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Gore Had Cameo in Disney, Pixar Rift

Ex-vice president's effort to resolve the studio contract dispute is said to have irked Eisner.

October 10, 2003|Claudia Eller and Richard Verrier | Times Staff Writers

As vice president, Al Gore had a taste of diplomacy from high-level missions to Russia, Saudi Arabia and China. But those may have looked easy compared with trying to broker a deal between Walt Disney Co. and Pixar Animation Studios.

In an unusual behind-the-scenes maneuver, Gore months ago approached George Mitchell, an influential Disney board member and fellow Washington power player, sources close to the negotiations said. Gore's aim was to enlist the former Senate majority leader's help to pressure Disney chief Michael Eisner into signing off on a new distribution deal with Pixar.

Though Gore's involvement as would-be mediator was short-lived, his very presence underscored the high stakes of one of the most closely watched deals in Hollywood and on Wall Street.

On Thursday, Disney received a new contract proposal from Pixar that the parties hope will put an end to months of roller-coaster negotiations.

Reaching an agreement has been complicated because Pixar, emboldened by its string of animated hits including this summer's "Finding Nemo," is demanding wholesale changes in the financial terms of the partnership. Pixar's proposal would revise the current pact that expires at the end of 2005.

Sources close to the negotiations said the parties remained far apart on various key issues despite some willingness by both sides to make compromises.

The talks have pitted two strong-willed media titans -- Disney's Eisner and Pixar chief Steve Jobs -- against each other as their companies have struggled to extend what has been a highly successful 12-year partnership.

Gore inserted himself into the thorny negotiations this year after joining the board of Apple Computer Inc., the company co-founded and led by Jobs, according to people familiar with the situation.

Sources said Jobs had complained to Gore that he was frustrated that the negotiations were dragging on and that he believed Eisner was standing in the way of a new deal.

Gore, believing he could act as an intermediary, contacted Mitchell to relay Jobs' impatience and frustration, asking his fellow Democrat to call Eisner and prod the Disney executive into moving the talks along.

Mitchell then phoned Eisner in the days leading up to Disney's latest board meeting Sept. 23 to question him about the status of the Pixar negotiations.

Sources said Eisner was taken aback by Mitchell's call and was irritated to learn later that Gore was behind it.

Although Disney directors would like to see a deal with Pixar, they made it clear at the board meeting that Eisner should accept only a contract that makes financial sense for the Burbank-based entertainment giant, sources said.

Eisner, Jobs and Mitchell declined to comment. Calls to Gore's representatives were not returned.

This wasn't Gore's only recent venture into Hollywood.

He and his business partner, former Democratic fund-raiser Joel Hyatt, are in talks with Universal Television Group to possibly buy a small cable news channel, Newsworld International.Gore also is no stranger to Disney and Eisner.

In 1995, Disney gave Gore and his wife, Tipper, elaborate, custom-made "Beauty and the Beast" costumes to wear at their annual Halloween party. A flap ensued, and the Democratic National Committee ended up paying $8,365 for the outfits.

Four years later, Eisner paid a visit to the then-vice president in Washington to discuss legislative issues of concern to Disney.

Gore and Jobs are friends, and this year Gore was invited to join the board of Apple.

Gore, 55, who has served as a senior advisor to Google Inc., has always embraced Silicon Valley and was considered one of the more technology-savvy politicians.

Top Disney executives are said to be poring over the details of Pixar's latest proposal. It is no secret that Pixar is seeking to collect the lion's share of profits from its future movies rather than share the proceeds with Disney, as it has for years.

Disney also takes an additional distribution fee of 12.5% of overall revenue from each movie, including sales from box office, video and DVD and television.

Pixar aims instead to give Disney a 7.5% distribution fee on future movies but is willing to pay as much as a 15% fee for the two movies that remain under the current contract, "The Incredibles" and "Cars."

In a question-and-answer session with analysts this week, Disney President Bob Iger indicated that the company might be willing to make concessions in some areas, including the two remaining film releases.

"Clearly, the relationship we have with them from a business standpoint on the next two pictures is on the table on both sides," Iger said. "There is value to be gained on their side and value to be potentially given up on ours."

The talks have gone through many ups and downs in recent weeks, making it difficult to predict the outcome.

Disney insiders said they were hopeful that Pixar's latest proposal would clarify matters and set the stage for a definitive agreement.

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