Wednesday, January 25, 2006

Mickey Mouse Makes Deal for Playmates

Mickey Mouse has bought some electronic playmates for $7.5 billion, as Disney buys Pixar. Three months earlier it would not have been possible. Why could a deal be made now?

In January 2004 Pixar broke off talks with Disney to extend their distribution deal past spring ‘06: Pixar made ‘em and Disney marketed ‘em. Why, since they had a very mutually profitable deal? Apparently Disney’s Mike Eisner grated on Pixar’s Steve Jobs. Pixar was and is of Emeryville, CA near San Francisco, while Disney is of Burbank near L.A. The principal’s personalities fit their locations.

Eisner may have grated on the Disney Board because they kicked him out and put in one Robert A. Iger as CEO in the fall of ‘05. Evidently Iger and Jobs jelled, and the deal came out of the dish. Little else changed beside who was dealing with whom.

Negotiation 101: Often whether a deal happens at all or not will depend very much on the personalities of the people dealing, while the terms of the deal will depend on things favored by accountants.

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