Dunn was beyond fed up with Michael Eisner, and he certainly wasn't about to give him another chance. "The partnership between Pixar and Disney ends here. I've already notified the legal team—we're buying out the contract with cash."
"What?"
Michael Eisner's jaw dropped.
He'd figured Dunn might refuse to renew the deal with Disney, but he hadn't expected this. Dunn wasn't just walking away—he was pulling the plug right now, terminating the collaboration and buying out the contract!
"You can't do this!" Michael Eisner blurted out in a panic.
Dunn shot back coolly, "I'll do what I want. You don't get a say in it! Don't forget—Pixar's my company now."
Sure, Pixar was still a publicly traded company, and it'd take at least four more months of approvals and logistics to fully delist it and turn it into a wholly-owned subsidiary of Dunn Films. But the reins were already firmly in Dunn's hands.
With Steve Jobs out of the picture, John Lasseter had stepped up as Pixar's new CEO. Could he really say no to Dunn?
Michael Eisner took a deep breath, his voice heavy. "Dunn, I get it—the past few months… we've had some rough patches. That's on me. But you can't let emotions drive this. Disney's the one who can maximize Pixar's potential. Buying out the contract… it's not a smart business move."
Dunn smirked, totally unfazed. "So what if it's not smart? When I went all-in on Spider-Man and nearly bankrupted myself, was that smart? When I dropped 80 million bucks on the North American TV rights for Band of Brothers, was that smart? When I skipped making movies to buy IMAX, a tech company, was that smart? Michael, please—don't talk to me about being rational! If you'd been rational enough, you'd have accepted my terms back then."
"I'll accept them! I'll absolutely accept them!" Michael Eisner jumped in, practically pleading. "Didn't you want to remake those old classic animated films? I'm in—Dunn Films can team up with Disney to dive deep into the 'Disney Princess' series. Even if Roy Disney doesn't like it, I'll ram it through the board!"
Dunn replied flatly, "Michael, if you'd had this attitude two months ago, things might've turned out differently."
"Heh, it's not too late now, right?"
Michael Eisner softened his tone, throwing in a bit of flattery.
To the outside world, it'd be unthinkable—the lofty king of Disney groveling to a 24-year-old, taking a verbal beating and still trying to butter him up.
But he had no choice. Pixar's impact was massive!
If word got out that Pixar was cutting ties with Disney, it'd be a disaster for Disney's already shaky stock price—adding insult to injury. Losing $3 billion in market value overnight would be the low end of the damage.
A hit that big would force the board to shake up management to reassure investors. Michael Eisner would be the fall guy—no escaping it. He'd have to step down.
At 60 years old, he'd been a top exec since 32—first at ABC, then Paramount, and finally Disney. He'd had a stellar run, hailed as Hollywood's top manager.
He wasn't about to let his legacy crumble now!
And right now, Dunn was his only lifeline.
But Dunn wasn't in the mood for mercy. His tone turned stern. "I said it's too late, and I meant it. I didn't pay this steep a price for Pixar just to keep it tied to Disney's apron strings."
Steve Jobs didn't want to renew with Disney—fine. So Dunn buys Pixar and then happily signs back up with Disney? What a joke. Was he Disney's errand boy?
Michael Eisner went quiet for a long moment, his voice tinged with defeat. "Dunn, you know what Pixar means to Disney. Buying out that contract might only cost you 20 million bucks, but once the news hits, it'll tank Disney's stock."
"Sorry, but I run Dunn Films. Disney's not my problem," Dunn replied matter-of-factly, not a shred of sympathy in his voice.
Michael Eisner sucked in a breath, frustrated by Dunn's stubbornness. With a sigh, he said, "Alright, tell me what you want."
"First off, I'm remaking those classic animated films into live-action movies. Dunn Films and Rose Pictures will handle it," Dunn said casually. "Rose Pictures is a studio focused on female-driven films—perfect for the 'Disney Princess' series."
Michael Eisner frowned. "Rose Pictures can co-produce with Disney. We'd share all the rights."
"No dice. If Rose Pictures and Disney butt heads, who calls the shots? We need a clear pecking order!" Dunn's stance was rock-solid.
Michael Eisner sighed, clearly exasperated. "Let's… put that on hold for now. We'll hash it out later. What else?"
Dunn continued, "Pixar's last few animated films—the distribution rights are with Disney. I want them back. Pixar's kids belong with Pixar. I'm not letting them stay stranded elsewhere."
Michael Eisner was so mad he couldn't speak for a good half-minute.
Dunn's demands were outrageous!
Not only did he want to buy out Pixar's distribution deal with Disney, but he also wanted the rights to the last four films back. He was dead-set on severing Pixar from Disney completely.
No way Michael Eisner could agree to something that extreme, but he didn't dare say no over the phone either. He'd need to buy time and talk it out with Dunn later. "Anything else?"
Dunn's lips curved slightly. "One more thing—about buying out the contract. I want it done peacefully, through friendly negotiations. No public mess, no court battles."
Buying out a contract meant paying a penalty.
It was a breach, sure, but a legally allowed one.
Still, Jobs didn't want the stain of breaking a deal, and neither did Dunn.
Plus, forcing a termination meant taxes. Negotiating it quietly? No taxes.
If Dunn Films and Disney could handle this under the radar, it'd be a win-win for Dunn.
Michael Eisner was trembling with anger. Dunn's demands just kept getting worse!
He wasn't leaving Disney any wiggle room at all.
"Dunn, you need to understand—if Disney's stock crashes, I'm out of the game! A new CEO steps in, they'll bow to Roy Disney's every whim. Then all your demands? They're dead in the water," Michael Eisner said through gritted teeth.
Dunn just smiled. "Exactly. I get what I want, you get what you want. We both win, no debts owed."
"Hmm?" Michael Eisner caught on. "You've got a way to steady Disney's stock?"
Dunn shrugged. "No one can control the market, but Dunn Films has the clout to sway it."
"How?"
Michael Eisner's interest piqued.
Disney's stock wasn't just about his power—it tied straight to his paycheck. His base salary at Disney was a measly $1.25 million, but he held options for 6.5 million shares. If the stock tanked, those options were worthless, leaving him with less annual income than a mid-level manager.
Dunn explained, "I've said it before—I can hand The Chronicles of Narnia over to Disney. The Lion, the Witch and the Wardrobe has already cleared $300 million at the North American box office and over $700 million worldwide. For 2001 releases, it's second only to The Unsinkable and The Lord of the Rings: The Fellowship of the Ring."
"And that's just the start. With the first film blowing up, Narnia's fame is only going to grow. Hit franchise logic—its value's about to skyrocket. The Lord of the Rings is a trilogy, but Narnia can stretch to seven films! That's not even counting spin-offs."
"Conservatively, The Lion, the Witch and the Wardrobe will net Dunn Films $500 million in profit. The merchandise sales are insane! If Disney takes it on, with their consumer products division and store network, the merch profits would be even bigger. The Narnia series could easily bring Disney $5 billion in returns—no exaggeration!"
Five billion dollars!
Dunn was dangling a juicy carrot.
Michael Eisner had been drooling over The Chronicles of Narnia for a while. A series with kid protagonists? It screamed Disney values. But he wasn't about to play along too eagerly. "Five billion? Ha, if that's true, I don't buy that you'd just hand Narnia over to me."
Dunn replied coolly, "I've said it—I only invest in projects where I hold the reins. Narnia was co-developed with Warner Bros., and their meddling's too much. I'm done working with them. Same deal with Disney's live-action remakes—the control's got to be mine."
Michael Eisner mulled it over, then shook his head. "Narnia alone? It's not enough."
Dunn chuckled. "Michael, you're too greedy. We're both movie people—you know what Narnia's worth."
"I need more ammo to sell this to the board. You know Roy Disney's got way too much sway—he's the face of the Disney family!" Michael Eisner leaned on his seasoned finesse.
Dunn didn't bite, grinning as he asked, "Michael, you've heard of American Idol, right?"
Michael Eisner's face darkened.
What a dumb question!
Right now, CBS and ABC, the two big broadcast networks, were locked in a fierce showdown.
And then Dunn Films' Dick Clark Productions dropped American Idol on CBS. It turned an already dominant CBS into an absolute juggernaut!
The latest episode of American Idol featured two girls with jaw-dropping vocals, and the ratings went through the roof. The average viewership hit over 35 million households, with a peak of 47 million tuning in at once to watch the reality show.
And this was still just the audition phase! What would happen during the elimination rounds?
It was almost scary to think about.
American Idol was unstoppable!