Sunday, February 5, 2006

In life, some people play checkers. Others play chess. On first glance, the agreement for Disney to buy Pixar Animation Studios for $7.4 billion seems like a move by a checkers player. A few Disney animated features do poorly at the box office, and the longtime Eden of Animation is bringing in outsiders to make cartoons for it? Walt must be spinning in his cryonic chamber.

Well, all of that thinking (including the urban legend surrounding Mr. Disney’s remains) is nonsense. Disney President and CEO Robert Iger, dramatically acting to reverse the fortunes of his company, is thinking like a chess player. His acquisition of Pixar, which had produced such megahits in conjunction with the Mouse House as “Toy Story,” “A Bug’s Life” and “The Incredibles,” will be paying dividends in any number of directions for the foreseeable future.

First, it cements the short term. Disney and Pixar are about to release “Cars,” which seemed destined to be the last in the wildly successful collaboration between the two companies. Pixar’s CEO Steve Jobs, of Apple Computer fame, had found it difficult to negotiate with Mr. Iger’s predecessor, Michael Eisner, and the word on the street (Wall and others) was that the two companies would definitely go separate ways.

But when Mr. Iger took over for Mr. Eisner earlier than planned, and took hold of the negotiations himself, the divorce became less inevitable. Thinking like a chess player, someone who needs to see a number of moves ahead of the current board, Mr. Iger knew that losing Pixar could be disastrous. This became clearer when Disney’s latest in-house attempt at a computer-animated hit, “Chicken Little,” laid an egg at the box office. It was clear that for Disneytocontinueasa powerhouse in animated entertainment — a field it had pretty much invented and perfected over six decades — it needed Pixar, at least right now.

But the acquisition of Pixar does much more than shore up Disney’s release schedule. With Mr. Jobs on board now as Disney’s largest stockholder (he will come out of the deal, according to reports, with six percent of the company), the sometimes-stodgy Disney has an opportunity to become a hipper, more tech-friendly version of itself. Remember, when Mr. Jobs left Apple Computer and the company went into a nosedive, he returned to unveil the iMac, which stabilized Apple. A couple of years ago, Mr. Jobs launched the iPod. That’s gone relatively well, too.

There is already speculation (Slate is among the speculators) that Mr. Jobs will eventually try to supplant Mr. Iger as Disney’s top executive, but as he is still CEO of Apple and will be on Disney’s board, he’ll have enough influence — and enough to do — without trying to run one of the world’s largest companies himself.

But another reason the acquisition is a brilliant move for Disney is that it brings John Lasseter to the company. Mr. Lasseter is the creative genius behind the Pixar animated films, and will bring back to Disney what the company’s entertainment has been lacking in recent years — strong story sense and characters children especially can find adorable.

That’s no small thing. Characters drive the animated films, for sure, but they also are the major force behind many of the theme-park attractions and myriad products, television programming and corporate identity Disney has traded on so successfully in the past. Think about Buzz Lightyear, the entire Incredibles family, and Dory, the absent-minded fish voiced by Ellen Degeneres in “Finding Nemo.” Now, try and think of one character from “Chicken Little” or “Atlantis: The Lost Continent.” See the difference?

When the dust settles on this acquisition — and that could take a good deal of time — it will be seen as a masterstroke by a CEO with very little time in the position (Mr. Iger has been at the Disney controls for about four months). It will be seen as a move that helped stabilize the ship and reverse a bad trend in animation at a company built by animation. And in the long run, it will be seen as a move by someone who plays chess, not checkers.

Michael Levine is the founder of the entertainment communications firm LCO, based in Los Angeles and started in 1983, and is the author of 17 books, including his latest “Broken Windows, Broken Business.”

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