Pixar Chief Chronicles Crisis as Disney Era Tests Studio

Seven years after its acquisition by Walt Disney Co. (DIS), Pixar, the studio known for “Toy Story” and “Finding Nemo,” was facing three crises, according to a new book by its president, Ed Catmull.

The cost of making animated films was rising, the DVD market was shrinking and there was a feeling among management that a tenet of the Pixar culture, employees’ freedom to speak their minds, was faltering, Catmull says in “Creativity, Inc.,” released today by Random House.

After buying Pixar for $7.4 billion in 2006, Walt Disney Chief Executive Officer Bob Iger put Catmull and Chief Creative Officer John Lasseter at the helm of both their studio and Disney’s animation unit. The wisdom of that decision has been evident in the unit’s success, including with the Oscar-winner “Frozen,” the top-grossing animated film of all time.

Less well-known are what Catmull, 69, says were growing pains and soul-searching at Pixar.

“How, we all wondered, could we maintain Pixar’s sense of intensity and playfulness, beating back the creeping conservatism that often accompanies success while also getting leaner and more nimble?” Catmull writes.

He quotes Lasseter as saying, “There’s a lightness and a speed at Disney that I want to see more of at Pixar.”

‘Tough’ Criticism

Catmull and others in management assembled more than 1,000 employees in the atrium of its headquarters in Emeryville, California, for an event it called Notes Day in March 2013.

Employees were asked in advance to share suggestions for topics, their complaints and ways for the company to improve. Lasseter received two-and-a-half pages of criticism. Among them were concerns he was so tightly scheduled that people wasted time overpreparing for meetings and that he carried his emotions from one meeting to the next, leaving some thinking he was mad at them when he wasn’t, according to the book.

“Those two-and-a-half pages were really tough to read,” Lasseter told employees that day, according to the book. “But it was so valuable for me to hear, and I’m already working to correct those things.”

Brian Ferguson, a former Disney animator who left last year and now teaches at the California Institute for the Arts in Valencia, said competition for Lasseter’s attention was an issue at the studio.

“It’s like children fighting over their parents,” Ferguson said in an interview. “He was being spread awfully thin. Any time anybody had with him was precious.”

‘Biggest Payoff’

Catmull says in the book that one goal of Notes Day was figuring out how to cut costs by 10 percent.

In November, Pixar fired about 5 percent of its 1,200 workers and closed a Vancouver, Canada, facility. The studio said at the time that it would delay the release of the film “The Good Dinosaur” until November 2015, making this the first year since 2005 that Pixar isn’t putting out a movie.

Its last film, 2013’s “Monsters University,” grossed $738 million in theaters worldwide; its budget was $270 million, including the cost of distributing and marketing the film, according to Boxoffice.com.

Employees discussed 106 topics in 171 sessions during the the Notes Day event, according to the book. Afterward, they were treated to beer and hot dogs.

“I believe the biggest payoff of Notes Day was that we made it safer for people to say what they thought,” Catmull said in his book. “Notes Day made it OK to disagree.”

Disney fell 0.3 percent to $78.88 at 11:46 a.m. in New York. The stock had gained 3.6 percent this year as of yesterday.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Anne Reifenberg, Rob Golum

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