Biz is buzzing about Disney, Pixar reunion

As far as a new Disney-Pixar deal goes, most insiders agree the question is no longer “Will they?” but “When will they?”

And, just as important, what will be the fallout?

Though both sides remain tightlipped, most insiders are confident that Disney and Pixar are on the verge of renewing their distribution pact.

So what’s holding things up?

There’s been some buzz that Disney might take a stake in Pixar, or even purchase it outright (though the latter seems very unlikely.)

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 greenlight 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 topper Steve Jobs and creative guru John Lasseter in the loop about developments at Circle 7 — something former Disney topper 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 place Disney would like to be in going into 2006.

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