The Second Coming of Steve Jobs - Alan Deutschman [86]
Steve was what Alvy called “an accidental visionary,” and Steve nearly confessed as much to Fortune’s Brent Schlender. “If I knew in 1986 how much it was going to cost to keep Pixar going, I doubt if I would have bought the company,” he said.
Steve’s second stunning contribution to Pixar was the decision to take the company public when all the lawyers and bankers said it wouldn’t work. His audacity paid off magnificently.
Before long, the speculative fervor around Pixar’s stock dissipated and the share price fell from the forties to the twenties. Steve’s tenure as a paper billionaire was short, but he remained a near-billionaire. Pixar kept $123 million of the $132 million proceeds from the public stock sale (the other $9 million was taken by the investment bankers). That meant that Pixar went from $47 million in the red to $76 million in the black.
Now that he had a huge box-office hit and a position of financial strength, Steve was ready to make the third of his three inimitable contributions to Pixar. He called Disney and said that he wanted to renegotiate the terms of their partnership.
The 1991 deal between Disney and Pixar was heavily weighted in Disney’s favor, which wasn’t unusual. Disney’s executives had reputations as fierce negotiators who had the power to demand a domineering “master-slave” relationship with their contractors.
Now Steve wanted a relationship of equals, and he had the nerve to insist on it.
As he prepared for his talks with Michael Eisner, he had three objectives. He wanted Pixar and Disney to split the production costs fifty-fifty for Pixar’s future films, and he wanted to share the revenues fifty-fifty as well. He wanted Pixar to have creative control over the movies. And he was especially intense about wanting equal billing, with the Pixar logo just as large as the Disney logo on the posters and ads and video boxes. Steve saw the potential for making Pixar a brand name that resonated with parents and children, a name that could sell all kinds of lucrative consumer products tied in to films. He realized that the Pixar brand, like the Apple brand or the Disney brand, could become a pop-culture icon, and that had a far greater financial potential than the box-office profits.
He had a one-on-one lunch with Michael Eisner.
Eisner was stunned.
“When Steve laid out the terms he wanted, Disney thought it was outrageous,” recalls Pam Kerwin.
The Disney executives lacked respect for Steve. He was a novice in their world, and they weren’t particularly impressed by his famous achievements in his own world. They thought that Hollywood was much tougher than Silicon Valley. In the movie business you had to fight viciously every day for survival, while in the technology business you were mightily rewarded by Wall Street for even the slightest accomplishments.
The culture clash was pronounced and comical. The hardened Hollywood types thought that Steve’s rhetoric and persona—the allusions to sixties counterculture and Zen—were just an act. They could easily see right through it. “All that vegan feel-good shit cloaks that he’s so cutthroat,” says a Disney executive who worked closely with him.
Though they weren’t impressed by Steve, they respected and admired John Lasseter. Disney’s animators began saying that John could become the new Walt Disney. The Disney brass saw that they had grossly underestimated Toy Story, which played to crowded theaters through the holiday season and ultimately reached $160 million in domestic box-office receipts, a high figure by any standard and a superb one for a film that only cost $27 million to produce. Disney rushed to make Buzz and Woody toys but couldn’t get them to the stores in time for the Christmas shopping rush. A well-placed Disney