I was just thinking about Pixar's profit potential, and took another look at the Katzenberg settlement. -------------- According to Reuters: Katzenburg could receive as much as $250 million in bonuses based on a 2 percent participation in income from films, TV shows and merchandise sold during his 10 years at Disney. --------------
Katzenberg lawyers asked for $342M-$580M, but I think I remember the final settlement to be rumored in the $150M range.
Let's do a little math:
Pixar's take is 50% or 25 times as much as Katzenberg's 2 percent.
25 X $150M = 3.75 Billion
$3.75 Billion divided by 10 years = $375 Million Per Year
Katzenberg's bonus was for income after he left Disney. This is the kind of income we should expect from Disney since Pixar's movies, on average, are doing as well as the movies under Katzenberg's tenure. And I would bet that the "Buzz Lightyear" TV show will be as successful in the television arena. After the 5-year deal with Disney is completed, the
income will double.
Some more math:
$375M minus Taxes (40%) = $225M
$225M divided by 50M shares = $4.50 a share
After the current Disney contract is completed, this would be $9.00
share. And remember, Katzenberg's money was mostly residual income after he left Disney. Pixar, on the other hand, has residual income plus movies in the pipeline. With three hits for three tries, why PIXR is valued under $100 per share is beyond my understanding. What does this company have to do to get
I am long Pixar and think it has a great future, but I don't think your numbers are neccessarily relevant.
Katzenberg gets a bonus based on all the films he oversaw during his tenure, not just animated films. You are comparing the numbers on five Pixar films to (i would guess) well over a hundred films K oversaw during his tenure. Even using your settlement # of 150 million as the basis for K's 2% cut, that translates to 7.5 billion in gross. The five pixar films are not going to gross that much -- conservatively, lets say 3 billion. Then need to subtract costs and Disney cut of 50%.
PIXAR is going to do great, but you are comparing their take to the bulk of the Disney studio output.
Since jimillo9 brought up one of our most beloved villains...Did anyone else think that Zurg might have been Pixar poking fun at Katzenberg? The stew is rich and thick.
Someday, after the movie has made jillions of dinero, I want this board to discuss the movie's plot with more thoroughness. (We will enter that sleepy zone when all we have to do is count and calculate piles of revenue!) I think the movie is full of fun and interesting messages.