In this interview, Ed Catmull narrates how Steve Jobs leveraged Pixar’s breakthrough success to negotiate a more favorable financial arrangement with Disney and ultimately take the company public. Initially, Pixar’s deal with Disney granted them only a small profit share (3‑5%). Anticipating Disney’s reluctance to let the contract end after the first hit, Jobs proposed that Pixar demand 50% of the profits, which required Pixar to fund half of the production costs. To secure the necessary capital, Jobs decided Pixar should go public immediately after the release of their first feature film. He organized a roadshow with the CFO and other executives, presenting the upcoming film and the plan to revolutionize the animation industry. The movie’s massive success and critical acclaim were followed a week later by Pixar’s IPO, which became the largest of the year, surpassing even Netscape’s offering. The story highlights Jobs’s strategic brilliance, the high‑stakes negotiations with Disney, and the rapid execution that transformed Pixar into a publicly traded powerhouse.
Chapters
So. And this is where Steve was showing his brilliance. Now, around this time. Next is kind of not working out so well. And I've got a good relationship with Steve, and all of us do, but we didn't want him there full time. He was really good part time because he faced our. And he let us. Excuse me. I keep raining. Just put on the table things. Rain. Yeah. So we're out trying to figure out how to make this movie. And we were a group, though, that had been through failures together. So we'd all experienced that, and it was really difficult to figure this out. We made a lot of misestimates, and the first versions didn't work very well. But as we got closer, it became apparent that we were onto something really big. And I have to say, John Lasseter believed right from the minute that this is going to be gigantic. But from Disney's point of view, it was a boutique film, so they didn't put any consumer products behind it because they didn't see it being anything but as we got into the last year, it was now apparent it was big. And so Steve said, okay, now we are going to revolutionize this industry. But we're also in a position where, because we've got the experience here, not only do we have the first film out, we will probably have the second filling out before anybody else can get into this. But the deal that we had with Disney, frankly, was not a very good deal. We got like 3 to 5% of the profits or something like that. So it was not all that. Not very good. Not very good. So Steve called John and me together, and he said, okay, our deal lasts for three pictures, and at the end, we're on our own. Michael Eisner will realize as soon as this film is successful that he will have just created his biggest nightmare. So he will not want the contract to end. So when the film comes out, he will renegotiate. And when we renegotiate, I want 50% of the profits. But if we get 50% of the profits, that means we have to put up 50% of the money. So in order for us to put up 50% of the money, we have to have the money in the bank, therefore, we should go public. So John and I are saying, whoa, whoa, whoa, whoa, whoa. This is a little early here. Let's prove our worth first. But Steve, being Steve, had a compelling way about him. So we put on the roadshow. We went out and showed pieces of the movie, but what he told people is he went on the roadshow. So I went out, our CFO went with us, Lawrence, Levy and Steve. And as we went out, the argument was that the company will go public one week after the movie opens. So you will see that we're changing the industry. And so that's the prep. So the movie comes out, it opens huge, it gets incredible reviews, and then the next week we go public. And it was the biggest IPO of the year. It was bigger than Netscape. Incredible. It was an incredible thing.
