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

Posted:
in General Discussion edited July 2014
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.
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Comments

  • Reply 1 of 29
    rob53rob53 Posts: 2,086member
    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.
  • Reply 2 of 29
    A great book, a must read for anyone managing in a creative environment.
  • Reply 3 of 29
    adamwadamw Posts: 114guest
    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.
  • Reply 4 of 29
    On that same note, would Steve Jobs have taken an interest in buying Pixar if he had not left Apple?
  • Reply 5 of 29
    zoetmbzoetmb Posts: 2,481member
    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.
  • Reply 6 of 29
    andysolandysol Posts: 2,506member
    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?

  • Reply 7 of 29
    andysolandysol Posts: 2,506member
    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.

  • Reply 8 of 29
    hexclockhexclock Posts: 592member
    So the movie Cars would have been recalled then?
  • Reply 9 of 29

    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.

  • Reply 10 of 29
    bobschlobbobschlob Posts: 1,074member

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

  • Reply 11 of 29
    MarvinMarvin Posts: 14,229moderator
    andysol wrote: »
    zoetmb wrote: »
    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."
  • Reply 12 of 29
    applezillaapplezilla Posts: 941member

    Yikes. Thank you, Jesus.

     

    Seriously, Phew!

  • Reply 13 of 29
    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.
  • Reply 14 of 29
    andysol wrote: »
    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!
  • Reply 15 of 29
    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...
  • Reply 16 of 29
    malaxmalax Posts: 1,598member
    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.

  • Reply 17 of 29
    elrothelroth Posts: 1,201member

    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?

  • Reply 18 of 29
    andysolandysol Posts: 2,506member
    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?

  • Reply 19 of 29
    lorin schultzlorin schultz Posts: 2,744member

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

  • Reply 20 of 29
    mdriftmeyermdriftmeyer Posts: 7,301member
    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%.

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