Pixar Chief Disparages Disney’s Creativity

Steve Jobs to Michael Eisner: The gloves are off.

Less than a week after Jobs’ Pixar Animation Studios ended talks to extend its movie partnership with Eisner’s Walt Disney Co., the tech titan teed off Wednesday on his soon-to-be former partner. Jobs sharply criticized Disney in a conference call with analysts about Pixar’s strong fourth-quarter earnings, disparaging the creativity of recent Disney animated films and labeling movies such as “Treasure Planet” and “Brother Bear” as “duds” that even the Burbank giant’s high-powered marketing machine couldn’t save.

About the relationship with Pixar, Disney has “said a lot of things that aren’t true,” a clearly irritated Jobs said in an interview. “We believe in accuracy.”

The remarks were Jobs’ first public comments since he announced Jan. 29 that Pixar was ending talks to extend the companies’ 13-year partnership after he and Disney Chief Executive Eisner butted heads for 10 months.

The Pixar CEO accused Disney of misrepresenting that it owns Pixar films made after the company’s original hit, “Toy Story.” Jobs noted that Pixar and Disney split ownership of the hits “A Bug’s Life,” “Toy Story 2,” “Monsters, Inc.” and “Finding Nemo,” as they will for two coming films, “The Incredibles” and “Cars.”

He added that Disney, while “making noises” about producing sequels to Pixar’s hits on its own, had turned out some “pretty embarrassing” animated sequels such as “Return to Neverland” and the new “Lion King 1 1/2.”

Jobs played down Disney’s creative contribution to Pixar’s success.

“The truth is that there has been little creative collaboration with Disney for years,” he said.

Jobs’ statements, in the conference call and the subsequent interview, irked Disney. In a statement, spokeswoman Zenia Mucha said: “It is unfortunate that Steve Jobs has grossly mischaracterized good-faith negotiations to reach agreement on an extension of the present, successful partnership that has been beneficial to shareholders of both Pixar and Disney. It’s also sad and unfortunate that he has resorted to insults and name-calling in the wake of the disagreement. We expected better of him.”

Jobs’ comments overshadowed Pixar’s record earnings both in the fourth quarter and for all of last year. Results were boosted by the international box-office take and DVD sales for “Finding Nemo,” now the biggest animated film ever, with global ticket sales of $850 million.

The Emeryville, Calif.-based company said it earned $83.9 million, or $1.44 a share, on revenue of $164.8 million. That compares with $17 million, or 31 cents a share, in the year-earlier quarter on revenue of $39.4 million. The results easily beat Wall Street’s consensus estimate of $1.27 a share as compiled by Thomson First Call.

The fourth-quarter numbers pushed the animation company’s full-year profit to $124.8 million, or $2.17 a share, on revenue of $262.5 million.

According to Jobs, every studio chief in Hollywood has inquired about replacing Disney since last week’s announcement. “They’d love to come to my house for dinner,” he said.

Jobs said Pixar would start talks in March with the goal of putting a new deal in place by the fall. He added that four studios had the inside track, and that it was “very unlikely” talks with Disney could be revived.

He didn’t identify the favored suitors, but sources said they were Time Warner Inc.’s Warner Bros., News Corp.’s 20th Century Fox, Vivendi Universal’s Universal Studios and Sony Corp.’s Sony Pictures Entertainment.

Notwithstanding the March timetable, analysts said the mercurial technology pioneer who founded Apple Computer Inc. clearly was trying to light fire under potential partners.

“From what I heard, it sounds like he started negotiations an hour ago,” said Michael L. Savner, analyst with Banc of America Securities. “He’s saying, ‘Let the games begin.’ ”

Disney has said that Pixar’s offer to continue the partnership was onerous, because it would have required the studio to give up rights to a pair of films Pixar owes Disney: “The Incredibles,” scheduled for release Nov. 5, and the 2005 film “Cars.”

Jobs defended Pixar’s demands, saying that to fold the two remaining films into a new deal would have been consistent with common practice in Hollywood, where studios often grant such concessions to keep a valued partner.

According to Jobs, such a concession would have mirrored the renegotiation of the contract between Disney and Pixar after Pixar’s first hit, “Toy Story,” under which the two remaining films from the old deal became the first two under a new contract.

During the conference call with analysts, Jobs read an account from a Times story that told how Eisner had suggested to Disney directors that “Finding Nemo” would not be a blockbuster and would thus help Disney gain negotiating leverage.

“We’ve been told the same story by several folks at Disney,” Jobs said. “As you know, things turned out a little different.”