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GM and Philips nearly bought Pixar, but deal's collapse allowed Steve Jobs to invest

post #1 of 30
Thread Starter 
Pixar co-founder Ed Catmull reveals in a new book that the now-legendary animation company was nearly sold to General Motors and Philips for its technology, but the deal fell through just before it could be signed.


Ed Catmull, Steve Jobs, and John Lasseter.


The details come in an excerpt from Catmull's new book, "Creativity, Inc: Overcoming the Unseen Forces That Stand in the Way of True Inspiration." An excerpt from the new book was published this week by /Film.

Lucasfilm was looking to spin off the Pixar team, and shopped it to 20 prospective buyers without a deal, before an agreement was eventually reached with GM and Philips. Catmull explained that Phillips wanted the Pixar Image Computer's ability to render data from CT scans or MRIs, while GM wanted to use its modeling technology for car design.

The parties were within one week of making the sale final, but it fell apart at the last minute, Catmull explained. He characterized his feeling at the time as "a mixture of despair and relief."

"We'd known from the outset that entering into a relationship with GM and Philips would likely put an end to our dream of making the first animated feature film, but that was a risk no matter who we joined up with," he wrote.

"To this day, I am thankful that the deal went south. Because it paved the way for Steve Jobs."

When Lucasfilm was unable to find a buyer, Jobs had recently departed Apple Computer. The Apple co-founder swept in and paid Lucasfilm's George Lucas $5 million for the rights to the technology created by Pixar, and Jobs also infused another $5 million in capital into the company.




When Jobs took over as chairman, the primary business of the company remained sales of the Pixar Image Computer. By 1991, Pixar signed a deal with Disney to produce its own series of CGI films, which led to the release of the first "Toy Story" film in 1995.

In another excerpt from his book released earlier this year, Catmull explained how the experience of running Pixar helped to change Jobs himself for the better. Catmull worked with Jobs for more than 25 years, and believes Pixar made him "more sensitive not only to other people's feelings, but also to their value as contributors to the creative process."

Catmull also revealed that Jobs would give advice at Pixar in a humble fashion, noting up front that he was "not really a filmmaker" and that people could choose to "ignore everything" that he said. When Jobs's take was sought, he would focus on the problems rather than the filmmakers.

"Creativity, Inc." was released by Random House publishing earlier this year, and is now available for purchase in hard copy from Amazon, or in digital form from Apple's iBooks.
post #2 of 30
Best $5M ever spent. We'd still be seeing stick figure animated movies if it wasn't for Pixar. It would have been a waste if GM or Philips had bought them.
post #3 of 30
A great book, a must read for anyone managing in a creative environment.
post #4 of 30
Innovative thinking was required to get Pixar to where it is today. If GM and Philips had bought Pixar, they might have just taken the patents and gutted the company.
post #5 of 30
On that same note, would Steve Jobs have taken an interest in buying Pixar if he had not left Apple?

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post #6 of 30
I don't think most people realize that Jobs bought into Pixar long before they released their first animated film. It would be interesting to find out (and perhaps the book tells us this) how much influence Jobs had (or not) on pushing or supporting Pixar to be in that business.

In some ways and especially since it wasn't part of Jobs' core competency or interests, that was a more amazing accomplishment than his return to Apple. Especially after paying just $5 million for the company, investing another $5 million and then after great success and becoming the leading animation company (and making Disney look bad in the process) and I assume, profits, selling the company to Disney for $7.4 billion in stock.

If there had been no Apple and Pixar was all Jobs ever had accomplished, that would still be amazing.

@rob53: Really? We'd still be seeing stick figures? There was plenty of great traditional animation before Pixar. Maybe the stories came to suck, but the animation was still great.
post #7 of 30
Quote:
Originally Posted by Suddenly Newton View Post

On that same note, would Steve Jobs have taken an interest in buying Pixar if he had not left Apple?

Good point- and highly unlikely he would have.

 

And even more in that line of thinking- if he had never left Apple, would Apple have the rejuvenation it did with his return?

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post #8 of 30
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Originally Posted by zoetmb View Post

Especially after paying just $5 million for the company, investing another $5 million and then after great success and becoming the leading animation company (and making Disney look bad in the process) and I assume, profits, selling the company to Disney for $7.4 billion in stock.

He didn't buy Pixar- he simply bought the rights to the technology.  I'm more curious what his original intentions were on what to do with that technology.

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post #9 of 30
So the movie Cars would have been recalled then?
post #10 of 30

Thank God this deal fell through. Considering the uses GM and Phillips were looking at Pixar to acquire, it would have been very bad for their core desires and hope for the company.

post #11 of 30

Now; If only Apple had bought GM and Phillips; then we'd be having a REAL party!

post #12 of 30
Quote:
Originally Posted by Andysol View Post

Quote:
Originally Posted by zoetmb View Post

Especially after paying just $5 million for the company, investing another $5 million and then after great success and becoming the leading animation company (and making Disney look bad in the process) and I assume, profits, selling the company to Disney for $7.4 billion in stock.
He didn't buy Pixar- he simply bought the rights to the technology.  I'm more curious what his original intentions were on what to do with that technology.

He did buy Pixar, he bought the company shares. This is how Steve made a lot of his billions when the company was sold to Disney as they were converted to Disney shares making Steve the largest disney shareholder:

http://alvyray.com/pixar/default.htm
http://appleinsider.com/articles/11/11/23/steve_jobs_wife_to_manage_trust_of_4_6_billion_in_disney_shares

He wasn't a co-founder:

"These are exactly the 40 founding employees of Pixar, including Ed Catmull and Alvy Ray Smith, the Co-founders. One of the 38 other founding employees is John Lasseter. Steve Jobs is the venture's capitalist - that is, its investor. He is not on this list. The original management team of Pixar was Ed, President, and Alvy, Vice President. The original Board of Directors consisted of Ed, Alvy, and Steve, with Steve as Chairman of the Board. The listed employees owned 30% of Pixar and Steve owned 70% at the founding."
post #13 of 30

Yikes. Thank you, Jesus.

 

Seriously, Phew!

post #14 of 30
As history stands, we would not be in this technological revolution of animated movies without Steve jobs. Is it possible it sill could've happened? Pixar may have found another buyer, or another company may tried it... Who knows. If Disney didn't have Pixar their movies would probably keep getting crappier, too. It could have always been taboo to have cgi at the movie theatre if it didn't start out right. If Disney had made a crappy entrance they could have been thought of as little kid flicks forever. Point is, Steve Jobs made history as it stands - that counts for something, he's the reason animated movies are the way they are. Look at the state of movies, there's not one big production hand drawn animated movie coming out (and not much clay mation anymore), and hardly any in the last 5 years. Now, many companies are making cgi animated movies. He really was revolutionary in that respect. He always had a way of changing industries like no other.
post #15 of 30
Quote:
Originally Posted by Andysol View Post

Good point- and highly unlikely he would have.

And even more in that line of thinking- if he had never left Apple, would Apple have the rejuvenation it did with his return?

He learned a lot from the failure of NeXT and the success of Pixar. It probably would not have been the same rejuvenation story!

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post #16 of 30
Quote:
Originally Posted by TheUnfetteredMind View Post

Thank God this deal fell through. Considering the uses GM and Phillips were looking at Pixar to acquire, it would have been very bad for their core desires and hope for the company.

I guess luck does play a part in the way history unfolds...

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post #17 of 30
Quote:
Originally Posted by Suddenly Newton View Post


He learned a lot from the failure of NeXT and the success of Pixar. It probably would not have been the same rejuvenation story!

Exactly.  I expect that Pixar changed Jobs as much as he changed Pixar.  The Jobs-Apple story would not have been the same if there were no Jobs-Pixar story.

post #18 of 30

Instead of just plugging Amazon at the end of the story, you might mention that the hardcover is also available at many other book stores. You may get some compensation for plugging Amazon, but you're still somewhat of a news organization, and you could mention other booksellers. If this title were published by Hachette, would you still plug Amazon and its delayed shipping of Hachette books?

post #19 of 30
Quote:
Originally Posted by Marvin View Post


He did buy Pixar, he bought the company shares. This is how Steve made a lot of his billions when the company was sold to Disney as they were converted to Disney shares making Steve the largest disney shareholder:

http://alvyray.com/pixar/default.htm
http://appleinsider.com/articles/11/11/23/steve_jobs_wife_to_manage_trust_of_4_6_billion_in_disney_shares

He wasn't a co-founder:

"These are exactly the 40 founding employees of Pixar, including Ed Catmull and Alvy Ray Smith, the Co-founders. One of the 38 other founding employees is John Lasseter. Steve Jobs is the venture's capitalist - that is, its investor. He is not on this list. The original management team of Pixar was Ed, President, and Alvy, Vice President. The original Board of Directors consisted of Ed, Alvy, and Steve, with Steve as Chairman of the Board. The listed employees owned 30% of Pixar and Steve owned 70% at the founding."

That was a great read- can't believe Alvy had that stuff scanned in.  Curious what his $5m infusion did for his stake.  Simply a loan?


Edited by Andysol - 7/3/14 at 11:08am

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post #20 of 30

Is there a way for me to donate my iBooks copy to my library or give it to someone here to read?

Lorin Schultz (formerly V5V)

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post #21 of 30
Quote:
Originally Posted by Marvin View Post


He did buy Pixar, he bought the company shares. This is how Steve made a lot of his billions when the company was sold to Disney as they were converted to Disney shares making Steve the largest disney shareholder:

http://alvyray.com/pixar/default.htm
http://appleinsider.com/articles/11/11/23/steve_jobs_wife_to_manage_trust_of_4_6_billion_in_disney_shares

He wasn't a co-founder:

"These are exactly the 40 founding employees of Pixar, including Ed Catmull and Alvy Ray Smith, the Co-founders. One of the 38 other founding employees is John Lasseter. Steve Jobs is the venture's capitalist - that is, its investor. He is not on this list. The original management team of Pixar was Ed, President, and Alvy, Vice President. The original Board of Directors consisted of Ed, Alvy, and Steve, with Steve as Chairman of the Board. The listed employees owned 30% of Pixar and Steve owned 70% at the founding."

 

The statement in the PIXAR Business Plan is wrong, referencing Steve as President and Chairman of the Board at NeXT. He was never the President, and always CEO, from its inception.

 

Steve spent a helluva lot more than $10 million getting PIXAR off the ground. It's one of the reasons he went out and got Perot and Canon to invest several hundred million into NeXT.

Alvy is still butthurt, to this day, because he had to ultimately sell most of his leverage in PIXAR to Steve, in order to keep PIXAR alive. Steve ultimately controllled over 80%.

post #22 of 30
Quote:
Originally Posted by Andysol View Post

He didn't buy Pixar- he simply bought the rights to the technology.  I'm more curious what his original intentions were on what to do with that technology.

Computers with the technology. When that failed, he allowed Lassiter and friends to make films to showcase its tech.

Interesting that Amazon didn't encounter "delays" with this book.
post #23 of 30
Quote:
Originally Posted by elroth View Post

Instead of just plugging Amazon at the end of the story, you might mention that the hardcover is also available at many other book stores. You may get some compensation for plugging Amazon, but you're still somewhat of a news organization, and you could mention other booksellers. If this title were published by Hachette, would you still plug Amazon and its delayed shipping of Hachette books?

Cry me a river. Were you happy they didn't mention that you could also get it electronically from Amazon, or on audiobook from the Amazon subsidy Audible, or on hardback/paperback from the Amazon subsidy The Book Depository?
post #24 of 30
I often wonder,

who holds those Pixar shares now? Steves wife?

And if so, couldn't she stick it to giggle and samscum by mandating all Disney content be Apple exclusive?

Heck, last time Disney chose sides, Blu-Ray won.
post #25 of 30
Thank God those two didn't get their hands on Pixar. They would have sold it off for spare parts long ago. Amazing how those things come about. Steve the proverbial 'right man at the right time'. Looking forward to reading the book.
post #26 of 30
It's funny that Catmull sort of brushed over the conflict between his co founder Alvy and Jobs. Alvy and Jobs Almost got into a fist fight. Jobs spent almost all of his personal fortune from the sale of his Appke stock (Almost $100 million) propping up Pixar for a decade. Most entrepreneurs would have given up long before that. They were months away from running out of cash and going bankrupt when Toy Story turned into a hit. Steve was also smart that he timed the IPO just as Toy Story was released so that it was a well sought after IPO. Just imagine the pressure Steve was in during this time in his life. He got fired from Apple. He then started Next which by this time he knew was a failure. The company that he spent most if his fortune on, Pixar, was also close to bankrupt. Then, just like that with the release of Toy Story, things started to all turn for him. The man had some set of brass balls.
post #27 of 30
Quote:
Originally Posted by mdriftmeyer View Post

The statement in the PIXAR Business Plan is wrong, referencing Steve as President and Chairman of the Board at NeXT. He was never the President, and always CEO, from its inception.

Steve spent a helluva lot more than $10 million getting PIXAR off the ground. It's one of the reasons he went out and got Perot and Canon to invest several hundred million into NeXT.


Alvy is still butthurt, to this day, because he had to ultimately sell most of his leverage in PIXAR to Steve, in order to keep PIXAR alive. Steve ultimately controllled over 80%.

Original Disney and Pixar 3-film contract from 1991. Unsurprisingly it put Disney in the catbird seat (that's a phrase you don't get to hear much anymore 1biggrin.gif ) , but it also brought focus, direction and urgency to Pixar. While Mr Jobs reportedly wanted Pixar for it's software and computer sales potential he was smart enough to recognize that Lassiter just might have a gem in his movie-making plans.
http://www.pixartouchbook.com/storage/toy-story-contract-1991.pdf

So IMO Disney had a bit to do with Pixar's (and Apples) eventual success too even tho they almost destroyed the movie creation itself by trying to form it into a traditional Disney-esque movie. As an example had they not agreed to cover the Toy Story cost overruns would Steve Jobs ever have landed back at Apple?
Edited by Gatorguy - 7/5/14 at 8:24am
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post #28 of 30
A
Quote:
Originally Posted by gilly33 View Post

Thank God those two didn't get their hands on Pixar. They would have sold it off for spare parts long ago. Amazing how those things come about. Steve the proverbial 'right man at the right time'. Looking forward to reading the book.

Agreed. Makes me wonder how many amazing companies and products we'll never see because some venture capital firm decided that the parts were worth more eviscerated, dissected and sold off in the short term, rather than letting the sum of the whole grow, succeed and flourish over the long term...
post #29 of 30
Originally Posted by Andysol View Post

And even more in that line of thinking- if he had never left Apple, would Apple have the rejuvenation it did with his return?

 

Of course not. A Steve that never leaves Apple never creates NeXT. No NeXT means no OS X. No OS X means, well... Copland. No iDevices, no iMac...

 

Additionally, a Steve not fired means a Steve still cruel. The early megalomaniacal Steve rather than the late one.

 

The failures of his life (even the ones built around successes, like Pixar’s computers and NeXT’s failure to capture marketshare) are what shaped him personally and business-ally upon his return.

 

The butterfly effect is a beautiful thing.

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post #30 of 30
Quote:
Originally Posted by Tallest Skil View Post

Quote:
And even more in that line of thinking- if he had never left Apple, would Apple have the rejuvenation it did with his return?

Of course not. A Steve that never leaves Apple never creates NeXT. No NeXT means no OS X. No OS X means, well... Copland. No iDevices, no iMac...

Additionally, a Steve not fired means a Steve still cruel. The early megalomaniacal Steve rather than the late one.

The failures of his life (even the ones built around successes, like Pixar’s computers and NeXT’s failure to capture marketshare) are what shaped him personally and business-ally upon his return.

The butterfly effect is a beautiful thing.

Good post. Powerful butterfly.
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