Post to Test Iger’s Fence-Mending Skill

Bob Iger has a message for Steve Jobs: Let’s talk.

On Monday, the day after he was named the next chief executive of Walt Disney Co., Iger said a top priority was to reach out to the Pixar Animation Studios chief in hopes of repairing a fractured partnership that over the years produced such blockbusters as “The Incredibles,” “Finding Nemo” and the “Toy Story” films.

“I will certainly make an attempt and look forward to some dialogue provided he’s willing,” Iger, now Disney’s president, said in an interview. “I’ve always valued creative partnerships. This one has been incredibly successful for both companies.”

When Iger takes over for outgoing CEO Michael Eisner on Oct. 1, it will fall to the diplomatic and low-key former network television executive to mend frayed relationships with key allies who clashed with the mercurial Eisner.

Analysts agreed that it was too late to prevent Disney’s pending breakup with Harvey and Bob Weinstein, the co-founders of its Miramax Film Corp. division and the men behind such films as “Chicago” and “Shakespeare in Love.” A settlement ending their union is expected within the month.

But Iger has an opportunity, analysts said, to breathe new life into Disney’s relationships with Pixar as well as the National Football League, whose games Disney airs on its ABC and ESPN networks.

Iger’s conciliatory style is expected to serve him well. “To know Bob is to like him,” said Jessica Reif Cohen, a media analyst with Merrill Lynch. “But he’s got his challenges.”

Chief among them, analysts said, will be luring Jobs back to the bargaining table.

In the interview, Iger said that as much as he valued Pixar, salvaging the relationship required striking “the right deal” for Disney shareholders.

Over the years, Pixar’s movies have contributed more than half of Disney’s profit from films. Pixar and Disney split profit and production costs under a multi-picture deal that expires in 2006 with the release of “Cars.”

Jobs wants to change that and is using Pixar’s success to leverage a better deal.

After repeatedly battling with Eisner, Jobs a year ago halted talks that could have extended the alliance with Disney. While haggling over business terms, Jobs and Eisner have repeatedly traded barbs in public.

Underscoring how personal the feud has become, Jobs has made it clear to people inside and outside of Pixar that he would be willing to resume negotiations once Eisner is gone.

Now that Eisner has a departure date, the likelihood of talks resuming is “definitely more possible,” a source close to Jobs said.

Jobs declined to comment Monday.

For his part, Iger has publicly given mixed signals on whether an agreement with Pixar can be achieved. Last fall, he said at a conference in London: “It would be nice to continue the relationship to infinity, but I think we’ve outgrown each other.”

Some analysts say the two sides are so far apart on basic financial terms that goodwill alone won’t be enough to bring the parties together.

“The chance that Pixar will go with Disney is still relatively slim,” said Tuna Amobi, a media analyst with Standard & Poor’s.

Responding to speculation of resumed talks, investors Monday pushed Pixar’s stock price up $1.98 to $90.96 on Nasdaq. Disney shares rose 43 cents to $28.02 on the New York Stock Exchange.

In the case of the NFL, Disney has exclusive rights to renew its contracts for ABC and ESPN through October. The pressure on Disney increased last year after the NFL’s three other major television partners -- Fox, CBS and DirecTV -- all renewed their contracts with the league, agreeing to stiff rate hikes of at least 25% a year over six years.

The ABC and ESPN contracts with the NFL expire at the end of the 2005-2006 season.

Sealing a new NFL deal won’t be easy for Iger. Investors could accuse Disney of paying too high a price for renewing “Monday Night Football” for ABC and the Sunday night package for ESPN. And losing either franchise could upset any number of constituents, from investors and broadcast station affiliates, to cable operators and TV viewers.

In the case of the ABC contract, the NFL is looking to charge more than $1 billion a year, up from about $550 million today, sources said.

Iger declined to comment on the talks.

He needs ABC to be profitable to meet growth projections Disney has promised Wall Street. Disney is losing an estimated $150 million on its current “Monday Night Football” contract, and would lose money on any contract of more than $482 million a year, Reif Cohen said.

As a result, Disney will probably shift “Monday Night Football” to ESPN and possibly give up the Sunday night ESPN package, according to sources.

Reif Cohen said Disney could live without “Monday Night Football” now that ABC has some hits, including “Desperate Housewives.”

“Given the significant cost involved and the importance of the NFL to ESPN, we view these negotiations as a key driver for both operating performance and the stock,” Reif Cohen said.