The stock price of Pixar Animation Studios has been volatile in recent days, fueled by rumors that Pixar soon will have a new distribution deal with Disney. The deal will expire after the release of the Route 66-themed movie, “Cars,” on June 6.
A few observations:
- The L.A. Times reported Wednesday that negotiations have focused on Disney acquiring part or all of Pixar, in which Pixar Chief Executive Steve Jobs would become a major Disney shareholder and possibly the company’s chairman. Given Jobs’ success with Apple‘s iPods and iTunes, such a marriage seems probable because Disney could benefit greatly from Apple’s entertainment technology.
- If a deal is struck, look for it before the release of “Cars.” Because Disney’s stock has been languishing for years, it can ill afford for Pixar to add another $200-million-plus-grossing movie to its portfolio and erode Disney’s already-anemic bargaining power.
- The departure of Michael Eisner as Disney chairman greatly improved the chances for Disney and Pixar to re-up its distribution deal. Eisner wore out his welcome years before he left his post in 2004.