Need for kid projects, established distrib'n are positves
MGM’s chairman-CEO Alex Yemenidjian said Tuesday he wants to do a deal with newly single Pixar and that the Lion is “the most perfect fit” among potential partners.
He cited three reasons: First, MGM doesn’t make kiddie fare, so there would be no conflict and no internal competition. Second, the companies are complementary. “Pixar represents a certain brand that MGM doesn’t produce” and vice versa. And third, MGM has a first-class, worldwide distribution biz.
“Hopefully, depending which way Pixar goes, we’ll get an opportunity to present our case,” Yemenidjian told investors at the Bear Stearns media and entertainment conference in Palm Beach, Fla.
Speaking later in the day, Disney president Bob Iger reiterated that Pixar’s best and last offer would have been economic suicide for Disney.
“We would have had to give back tremendous economic value on the next two pictures, in exchange for a long-term distribution deal that we didn’t think would give us as much value as we would be giving up,” Iger said. “This was one of the toughest decisions we had to make. We ran the numbers right and left. There wasn’t an angle that we missed.
“I hope things could change. I’m not saying that they will or won’t,” he added cryptically.
Yemenidjian said that along with Pixar, his wish list includes a major merger partner, since “there is no question we could leverage our assets better being part of a larger organization.” He said MGM’s bid for Vivendi Universal Entertainment last year, although ultimately unsuccessful, drove home the realization that the revenue enhancement and cost savings from the right combination are “much bigger than we thought.”
Since then, MGM has been actively pursuing various options to give the company more scale.
He said deals are hard because “there are many more buyers than sellers” in the current market.