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February 25, 1997updated 05 Sep 2016 12:45pm

DISNEY MAY BUY UP TO 5% OF PIXAR

By CBR Staff Writer

Pixar, the hot computer generated imagery (CGI) shop that gave us Buzz and Woody in 1995’s Toy Story, has cemented its already tight marketing agreement with Disney with a five-picture deal over the next 10 years. Disney is also buying 1 million Pixar shares at $15 a share, with an option for an additional 1.5 million shares (at a higher premium), which would give Michael Eisner 5% of Steve Jobs’ company. Pixar, formerly a division of George Lucas’s Industrial Light & Magic before its buyout by Jobs in 1987, was sole creative agency behind Toy Story. But given the fledgling company’s lack of clout in 1991, and the fact that CGI movies remained a fantasy until Toy Story, Jobs had to accept the terms he was offered – a stiff 85% of all the profits from the movie and spin-off merchandising of the flick go to the Magic Kingdom under the original distribution deal. The film has grossed $350m worldwide and the video cassette version is claimed to have sold 30 million copies so far, so Pixar has had to watch a lot of cash go to its big-eared distributor. Now both companies claim they will be equal partners in the future movies and related products. They already had two more offerings lined up under a 1991 three-picture deal, meaning that these will now become the first two pictures under the new, more equitable, framework. The next Pixar product is Bugs, not due until the end of next year. Pixar stock jumped over 48%, or nearly $7, to close the day at $21, following the news.

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