Circle Seven Animation

Pixar and Disney originally had a seven-film distribution agreement that gave Disney full ownership of Pixar's feature films and characters up to and including the film Cars, and the rights to make sequels. With the success of Toy Story 2 at the end of 1999, then-Disney CEO Michael Eisner and then-owner of Pixar Steve Jobs began to disagree on how Pixar should be run and the terms of a continued relationship.

Eisner claimed that Toy Story 2, as it was a sequel, did not count towards the "original" film count of the agreement, though Jobs disagreed.{{cite news|last1=Armstrong|first1=Josh|title=Bob Hilgenberg and Rob Muir on the Rise and Fall of Disney's Circle 7 Animation|url=http://animatedviews.com/2012/bob-hilgenberg-and-rob-muir-on-the-rise-and-fall-of-disneys-circle-7-animation/|access-date=March 27, 2012|date=March 5, 2012}}

Jobs announced in January 2004—after ten months of negotiations—that Pixar would not renew their agreement with Disney, and would seek out other distributors for releases starting in 2006. Jobs wanted Pixar to receive most of the profits that their films made (giving Disney the standard 10% distribution fee) as well as full ownership of any future films and characters that the studio would create after Cars (2006).

Eisner found these terms unacceptable.{{cite news|title=Pixar dumps Disney|url=http://money.cnn.com/2004/01/29/news/companies/pixar_disney/ |access-date=21 February 2013 |newspaper=CNN Money|date=January 30, 2004}} Pixar executive producer John Lasseter, who had personally directed Toy Story (1995), A Bug's Life (1998), and Toy Story 2 (1999), became distraught over the breakdown of the Disney-Pixar relationship, as he was worried about what Disney might do with the characters Pixar had created.{{cite book |last1=Issacson |first1=Walter |title=Steve Jobs |date=2013 |publisher=Simon and Schuster|location=New York|isbn=9781451648546|pages=435–436|edition=1st paperback|access-date=29 June 2014|url=https://books.google.com/books?id=8U2oAAAAQBAJ&pg=PA436}}

When he had to announce what had happened at a meeting of Pixar's 800 employees, Lasseter reportedly said, through tears, "It's like you have these dear children and you have to give them up to be adopted by convicted child molesters."

Circle Seven Animation was named after the street where its studio was located, and the often-used Circle 7 logo, a television station logo in the United States designed in the early 1960s for ABC's five owned-and-operated stations, all of which broadcast on VHF channel 7.

File:Disney Circle 7 Animation.png

In March 2004, Disney Circle Seven Animation was formed as a CGI animation studio to create sequels to the Disney-owned Pixar properties, and the studio began to hire staff shortly thereafter. It was seen as a bargaining chip by people within both Pixar and Disney, but also as a backup plan by Eisner in case negotiations fell through.{{cite news|last=Eller|first=Claudia|title=Disney Plans Life After Pixar With Sequel Unit|url=https://www.latimes.com/archives/la-xpm-2005-mar-16-fi-animate16-story.html|access-date=21 February 2013|newspaper=Los Angeles Times|date=March 16, 2005|author2=Richard Verrier}}

The projects that the studio worked on were early drafts of Toy Story 3, Monsters, Inc. 2: Lost in Scaradise, and Finding Nemo 2.

Bob Iger succeeded Eisner as the new CEO of Disney in 2005. While viewing a parade at Hong Kong Disneyland that fall, Iger felt that Disney needed Pixar because all of the characters less than ten years old in the parade were from Pixar's films. On January 24, 2006, Iger and Jobs agreed to a deal in which Disney would buy Pixar for $7.4 billion, with Pixar's leadership (Edwin Catmull and Lasseter) taking control of Disney's animation group.{{cite news|last=Eller|first=Claudia|title=Deal Ends Quarrel Over Pixar Sequels|url=https://www.latimes.com/archives/la-xpm-2006-jan-26-fi-pixarent26-story.html|access-date=21 February 2013|newspaper=Los Angeles Times|date=January 26, 2006}} Under this new deal, Pixar would make Toy Story 3 with a new script; director Andrew Stanton stated that Pixar purposely avoided looking at Circle Seven's script.

On May 26, 2006, Disney shut down Circle Seven Animation, and transferred about 136 out of the studio's 168 employees to Walt Disney Feature Animation (renamed Walt Disney Animation Studios in 2007).{{cite web|url=https://www.latimes.com/archives/la-xpm-2006-mar-21-fi-pixarent21-story.html|title=Disney Closes Unit Devoted to Pixar Sequels|work=Los Angeles Times|date=March 21, 2006|access-date=October 30, 2011 |quote=Thirty-two employees, or nearly 20% of the 168 artists, production managers and support staff, were told they would lose their jobs effective May 26.}} Catmull later disclosed in his 2014 book Creativity, Inc. that although Pixar employees had been frustrated with Disney's decision to create Circle Seven Animation in order to create sequels to Pixar's own films, they did not hold that against Circle Seven's employees, who had no part in that decision.{{cite book|last1=Catmull|first1=Ed|author2=Amy Wallace|title=Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration|date=2014|publisher=Random House|location=New York|isbn=978-0812993011|page=[https://archive.org/details/creativityincove0000catm/page/256 256]|url=https://archive.org/details/creativityincove0000catm|url-access=registration}} This was why Catmull and Lasseter were willing to absorb most of the Circle Seven workforce directly into Walt Disney Animation Studios. They eventually appointed Andrew Millstein, the former head of Circle Seven, as the general manager of Walt Disney Animation Studios to handle day-to-day business affairs on their behalf.

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{{Animation industry in the United States}}

Category:American animation studios

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Category:Michael Eisner