Disney-Pixar Deal

According to Variety, as far as the Disney-Pixar deal goes, both sides remain tightlipped, most insiders are confident that Disney and Pixar are on the verge of renewing their distribution pact.

So what's up with the delay?

There have been some whispers that Disney might take a stake in Pixar, or even purchase it outright. A key point is undoubtedly Circle 7, the secretive division that Disney formed to make sequels to Pixar films, for which it has rights through next year's Cars. (That film is the last under the partners' current deal.)

Production on Toy Story 3 is already under way and the division is close to picking a second film to green light from several scripts under development -- most likely Finding Nemo 2 or Monsters, Inc. 2. Sources indicate the next step -- picking a director -- is on hold until Disney and Pixar close their deal. But in a sign of how close the two companies have again become, Disney CEO Bob Iger reportedly is keeping Pixar chief Steve Jobs and creative guru John Lasseter in the loop about developments at Circle 7 -- something former Disney boss Michael Eisner rarely did.

In the past, Jobs has had little good to say about Disney-produced sequels, but he might warm to the idea with the right deal and if Pixar had enough involvement. Many have speculated that a Disney-Pixar renewal could be the end of Circle 7. But with the Mouse House continuing to spend money on talent, facilities and production, a complete shutdown seems unlikely. In the ideal situation for Iger -- one that looks increasingly likely -- Disney would distribute new Pixar films and produce, in one form or another, a slate of sequels. Combine that with the studio's own newly invigorated toon unit following a successful run for Chicken Little and Disney could again be the undisputed No. 1 animation player. With DreamWorks gaining a more powerful distribution partner in Paramount, and Sony and Warner Bros. getting ready to launch CG toons next year, that's just the position Disney would like to find themselves in going into 2006.

{UPDATE: January 6th} Amid intense speculation on Wall Street that the Walt Disney Co. and Pixar Animation were about to announce a new deal, shares in Pixar began taking off Wednesday and continued its flight on Thursday -- rising nearly 10 percent over the two days. But as the day wore on Thursday, with no news from either company -- a Disney spokesperson said late in the day that there was nothing new to report -- Pixar shares began retreating. The drop was accelerated after Credit Suisse First Boston analyst William Drewry said in a report to clients Thursday that Pixar's stock looked "priced for perfection" -- presumably meaning that it was based on the presumption that Pixar would continue to have an unbroken streak of hits. At midmorning today (Friday), Pixar was the only major entertainment company listed on the NYSE showing a drop in share price.