On This This Day in 1995

Toy Story got released.

... At the time, Pixar was owned by Steve Jobs, founder of Apple (NAS: AAPL) and then-CEO of NeXT Computer. Jobs' control of Pixar would be a point of contention in the Disney negotiations that led to Toy Story.

The Pixar crew had originally planned to produce a half-hour TV special, but Disney film honcho Jeffrey Katzenberg insisted on a feature film during an initial meeting. His terms were extremely high. Katzenberg wanted the rights to Pixar's 3-D animation technology, which Jobs understandably refused. Jobs countered with a deal that allowed Pixar part-ownership of the film's characters, as well as video and sequel rights. However, Disney was in a much stronger position -- Pixar was nearly bankrupt. Jobs and Pixar were forced to cave to a deal that granted Pixar only about 12.5% of the ticket revenues, and nothing further. The deal was signed in mid-1991.

... Numerous rewrites left the film a steaming mess, requiring a completely new script and a brief production shutdown. It was in early 1994 when the new script was approved, and the crew soon ballooned from 24 to 110 people. Toy Story's initial $17 million budget was not going to cut it. As premiere time neared, Jobs' initially underwhelmed attitude changed to excitement as the film came together ...

I remember that day well. Disney staffers had been telling me for months there was this terrific new animated feature that was going to knock everyone's tennis shoes off.

They were right, and of course it did. And Toy Story and its successors remade the animation industry. Two decades later, CG animated features are the most profitable kind of long-form movie, and companies that disdained animation for decades now eagerly produce it.

And Pixar, fifteen years further on, was anything but the weak player when Disney wanted yet another deal. In 2005-2006 Pixar was king of the roost and Disney Feature was in a death spiral. Walt's conglomerate, desperate to avoid a rupture with Mr. Jobs and his company, paid $7.5 billion to acquire the Emeryville studio, and Steve Jobs became Disney's largest shareholder. John Lasseter became the chief creative officer of the animation dividion that had laid him off in 1984.

The negotiations of 1991 and 2006 offer to sterling examples of the maxim: "You get what you have the leverage to get."