Question

Why must Disney own Pixar? Why can’t they just renegotiate the contract?

Why must Disney own Pixar? Why can’t they just renegotiate the contract?

Homework Answers

Answer #1

Disney must own Pixar because Disney need to keep the relationship with Pixar.It has two options: Renegotiate existing contract with Pixar, make an attractive offer and acquire Pixar.

But it is difficult to renegotiate their contract and agree to new terms. There are lots of unknowns regarding the evoloving nature of the industry,the quality of futur films and the pressure of profiting from sequels markets. Accounting for every possible contingency in a contract is impossible.

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