
The former Hole frontperson has been in all sorts of legal and financial trouble herself in recent years, including various drug arrests and lawsuits. She recently sold a condo in New York City after failing to pay off her mortgage.

Viacom to Sell DreamWorks Film Library
NEW YORK – Entertainment company Viacom Inc. said Friday it agreed to sell the film library of the recently acquired DreamWorks studio to an investment group led by financier George Soros in a deal that values the library at $900 million.
The 59 films in the library include “Gladiator,” “American Beauty” and “Saving Private Ryan.”
Viacom, which recently split off its broadcasting and publishing assets into separately traded CBS Corp., said the deal will complete the second stage of its acquisition of DreamWorks SKG Inc., the studio founded by director Steven Spielberg, producer David Geffen and former Walt Disney Co. executive Jeffrey Katzenberg.
The buyers are Soros Strategic Partners LP and Dune Entertainment II LLC.
Soros and Dune will acquire all 59 DreamWorks live action films released through Sept. 15 of last year, while Soros will distribute the library through an exclusive five-year agreement with Paramount, the company said.
Viacom will retain ownership of music publishing and certain other rights related to the library, including sequel and merchandising rights. The company also will own a minority stake in the entity holding the library assets.
Viacom will have the right to reacquire the library, and Soros and Dune will have the right to sell it to Viacom, beginning at the end of the fifth year after the deal. The parties also may acquire the other’s interest under certain conditions.
While full details of the deal were not disclosed, it’s likely Soros and Dune will look to get a return on their investment through licensing the film library’s content on DVDs, cable and worldwide television broadcasts, said Harold Vogel, media analyst and author of the book “Entertainment Industry Economics.”
“They’ll project how much each film can generate,” Vogel said. “The difficulty is, probably only the top 10 films generate 80 percent of the income.”
In December, Viacom’s Paramount Pictures unit agreed to buy DreamWorks SKG for $775 million in cash, plus $825 million in debt and other obligations. At that time, the studio said it would finance the deal by immediately selling the DreamWorks film library, which Paramount valued at between $850 million and $1 billion.
Viacom said Friday it expects the net purchase price for DreamWorks to be about $600 million after converting certain commercial agreements from debt to advances.
The sale is expected to close in April, pending closing conditions, the company said.
The distribution agreement with Paramount will automatically renew if Soros still owns the library after the fifth year, Viacom said.
Dune Entertainment is an affiliate of Dune Capital Management LP.
Viacom stock rose 69 cents, or 1.8 percent, to close at $39 on the New York Stock Exchange.

Disney buying Pixar for $7.4B
LOS ANGELES (AP) – The Walt Disney Co. said Tuesday it is buying longtime partner Pixar Animation Studios Inc. for $7.4 billion US in a deal that could restore Disney’s clout in animation while vaulting Pixar CEO Steve Jobs into a powerful role at the media conglomerate.
Disney will buy the maker of the blockbuster films Toy Story and Finding Nemo in an all-stock transaction that makes Jobs Disney’s largest shareholder. Jobs, who controls more than half of Pixar’s stock and also heads Apple Computer Inc., will also join Disney’s board.
“With this transaction, we welcome and embrace Pixar’s unique culture, which for two decades, has fostered some of the most innovative and successful films in history,” Disney chief executive Robert Iger said in a statement.
Disney has co-financed and distributed Pixar’s animated films for the past 12 years, splitting the profits. But that deal expires in June after Pixar delivers Cars.
Disney, the theme park owner that also owns the ABC and ESPN TV networks, and Pixar have been talking for months about a new relationship.
Pixar executive vice-president John Lasseter will become chief creative officer of the animation studios and principal creative adviser at Walt Disney Imagineering, which designs and builds the company’s theme parks.
Pixar president Ed Catmull will serve as president of the new combined Pixar and Disney animation studios, reporting to Iger and Dick Cook, chairman of The Walt Disney Studios.
“Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders,” Jobs said in a statement. “Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world.”
Under the deal, Disney said it will issue 2.3 shares for each share of Pixar stock. At Tuesday’s closing price of $25.99 for Disney, Pixar shareholders would get stock worth $59.78, a four per cent premium over Pixar’s closing price of $57.57. The deal was announced after the markets closed for the day,
With Pixar, Disney gains a company that has produced a long-running string of animated blockbusters, including The Incredibles.
Through Jobs, Disney tightens its link with Apple Computer, the innovative technology company behind music and video IPods.
Disney is not acquiring a direct interest in Apple. But Jobs could help Iger push his plans to marry films, TV shows, video games and other content to computers, IPods, handheld game consoles and even cellphones.
The deal will accelerate Iger’s plans to strengthen Disney’s animated features, the hallmark of the company since its founding and a steady source of characters for Disney’s theme parks and other units.
Pixar has served as Disney’s de facto animation unit for a decade. Two Pixar movies, Finding Nemo and The Incredibles, have won Academy Awards for best animated feature film.
Pixar films have been a financial windfall for Disney, which receives 60 per cent of the profits.
By contrast, Disney’s own animation unit has struggled, producing some modest successes, such as 2002’s Lilo & Stitch, and many flops, including Treasure Planet and Home on the Range.
Its first fully computer-animated effort, Chicken Little, grossed more than $100 million domestically since its release last year and will likely be profitable. But that figure falls well short of the more than $200 million domestic gross of 2004’s The Incredibles.
Disney and Pixar had been discussing an extension of their distribution deal since early 2003. Last year, analysts said striking that agreement was Iger’s top priority.
The talks stalled in 2004 after Pixar demanded that it own 100 per cent of all future films and pay Disney a straight distribution fee, similar to the deal Star Wars creator George Lucas had with Twentieth Century Fox.
Pixar also wanted ownership of all the films already produced as well as two that were remaining under the existing agreement at the time.
Personal animosity between Jobs and former Disney CEO Michael Eisner also contributed to the breakdown.
In 2004, Jobs broke off talks with Disney and said he would begin talking to other studios, including Fox and Warner Bros. Relations soured even more after Disney announced it would make the sequel Toy Story 3, a project strongly opposed by Pixar.
The relationship between the two companies goes back to 1991, when Disney agreed to finance and distribute three films from the fledgling company.
That deal led to the release of Toy Story in 1995 – the world’s first fully computer animated feature film. It was a huge hit and became the highest-grossing film that year.
The same year, Pixar raised $140 million in an initial public offering.

Disney board okays takeover offer to Pixar: source
LOS ANGELES (Reuters) – The board of Walt Disney Co. has authorized Chief Executive Robert Iger to make an offer to buy Pixar Animation Studios Inc., and that is expected by Tuesday, a source familiar with the matter said late on Monday.
Pixar’s board is expected to consider the offer on Tuesday as well, said the source, who did not disclose financial terms.
The Pixar board was expected to confer by telephone, the source said.
In the event a decision is reached, an announcement by Disney would be expected after the market closes, the source said.
Pixar shares closed at $58.27 on Monday on Nasdaq, putting its market value at just under $7 billion. The shares have risen about 12 percent in the last month, partly on speculation that Disney would buy the computer animation company that created such hits as “Toy Story,” “Finding Nemo” and “The Incredibles.”
Shares of Disney were up nearly 2 percent, or 48 cents, at $26.01 in morning trade on the New York Stock Exchange. Pixar shares were down 8 cents at $58.19 on Nasdaq.
The Wall Street Journal has reported that Disney is considering an all-stock offer, which would make Pixar Chief Executive Steve Jobs the company’s largest individual shareholder.
The Journal reported late on Monday that the offer under consideration would give Jobs, who has a controlling stake in Pixar, a seat on the Disney board.
Disney, for decades the world leader in hand-drawn animated films such as “Pinocchio” and “Lion King,” has struggled in recent years to maintain its position in an industry that has embraced computer-generated films.
Although Disney has not produced a blockbuster animated film on its own in years, the six films Pixar and Disney made since the 1995 release of “Toy Story” have grossed more than $3.2 billion.
Jobs had feuded publicly with Iger’s predecessor, Michael Eisner, and broke off negotiations for a new distribution agreement with Disney about two years ago.
Iger, who succeeded Eisner as Disney’s CEO in October, made a priority of smoothing over relations with Jobs and was in the midst of renegotiating the distribution pact, which expires in June with the release of “Cars,” when takeover rumors surfaced.
Jobs, who is also chief executive of Apple Computer Inc., has already led a revolution in digital delivery of content by providing legal downloads of music through Apple’s iTunes Music Store and by striking a deal with Iger and Disney to offer video downloads of ABC television shows.
A deal that would give Jobs a Disney board seat could also put him in a position to lead Hollywood’s move onto the Web.
The Disney board may also approve a buyer for the company’s ABC Radio assets, worth an estimated $2.6 billion to $2.9 billion, from among several bidders.
Sources familiar with the radio transaction said on Friday that Disney was within a week or two of deciding on a buyer.