Supplementary Material: Disney

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{| class="article-table" {| class="wikitable"  "The Walt Disney Company Changes Name of Distribution Arm," Internal memo, 1985  Effective today, The Walt Disney Company will change the name of its distribution arm from Buena Vista Theatrical Pictures to Walt Disney Studios Motion Pictures, to represent well and truly that Disney distributes and owns its own films. Furthermore, home video releases of all films prior to 1985 will have the message "Distributed by Walt Disney Studios Motion Pictures" added to them, along with keeping distribution notes of "Distributed by RKO Radio Pictures" and "Distributed by Buena Vista" intact, adding the new addendum only at the very end. Disney will keep the Buena Vista name for its home video division, under the Buena Vista Home Video umbrella.  "Disney, Capital Cities/ABC Agree To Merge," BusinessWire, July 31, 1995  $19 Billion Transaction Will Enhance Value By Creating World's Leading Entertainment And Communications Company

BURBANK, CA, AND NEW YORK-The Walt Disney Company (NYSE: DIS) and Capital Cities/ABC Inc. (NYSE: CCB), two of the world's leading entertainment and media companies, today announced that they have agreed to merge. The combined enterprise will have a unique ability in creating, packaging and delivering entertainment, news, and sports - all of which will generate significant new opportunities for domestic and international growth.

Under terms of the agreement, which has been approved by the Board of Directors of each company, Capital Cities/ABC shareholders will have the right to receive one share of Disney common stock and $65 in cash for each of their shares. At current share prices, the value of the transaction is approximately $19 billion.

In a joint statement, Michael D. Eisner and Thomas S. Murphy, chairman and chief executive officer of Disney and Capital Cities/ABC, respectively, said: "The combined company will become a vital and dynamic force in the entertainment and media business, reaching family audiences worldwide and providing them with unparalleled news, information and entertainment both inside and outside the home.

"Disney and Capital Cities/ABC have created some of the most recognized and respected brands in the world. The merger will create tremendous value for the shareholders of each company by taking full advantage of the complementary strengths of each organization. The combined enterprise will be better equipped to grow, to provide valuable services for our viewers, listeners, readers, sports fans and vacationers, and to capture the imagination of future generations."

As a result of the merger, Capital Cities/ABC Inc. will become a wholly-owned subsidiary of Disney. The combined enterprise, which will be known as The Walt Disney Company, will be led by Mr. Eisner, who will continue as chairman and CEO. Mr. Murphy, chairman and CEO of Capital Cities/ABC, will relinquish his current titles on the effective date of the merger and join Disney's Board of Directors. Robert A. Iger will continue in his role as president of Capital Cities/ABC and also become COO and president of The Walt Disney Company. The companies had combined annual revenues in 1994 of approximately $16.5 billion.

"This transaction is a once-in-a-lifetime opportunity to create an outstanding entertainment and media company," Mr. Eisner said. "The merger positions us for substantial growth worldwide and puts us in a strong competitive position in an industry which, by this transaction, we are helping to define. The Walt Disney Company will now have more global outlets to provide the highest quality entertainment, news and sports programming."

"We sought a merger with Capital Cities/ABC in particular because of our tremendous respect for the management team Tom Murphy has assembled and the outstanding collection of broadcasting and publishing assets they have built," Mr. Eisner said.

Mr. Murphy said, "This is a terrific opportunity for our shareholders and employees and will result in a world-class organization dedicated to providing the finest in information, entertainment and news. The dynamism of Disney, under the leadership of Michael Eisner, combined with the experience and energy of our operations under Bob Iger, makes this the most exciting new business venture in many years."

Mr. Iger said, "I have always had tremendous respect for The Walt Disney Company and its excellent management. Our assets and reach can help increase the scope of what is already a worldwide enterprise; but it will be our enthusiasm and spirit, added to theirs, that will give this combination a special dimension. I am very excited to be a part of this new venture and to have the opportunity to help build a unique force in international media. I am also honored to take the roles of president and COO of The Walt Disney Company and officially be part of Team Disney."

Under terms of the merger, any shareholder of Capital Cities/ABC can elect to receive proportionally more cash or common stock than provided for in the exchange ratio, subject to proration if either the stock or cash portion is oversubscribed, and subject to the option of Disney to increase the cash portion if requested by Capital Cities/ABC shareholders.

The transaction, which is subject to regulatory review and approval of the shareholders of each company, is expected to be completed by early 1996. The companies noted that because their businesses are complementary, they do not expect staff reductions as a result of the combination.

The Walt Disney Company is a worldwide leader in motion pictures and television production, theme parks and consumer products. Its film division, led by the success of animated titles like Pocahontas, The Lion King, and Aladdin, has been either first or second at the domestic theatrical box office over the past five years.

In television, Disney offers more than 58 hours a week of network and syndicated shows in the U.S. Two of its top network shows, Home Improvement and Ellen, run on the ABC network. Disney will establish a new record with the launch of 9 new shows in syndication during the 1995 season. In addition, Disney's international television programming is seen by audiences on every continent.

The Disney Channel, with 14 million U.S. subscribers, is currently extending its reach overseas. It made its foreign debut in Taiwan this spring and will debut in the UK this fall. Disney recently launched Super RTL as a joint-venture channel in Germany with a significant amount of Disney programming.

In addition to its film and television activities, Disney owns and operates theme parks in California (Disneyland) and Florida (Walt Disney World). The company also receives royalties from Tokyo Disneyland and owns 39% of Disneyland Paris. Disney also licenses its characters to manufacturers worldwide, operates 400 Disney Stores around the world, and publishes books, magazines and music.

In addition to the ABC Television Network, which consists of 225 affiliated stations reaching 99.9 percent of the nation's television households, Capital Cities/ABC owns and operates 8 television stations, with plans to purchase two others in August, reaching about 25 percent of the U.S. market.

Capital Cities/ABC also has a significant and rapidly expanding international operation - one of the most aggressive of any U.S. media company. These holdings include significant equity interests in Tele-Munchen and RTL2, Munich; Scandinavian Broadcasting Systems, Luxembourg; Hamster Productions and Eurosport, Paris; and The Japan Sports Channel, Tokyo.

Capital Cities/ABC also owns:

-80 percent of ESPN, Inc., which includes ESPN, its U.S. flagship sports channel which reaches 67 million households and, through its international program services, over 100 million households overseas; as well as ESPN2, serving 22 million households;

-21 radio stations and radio networks serving more than 3400 radio stations;

-50 percent of Lifetime Television, serving 58 million U.S. households;

-37.5 percent of A&E Television Networks, reaching 56 million domestic households;

-a large publishing group, with 7 daily newspapers, weekly newspapers and shopping guides, various specialty and business periodicals and books; and

-a multimedia group which develops and manages business opportunities in new and emerging media technologies.  "Disney To Acquire CapCities/ABC in $19 Billion Merger," by Steven P. Rosenfeld, Associated Press, July 31, 1995  NEW YORK (AP)-The Walt Disney Company will acquire Capital Cities/ABC Inc. in a surprise merger of entertainment giants valued at about $19 billion, the companies announced today.

Under the agreement, New York-based Capital Cities, which owns the ABC television network, will become a subsidiary of Burbank, Calif.-based Disney, which produces ABC’s hit comedy series, Home Improvement.

The combined company will be called The Walt Disney Company, with Disney’s chairman, Michael D. Eisner, a former entertainment president at ABC, continuing as chairman and chief executive.

Disney is best known for cartoon characters like Mickey Mouse, animated movies like The Lion King and Pocahontas, and its Disney World and Disneyland theme parks.

The company, which also has interests in parks in Japan and Europe, operates the Disney Channel on cable television. It has 400 Disney Stores and licenses its characters to manufacturers. Disney also publishes books, magazines and music.

In addition to ABC-TV, Capital Cities has a network of 225 affiliated stations and owns eight TV stations. It plans to acquire two more in August.

It also owns 80 percent of sports cable broadcaster ESPN Inc., has interests in the Lifetime Television and A&E Television Networks cable channels, and has 21 radio stations. It also publishes newspapers, shopping guides, magazines and books, and has interests in international broadcasting.

The acquisition, already approved by the boards of both companies, is subject to shareholder approval and federal antitrust review. The companies said they expected the deal to be concluded by early 1996.

Because the businesses are complementary, the companies said they do not expect jobs will be lost in the combination.

Under the proposal, Capital Cities shareholders would receive one share of Disney stock and $65 in cash for each of their shares.

At the close of trading Friday, Disney stock was at $57.37 1/2 a share and Capital Cities at $96.12 1/2. The deal would value Capital Cities at $122.37 1/2 a share.

The companies had combined annual revenues of about $16.5 billion in 1994.

The announcement comes at a time of consolidation in the media industry.

There have been reports for weeks speculating that Westinghouse Electric Corp. is putting together a $5 billion bid to buy CBS Inc.

Recently, Viacom Inc. agreed to sell its local cable television operating systems to Tele-Communications Inc. in a deal valued at $2.25 billion. Gannett Co., the nation’s leading newspaper publisher, announced it is acquiring Multimedia Inc., a publisher and producer of talk shows, for more than $1.7 billion.

Eisner said the deal "is a once-in-a-lifetime opportunity to create an outstanding entertainment and media company.″

"Disney and Capital Cities/ABC have created some of the most recognized and respected brands in the world,″ said a joint statement by Eisner and Thomas S. Murphy, chairman of Capital Cities. ``The merger will create tremendous value for the shareholders of each company by taking full advantage of the complementary strengths of each organization.″

Murphy will relinquish his titles of chairman and CEO when the merger takes effect and join the Disney board. Robert A. Iger would remain as president of Capital Cities/ABC, but also move to become president and COO of The Walt Disney Company, duties that Eisner has also been effectively handling for the past year, since the death of Frank Wells.

Eisner, appearing with Murphy this morning on ABC’s Good Morning America, said the deal fell together a week ago Thursday at an Idaho resort.

"I literally passed Tom Murphy in Sun Valley on the street ... and said, `Tom, I think the time is right now. Every part of your company is working. Every part of our company is working.

"There are no fires in any divisions. Disneyland in Paris is doing great. They’re No. 1 in prime time. Maybe now is the time,‴ said Eisner. "He simply looked at me and said OK.″

Murphy said, "We’re not putting two television networks together or two movie studios together or two theme parks together. We’re in allied fields but we’re in different fields.

"I don’t think there’s any domination of the media or any part of the media so that we would be damaging competition at all,″ he said.  "The Media Business; Disney and ABC Shareholders Solidly Approve Merger Deal," by Geraldine Fabrikant, The New York Times, January 5, 1996  Shareholders of The Walt Disney Company and Capital Cities/ABC approved a merger yesterday, and Disney executives said they expected the deal to clear the final hurdle of Government approval in the next few weeks.

Speaking to a packed shareholder meeting at the Waldorf-Astoria Hotel, Disney's chief of operations, Sandy Litvak, said the merger was scheduled for a vote by the Federal Communications Commission on January 18 but because of the government shutdown, the vote could be postponed. If the FCC votes on schedule, Justice Department approval could come shortly afterward, which would make the merger final.

During the meeting, attended by about 4000 shareholders and others, Disney's CEO and chairman, Michael Eisner, went out of his way to praise ABC's news division.

"I am affirming my commitment that ABC will continue to operate in the public interest without corporate interference and with the mission of pursuing the news aggressively, and reporting it without fear or favor," Mr. Eisner said.

There have been concerns that Disney might try to exert some control over news and Mr. Eisner was apparently eager to reassure ABC news executives that Disney would not do so.

Harold Vogel, an analyst who follows Disney for Cowen & Company, said yesterday that Disney was anxious to keep the successful news operation intact since it was one of the linchpins of the company's plan to expand its cable business abroad. ABC is starting a 24-hour business news service that it hopes to export overseas and Disney wants to expand ABC's successful sports channel, ESPN, abroad. Additionally, Mr. Vogel said Disney might be concerned about raising objections at the FCC.

One mystery that continued yesterday among shareholders concerned how much stock the investor Warren E. Buffett would choose to take in the new company. Mr. Buffett's company Berkshire Hathaway currently owns 13 percent stake, or 20 million shares of Capital Cities/ABC, and can choose the combination of Disney stock and cash he takes from the deal.

Investors are watching carefully because if Mr. Buffett leans heavily toward stock it would represent a vote of faith in Disney. Disney executives said yesterday that they did not know Mr. Buffett's preferences.

Capital Cities/ABC shareholders are set to receive $65 a share in cash and one share of Disney stock for each share of Capital Cities/ABC stock. If all shareholders settled for the standard payout, Disney would issue 155 million new shares and spend $10 billion in cash.

But Capital Cities/ABC shareholders can ask for more stock or cash once the merger is completed. Disney has said it will meet those requirements to the degree that it can but will not issue more than 155 million new shares of Disney stock.

Peter Russ, an analyst at Shelby Cullom Davis & Company, said that investors would probably only learn of Berkshire's position in the first quarterly report following the merger or the company's next annual report. Mr. Buffett did not return phone calls.

Both shareholder groups approved the merger by a wide margin. But 16 percent of Disney shareholders voted against a new stock option plan that allows Disney to issue 65 million additional shares.

Ann Yerger, deputy director of the Investor Responsibility Research Center, said Disney's new option plan, together with other shares available and outstanding options as of September 30, 1995, meant that the company could have as much as 16.7 percent more shares outstanding than it does now. Ms. Yerger said that number was high relative to other companies in the entertainment industry, though not high in comparison with some technology companies.

Although many shareholders do not like such dilution, Ms. Yerger noted that shareholders might base their judgment on Disney's performance. "Some investors have a sniff test," she said. "Some factors may raise a red flag, but other factors mitigate it."

Disney has made some of the largest grants of options in the entertainment industry, including grants of eight million shares each to Mr. Eisner and a grant of five million shares to Disney's interim president, Michael Ovitz, who will soon leave to make way for ABC president Robert A. Iger to be Disney's president and COO.

Graef Crystal, a compensation expert who is an adjunct professor at the University of California at Berkeley's Haas School of Business, said one reason for the size of the new option program might be to provide for additional options for Mr. Eisner, whose contract is up in 1998. A company spokesman said the new option plans were a move to accommodate the number of executives coming into the merged company.  "Disney to Acquire Pixar Animation Studios," PRNewswire, January 24, 1996  Burbank, CA and Richmond, CA – Furthering its strategy of delivering outstanding creative content, Michael D. Eisner, Chairman and Chief Executive Officer of The Walt Disney Company (NYSE: DIS), announced today that Disney has agreed to acquire computer animation company Pixar Animation Studios in an all-stock transaction, expected to be completed by this summer. Under terms of the agreement, 2.3 Disney shares will be issued for each Pixar share. Based on Pixar's fully diluted shares outstanding, the transaction value is $2.4 billion.

This acquisition, coming soon after the official approval of Disney's $19 billion purchase of Capital Cities/ABC, combines Pixar's rising creative and technological resources with Disney's unparalleled portfolio of world-class family entertainment, characters, theme parks and other franchises, resulting in vast potential for new landmark creative output and technological innovation that can fuel future growth across Disney's businesses. Garnering an impressive box office and award nomination run with the release of last year's Toy Story, Pixar's creative team and global box office success have made it a potential leader in quality family entertainment through incomparable storytelling abilities, creative vision and innovative technical artistry.

"With this transaction, we welcome and embrace Pixar's unique culture, which has already fostered one of the most innovative and successful films in history. The talented Pixar team has delivered outstanding animation coupled with compelling stories and enduring characters that have captivated audiences of all ages worldwide and redefined the genre by setting a new standard of excellence," Eisner said. "The addition of Pixar significantly enhances Disney animation, which is a critical creative engine for driving growth across our businesses. This investment significantly advances our strategic priorities, which include – first and foremost – delivering high-quality, compelling creative content to consumers, the application of new technology and global expansion to drive long-term shareholder value."

Pixar President Ed Catmull will serve as President of the new Pixar and Disney Animation Studios, reporting to Eisner and Joe Roth, Chairman of The Walt Disney Studios. In addition, Pixar Executive Vice President John Lasseter will be Chief Creative Officer of the animation studios along with Roy Edward Disney and Animation Studios chairman Peter Schneider, CCO of Pixar, as well as Principal Creative Advisor at Walt Disney Imagineering, where he will provide his expertise in the design of new attractions for Disney theme parks around the world, reporting directly to Eisner. Pixar Chairman and CEO Steve Jobs will be appointed to Disney's Board of Directors as a non-independent member. With the addition of Jobs, 11 of Disney's 14 directors will be independent. Both Disney and Pixar animation units will retain their current operations and locations, and Pixar will continue to have its own financing source in place thanks to the earlier IPO.

"Disney and Pixar can now collaborate without the barriers that come from two different companies with two different sets of shareholders," said Jobs. "Now, everyone can focus on what is most important, creating innovative stories, characters and films that delight millions of people around the world."

"Pixar's culture of collaboration and innovation has its roots in Disney Animation. Our story and production processes are derivatives of the Walt Disney 'school' of animated filmmaking," said Dr. Catmull. "Just like the Disney classics, Pixar's films are made for family audiences the world over and, most importantly, for the child in everyone. We can think of nothing better for us than to continue to make great movies with Disney."

The acquisition brings to Disney the talented creative teams behind the tremendously popular original Pixar blockbusters to come, who will now be involved in the nurturing and future development of these properties, including potential feature animation sequels. Disney will also have increased ability to fully capitalize on Pixar-created characters and franchises on high-growth digital platforms such as video games, broadband and wireless, as well as traditional media outlets, including theme parks, consumer products and live stage plays.

"For many of us at Pixar, it was the magic of Disney that influenced us to pursue our dreams of becoming animators, artists, storytellers and filmmakers," said Lasseter. "For 10 years we have created our shorts, and now our films in the manner inspired by Walt Disney and the great Disney animators – great stories and characters in an environment made richer by technical advances. It is exciting to continue in this tradition with Disney, the studio that started it all."

"The wonderfully productive partnership that exists between Disney and Pixar provides a strong foundation that embodies our collective spirit of creativity and imagination," said Roth. "Under this new, strengthened animation unit, we expect to continue to grow and flourish."

Disney first entered into a feature film agreement with Pixar in 1991, resulting in the release of Toy Story, which has been hailed as an instant classic upon its release in November 1995. Disney had been looking to merely extend their relationship in a joint venture, but chose instead to acquire the company and ensure that Pixar remains a cherished unity of the Disney empire.

The Boards of Directors of Disney and Pixar have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antritrust Improvements Act, certain non-United States merger control regulations, and other customary closing conditions. The agreement will require the approval of Pixar's shareholders. Jobs, who owns approximately 50.6% of the outstanding Pixar shares, has agreed to vote a number of shares equal to 40% of the outstanding shares in favor of the transaction.

The Disney Board was advised by Goldman Sachs & Co. and Bear Stearns & Co. The Pixar Board was advised by Credit Suisse.

About The Walt Disney Company

The Walt Disney Company (NYSE: DIS), together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products. Disney is a Dow 30 company.  "Disney Completes Deal With Capital Cities/ABC," The Spokesman-Review, February 10, 1996  Capital Cities/ABC Inc. is no more.

The Burbank, California-based Walt Disney Company completed the $19 billion acquisition of the broadcast and publishing concern Friday. Now all that's left in the deal to create the nation's largest media concern is for shareholders to decide whether they want cash, stock or both in exchange for their Capital Cities holdings.

"There is no longer a Capital Cities/ABC trading on the New York Stock Exchange," Disney spokesman John Dreyer said Friday, the last day of trading for Capital Cities stock.

Capital Cities shares closed at 127 1/2 Friday, down 1, while Disney stock fell 7/8 to end at 62 3/4. The new company holds the Disney name and will trade Monday under the company's stock symbol of DIS.

Capital Cities shares now are worth $127 in either cash, Disney stock or a combination of both. Shareholders will be mailed forms next week asking them whether they want one share of Disney stock plus $65 cash, all Disney stock or all cash, Dreyer said. The deadline to return the forms is March 7.

If too many shareholders seek all cash or all stock, Disney reserves the right to balance out the distribution, Dreyer said. If Disney stock rises significantly, shareholders may opt for more shares or more cash if it falls.

Disney plans to issue 155 million shares of new stock for Capital Cities shareholders. There are 154 million shares of Capital Cities stock outstanding and 523 million shares of Disney stock.

The two firms announced their plans to merge July 31, combining Disney, which owns film and animation studios, theme parks, sports franchises and a computer software business with Capital Cities, which owns the ABC Television Network, ESPN Sports Network, the Arts and Entertainment Network and several radio and publishing entities. Disney is not finished acquiring, though, as before the Capital Cities deal was complete, it announced it was acquiring Pixar Animation Studios, the producer of the computer-animated hit Toy Story, for $2.4 billion in stock.  "Disney to Acquire Lucasfilm Ltd.," PRNewswire, May 30, 1996 

Global leader in high-quality family entertainment agrees to acquire world-renowned Lucasfilm Ltd, including legendary STAR WARS franchise.

Acquisition continues Disney's strategic focus on creating and monetizing the world's best branded content, innovative technology and global growth to drive long-term shareholder value.

Lucasfilm to join company's global portfolio of world-class brands including Disney, ESPN, Pixar, and ABC.

''STAR WARS TRILOGY SPECIAL EDITION coming to theaters in early 1997. STAR WARS: EPISODE I feature film targeted for release in May 1999.''

Burbank, CA and San Francisco, CA – Continuing its strategy of delivering exceptional creative content to audiences around the world, The Walt Disney Company (NYSE: DIS) has agreed to acquire Lucasfilm Ltd. in a stock and cash transaction. Lucasfilm is 100% owned by Lucasfilm Chairman and Founder, George Lucas.

Under the terms of the agreement and based on the closing price of Disney stock on May 26, 1996, the transaction value is $2.05 billion, with Disney paying approximately half of the consideration in cash and issuing approximately 40 million shares at closing. The final consideration will be subject to customary post-closing balance sheet adjustments.

"Lucasfilm reflects the extraordinary passion, vision, and storytelling of its founder, George Lucas," said Michael D. Eisner, Chairman and Chief Executive Officer of The Walt Disney Company. "This transaction combines a world-class portfolio of content including Star Wars, one of the greatest family entertainment franchises of all time, with Disney's unique and unparalleled creativity across multiple platforms, businesses, and markets to generate sustained growth and drive significant long-term value."

"This is an extraordinary moment for me, for Lucasfilm, and for Star Wars," said George Lucas, Chairman and Chief Executive Officer of Lucasfilm. "At this moment, we are working on the restoration of the Star Wars trilogy, in order to create a special edition more in line with my original vision from 1975, that for various reasons, I couldn't have in the films as they were originally released. So, with the 20th anniversary of the original film on the horizon, this is a perfect opportunity for a new generation to be introduced to Star Wars and see it as it was intended. Then, the new trilogy, the prequel trilogy, establishing the backstory of Darth Vader, will be released and the story, as I've intended it, will be told. Having a new home within the Disney organization, Star Wars will certainly live on and flourish for many generations to come. Disney's reach and experience give Lucasfilm the opportunity to blaze new trails in film, television, interactive media, theme parks, live entertainment, and consumer products."

Under the deal, Disney will acquire ownership of Lucasfilm, a leader in entertainment, innovation and technology, including its massively popular and "evergreen" Star Wars and Indiana Jones franchises and its operating businesses in live action film production, consumer products, animation, visual effects, and audio postproduction. Disney will also acquire the substantial portfolio of cutting-edge entertainment technologies that have kept audiences enthralled for many years. Lucasfilm, headquartered in San Francisco, operates under the names Lucasfilm Ltd., LucasArts, Industrial Light & Magic, Skywalker Sound and THX, and the present intent is for Lucasfilm employees to remain in their current locations.

20th Century Fox, which distributed the original trilogy's theatrical releases and which had locked in ownership of the original Star Wars in perpetuity, has officially waived those provisions and transferred full ownership to Disney, allowing Walt Disney Studios Motion Pictures to distribute the forthcoming Star Wars Trilogy Special Edition in 1997 and all future films, and Buena Vista Home Video to control the home video rights.

Lucas himself, Lucasfilm President Gordon Radley, and co-chairman and producer Rick McCallum will report to Walt Disney Studios Chairman Joe Roth. Additionally, McCallum will serve as the brand manager for Star Wars, working directly with Disney's global lines of business to build, further integrate, and maximize the value of this global franchise. The Star Wars Trilogy Special Edition will be released in January, February and March 1997. Star Wars Episode I is targeted for release in May 1999, with the other two installments to come soon down the pike and Disney also expects more feature films and potential TV series expected to continue the Star Wars saga and grow the franchise well into the future. In addition, work on the Indiana Jones franchise, such as restarting the ABC series The Young Indiana Jones Chronicles, will also come down the line.

The acquisition combines two highly compatible family entertainment brands, and strengthens the longstanding beneficial relationship between them that already includes successful integration of Star Wars content into Disney theme parks in Anaheim, Orlando, Paris and Tokyo.

Driven by a tremendously talented creative team, Lucasfilm's legendary Star Wars franchise has flourished for nearly 20 years, and offers a virtually limitless universe of characters and stories to drive continued feature film releases and franchise growth over the long term. Star Wars resonates with consumers around the world and creates extensive opportunities for Disney to deliver the content across its diverse portfolio of businesses including movies, television, consumer products, games and theme parks. The franchise provides a sustainable source of high quality, branded content with global appeal and is well suited for new business models including digital platforms, putting the acquisition in strong alignment with Disney's strategic priorities for continued long-term growth.

The Lucasfilm acquisition follows Disney's very successful acquisitions of Pixar and Capital Cities/ABC, which demonstrated the company's unique ability to fully develop and expand the financial potential of high quality creative content with compelling characters and storytelling through the application of innovative technology and multiplatform distribution on a truly global basis to create maximum value. Adding Lucasfilm to Disney's portfolio of world class brands significantly enhances the company's ability to serve consumers with a broad variety of the world's highest-quality content and to create additional long-term value for our shareholders. To meet potential antitrust concerns, Disney will sell off 80 percent of its stake in Miramax Films, acquired in 1993 for $60 million, retaining only home video rights for films with Buena Vista Home Video.

The Boards of Directors of Disney and Lucasfilm have approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, certain non-United States merger control regulations, and other customary closing conditions. The agreement has been approved by the sole shareholder of Lucasfilm.

About The Walt Disney Company

The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, interactive media, and consumer products. Disney is a Dow 30 company.

About Lucasfilm Ltd.

Founded by George Lucas in 1971, Lucasfilm is a privately held, fully-integrated entertainment company. In addition to its motion picture and television production operations, the company's global activities include Industrial Light & Magic and Skywalker Sound, serving the digital needs of the entertainment industry for visual effects and audio postproduction; THX, an audio reproduction standards company for movie theaters and amusement park attractions; LucasArts, a leading developer and publisher of interactive entertainment software worldwide; Lucas Licensing, which manages the global merchandising activities for Lucasfilm's entertainment properties; Lucasfilm Animation; and Lucas Online creates Internet-based content for Lucasfilm's entertainment properties and businesses. Additionally, Lucasfilm Singapore, produces digital animated content for film and television, as well as visual effects for feature films and multi-platform games. Lucasfilm Ltd. is headquartered in San Francisco, California.  "ABC Daytime Plans Major Reshuffle," by Cynthia Littleton, Broadcasting & Cable, December 7, 1996  In a major move to satisfy affiliates and shore up viewership, ABC and its ABC Daytime division has announced a reshuffling of its programming lineup of soaps, particularly regarding its youngest offering, The City, a 30-minute spinoff of Loving.

In the new schedule, One Life to Live will now air at noon, directly against CBS' popular soap The Young & the Restless, which The City had been doing, and losing badly, with a 2.9 viewer rating, up against Y&R's healthy 7.2/28 share, which makes it the No. 1 daytime soap. Because of this continued bleeding of viewers, many ABC affiliates have strongly considered to stop airing The City altogether, and the show was in very real danger of being dropped. However, ABC executives felt that reshuffling the schedule and giving their stable of soaps more rope would be better, and even put ABC in a better spot, competition-wise, with CBS during the noon slot. One Life to Live was felt to be the best contender for the slot.

At 1 PM, All My Children will air, with General Hospital airing at 2. Between 1 and 2, The City will air, and then, starting on June 1, another brand new 30-minute soap, a spinoff of General Hospital called Port Charles, will air at 1:30.

General Hospital executive producer Wendy Riche praises the decision. "ABC Daytime has solidified its future, especially for the affiliates who were considering opting out. Now ABC has a stable of five quality soaps to entertain and enamor viewers five days a week, and Port Charles will be part of that heritage. Port Charles is something impressive; this will be a mutigenerational show, which is the kind of drama we've always done at GH, and it is in fact expanding on everything you love and enjoy about GH."

Port Charles will focus on a university medical school in the namesake town, home to the titular General Hospital of the parent show. The new generation of nurses and doctors will receive their training here, guided by familiar faces. "Unlike most spinoffs, which center on only a few central characters, PC will have the unique opportunity to rotate key General Hospital cast members in high-concept storylines that intersect while creating two self-contained programs," says Pat Fili-Krushel, President, ABC Daytime.

Riche will have the executive producer position for Port Charles in addition to the original show, and Richard Culliton will be head writer for both shows. Port Charles will use the same facilities and sets as General Hospital and be taped in Los Angeles. It will premiere less than two months after NBC debuts a new daytime drama, Sunset Beach.  Interview with George Lucas for 60 Minutes, aired on CBS January 25, 1997  As everyone knows, this year marks the 20th anniversary of Star Wars. ''So you're celebrating by re-releasing all three films in theaters this year. Why did you choose to do that?''

Of course, 20 years is a massive, important milestone for anything, but Star Wars has basically become something in and of itself, a phenomenon unlike anything else. I certainly had no idea it would become this big, but I'm quite pleased. There's also the fact that Star Wars is a story meant to be experienced on the big screen, in the movie theater, if you've only seen it on your TV, you haven't really experienced it. The thing is that, I'm very much someone who's concerned about the future of film and of individual films. I want to ensure that something is around in a viable medium for audiences many generations from now to enjoy. A lot of the early films of the first few decades, up through the '50s and '60s, have been lost forever because of poor stewardship and happenstance. I wanted to ensure that Star Wars would never suffer that fate. And indeed, when we pulled up the negatives to begin work on restoring, we'd found they'd deteriorated faster than we'd anticipated, so we had to do this now. At the same time, I had an ulterior motive, there were a lot of things on the films that I'd wanted to accomplish but didn't, things that had to be cut, shots that didn't turn out well, effects shots that didn't turn out that well. So what I've really wanted to do was, basically, fix the films to accomplish what I originally couldn't.

How different is this from many restoration works, director's cuts and things of that nature?

On projects like that, those are things the studio ordered to be cut, over the director's objections, wishes and whatnot. With Star Wars, these cuts and removals I'd made because time, money and scope didn't properly align, and in quite a lot of ways, I basically settled for "good enough", rather than "great." Plus, some effects don't look as impressive as they did when they were originally released in theaters, and a new generation's coming up that hasn't seen these films, but seen movies with breathtaking visuals like Terminator 2 or Jurassic Park, and where do these movies fit in? So really enhancing the visuals was quite important.

Does this have something to do with the new films you're working on, the prequel trilogy that you're doing?

To an extent, yes. When those films are made, they're going to be made using real state of the art visual effects, especially digital effects, and even with digital cinematography, without film stock, or at least the last two will be, because we're not sure we can get it to work on the next film just yet. But I need to effectively get familiarized with what the filmmakers of today are using to tell their stories, and basically have a "proof of concept" that it works. So using the digital effects on the original trilogy, the special edition, is a good way to test it out.

What kind of response do you have for certain moviegoers who might say, "Why these new effects? The movie was just fine as it was?"

Well, everyone's entitled to their own opinion. I also think when it comes to the film and any enhancements done, you take it on a case by case basis, because enhancement would be good for some films, not good on others. In my case, I've always thought of the original trilogy as incomplete films, because I basically released them unfinished, in terms of the original vision. So what I'm doing is going back to complete the films at last.

Some might call you a hypocrite, because you've talked, in your efforts on the Film Foundation and film preservation, against films being tampered with and changed.

When I said that, I was talking about choices done without the director's consent or vision, things like, you know, Ted Turner colorizing old black-and-white movies to show on his station. But all of this, with the special edition, is my vision through and through, and I'm doing it for myself, really. I have one person I'm aiming to please with the special edition, and that's myself. I'm happy to be able to remove these thorns in my side that I've had to live with for so long.

Now, the special edition comes out on a staggered schedule, Star Wars on January 31, The Empire Strikes Back on February 21, and Return of the Jedi ''on March 7. Besides the new visuals and scenes being added back in, the most notable thing about these releases is that they're being distributed not by 20th Century Fox, who did them originally, but Disney, as a result of them buying Lucasfilm Ltd. last year. Why did you make that call?''

Well, it's much the same reason Disney bought ABC. They had a relationship with us that lasted a long time, producing attractions for their parks, and we were part of their culture already. We just wanted to make it official. Besides, Michael Eisner said that he wouldn't interfere or tell us what to do, and just wants to give the films extra promotional muscle.

''What about the merchandising? You've long been very protective of merchandising rights, especially when Fox showed so little faith in the first film initially, they sold those rights to you.''

The contract states that we will share the rights equally until the third prequel is out, and then it will go entirely to Disney. And, yes, I'll admit that merchandising rights have been quite good for me, that I've made a lot of money from licensing deals, but I've never considered it the be all, end all of things. The movies are what I love most, and that's what matters the most to me. Having Disney for a partner is quite creatively fulfilling.

Does that mean that they're pouring money into the budgets and...?

No, I'm still paying for the prequels out of my own pocket. I'm still raising the money. I could easily take Disney's money to help, yes, but I don't want to. I want to be absolutely certain of creative control, that no one's coming in to say "No, you can't do this, no, you can't do that, we're not paying more for that." It's not that I don't believe Michael, I do, but having an insurance policy doesn't hurt. I still value my independence greatly, and having Disney be distributor doesn't change that. Plus, Michael saw it as a can't-lose opportunity; Disney doesn't have to fret about the budget, so they can put their money to the prints and advertising costs, and we all know Disney has a mammoth machine for that.

So no concerns from them at all?

The one thing Eisner was worried about was that I was rusty, having not directed since the original film. You know, I had a lot of stress making the original film, I was actually hospitalized for chest pains and high blood pressure, so I didn't want to experience that again, so I dialed things back, especially when I went to focus on my family, having children. This the first real time in 20 years I've gotten that active again, not just writing and producing but directing the next one as well. And I originally didn't plan to direct this film. I asked Steven (Spielberg), Ron Howard, Bob Zemeckis to do it, they all said no, told me I should do it.

And how does the prospect of directing the next film feel for you?

Well, I've always wanted to direct again, I just wasn't necessarily sure it should be Star Wars. And I do understand concerns about a long time away from the director's chair, I do. So while the script is being polished by my good friend Larry Kasdan, and even from Carrie Fisher on the side, I've been making some private movies to get in the habit and the rhythm of it again. Movies that will never be released to the public, but just to prove I can do it. I think, that when we start filming in Tunisia and Venice this July, I'll be as prepared I can be.

''When you do complete the next three films, where do you see things going? Will there be more Star Wars?''

The next three films are the completion of my original story. When I made the original films, I had to write an extensive background, to learn and understand how Anakin Skywalker became Darth Vader, I had to figure out where Ben Kenobi fit into everything, I had to figure out that Luke and Leia were twins, about who their mother was and why she died. I know the background already, but the rest of the world doesn't. Because the movies are really the story of Anakin Skywalker, the original three films are about how his son brings him back to the light, but you don't know how he fell, and the trauma that he went through to become this symbol of evil. The third of the prequels will reveal and show that part, and it's the last of the stories I want to tell. To me, the story I set up over 20 years ago is complete. Any future films, which I'm sure Disney will want, will be at their discretion.

So any future films by Disney, you wouldn't be a part of?

Not actively, maybe in a very limited way, but not in the production. And I would be fine with that. You know, the Disney deal, setting all this up, this was about ensuring that Star Wars has a home that is safe, and can be preserved.

Do you have ideas of what else you'd do?

Well, Indiana Jones is just as big in the scheme of things as Star Wars, another important aspect of the Disney deal. I helped make the TV series, Young Indiana Jones, which ABC aired, before Disney bought them. It was a really great show, a great narrative to show how Indy becomes the hero we know and love, but the network cancelled it. Now, we're going to get it restarted, to finish the narrative and the timeline I'd conceived, which will be easy since the prepubescent and teenage adventures have been finished, so we can focus solely on Indy as a young adult. I also do very much plan to make a fourth movie with Steven, down the line, though Disney wouldn't be alone, Paramount contractually owns rights to a fourth movie, so Disney might have to be mere profit participants on that one, but still. I don't have a story yet, a setting or anything, but it will be done. I also imagine continuing my association with Disney on theme park attractions, creating great experiences there. And there are things I'd like to do that don't necessarily involve Disney, but are dreams of my own.

Like what?

Television, I really want to be involved in stories for television. I got the bug from doing Young Indy, and I think there's a real opening for a new wave of storytelling there, that there are opportunities that are going to open. I also want to make some experimental films, things not for the general public to see. And I also really want to help push things with digital filmmaking, really broaden those horizons.  "Disney May Sell ABC Units," CNNfn website, January 29, 1997  The Walt Disney Company reportedly wants to sell off the publishing operations it acquired last year through the $19 billion takeover of Capital Cities/ABC Inc.

Published reports in The Wall Street Journal and Daily Variety Wednesday said Disney has little interest in holding onto such eclectic businesses as the Fort Worth Star-Telegram, Women's Wear Daily, Institutional Investor and Kentucky Prairie Farmer.

Any sale is not expected to include Disney's Hyperion book division.

Unlike the broadcasting operations and the subsequent purchases of Pixar Animation Studios and Lucasfilm Ltd. - all of which have an obvious fit with Disney's movies, theme parks and resorts - analysts said the publishing operations have little synergy with the rest of the entertainment and media giant's holdings. Company officials said they can better serve shareholders by selling the units either to pay down debt or make investments in other businesses.

Analysts said a deal for the publishing operation could fetch as much as $2 billion. Potential suitors include K-III Communications, Gannett, Hearst and Reed Elsevier.  "Disney to Sell Publications Inherited With Capital Cities," by Geraldine Fabrikant, The New York Times, January 29, 1997  The Walt Disney Company announced yesterday that it was putting up for sale the publishing businesses it acquired in its 1995 purchase of Capital Cities/ABC Inc.

The list of properties that Disney is putting on the auction block range from seven newspapers, including The Kansas City (Missouri) Star and The Fort Worth Star-Telegram, to consumer publications like Women's Wear Daily and Los Angeles magazine, to the trade magazines Institutional Investor and Automotive Industries.

All in all, analysts said, the sale could fetch $2 billion to $3 billion.

Disney also announced a 33 percent increase in net income in its first fiscal year 1997 quarter, which ended on December 31, to $749 million, from $565 million in the similar period a year earlier, and a 7 percent gain in revenue in the same period, to $6.28 billion from $5.89 billion. The earnings were bolstered by the sale of KCAL-TV, a Los Angeles television station, for $135 million.

The fiscal year 1996 results were restated to reflect the near-simultaneous ABC, Pixar Animation Studios and Lucasfilm Ltd. acquisitions.

Analysts attributed the gains in large part to the strong performance of the cable TV sports channel ESPN and of Disney's theme parks. And although broadcasting did well, the company said the broadcasting business also benefited from amortization costs related to the ABC purchase.

The network's performance was somewhat down but the TV stations did fairly well, I believe, said David Londoner, who follows Disney for Schroder Wertheim & Company.

Disney also announced that it was teaming up with the Comcast Corporation to acquire control of E! Entertainment Television, a cable programming channel, for $320 million. Comcast, which already owns 10.4 percent of E! Entertainment, will increase its stake to 50.1 percent, and Disney will own the rest as the result of the purchase of Time Warner Inc.'s 58.4 percent stake.

Unless Disney comes up with a clever tax strategy, much of the proceeds from the planned sale of its newspapers and magazines could go to the government in capital gains taxes.

Disney inherited Capital Cities/ABC's cost basis for calculating those taxes, and it is relatively low because Capital Cities had owned many of the publications for years. Indeed, last year Michael Ovitz, then the interim Disney president, told at least one investment banker that the company did not plan to sell the publishing operations because the tax bite would be so large.

Apparently Disney's CEO and chairman, Michael D. Eisner, assured some key managers of that commitment.

The newspaper industry analyst John Morton said that during a meeting with analysts last year, Philip Meeks, president of the publishing group, told his audience that Mr. Eisner had reiterated the company's decision to stay in publishing. Mr. Meeks was out of the office yesterday and did not return phone calls.

But Wall Street was hardly surprised by the sale. Everyone assumed that it was not their prime focus, and that they would consider divesting those assets, said Harold Vogel, who follows Disney for Cowen & Company. Although Mr. Eisner is known to be uncomfortable with debt, Disney' s debt levels are reasonable, even after having spent about $25 billion on the three acquistions. And analysts generally agreed that the lack of strategic fit was a key factor for the sale, adding that Disney is likely to pay off some of its debt in any case, both from the print divestments and its proceeding with spinning off a majority of its ownership stake in Miramax Films, a move done to help satisfy antitrust concerns after the three mergers.

Disney no longer breaks out publishing earnings separately, but Mr. Vogel said that the publishing division was likely to bring in about $200 million in operating profits in the 1997 fiscal year, which ends in September. He added that the unit's performance has clearly improved since 1986, when it reported its high for the decade of $160 million. Typically, publishing companies sell for 10 times or 12 times cash flow, which explains why investors expect the sale to generate at least $2 billion.

Wall Street seemed pleased with both the earnings reports and news of the pending sale: Disney's stock advanced $1 yesterday, to $72.875.

Mr. Morton, the newspaper analyst for Morton Research, said he believed that the sale of the papers alone would bring in about $1 billion. But he cautioned that a lot of potential buyers, including Gannett, the Tribune Company and A.H. Belo, are already digesting major acquisitions, although he viewed Newhouse and Hearst as potential acquirers.

Analysts say they will be watching to see whether Disney can find a buyer for the whole package or whether it ends up having to sell the publications piecemeal.

Disney said yesterday that its creative content business saw profits rise 10 percent, to $719 million: broadcasting profits jumped 38 percent, to $470 million, and theme parks turned in $238 million in profits, a gain of 21 percent.  "Beyond Star Wars," by Kevin Kelly and Paula Parisi, Wired, February 1, 1997  No director has fast-forwarded filmdom into the 21st century as far as George Lucas has. His popular galactic fairy tale Star Wars is the classic saga of a charming princess and brave knights, but also of very unclassical warp drives, Wookies, bots, and droids. Lucas's mythmaking is a novel convergence of Hans Christian Andersen and Isaac Asimov, the blending of soul and tech, the meeting of inner child and inner nerd.

In the late '70s, Lucas fleshed out the scope of his interplanetary opera with a new cinematographic technique: computers married to cameras, called motion-controlled cameras. He used technology not to make his tale unbelievable, but to make it ultrabelievable. Each new installment of the trilogy - The Empire Strikes Back, then Return of the Jedi - revved up the cinematic wizardry by making the special effects more potent yet less visible. This month Lucas and company have reissued the first Star Wars episode with additional scenes and superior effects, in effect declaring that a movie is a dynamic creation (like a Web page!) that can be forever tweaked. Ever the rebel, Lucas is busy conjuring up the next revolution - an innovative way of "nonlinear 3D filmmaking" that we bet will become the dominant form of cinema production on the other side of 2000. Soon in the future, Lucas predicts, in a garage not very far away, two guys will use digital video technology to make a movie you'll never forget.

Wired: What has surprised you in the last 10 years?

Lucas: A lot of the things that I believed in in the past are coming to pass.

W: Such as?

L: What I call 3D filmmaking. In 3D filmmaking, I can take images and manipulate them infinitely, as opposed to taking still photographs and laying them one after the other. I move things in all directions. It's such a liberating experience. It's like you said "I wish I could fly" and then the Wright Brothers come along, and then you can fly, and you can't get over the fact that it is so astounding. I am still in that phase of saying "This is so amazing."

W: Everything seems to be going digital. When do you expect to make a complete movie using just a video camera and no film?

L: Well, we were going to do the next one with all video, but we're having a little problem with the widescreen format, so we may not be able to accomplish it on this film. But the next one we will. Definitely. If I wasn't doing widescreen, I could do it today.

W: In two years you'll make a completely digital feature with no film?

L: Yes. Two or three years.

W: What have you changed in the reissued Star Wars films? Have you created new characters?

L: In the original Star Wars, the Dewback, the creatures the Stormtroopers ride on Tatooine, they've gone from rubber mannequins to freely-moving digital creatures, and there's some additional seconds of footage of them, showing more Dewbacks and more Stormtroopers. We did that by not just computer enhancement but even shooting a few new seconds of film to match the original sequence. There's a greater scale and size to Mos Eisley, more shots, more creatures, more citizens, more buildings. The Death Star battle has digital X-Wings and TIE fighters, and more, new camera angles. In The Empire Strikes Back there was a snow monster you didn't really see. It was just shadows and sounds; we always wanted the creature but were never able to accomplish it. Now we actually have a creature there. We have a lot of new shots in Cloud City to make it be bigger and look better. And the snow sequence was one of those state-of-the-art things at the time - doing white mattes on a white surface, which nobody had ever accomplished. Now, with digital, we can do that much better. In Jedi, there was a sequence in Jabba's palace that was meant to be a musical number. But it ended up just a little tiny thing with this dancer, Ula, that was maybe 15 seconds long. Now we've turned that into about a minute and a half. There's a bigger band and backup singers. It is what it was meant to be originally; we just didn't have the wherewithal to do it then.

W: That makes new films cheaper, too! You were once trying to cut moviemaking's economies of scale down to one-tenth the normal cost. What will your Star Wars prequels cost?

L: I'm hoping to do the new Star Wars films for between $60 and $70 million. These are maybe $120 to $140 million movies.

W: That's amazing! A talking head drama like The Bridges of Madison County costs maybe $50 million. How are you making a new Star Wars installment for only $10 million more?

L: This first film will be a big experiment, because we're taking a lot of the ideas I've learned from doing the Young Indy TV series and moving it to this larger level to see what happens. Some of it is going to work; some of it's not. The reason I'm directing the first one is so I can learn how to do it myself. We're going out there in a whole different style of filmmaking.

W: And despite having Disney distribute the films, including the new Special Editions, you're not taking any money from them for the budgets?

L: Not a penny. It's my own money, every cent. This helps further ensure creative control, and everything goes where it needs to go.

W: You say you don't intentionally set yourself up as godfather of the digital era, but is what you are working on the paradigm for 21st century filmmaking?

L: People ask me about it more, I guess, but other people are doing it, too. Imagine having to publish a story the way films are made. The publisher does the outline, then turns it over to you, the "writer," and says, "OK, write the story." You write it, but once you've written there's no such thing as being able to take words out and change them around. Then you turn it over to me, the editor. The editor says, "Now, I'm going to put it in my word processor. I'm going to move everything around," and he does. You get to check in once in a while and say, "No, no, that's not what I meant. I meant this." "Oh, really, I had no idea that's what you were talking about. OK, I'll put that." And then you turn it over to the printer, the printer retypes it however he wants, and then prints it that way. Then you say, "But you can't do that!" That is the way it's done in movies. We've all got a word processor now, so why not just let one person do the whole thing? You can say about halfway through the story, Gee, we should add this new section in the outline and put it in there because that's even better.

W: Writers say they write to find out what they think. Are you saying that you can't determine what the movie is really about until you film it?

L: It's very hard to have planned out at the very beginning what is going to happen at the very end. Obviously real life comes into it, personalities come into it, and the process of doing it sequentially forces you into making certain kinds of decisions in a certain way. Instead of making film into a sequential assembly line process where one person does one thing, takes it, and turns it over to the next person, I'm turning it more into the process of a painter or sculptor. You work on it for a bit, then you stand back and look at it and add some more onto it, then stand back and look at it and add some more. You basically end up layering the whole thing. Filmmaking by layering means you write, and direct, and edit all at once. It's much more like what you do when you write a story.

W: How exactly does that change what you do while making a movie?

L: Everything is different. The actors, the contract, the crew is assembled in a different way. We work a lot in Hi-8 before we get to the actual movie. It's a little more like animation, where you are storyboarding and writing and shooting and editing - all happening all the time. I have been writing [the next Star Warsepisode] for two years, even with Larry Kasdan and Carrie Fisher polishing things and helping me out, but I've also been shooting and editing, exploring different kinds of actors for different kinds of parts, and shooting and figuring it out. It's not done sequentially at all. I'll be able to add more things and change more things. Then I can go back and finish shooting. Then as we cut that together, I have already scheduled another three weeks of shooting six months later to add more stuff and change more things, and rewrite it in that period, and then I've got another three months, and then I've got another two weeks of shooting after that. I'm shooting now, and I'll be shooting three years from now.

W: Sounds like the film is never done!

L: There is no such thing as "the film." The film is the thing that gets spit out at the very end. Whether I'm doing notes on paper or doing notes electronically, it all comes down to the same thing. Except now I've a very, very clear picture of what it is I'm doing. It's like a painting. You rough it in. You say, Oh, I was going to do this, and then halfway through you change your mind. You can see it evolve; you can sort of be with the work, rather than draw.

W: That kind of uncertain approach must drive some people in the film industry crazy.

L: The film business is designed in a kind of industrial way, vaguely the way buildings are built. The architect does the blueprint and turns it over to the contractor. The contractor then follows the instructions, and if nobody is there to say "wait, wait, wait," and if nobody goes in and makes those change orders - which, of course, nobody wants to do because it's very expensive - you end up with a building that's only sort of interesting.

I'm of a carpenter mentality. I have a rough idea of what I want to do, but I'm going to start hammering, and then when I get along here, I'll look at it and say, "We should move this wall here, it would be even better." A lot of Victorian houses were built that way. They weren't built with plans, just by the carpenter saying, "Well, all right, let's measure out the room, it will be 20 feet this way, and it will be 40 feet that way, and when we get the first floor built, we'll figure out what's going to be on the second floor." If you are a good craftsman, you really know what to do, and you understand the structure, you can build a very nice building, but it's very organic. It feels better than something that someone who had a set of plans bolted together.

W: You take visual notes and some of them - rewritten or not - eventually become part of your film.

L: The important thing, something Francis [Coppola] taught me, is to go through and do a lot of different layers. He said, "Look, when you write a script, just go as fast as you can. Just get it done. Don't ever read what you've written. Try to get it done in a week or two, then go back and fix it, and then go back through as fast as you can, and then go back and fix it - you just keep fixing it. But if you try to make each page perfect, you'll never get beyond page 10."

W: Do you think digitalization of film changes things much?

L: Digital is like saying, "What kind of camera are you going to use? Are you going to use Panavision or an Arriflex? Are you going to write with a pen or on your little laptop?" I mean, it doesn't change anything.

W: On one hand you are saying digital technology doesn't change much, and on the other hand you are saying it will make a huge difference.

L: Everyone seems to think that digital technology devoids the medium of content, but that is not true at all. If anything, it broadens the content. There were vast numbers of things you could do in a literary medium that you couldn't even think about doing in a movie. If you said, "There are 10,000 people trudging over the hill," well, to accomplish that in real life is a very, very difficult undertaking. To do a movie like The Ten Commandments or Ben-Hur would be cost-prohibitive now.

But digital technology allows us to do even more. Until this point in film we have been limited to the short story in terms of scope. Digital technology allows us a much larger scope to tell stories that were pretty much the grounds of the literary media.

W: Would you say it is revolutionary?

L: Digital technology is the same revolution as adding sound to pictures and the same revolution as adding color to pictures. Nothing more and nothing less.

W: Certainly there must be some issues raised by the fact that these digital layers can be amended later on - by either you or somebody else.

L: Yes. Digital in film is just like digital in writing. It makes the medium much more malleable; you can make a lot more changes. You can cut and paste and move things around and think in a more fluid style - and I love that. We're just getting into that on a grand scale in film. I don't think I'd ever go back to analog. I haven't used an editing machine with film on sprocket holes for almost eight years. I hardly even know how to hold a piece of film anymore, let alone to take a razor to cut footage, then paste it together - I don't think I could do it. It's just too much work: It's too cumbersome, too slow, and you can't manipulate it enough. It would be like going back and scratching things on rocks!

W: Are you at all worried about the other consequences of this ease of redoing things? Would you be concerned about someone making Yoda walk long after you're dead and gone?

L: It doesn't make any difference whether you're digital or analog: somebody can recut your movie and make it completely different than what it is. The issue is artists' rights. In book publishing, usually the artist owns the copyright, and therefore it's impossible for somebody to go back and rewrite the book. But in film, the copyright is owned by a studio, and they can go do whatever they want whenever they want. One of the things that's being pushed through Congress is to try to allow the artist in the film industry to have the same rights that a painter or an author has, which is the way copyright was intended. It wasn't intended for a large corporation to own copyrights; it was intended for the artist to own the copyright. The thing that is problematic in film is who is the artist? Who is the author? Writers claim authorship; the director claims authorship; the producer claims authorship. Ultimately, somebody should be designated the author - not the corporation that owns the copyright that sells it to another corporation that sells it to another corporation. It has nothing really to do with technology.

W: So who do you think should be the author?

L: I'm not completely sure whether it's the producer, the director, the writer, or all three. It's up to the world to designate an author, because if you say it's the producer, then a lot of directors will become director-producers. That's what I do. I solved the problem by owning my own copyright, so nobody can screw around with my stuff, even after I sold Lucasfilm to Disney. Nobody can take Star Wars and make Yoda walk, at least not yet, because I own it. Now, when I'm done with the prequels and I've done everything in Star Wars I want to do, by the terms of the contract, Disney has free rein to do whatever they want, whatever stories they want. But while I'm doing the prequels, I'm calling the shots.

W: What about the temptation to change your own work -

L: That's what I'm doing! I'm doing that with Star Wars right now.

W: Right, but certain changes may only be pandering to the public at large, or to political correctness.

L: You know, we didn't have artists' rights in this country until about three years ago. It's my artistic vision. If I want to go back and change it, it's my business, not somebody else's. Somebody bought a Henry Moore sculpture and painted it white - it was a bronze - because it fit better with her backyard. Moore was just absolutely furious. The fact is, in this country you have a right to do that. Well, you shouldn't. If Henry Moore came and said, "I'll paint it white," that's his business because he's the artist. Whoever's name is on the work, whoever's reputation is on the line has the right to alter the work.

W: That process works really well when you have a world of originals (as in painting and sculpture), but in a world filled with copies (videos, music albums, books), it's a little less clear. It's easy to mess with a copy of something, and should an artist care if I mess with my copy?

L: An artist has a legal right to say, "You can't do that." That's how copyright got to be developed in the first place - to protect the artist so that people couldn't exploit his work without him getting something for it. People can take material and then reconfigure it for their own personal needs or turn it into something else. But where you cross the copyright law doing that is an issue that is being debated in court. It's the same issue as somebody taking a famous photograph and then making a sculpture out of it.

W: I mean, who owns the copyright? The guy who took the photograph or the guy who made the sculpture off the photograph?

L: Some people even claim that the scene the guy photographs and the sculptor recreates - say, a building or a face - is itself a copyrightable work. Some owners of public buildings won't allow photographers to take a picture of the building without permission.

I'll probably get in trouble for this, but I am an ardent subscriber to the belief that people should own their own image, that you shouldn't be allowed to take anybody's picture without their permission. In the film business, that's the way it is. If I come in here with my Panavision camera, and I take pictures of you guys and then put it in my movie without getting your permission, it's against the law. Now ABC News isn't any more or any less commercial than a Paramount picture, but if I come in here with the same camera, do the same thing, and give it to ABC News, I can do it. My feeling is we should just simply make it all the same: nobody is allowed to use anybody's image unless they give them permission. It's not a matter of freedom of the press, because you can still write about people. You can still tell stories. It just means you can't use their image, and if they want you to use their image, then they'll give you permission.

W: Many people further believe that their informational image, so to speak - say, their address - should also be just as private. Do you think others should need my permission to use my name and address?

L: I think so, but the one that gets abused most, actually, is the image. That people should own their own image, which is true in the most primitive cultures, is something we've given away. It's just become a cultural thing. Obviously, the electronic media would go nuts if you couldn't take people's picture without asking permission. But how do you rationalize a supermodel who makes her living posing for pictures at $5000 an hour, yet the paparazzi can come along and take her picture and then turn around and sell it for, say, $50,000 to the cover of People magazine, and that's legal. And you don't need to pay her.

W: Computers make this more fascinating because someone could create a working model of your face, that is, a 3D virtual likeness of you. The artist would have spent a lot of time doing it, so they would think they own that likeness, and you, as the subject, might think you would own it.

L: Unfortunately, in this country the issue is where does it go? If you put it on the show Friends, you'd get sued. But you wouldn't if you put it on Entertainment Tonight, which is considered news. And what is the difference between those two shows? Nothing.

W: Are you surfing the Web these days?

L: When I'm interested in something, I'll look it up, but I don't have time to just spend on the Web.

W: So do you think there's anything worth paying attention to on the Web, or is it just a fad?

L: I think it's very important. It's a great asset for education and for school and for anybody doing research. The social aspects of it are very interesting. It's a kind of new town square - a place where people go and meet. Our society doesn't foster that kind of thing, which was the center point of most communities 100 years ago. The Net, I think, is renewing that whole concept of social interaction.

W: Are you using the Net in that way?

L: Not very much. Again, my issue is I've got a lot of stuff that goes on in my life.

W: Do you use email for that?

L: No. No. For being sort of a state-of-the-art guy, my personal life is very unstate-of-the-art. It's very Victorian, actually.

I like to sit on a porch and listen to the flies buzz if I have five minutes, because most of my life is interacting with people all the time. I interact with a couple of hundred people every single day, and it's very intense. I've got three kids, so I interact with them whatever's left of the day. The few brief seconds I have before I fall asleep are usually more meditative in nature.

W: When you were growing up, films were something that everybody stood in line for. Of course, these days, with big screens in our houses, the crowds are going to be hard to replicate. Do you think that's a big deal? Will we lose the association of movies and a crowd of other people?

L: I don't think we will. That's the experiment I'm doing with reissuing the Star Wars trilogy. What we're doing is to say, "Here is a movie that was designed to be seen on the big screen with a lot of other people. It's a communal experience and something that needs overwhelming size to make it the kind of experience it was designed to be, and it was. It was designed to be on a wide screen with full surround sound, with a lot of other people sharing the moments." There's something about the shared experience of everybody laughing at the same moment, everybody gasping at the same moment, everybody yelling and cheering at the same moment that takes it to a whole different level than just sitting and watching it on a TV screen.

We will see what happens, because nobody has tried to reissue a movie on the scale we're doing since video has been invented. When we started, there was a lot of skepticism about whether all the money poured into fixing the movies would ever be recouped and all that sort of thing, but my feeling is it's like going to a baseball game or a rock concert. You can see it better on television or hear it better on the album; but there's something about the experience of being there that lifts it way above just listening to the CD or watching it on TV.

W: So will you shoot your future films for the large screen, or the small TV screens that are more ubiquitous?

L: I love television because you can tell different kinds of stories that you could never tell on the big screen. The big screen is very demanding in a very particular kind of way; on the small screen you can actually tell a more intimate story with more intellectual content.

W: I can foresee a third screen happening, a home screen somewhere between TV and a movie screen in size.

L: What's happening is the movie screen is becoming that "third" screen, and the big screen is becoming the IMAX or the next 3D, super-engrossing experience. They're building more and more of these. Before, there were like 20, and now there's more than 200 IMAX, OmniMax, 3D experience theaters. And their films are getting a little bit longer and a little more dramatic. Most multiplexes are probably going to end up with one of those, and you're going to see more people making movies for those screens, so that's going to be this kind of super-encompassing experience. Then at home you'll have a TV screen, which will be, you know, 5 feet by 2 feet.

W: And someday it will be high-definition TV. Will HDTV change the nature of what is shown on television?

L: I don't think it will change content much at all. HDTV is just a sharper image - but not that much sharper. Going to a movie theater to see an image that is 20 feet high and 40 feet long while sitting with a thousand people in a room is a very different experience from watching TV - even HDTV - alone at home. Content is much more influenced by market forces than by technology. Stuff made for television is different because the market is different. It's free for one thing; people are less discriminating about what they watch. So the creator can be more adventurous. You can tell more interesting stories on TV than on film because there are more outlets, cable and such. Feature films are so expensive that what you make has to fall into three or four market niches or it is simply not going to happen. Digital technology allows us to cross media. Normally TV is limited by resources to talking heads. But I was able to do grand scale on TV for the same budget because I was using digital technology. And digital technology allows me to make stories for film on a bigger, epic scale, with a grander sweep, than was even conceivable before.

W: Another question about scale: "Two guys in a garage" is the basic building block of Silicon Valley. Can you imagine a time when a culturally significant movie can be made by just two guys in a garage?

L: Definitely. Definitely. That's what we did in film school. So far nothing culturally significant has been made in a film school, but it's all relative, of course. On my first film, THX 1138, there was a very, very small crew. I mean, it wasn't two people, but it was less than 20, so it was a very small group. It was made with very, very little money. Now we have things like Hi-8 and Photoshop. Some of the special effects that we redid for Star Wars were done on a Macintosh, on a laptop, in a couple of hours. And they look exactly the same because they're intercut with the old shots. Obviously, they were done by somebody who's brilliant. But at the same time, the mechanical technical wherewithal to do it exists today. I could have very easily shot the Young IndyTV series on Hi-8 rather than 16mm. Young Indy looks like big, giant movies, especially as the planned reediting of certain episodes for home video is proving. I mean, the quality is just as good; no one would have known the difference. So you can get a Hi-8 camera for a few thousand bucks, more for the software and the computer; for less than $10,000 you have a movie studio. There's nothing to stop you from doing something provocative and significant in that medium.

W: So why aren't there more guys in garages doing great movies?

L: It's hard. Why aren't there more people writing great American novels? I mean, that's what it comes down to. All the stuff is there. Everybody in this country who has graduated from high school, in theory, should be able to write the great American novel. Why don't they? Or at least a bad, sleazy novel that can sell for hundreds of millions of dollars to the film industry.

W: That's what they're doing!

L: Yes, but not even many people do that. The thing that stops it now is the marketplace, the distribution thing. Of course, it takes talent and courage and most people don't want to attempt it, but you're going to find more and more people - especially as the Internet-cable configuration begins to become more accessible - start doing it. Once distribution frees itself up and more people have access to the distribution channels, you're going to find more people doing that; if you can sell a "view-on-demand" movie for 50 cents and it cost you $50,000 to make, you could find enough people - 100,000 - who will watch it. The big problem is doing marketing and trying to figure out what your thing is; but if you can develop a channel that has a certain cachet to it and if you can continually pump that kind of material out, you've suddenly got yourself a channel.

W: We've heard this promise before in the technology of the '90s - interactive, CD-ROM stuff. What happened to that?

L: That was a nonidea to begin with.

W: Yes, but you guys at Lucas were pretty involved with it on some level.

L: We have a games group, a branch that makes video games. Interactivity is games - how hard is that to figure out? Everybody said, "Well, you're going to have to have interactive movies." You don't have to have interactive movies. There's games, and there's movies. Movies are storytelling; you tell somebody a story. A game is interactive; you participate in some kind of an event with a lot of other people or with yourself, or with a machine. Those are two different things, and they've been around forever. Games have been here since the Greeks, and so has storytelling.

W: You don't think those two are going to cross over at all?

L: No! Because by definition they're different - storytelling and games are two different mediums. The fact that games are going to look more like movies, and you'll be able to interact with cybercharacters that look very real, and you'll be able to have conversations with them, that doesn't suddenly make it a movie or storytelling. You're using the same techniques that you're using to make movies in a game environment, but it's still a game. I don't care how you do it, once you have no story to tell, it's different. If I'm interacting, then that's a whole different kind of experience. We're talking, and I don't know what you're going to say; you don't know what I'm going to say. If I punch you in the nose, I don't know what the reaction is going to be because it will be different every time it happens. That's a game. If I'm telling a story, and the interest in it is the fact that I'm telling you something, and you are listening because I can tell it to you in an interesting way, that's why you're there. Psychologically, it's a different kind of experience.

W: We agree they are different, but perhaps there's some imaginable hybrid. I don't know how big a possibility space it would be, but I could see semidirected stories. Like improv dinner theater where you become part of a mystery while you eat. It feels like something in between a story and a game.

L: Yes, but it's so marginal. You're doing one for one reason and another for another reason. I mean, that's the difference between playing catch with your son and reading a book. You're doing them for two different reasons. The idea of combining reading the book and playing the game isn't that interesting. It's like trying to swim and fly at the same time - um, I guess they call that diving.

W: Is there any technology you're working on today that has the potential to revolutionize film a few years from now?

L: We are still pushing the envelope to get a really good and well-run all-digital post system.

W: What's holding it up?

L: We developed a system called EditDroid, but we didn't want to be in the hardware business, so we sold it to Avid. They are focused on the mass market. It's a matter of getting their enthusiasm for something that is considered to be a high-end item, even though obviously it would trickle down into the mass marketplace. In EditDroid we were able to store over a million feet of film. It advances every year, but we always need more storage.

W: This [holding up pencil] is an imaginary magic wand. You wave it and it does whatever you want. It could be a black box - only it has to be something that would help you and not help others. What would you have it do?

L: That's hard, because most of the things I do are to help others.

W: Well, it could be that editing system you always wanted.

L: If I could have that magic wand, I guess what I'd love to have is infinite storage.

W: You think a lot about education - indeed, you have been producing educational materials. You even wrote an essay on education for this magazine. Do you think that the online networks and educational software that currently complement schooling will ultimately replace it?

L: You need an educational system. I can't fathom how it would work without one. One of the more important parts of education is socialization - learning to cooperate and work with other people, particularly in the workplace. Interpersonal relationships are very crucial to the educational system, and they need to be done in a communal environment, which means you will always need an educational system.

W: Like a lot of kids who read science fiction, I thought I knew what the future looked like - it was stainless steel and clear plastic. Yet, one of the most surprising things about your vision of the future in Star Wars was that it was filled - for the first time - with grime and dirt and wear and tear and cheery dilapidation. It took the sterility out of the future. This high tech lowlife changed how a lot of people thought about the future. That was a very profound insight; where did it come from, and when did it come to you?

L: I wanted to tell a story. I wanted to make sure that what I was doing was not construed as science fiction: This was space fantasy. This was like opera. This was a genre of fairy tales or mythology. But although it was completely made up, at the same time it had what Kurosawa would say is "immaculate reality." If you are going to strive for immaculate reality, obviously everything is kind of dirty in the real world, and everything is kind of beat up, and everybody doesn't drive around in a brand-new car. Star Wars is a completely made-up universe; it doesn't hold to any scientific rules, really. But at the same time, it is very logical in a certain kind of clock way. Once you've set up a particular kind of rule, you don't break that rule, so I was very careful to make it as realistic as possible even though it is a completely fantasy world.

W: I've heard you buried a time capsule here at Skywalker Ranch. An interesting fact about time capsules is that a significant portion of them are lost, even within 10 years of being buried. Are you are sure you know where it is?

L: Yes, it is in the corner of the building.

W: Do you know what's in it?

L: I don't know everything that's in it. There are a lot of artifacts from Star Wars, and from the company. It's just trivia stuff, basically.

W: When is it due to be resurrected?

L: Never.

W: Never?

L: Well, I mean it's for some archeologist 2000 years from now to discover. There is no point in raising it. We have an archive, over there [points out the window to another building], and it is very big. But after a few hundred years it will be gone, so the only thing left is the time capsule.

W: Why did you make it?

L: I don't know, just for the fun of it. When we are all gone and the microbes have taken over, and they begin to speak and think and do things that we have done, they will dig it up some day, and say, "Look, humans were here."

W: You have a pretty extensive library here, which is a bridge to the past, and you have a time capsule, which focuses our attention on the far future. That extremely wide span of attention is very unusual for a modern American. Where did that come from?

L: I'm a history buff. I started out in anthropology. I am very interested in culture. Most of what I do centers on that.

W: If we gave you one round-trip ticket to go to the past or to the future, which way would you go?

L: Well - that's an interesting question. That would be a struggle for me. Can I get two? Boy, I don't know. I'd probably go to the future.

W: How far?

L: At least 1000 years.

W: Why 1000?

L: Because my feeling would be that if I went too much further it would be incomprehensible. A thousand years isn't going to be that different. I would at least have some kind of sense of what it was I was looking at. If I was born 1000 years ago and I came here, it would be pretty amazing, but it wouldn't be so much so that I couldn't sort of adapt. If you brought someone from 5000 years ago, they probably could not adapt. It would be so overwhelming that they would be at a loss.

W: Well, one thing they will probably have 1000 years from now is virtual personalities that are viable, bankable commodities. If somehow you had a 3D digital Luke Skywalker, you could be putting him into movies for the next 100 years.

L: That's what I'm doing anyway. I can put Yoda in a hundred movies.

W: You can rent him out?

L: I can put him in the next Jim Carrey movie if I want to. I could work him just like an actor. Conceivably you can get to a point where you can create a character that anybody can use, and you can put him in any kind of an environment. Kermit and some of those characters are the same way. Bugs Bunny, though not quite digital, could be a digital character. He looks as much like a digital character as Woody or Buzz Lightyear does, and they would argue about who is the better looking of the group.

W: So how do you imbue them with spirit, and soul?

L: It's no different than what Tolstoy did. You are going to be able to take Anna Karenina, turn her into a three-dimensional person, and put her into a particular environment instead of just a bunch of words on a page. The fact that eventually you'll have artificial intelligence that will be able to take on a particular persona is a whole other issue; it won't happen in our lifetime, so I'm not too worried about it. But we will be able to create the 3D character. That's going to happen in a few years. The 3D character is animated by a human being to make it react in a particular way, and that's Tolstoy. The real question is when that character starts to think for itself ...

W: Who owns it? And who owns what it says?

L: It's not a matter of who owns it, but what are you going to do with it? How are you going to relate to it? What happens if you fall in love with it? The question will be when do they start asking for their own rights? They'll say, "I have as much right to be here as you do, and the problem with these humans is that are they are too dirty." And they will.

W: Speaking of digital characters, why did you sell off Pixar?

L: I had Pixar for 10 years. At that time it was primarily a hardware company that developed a lot of technology: digital printers, the first nonlinear editing system we developed, high-speed graphics.

I wasn't particularly interested in being in that business. I'm a movie company. But I had companies that needed those technologies, Industrial Light & Magic and Lucasfilm. A couple of guys at Pixar, Ed Catmull and John Lasseter, wanted to do computer-animated movies. There was a lot of investment that had to be made there, and I wasn't really interested in spending $50 million developing animated films. I would much rather take that $50 million and develop a game company, or a lot of other things, than push the special effects company. It was basically a hardware company with a couple of guys whose hearts were into the animated films. So they went off, and Steve [Jobs] bought it, and after a few years Steve sold the hardware company to somebody else, and he took John and Ed and a few of those guys and said, "OK, I want to make movies, too, so let's all get together and make movies," and that's really where it started. ILM is exactly like Pixar, except we don't do animated movies. We do animated pieces in feature films. I didn't need two companies that were doing the same thing.

W: Of course, after Toy Story came out, Disney bought Pixar, along with ABC and Lucasfilm, so you're basically indirectly reunited with Pixar, John and Ed.

L: I didn't plan it to be that way, naturally, and I'm sure Disney didn't, either. But I like John and Ed, I really like Steve and he's fun. Of course the news Steve is back at Apple is also somewhat exciting as well. Clearly Michael Eisner thinks we're all very important to him.

W: You've listed Japanese samurai films, Flash Gordon serials, and Joseph Campbell as the influences that inspired you while writing the first Star Warstrilogy. As you begin this prequel series, are you finding any new sources of inspiration?

L: The influences I use are just the way I live my life. A lot of this stuff I've been gathering since I was in college; the basics were done 20 years ago. In the case of Star Wars I had studied mythology in my cultural anthropology class for a year, so I knew something about it, but then I went back and started doing a lot more research in that area, and in history. I just keep going through it. I'm obviously reinterpreting it for today, but the core of it is actually pretty old.

W: At one time you said, "Technology won't save us." Do you think technology is making the world better or worse?

L: If you watch the curve of science and everything we know, it shoots up like a rocket. We're on this rocket and we're going perfectly vertical into the stars. But the emotional intelligence of humankind is equally if not more important than our intellectual intelligence. We're just as emotionally illiterate as we were 5000 years ago; so emotionally our line is completely horizontal. The problem is the horizontal and the vertical are getting farther and farther apart. And as these things grow apart, there's going to be some kind of consequence of that.

W: So would you say your films are a bridge between those two curves of emotion and intelligence?

L: Storytelling, art, mythology has always been an attempt to bridge that gap. I'm not doing much better than Sophocles did (if I could only aspire to that level). Even after Freud, we're still bouncing around with so little sense of what controls that intellectual part. But I'm very optimistic. We managed to get past a nuclear era that was the perfect example of a stupid caveman with a club, a club that can destroy the planet. You can't keep the intellectual side going without expanding emotional intelligence, too. Intellectual intelligence is not fair. It just gives you a bigger club. It doesn't at all tell you how to use it. We're still just figuring out how to make a bigger club.

W: A futurist in our magazine said Yoda was his hero. Who are your heroes?

L: I won't answer that. It's too revealing. Yoda is just one of my kids.  "Knight-Ridder Agrees to Buy 4 Newspapers From Disney," by Nikhil Deogun and Bruce Orwall, The Wall Street Journal, April 7, 1997  Knight-Ridder Inc.'s planned $1.65 billion acquisition of four newspapers from The Walt Disney Company brings the Miami media company back to its roots as a newspaper publisher and caps the reversal of its onetime strategy to diversify into other businesses.

On Friday, the company said it agreed to acquire two large metropolitan newspapers - the Kansas City Star in Missouri and the Fort Worth Star-Telegram in Texas, and two middle-market newspapers - the News Democratin Belleville, Illinois, and the Times Leader in Wilkes-Barre, Pennsylvania. In addition, Knight-Ridder said it plans to divest Knight-Ridder Information Inc., an online information service for business and professional users. One analyst estimated that the unit should fetch $400 million to $500 million.

Mark of CEO Ridder

The moves are the latest in a series of steps by Anthony Ridder, Knight-Ridder's chairman and chief executive officer, to build the company's core newspaper business, boost profitability and shed underperforming assets. Prior to Mr. Ridder taking over as CEO in 1995, the company had pushed heavily into electronic and financial information services, saying it wanted to limit its exposure to newspapers, which are more cyclical and subject to the vagaries of newsprint prices and advertising revenue.

During the past year, however, Mr. Ridder has shed the company's stake in a cable venture and sold Knight-Ridder Financial, a provider of real-time financial information. Now with the planned divestiture of Knight-Ridder Information, which includes Dialog and DataStar, the company has rid itself of nearly all its non-newspaper operations.

"I wish we could have held onto Knight-Ridder Information," Mr. Ridder said in an interview. But he said he found he had to divest it to maintain the company's credit ratings. "Besides, and this would be an understatement, I love newspapers," he added.

First Step for Disney

For Disney, the sale is a big first step in the dismantling of an estimated $2 billion in publishing assets that it inherited as part of its $19 billion acquisition of Capital Cities/ABC Inc. in 1995. Disney announced its intention to sell the publishing assets in February, saying the publications' strategic fit wasn't as strong as other properties it acquired in the Cap Cities/ABC deal, nor as important or strong as its later acquisitions of Pixar Animation Studios and Lucasfilm Ltd.

The sale had attracted interest from a number of large newspaper chains, including Times-Mirror Co., Hearst Corp., Tribune Co., and Hollinger Inc.

To finance the transaction, Knight-Ridder will issue $660 million in convertible preferred stock. It will also assume $990 million in debt. The company said the transaction, which is expected to close in 60 days, will dilute Knight-Ridder's earnings by about 10% in the first 12 months. But the acquisition should add to earnings by the third year, the company said. Knight-Ridder plans to repurchase 15 million of its common shares in the open market during the next 12 months.

News of the transaction was released after markets closed on Friday. In composite trading on the New York Stock Exchange, shares of Knight-Ridder rose 37.5 cents to $39.50, while Disney closed at $79.75, up $1.125.

Climate for Publishers

Analysts generally applauded the deal. Combined revenue for the four publications was $500 million in 1996, with an operating margin of about 25%. "I think it's an attractive price," said Michael Kupinski, an analyst at A.G. Edwards & Sons Inc. in St. Louis.

As for the company being too dependent on newspapers, Mr. Ridder said that owning papers in small and large markets provides geographic and distribution diversity, protecting the company from regional economic fluctuations. Knight-Ridder publishes 31 daily newspapers in the U.S., including the Philadelphia Inquirer, the Miami Herald and the San Jose Mercury News.

The climate for newspaper publishers has been upbeat of late, with low newsprint prices and solid advertising revenue boosting profitability. Knight-Ridder reported 1996 net income of $267.9 million, including a gain of $87 million from the sale of assets, on revenue of $2.77 billion.

The deal with Knight-Ridder leaves Disney still holding a handful of small papers, such as the Oakland Press in Michigan and the Albany Democrat Herald in Oregon, as well as a long list of trade publications. "We're still looking at the alternatives for those and a number of other publications," a Disney spokesman said.  "Disney Quashes Rumors Of Little Mermaid Theatrical Re-Release," by Adam Dawtrey, Variety, May 20, 1997  Robert A. Iger, COO and President of The Walt Disney Company (as well as ABC Entertainment) announced in an open letter today that contrary to rumors, Disney is not launching a theatrical re-release of The Little Mermaid this November. These rumors had taken ahold because Disney has done various relaunchings of its classic films in the past, partially to generate interest for their home video releases, and many felt that the 1989 film that resurrected Disney from the brink of irrelvance and kickstarted its run as an emerging corporate behemoth, was ripe for such a run. Many also felt Disney would do this partially to head off competitive runs from emerging rivals, such as 20th Century Fox and Don Bluth's Anastasia and Paramount Pictures/Nickelodeon's The Ren and Stimpy Moving Picture Talk-O-Rama, both also set to release in theaters in November.

Iger admits in his open letter that this option was on the table, predominantly suggested by CEO and Chairman Michael Eisner and Walt Disney Studios chairman Joe Roth, and that this wasn't the first time such a strategy to potentially kneecap competition was floated, as last year Disney had mulled doing a re-release of its 1988 film Oliver & Company to compete with MGM's All Dogs Go to Heaven 2, which was released to a piddling $12 million at the box office (the budget has not been revealed, but it is firmly believed this is a considerable loss) and universally negative reviews by critics. "I told Michael and Joe that it wasn't necessary to do this, and that I felt confident that movie would fail on its own, and it certainly didn't need us to push it and kick it while it was down. But they really wanted a re-release this year, and I was dead set against doing anything that could be perceived as putting our thumb on the scale and anticompetitive behavior. Our movies have always succeeded or failed based on their own merits, so it's only fair that our competitor's offerings do likewise."

The open letter has actually earned Disney a glowing reception, and burnished Iger's status, to the point many are considering him as the prime candidate to be Eisner's successor as CEO. Disney's stock has risen by $14.75 just on the basis of the letter, and prices for News Corporation (parent company of Fox) American depositary receipts and Time Warner, Seagram (parent company of Universal Pictures), Sony and Viacom shares also had a cosiderable climb. ''' "Can Anyone Dethrone Disney?" by John Horn, Los Angeles Times, June 1, 1997 ' To appreciate The Walt Disney Company's animation monopoly, you have to travel back to 1994-months before The Lion King'' shattered Hollywood records.

Far from Los Angeles, Warner Bros. held two test screenings of Thumbelina, showing clips from its animated movie to gauge audience interest. The first time around, audience reaction was flat. For the next test, according to people familiar with the experiment, Warners stripped off its company logo-and slapped Disney's name on the exact same Thumbelina footage.

The test scores soared. (Warner Bros. declined to comment.)

Toy Story director John Lasseter is only half-kidding when he says, "You can have an hour and a half of blank film leader with the Disney name on it and people will go see it."

What has been equally true is that if an animated movie-no matter how brilliant and entertaining-does not sport Disney's logo, people will avoid it. It's as if the movie has rabies: The audience steers clear, the theaters become empty quarantines.

Nevertheless, some of Hollywood's biggest players-Warner Bros., 20th Century Fox, DreamWorks-are now poised to challenge Disney's animation dynasty, and their first three rival movies are nearing completion. Unlike earlier adversaries, the competing studios are committing vast sums to the campaign, erecting sprawling animation studios from scratch and organizing expansive marketing campaigns. The buildup for the animation battle has been happening for a couple of years, already dramatically changing the animation job market, but the next several months will finally see some of these competing studios' big releases.

The goal is simple: Grab a slice of Hollywood's single most lucrative franchise.

In just over a decade, Disney has turned animation from an ailing weakling into a show business steamroller, building the only real brand name in movies. The franchise is more profitable than James Bond and any cleavage you throw his way. Better than the Die Hard and Lethal Weapon series rolled into one. One animated movie alone-The Lion King-generated an estimated $1 billion in profits.

Not revenue. Profits. Every T-shirt. Every sing-along book. Every pair of flannel pajamas. Every ticket sold in Pago Pago and Bora Bora. Even a relatively weird offering like The Hunchback of Notre Dame added an estimated $700 million to Disney's bottom line-or a quarter of Disney's entire annual profit in a given year.

Disney executives say animation is more than twice as profitable as all of the studio's live action films combined-with a fraction of the risk and effort. In an average year, Disney may release two animation films and 60 live action titles (including Miramax films, though Disney is now spinning off most of its ownership to help the consummation of its near-simultaneous purchases of Capital Cities/ABC, Pixar Animation Studios and Lucasfilm Ltd.), and yet those two animated movies dwarf the 58 other releases. (Except for the recent special editions of the Star Wars Trilogy, which definitely did an extremely brisk business and further fattened Disney's coffers to a level comparable with the animated offerings.) Calculating exact profits from animation is difficult, because the movies spin off other entertainment like parades at theme parks and TV programming. Some estimates say animation and its ancillary income may account for 70% of all of Disney's profits. Warner Bros. once said that without animation Disney would trail Warners for top box office share, which is a little like saying if it weren't for Coke, Pepsi would be No. 1.

Given the loot, it's not surprising new animation studios are popping up faster than ancient rocker reunion tours. Warner Bros., DreamWorks, 20th Century Fox and Viacom are gambling more than a combined $1 billion building mammoth animation departments, and several independent producers-from Morgan Creek (The King and I) to Nickelodeon (The Ren and Stimpy Moving Picture Talk-O-Rama, The Rugrats Movie)-are quickly assembling new animated flicks. Faced with the new competition, Disney is working harder than ever before to evict the would-be claim jumpers, and has 10 animated movies in active production, and at least another five being considered for the green light.

The battlefield is cleared and the war is about to begin.

In the next 18 months, no fewer than a dozen Disney and non-Disney animated movies are set to be released, starting with Disney's Hercules on June 27. The first high-flying challenger to the Disney empire is the debut film from 20th Century Fox's new Arizona animation studio, director Don Bluth's $60 million Anastasia, due November 21. Fox's next release, Planet Ice, should arrive in late 1998. Warner Bros. Feature Animation is set to release its delayed (and troubled) Quest for Camelot in early or mid-1998, followed by The Iron Giant in the summer of 1999.

DreamWorks, whose Jeffrey Katzenberg helped build the Disney monarchy he's now trying to overthrow, will unveil five animated films in the next three years, starting with Shrek, a freewheeling and somewhat crass takedown of Disney films with Chris Farley voicing the titular character, an ogre, in August 1998. Switching tack, then comes the often dark and serious Old Testament tale The Prince of Egypt in the fall of 1998. In animation's version of the race to theaters between Dante's Peak and Volcano earlier this year, DreamWorks and Pixar are both making computer animated movies: Antz and A Bug's Life, respectively, both set for the fall of 1998. MTV Networks' $420 million animation investment (which includes a planned Burbank studio) will focus initially on lower-budget works. Projects include The Stinky Cheese Man, a Beavis and Butt-head sequel, the $15 million The Ren and Stimpy Moving Picture Talk-O-Rama for early November and set to compete directly with Anastasia, and the $15 million The Rugrats Movie, based on the TV show, which is due in the fall of 1998.

Only a handful of companies are not massing troops in the animation wars.

Sony Pictures, MGM and Universal Pictures have no public plans to launch animation units. Universal's home video division has generated more than $375 million in cassette sales from The Land Before Time and its direct-to-video brethren, but instead of a splashy animated feature, Universal is making two more Land Before Time video sequels and an animated direct-to-video film called Hercules and Xena: The Animated Journey. The film, based on the hit shows Hercules: The Legendary Journeys and Xena: Warrior Princess, will feature main stars Kevin Sorbo and Lucy Lawless.

As the debuts of the non-Disney animated movies draw near, the rival studios are sweating every detail. The executives are either convinced the more attention they lavish on a film the better it will do-or they are simply proving they did their best if (or when) the movie goes down in flames. In some ways, it's as though Warners, Fox and DreamWorks are learning to walk for the first time, while Disney is already sprinting. The challenge is to not fall flat on their faces-just like all the others.

GOLIATH VS. LOTS OF DAVIDS

Each of the last six Disney films has grossed more than $100 million at North American theaters. Two (The Lion King and Aladdin) have surpassed $200 million. Of the 50 non-Disney-distributed animated movies released since 1989's The Little Mermaid, a grand total of one surpassed $50 million-last year's Beavis and Butt-head Do America, according to Entertainment Data Inc. No other non-Disney animated film has grossed even $30 million in that time frame.

Of the more than $1.8 billion in animation movie tickets sold in those eight years, Disney claimed a whopping 85% of the pot. (Warner Bros.' Space Jam grossed $90.4 million, but the 1996 movie was a combination of live action and animation, and therefore is not counted in this study.)

"It is clearly competitive," says Chris Meledandri, president of Fox Family Films, with obvious understatement. Adds a more candid Max Howard, president of Warner Feature Animation: "Of course there is tremendous pressure."

The rival studios are studying Disney's strategy the way an NFL coach might scrutinize game films, looking for openings and lessons. For its first animated movie, DreamWorks is trying to counterprogram Disney, shooting for an audience years older than the average crowd for Pocahontas or The Little Mermaid.

Fox Filmed Entertainment Chairman Bill Mechanic, who formerly built Disney's vast home video and international theatrical businesses, is, in the words of one colleague, "doing a full Jeffrey," personally involved in almost every frame of Anastasia the way Katzenberg would watch over Beauty and the Beast or Aladdin. Katzenberg himself, not surprisingly, spends almost half his time in DreamWorks' animation offices and has transferred some of his Disney tricks to his new digs: Every animated movie has an "emotional beat board" that tracks with string and push-pins the presumed audience response to each scene.

Disney is a strange mixture of flattered and peeved by the imitators.

With all the activity swirling around it (both Warners' and DreamWorks' animation facilities are mere blocks from Disney), Disney has gone on a huge hiring binge, nearly doubling its animation department from 1248 employees in 1995 to 2200 this year, spread out among four studios (in Florida, Paris and two in Burbank).

To assert its dominance, Disney will launch an armada of animated movies through the millennium, starting with Hercules, which looks more obviously commercial than the strange Hunchback of Notre Dame. Hercules features gospel-style music and the voices of Tate Donovan in the title role, Danny DeVito as a satyr companion and James Woods as the villain Hades. Upcoming Disney titles include Mulan (summer 1998), Pixar's computer-animated A Bug's Life (fall 1998), Tarzan (summer 1999), The Emperor's New Groove, Dinosaur, Wild Life, Atlantis: The Lost Empire, Treasure Planet, My Peoples and Fantasia 2000.

To somewhat defray potential losses from stumbling with these films, Disney is certainly counting on George Lucas' upcoming Star Warsprequel trilogy, the first film in which will release in May 1999, to do extremely brisk business and break box office records.

"We're not going to simply rest on our laurels," Lasseter, who not only runs Pixar but has also helped run Disney's own animation division alongside Roy Edward Disney, nephew of Walt, says quite assuredly. "Disney has to evolve and grow in order to stay relevant. This involves not only coming up with great stories, but also not being afraid to challenge the audiences. A lot of people think Disney movies are in just a very tight box, with clearly defined boundaries. Well, that's not good enough. We should not be afraid to include more mature storytelling, to go darker if necessary, and upend certain stodgy traditions. In the end, it's the story that matters."

A CUTTHROAT JOB MARKET

The boom has revolutionized animation's job market and even touched the Immigration and Naturalization Service, as studios are looking as far as the Philippines to import drawing talent. Ponytailed art students who five years ago would spend their working hours staring at biscotti in some Melrose latte house are now commanding six-figure starting salaries. Veteran lead animators-especially those with a Disney credit or two-are banking $1 million a year, earning a share of a film's profits, collecting potentially lucrative stock options and receiving rich signing bonuses previously reserved for the NBA. When Lasseter signed his formalized Disney contract in February, the seven-year deal included a $1.25 million signing bonus and a base salary of $700,000 (with guaranteed 8% annual raises), according to securities filings.

So many people are hiring that artists who can barely draw basic body parts are getting jobs. The industry joke is 100% employment, 30% talent. Some studios are recruiting third-year students at schools such as CalArts and USC, and helping pay their tuition in exchange for job commitments.

"The animators all became quickly aware of how fast the market was changing-and it really was the day after DreamWorks was announced," says Nancy Newhouse, a lawyer whose 200 animation clients include Lasseter, Disney's Tarzan director Chris Buck and DreamWorks' The Road to El Dorado director Will Finn.

How important are the artists? Disney re-signed superstar animator Glen Keane (Ariel in The Little Mermaid, Beast in Beauty and the Beastand the title characters in Aladdin and Pocahontas) to a seven-year contract in late April. Minutes after the news hit the financial wires, Disney's already strong stock climbed to a new all-time high.

Due partially to these accelerating salaries, the budget of a big animated film now exceeds $100 million, several producers say. Five years ago, a Disney animated movie cost only $40 million. But even with the spiraling costs, animated movies have no $20 million star salaries, and unlike Stallone or Schwarzenegger, Hercules doesn't get a cut of the gross.

To gain an advantage (and build new outfits as quickly as possible), the new studios also have been hiring scores of Disney stars.

Warner Feature Animation estimates up to 80% of its staff members have a Disney pay stub in their file cabinets. Howard worked at Disney from 1986-1995. Among the other Disney alumni are Tony Fucile, who moved from The Lion King and The Hunchback of Notre Dameto Warners' The Iron Giant, based on the children's book by poet Ted Hughes and executive produced by Pete Townshend, the pyrotechnic, windmilling, instrument-smashing guitarist of The Who.

DreamWorks has been particularly aggressive-some say too aggressive-raiding Disney's easels. The Prince of Egypt's music is from Pocahontas alumni Stephen Schwartz and The Lion King's Hans Zimmer. The tunes for DreamWorks' The Road to El Dorado (a comedy set against the conquest of the Aztecs) come from The Lion King scorer Elton John and lyricist Tim Rice. Key DreamWorks animators include James Baxter (Quasimodo in Hunchback), Duncan Marjoribanks (Ratcliffe in Pocahontas, Sebastian in The Little Mermaid), Finn (Cogsworth in Beauty and the Beast, head of story on Hunchback) and Kathy Zielinski (Frollo in Hunchback). Prince of Egypt is co-directed by Brenda Chapman, head of story on The Lion King.

Fox's animation studios is headed by Don Bluth and Gary Goldman, who left Disney in 1979. The two have hired many overseas animators in an attempt to find fresh talent and keep costs in control, relocating its artists to Arizona. The international staff includes people from Canada, Spain, Germany, France, Ireland, England and more far-flung locales.

Bluth has been somewhat of a maverick in his oeuvre, starting with the popular arcade game Dragon's Lair, and then going on to create beloved animated classics such as The Secret of NIMH, An American Tail and The Land Before Time, where he established himself to show off incredibly technical animation, especially of human characters, and featured incredibly compelling and dark stories within.

Bluth's recent films-Thumbelina, A Troll In Central Park, The Pebble and the Penguin and Rock-a-Doodle-have all been box office disappointments. People who work with Bluth say his films' scripts have typically been weak. Fox, sources say, has labored to polish the Anastasia screenplay, offering the services of some of its live action screenwriters.

Bluth himself says financial problems at his previous studio distracted his focus on those earlier underachievers. "I no longer have this worry every week about the payroll," the director says. "I feel the burden greatly lightened."

The competition between animation houses is not limited to movies. As soon as established animators' movies wind down, they attract attention usually reserved for Madonna's offspring. "Our artists are getting calls every day from the other studios saying, 'When your contract comes up, give us a call and we'll give you a better deal,' " says Bluth, who claims not to do the same. Director Brad Bird says he needs to be finished with his Iron Giant storyboards in September "in order to pick up all the people coming off Quest for Camelot, " and make sure they don't sit around waiting for another job offer.

To protect its seat at the head of the table, Disney also is trying to price its emulators out of business. Disney now throws huge salaries ($3500 a week and more) at such employees as lead key cleanup artists and locks up talent for the maximum seven years. Pixar, Disney's computer animation division, offers its employees potentially lucrative Disney stock options, Lasseter says.

In response, Warners and DreamWorks are respectively offering bonuses and profit participation, but only DreamWorks has effectively matched Disney's salaries.

"You remember when Reagan was president and he said he was going to outspend Russia on defense?" says Jon Cantor, a lawyer representing some 350 animators. "And Russia said, 'OK, we'll outspend you, then.' It ended up bankrupting Russia. Well, that's what Disney will do to the competition."

With all the activity, one critical question remains:

Can anyone besides Disney make money in animation? Historically, non-Disney animated films have as short a run as Larry King's wives. So why have so many failed? Cats Don't Dance offers a case study.

EVERYTHING BUT THE LOGO

It took 4 1/2 years to bring the animated musical Cats Don't Dance to movie theaters. It took 4 1/2 hours to declare it dead on arrival.

At the film's first March matinee at a spacious Pasadena theater, a grand total of 15 people bought tickets. "It was very well done. It was a nice movie," said Michael Osborn, whose five-member family accounted for a full third of the house. "It's too bad people aren't coming to see it."

The film's collapse had little to do with what was on the screen. Cats Don't Dance attracted largely positive reviews from some leading critics, and some reviewers said the Warner Bros. release surpassed Disney's artistry. Missing, however, was the Disney name and the seemingly minor garnishes that increasingly determine success and failure.

There was no Danny the Cat Happy Meal at McDonald's. Soft and fluffy Cats Don't Dance toys were not spilling from Toys "R" Us shelves. Distributor Warner Bros. did not run a parade up New York's 42nd Street and 10 blocks of 5th Avenue (as Disney will do with Hercules) to elevate the film from mere movie to cultural event.

In other words, producer Turner Pictures and distributor Warner Bros. thought Cats Don't Dance was a movie and did not pursue tie-in deals. But successful animated movies are not movies. They are motors, and they don't go anywhere without the fuel of merchandising and the wheels of event marketing. Disney knows how to build that car better than anyone else. And they've done it so well for so long customers won't buy from another dealer.

"Cats Don't Dance got great reviews and great exit polls. And no one knew it was out there," says David Kirschner, the film's producer, who says he was "devastated" by the film's flameout.

He shouldn't have been surprised.

Produced by since-folded Turner Pictures, Cats Don't Dance was supervised by no less than eight executives in its lifetime, several of whom would have rather ironed Chris Farley's underwear than make an animated movie. "(Turner Pictures President) Amy Pascal told me, 'I don't care for animation in any way, shape or form,"' Kirschner says. "Those were her exact words." (Now the head of Columbia Pictures, Pascal says she merely was not a fan of the story of animals seeking to become movie stars in 1939 Hollywood and may well want to make an animated Columbia feature in the future. She did, however, speak highly of Cats Don't Dance when it was announced.)

"I asked and I asked about the merchandise campaign," Kirschner says. "And they kept saying, 'We'll get to it.' They never did."

Without studio support and concerted effort for fast food and toy tie-ins, the $45 million Cats Don't Dance was doomed. "When you do a film like this, you better damn well make sure you have support across the board," Kirschner says. "Launching these films takes a year and a half of planning."

Disney has practically copyrighted the book both on how to make-and, equally important, to launch-an animated movie. Children and their parents know about the next Disney film months before it comes out, and each film's popularity builds awareness for the next. Since families now collect Disney videos the way earlier generations once did books, the cassettes have become incredible sales tools. The 21 million shipped copies of the Toy Story video carry a Hercules trailer, as do the more than 10 million videocassettes of The Hunchback of Notre Dame.

There's no limit to Disney's merchandise efforts.

The floor-to-ceiling shelves in Lasseter's Pixar offices are jammed with Toy Story booty. Among Lasseter's collection is Toy Story lip balm, a Toy Story sushi lunchbox (complete with Toy Story chopsticks) and three Buzz Lightyear dolls that declare "To Infinity and Beyond!" in French, German and Italian. Lasseter is desperately trying to find a Toy Story stamp from Uganda and will soon catch the Toy Story ice skating spectacular. Counting its domestic, international, home video and merchandise profits, Toy Story has spun off $400 million in profits.

The Toy Story merchandise testifies to the staggering ancillary appeal of a movie Disney admitted it underestimated. The goods simultaneously reinforce name brand identification and create a thirst for more Toy Story experiences: Without appearing to sell anything, the toys and piggy banks and comic books turn prepubescent children into highly trained consumers. Not surprisingly, Pixar is hard at work on a Toy Story sequel, eager to tap the market before the attention subsides.

The merchandise tie-ins have grown so pervasive that Disney's Hercules actually makes fun of the practice in the movie itself. After a particularly heroic feat, people in the film start wearing "Air Herc" sandals, drinking "Herculade" thirst quencher and Hercules signs autographs outside a Disney-fied "Hercules Store" crammed with figurines.

It helps, too, that Disney's artwork and music are consistently good, and that Beauty and the Beast remains the only animated film nominated for a Best Picture Oscar. No one was fooled into thinking Miramax's Arabian Knight, a cannibalized version of Richard Williams' legendary unfinished opus The Thief and the Cobbler, was anything but a low-rent knockoff. Consequently, over the course of 35 animated features Disney has developed remarkable brand name loyalty.

"People will go to see a Disney movie even if it's not good," says Warner's Howard. "They have earned that-I don't have that. I have to be great."

"The word 'Disney' is like Santa Claus-you can't invoke criticism," says Bird, director of the upcoming Warners animated film The Iron Giant.

And Santa was never so flush.

GIRDING FOR BATTLE

How do the Disney rivals match that clout? A lot of early planning and calculation.

Morgan Creek Chairman James Robinson says he wouldn't be risking as much as $50 million challenging Disney if he didn't have a pre-sold title. "If we didn't have The King and I, we wouldn't be making an animated film," Robinson says. "For a non-Disney film, you can't get a better title-and we already know the music has tested well, so we're keeping it in," he says with a laugh. Morgan Creek already has been approached by several fast food chains and toy companies, even though the movie is more than a year and a half from being finished.

Producer-director Bluth can't come to the phone at the brand new Fox Animation Studios in Phoenix; he's meeting with the Anastasiamerchandisers. Hundreds of miles away, Burger King and Galoob Toys are cranking out their Anastasia merchandise. Back in Los Angeles, 20th Century Fox is laboring to launch the movie with more fanfare than Independence Day and Volcano and the upcoming film spinoff of the hit TV series The X-Files. With only 30 minutes of the film completed, Fox has started showing the unfinished footage to the media (as Disney first did with Beauty and the Beast), trying to generate positive buzz and awareness.

"Any independent animated feature can't make it any more," says Bluth. "I saw Cats Don't Dance and thought it was really good. But nobody knew it was out there. . . .I don't think you can make an animated film by yourself. Even if it's the best animated film in history, no one will see it if there's no awareness."

Part of Bluth's Anastasia strategy is to get away from what is historically a tale of bloodthirsty Bolsheviks, the last Russian czar, revolution and a young woman believed by historians to have been slaughtered. In Bluth's retelling, Anastasia is more fairy tale, a story of a little girl who may be royalty searching for identity. As the movie puts it, "Every lonely girl hopes she's a princess." The lead voices are Meg Ryan, John Cusack, Angela Lansbury and Christopher Lloyd. The music is by Ragtime's Lynn Ahrens and Stephen Flaherty.

When Bluth began adapting Anastasia, he was mindful of creating characters that appealed to children and not coincidentally had tremendous toy potential. "(The dog) Pooka was created to give kids access to the story because it's in many ways an adult story," he says.

"What we set out to do is tell a great story-no one has the exclusivity in telling great stories in this medium," says Fox's Meledandri. "Are there marketing challenges in communicating that Fox has made a great animated film? Yes, there are great challenges. But when you step back and look at the overall risk, it's similar to the risk you take with any film. If you succeed, people will come. If you fail, people will not come."

The Disney challengers (and Disney itself) need to be careful that marketing does not get in the way of the actual film. "The amount of money spent is so astronomical and you have to make the deals so far in advance, the movie is not always the first priority," director Bird says. "You have to make sure (the merchandise) doesn't dictate what kind of entertainment we make."

DreamWorks' The Prince of Egypt doesn't look like the typical Disney movie, with no wisecracking sidekick and huggable furry companion (Habibi, the stubborn camel, does not speak). Among the artists the DreamWorks animators studied are French illustrator Gustave Dore, impressionist Claude Monet and director David Lean. The movie opens with the song "Deliver Us" as Moses is put in a basket in the river, and sequences include the tongue-twisting "Tzipporah Escapes" and "Hieroglyph Nightmare." With the voices of Val Kilmer, Ralph Fiennes, Michelle Pfeiffer, Helen Mirren, Jeff Goldblum and Sandra Bullock, the estimated $60 million film features two highly complicated, computer-animated scenes: the parting of the Red Sea and the Burning Bush.

Some who have viewed portions of the work say the story of faith, slavery and deliverance is not something for toddlers. The film will probably be rated PG, and is aimed at 8-year-olds and up. "I saw the first six minutes of Prince of Egypt, " says attorney Cantor. "It looked like an animated version of Schindler's List. I said to Jeffrey, 'What audience are you going for?' "

Katzenberg declined to be interviewed. But the film's two producers say the film is indeed geared to an older, more sophisticated crowd. "[The audience] expects something they can take their 3-year-old to without any problem," says the film's co-producer, Penny Cox. "This is a different film, with hard issues and hard questions."

Meanwhile, DreamWorks executives say they are agonizing over how to promote the film: A Promised Land Picnic Set would look sacrilegious, but is a Ramses coloring book irreverent? When you make The Lion King, everything down to (and including) promotional toilet paper seems acceptable. But how do you create a profile if you can't churn out consumer products? Will education programs offered through religious organizations turn Prince of Egypt into an event?

Equally important, how do you prepare an audience for a movie with no singing crab or dancing teacup? While Disney can take some liberties with the life story of Pocahontas and Fox can (and will) do the same with Anastasia, you can't really rewrite the Old Testament.

DreamWorks certainly hopes Prince of Egypt will be a hit, but the studio, in an unusual spin-control move, already is saying the movie's value cannot and will not be measured in ticket sales alone. It is critical, for starters, that Prince of Egypt proves the new studio is not trying to clone Disney movies.

"It is less about what the film grosses," Cox says. "The significance is less about the bottom line than in succeeding in making the movie we set out to make. What this movie has to do to be successful for DreamWorks is to be done well."

As Prince of Egypt demonstrates, the animation wars carry the promise of new animation styles. With so many people clamoring for their services, artists suddenly are empowered, free to make movies the way they want to. If a studio executive interferes too much, they simply move on. The money and the jobs are out there.

"One of the nice things at Disney now is there's a strong creative vision by the director," says Lasseter in a thinly veiled broadside at former studio chairman Katzenberg. "There's a difference when the director is the director of the picture and a studio executive is the director of the picture."

"The artists have more choices than they've ever had before," says Ron Clements, the co-director of Hercules. "You can make choices and work on films you want to work on."

No one knows, of course, who will triumph and who will perish-only that somebody will inevitably crash and burn. Warners' Quest for Camelot was started in 1993 and has had significant story problems. Its first director, Bill Kroyer (Ferngully: The Last Rainforest), left the film last summer, as did two lead animators and a number of people in the art department. If Warner Bros. executives are unimpressed with storyboards for Iron Giant, it may not go forward, immediately interrupting the studio's planned stream of titles.

"You've got to be making something," says Howard, who says Iron Giant will be made. "There's a danger in not making something."

"Of all the players in the ring, not everyone is going to make it," says Bluth, whose last studio, Sullivan Bluth Studios, flopped. "Somebody is going to get hurt and lose a lot of money."

"When Jeffrey was here years ago he would say, 'Guys, I want you to know I believe in monopolies,' " says John Musker, Hercules' other co-director. "Now, he obviously believes in at least duopolies."  "Disney to Sell Investor Journal," The New York Times, July 17, 1997  Euromoney Publications PLC said today that it had agreed to buy Institutional Investor Inc., a unit of The Walt Disney Company, for $142 million, establishing a strong presence in the United States.

The London-based publishing and conference company was one of several businesses that looked over the unit after Disney decided to sell it along with other publishing assets it acquired when it bought Capital Cities/ABC.

Institutional Investor, which publishes the magazine of the same name, is involved in information publications and the conference and newsletter business and derives 73 percent of its $74.4 million revenue from the United States.

The publication Euromoney, which is 63 percent-owned by the Daily Mail and General Trust PLC, competes directly with Institutional Investor for an audience of financiers and investors.

After it paid $19 billion to acquire Capital Cities/ABC last year (as well as committing over $5 billion more to purchase Pixar Animation Studios and Lucasfilm Ltd. that same year), Disney began selling its publishing units to focus on its entertainment business. Disney sold its Chilton trade publishing unit to the British-Dutch publisher Reed Elsevier PLC for $447 million.

In April, Disney sold four newspapers to Knight-Ridder Inc. for $1.65 billion and said it was exploring its options regarding the magazines. The company still has 24 farm magazines; Fairchild Publications, which publishes Women's Wear Daily, and Disney Publishing, with its children's magazine Disney Adventures, and magazines Discover and Family Computing.  "Disney Sells Off Oregon-Based Newspapers," Los Angeles Times, July 29, 1997  Iowa-based Lee Enterprises Inc. will buy the Pacific Northwest Publishing Group-composed of eight Oregon newspapers-from ABC and its Burbank-based parent The Walt Disney Company for $185 million. The papers, consisting of the Albany Democrat-Herald, Ashland Daily Tidings, The Sandy Post Lebanon Express, Cottage Grove Sentinel, The Outlook and Newport News-Times, will be sold as part of Disney's continuing efforts to divest itself of print assets it inherited after purchasing Capital Cities/ABC for $19 billion. Disney had earlier sold four newspapers to Knight-Ridder, Chilton Publications to Reed Elsevier, Institutional Investor to Euromoney, and Farm Progress to an Australian firm. This was all done to help the company pay down debt incurred from the ABC purchase, as well as purchases of Pixar Animation Studios and Lucasfilm Ltd. last year. Disney is also spinning off a majority stake of its ownership of Miramax Films, both to meet antitrust concerns and pay off debt, and also sold KCAL-TV to Young Broadcasting for the same reasons. Disney sold off the Shamrock Broadcasting group, a collection of 19 radio stations, to Chancellor Broadcasting back in 1995.  "Disney and Fox Iron Out Details of Star Wars Prequel Trilogy Distribution Deal," PRNewswire, April 2, 1998  LOS ANGELES - Peter Chernin, President and COO of News Corporation and Chairman and CEO of the Fox Group, and Walt Disney Studios chair Joe Roth announced today that 20th Century Fox and Disney have entered into a far-reaching agreement with Lucasfilm Ltd. regarding distribution the next three Star Wars films, which are prequels to the original Star Wars trilogy, as well as tying up loose ends from 20th Century Fox's original distribution of the trilogy. As with the Star Wars Trilogy Special Edition, Disney will distribute the films theatrically through their Walt Disney Studios Motion Pictures division. In addition, the American Broadcasting Company has licensed the network broadcasting rights to the first of the new films, tentatively titled "Episode I." However it will then grant further repeat broadcast rights to Turner Network Television (TNT), along with the rights to the original trilogy and the two upcoming sequels to "Episode I." Fox originally had the rights, especially an owning of the original 1977 film in perpetuity, but Fox graciously waived that privilege after Disney's 1996 purchase of Lucasfilm. In addition, Fox is granting Disney and Lucasfilm the rights to use Fox studio lots to film the remaining two installments in the new trilogy.

Peter Chernin stated: "The biggest thrill of any motion picture executive is to touch greatness. At 20th Century Fox, it has been a tremendous joy to have been a part of George Lucas' groundbreaking Star Wars Trilogy. It is one of the privileges of my career to be involved, even indirectly, in bringing out the next installments of Star Wars to the world."

George Lucas stated: "I will always remain grateful to the work with Fox for the original releases of the original trilogy, and they hold a place in my heart. Even as Star Wars continues to expand with its new home at Disney, I hold no bad memories of working with Fox. Peter's gracious terms regarding distribution and allowing Fox lots to film the next two installments pleases me immensely."

The new films are Episodes I, II, and III of the Star Wars saga. Episodes IV, V, and VI - Star Wars: A New Hope, The Empire Strikes Back, and Return of the Jedi - were released by Fox in 1977, 1980, and 1983 respectively. In 1997, on the twentieth anniversary of Star Wars and one year into the acquisition, Disney released the Star Wars Trilogy Special Edition to theaters around the world.

Roth stated: "Disney and Lucasfilm created history last year with the successful release of the Star Wars Trilogy Special Edition. We not only achieved amazing results but moreover sparked a fervor for the Star Wars movies and characters."

Gordon Radley, President of Lucasfilm Ltd., stated: "Choosing the right distribution partner was a critical decision for us. Disney certainly has earned their laurels in that regard. We've enjoyed working very closely with the Walt Disney Studios Motion Pictures and Buena Vista Home Video teams and their talented colleagues on the worldwide theatrical and video releases of the Special Edition."

The original Star Wars trilogy told the story of Luke Skywalker, a young farmboy who became a hero in the struggle to overthrow an evil empire and had to confront one of the Empire's staunchest henchmen, his own father, Darth Vader. The new Star Wars trilogy will go back in time a full generation to reveal the origins of Darth Vader. In Episode I Darth Vader is a hopeful 9 year old boy named Anakin Skywalker and Obi-Wan Kenobi is a brash young Jedi Knight. This first chapter in the Star Wars saga follows Anakin's journey as he pursues his dreams and confronts his deepest fears in the midst of a galaxy in turmoil.

Episode I was shot in Venice, Italy; Tunisia; and Leavesden, England last summer and is currently in postproduction at Skywalker Ranch and Industrial Light & Magic in Marin County, California. The film was directed by George Lucas, written by Lucas and Lawrence Kasdan, produced by Rick McCallum and stars Liam Neeson, Ewan McGregor, Natalie Portman, and Jake Lloyd. Additional cast members include Christopher Lee, Ian McDiarmid, Samuel L. Jackson, Terrence Stamp, and Pernilla August. Episode I is scheduled to be released in the United States in May 1999.

The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with four business segments: media networks, parks and resorts, studio entertainment and consumer products. Disney is a Dow 30 company.

20th Century Fox is a unit of Fox Filmed Entertainment, a News Corporation Company.

Lucasfilm Ltd., a Disney subsidiary, is one of the leading film and entertainment companies in the world. Lucasfilm Ltd.'s businesses include George Lucas' film and television production and distribution activities as well as the business activities of the THX Group. Lucasfilm's feature films have won 17 Oscars and received 56 Academy Award nominations, and its television projects have won 12 Emmy Awards.  "Hollywood Declares A New World Order Framework," by Elizabeth Lesly and Ronald Grover, BusinessWeek, July 20, 1998  Tinseltown's top executives redefine "friendly competition" at Sun Valley

At this year's edition of the Allen & Co. Sun Valley conference in Idaho, all the usual major business and political players were in attendance. Barry Diller, Michael Eisner, Bob and Harvey Weinstein, Rupert Murdoch, Sumner Redstone, John Calley, David Geffen, Dick Parsons, Ted Turner, Robert Shaye, Bill Gates, Steve Jobs, Meg Whitman, Andy Heyward, Haim Saban, George Soros, Tony Blair, Michael Dell, Phil Knight, President Clinton, Alan Greenspan and so on and so forth, and featuring the traditional closing statements from Warren Buffett. But this year's edition of the conference, where big executives and leaders in the entertainment industry, Silicon Valley, Wall Street and geopolitics hobnob with each other, schmooze to lay new relationships and business deals together, and get in a little vacation time with their families over a weekend in July, may be the most consequential one in its history.

Mainly because this year, a lot of executives and studio chairs from all of Hollywood's major studios and TV networks were in attendance together, most notable Michael Eisner's number two man at The Walt Disney Company, COO and President Robert A. Iger, who is also CEO, COO and President of the ABC network. Iger was a man on a mission this year, as he decided to try and get Tinseltown to recognize an important reality: operating margins are shrinking for all of them, as the race to grab a slice of the market for every corner of entertainment is beginning to cannibalize their profits. There is a glut of choices in entertainment, with more than ever, and there will clearly only continue to be more in the years to come, especially as hundreds of new cable TV channels are created and the possibilities of entertainment on the Internet unfold.

"There's no doubt we all need to expand our reach to cover every part of entertainment," Iger said in an address delivered to the rest of the attendees. "But we can't do so without a degree of protection. Just a few years ago, Disney earned over a billion in profit-not revenue, but profit-on The Lion King, and Titanic is now the biggest movie in the world! But that's simply not possible these days. Now everyone's joining the race, in movies, TV, theme parks, books, press, radio, music and the Internet, and it's actually shrinking the pot. Our hands are continually getting weakened, and the slices are getting skinnier. At some point, it could be years or even decades from now, we're basically chasing a disappearing audience using tired formulas if we don't evolve."

The continued uncertainty of the world's markets because of the Asian meltdown and jitters of instability in Russia, Chile and Argentina, as well as the aftereffects of the Mexican peso crisis from earlier, also established Iger's point. "Will those profits come back? Eventually, yes, but it could take years for them to do so. Right now, we're getting hammered, and we need an alternative, we need insurance against a global contagion."

"FRENEMY MINE."

Iger decided to shock attendees by proposing a radical new framework, to redefine the meaning of "friendly competition." It means getting different studios to do profit-sharing and co-distribution deals more often, and to launch combinations that, on the face of it, don't make much sense. While not a strictly new idea (20th Century Fox and Paramount did such a deal for both Braveheartand Titanic; Universal and Sony have some projects in the offering to do likewise, Universal and Paramount and MGM have the United International Pictures partnership together, Universal distributes Miramax films overseas and vice versa, and Disney's Touchstone Pictures is actually distributing certain Paramount and Universal films overseas and vice versa), Iger wants this framework expanded radically. "The time is coming for us to really think outside of the box. Have Disney and New Line work together, Artisan and Miramax, Miramax and DreamWorks, Universal and Fox, MGM and Disney, MGM and Paramount, and any number of combinations you can think of!"

Iger stated he does not see rivalry and competition going away, and that most films will continue to be distributed by one studio alone. He also admits that the merger/conglomeration era will continue unabated, and continue to leave fewer players around as standalone entities over the decades. "But we have to really push the envelope here and really emphasize the 'friendly' part of 'friendly competition.' A rising tide should lift all boats, help the industry, help all of us, and help all of us compete with each other. Basically making us all see each other as 'frenemy mine' from now on."

Iger says he sees this happening not only in film, but TV and other ventures. "Different studios and networks continue to produce content for competitors, so let's really expand on that more. Speaking from experience, I had to convince Michael (Eisner) not to have Disney do all the programming for new series on ABC, because you don't want to narrow the net that you cast. So let's really make that a big thing." He said, for example, that The Disney Channel, Nickelodeon and Cartoon Network could easily work on producing animated series for each other, among other things.

Most notably, Iger also says licensing agreements should be very open, allowing different conglomerates' IP to be used by another on certain projects: such as making a video game series featuring not only Disney's characters, but open to featuring ones from say, Fox or Universal. "I know this is a way forward for all of us."

BUCKING THE TREND

Another point Iger brought up was regarding trends of what audiences want to experience. "If we continue as we are, one day mainstays like the romantic comedy, the sitcom, and things like that, will no longer have the drawing power they have had for decades. The genres need to evolve, all of them do. If we evolve with our audiences, organically and naturally, we'll be making more hits and thus raking in more profit."

Iger is under no illusions that duds can be avoided completely, that most movies will still fail to make money, that what people will call "brainless product" will still get released regardless, material that is unearthly awful that it fails on every level, or things that make lots of money but get no critical respect because it is merely pandering to the lowest common denominator. "That has happened throughout the industry's history, and it will still happen until the end of time. But we can ensure more bona fide classics that endure are created, and that the opinion of the industry is improving. This will help not only the big league players, but the smaller ones too. The indie and art house scene, the blockbuster and the Oscar contenders all need each other to survive, and let's make them all succeed more."

He also pointed out that all this could improve studios/conglomerates' bargaining power with cinema exhibitors and cable providers. "We can buck the trend of being continually shortchanged and get favorable terms that redress the balance."

Iger's speech actually received a thundering ovation, and already talks of new alliances between industry players are growing. Some old enmities (but not certain others, such as Disney and DreamWorks) are melting already.

TURNING OF THE TIDES?

There is certainly a lot of buzz about the gauntlet Iger has thrown down. In an age where "multiplexing" of television and a continual rollout of channels and the efforts of conglomeration leads to more concentrations of power that paradoxically shrink the pot, having a new framework to evolve with the changing times could conceivably alter the entertainment industry for the better.

"Bob Iger has found the way forward for all the industry," Los Angeles Timesfilm critic Kenneth Turan says. "Linking arms like never before will bring the major players to a point where everyone is profitable, and everyone can really do one-upsmanship to a greater extent than before. The best will get even better."

Actor Michael Douglas, who is also a producer, from fare as varied as One Flew Over the Cuckoo's Nest and Face/Off, is likewise excited. "I always want the industry to continue to evolve and produce impressive works, and I think the future is very secure. We'll also see smarter projects coming out."

Cultural critic Elvis Mitchell is unconvinced. "It's just pandering pablum to make us think things will change. But the pandering will get worse, movies will become worse, indies will die, and the studios will continue to pretend to be art house producers with their 'specialty" divisions. Fool me once..."  "Disney Completes Miramax Spinoff Process," by Army Archerd, Variety, August 27, 1998  The Walt Disney Company today announced that it has completed its two-year phased spinoff of a majority stake in Miramax Films, a process that it had begun back in June 1996 to help facilitate its purchases of Pixar Animation Studios and Lucasfilm Ltd. and allay potential antitrust concerns.

Miramax, the company founded by Bob and Harvey Weinstein in 1979 and responsible for delivering art house fare to megaplex audiences, was purchased by Disney for $60 million back in 1993. Five years later, 80 percent of the company has gone back to Miramax itself, particularly to the Weinsteins, with Disney maintaining 20 percent and the home video distribution of its films.

"Today is a momentous day," Disney President and COO Bob Iger said. "We've unlocked the potential of Miramax and helped solidify Disney's position with the Pixar and Lucasfilm deals. Those deals signify the start of a very fruitful and creative partnership, and we're impressed by how far we've come. On the other hand, Disney remains proud of its association with Miramax, whose reputation for quality filmmaking is well deserved. Our hats are off to Bob and Harvey for all they have accomplished and the rich library of films they have released to the public."

Disney originally bought Miramax to help boost its production slate and establish itself for more than its usual family-friendly fare, something also achieved through its Touchstone Pictures and Hollywood Pictures imprints. Miramax and its subsidiary Dimension Films are responsible for many of the notable hit films of recent memory such as Pulp Fiction, Clerks, Chasing Amy, Emma, Heavenly Creatures, Scream, Kids, Desperado, The English Patient and Good Will Hunting. Miramax is set to unveil its latest Oscar contender, the romantic comedy-drama Shakespeare in Love, for Christmas.

Disney's Pixar and Lucasfilm deals are also set to bear impressive fruit with the forthcoming release of Pixar's new film A Bug's Life and the eagerly awaited Star Wars: Episode I-The Phantom Menace.  "Disney Goes Big For Rock n' Roller Coaster Plans," Orlando Sentinel, August 27, 1998  Walt Disney Imagineering announced that one of its newest and most eagerly anticipated attractions, The Rock n' Roller Coaster, has been officially adopted to be built at a gate from each of its main parks. The attraction, a high-speed coaster attraction that launches the riders from zero to 60 miles an hour to simulate a rush through heavy traffic to a major band's concert (with several inversions and a full loop included), will be launched with a different major band for every version, "to create a truly unique experience for each park."

The first to open, at Disney-MGM Studios in Walt Disney World, will feature Aerosmith, the perennial hard rockers who famously nearly destructed in a haze of booze and drugs in the '70s before coming back roaring stronger than ever in the '80s and '90s and contributed the end credits ballad "I Don't Wanna Miss A Thing" to the Michael Bay action movie Armageddon. It will open next spring, becoming the biggest major new attraction since The Twilight Zone Tower of Terror in 1994.

The version at the planned WESTCOT second gate at Disneyland (tentatively scheduled to open in 2002) will feature Nirvana, the iconoclastic grunge band who have found themselves at the vanguard of angsty bands appealing to Generation X. The planned second gate at Disneyland Paris, Walt Disney Studios Park, will open in 2002 with a version based around Australian funk rockers INXS, a band lately more known for the volatile personal life and failed relationships of frontman Michael Hutchence. The band for the version that will open in Tokyo Disneyland has not yet been decided.  "Star Wars To Come to Fox Studios Australia," PRNewswire, November 3, 1998 

SYDNEY, AUSTRALIA - Lucasfilm Ltd. and Fox Studios Australia today announced Star Wars Episodes II and III would be made at Fox Studios Australia in Sydney.

The announcement was made at the studios by Star Wars director George Lucas, producer Rick McCallum and Fox Studios Australia chief executive Kim Williams.

George Lucas is currently writing Episode II, with shooting scheduled to begin at Fox Studios Australia in 2000.

George Lucas: "Sydney is a wonderful location for the film - it's an exciting city, with a reputation for highly professional and experienced crews and now great production facilities. We're looking forward to bringing Star Wars here and working with talented Australians."

Kim Williams: "Lucasfilm is one of the world's preeminent production companies, and the groundbreaking Star Wars saga has a firm place in the hearts of moviegoers worldwide. They are magnificent stories told by an unrivalled storyteller - George Lucas. Fox Studios Australia is delighted and privileged to be part of these next chapters of filmmaking history.

Rick McCallum: "We have long been interested in working in Australia with its incredible pool of talent. We now have that opportunity at the wonderful facilities at Fox Studios Australia, and look forward to further developing the already strong relationship we have established with Kim Williams and Fox Studios manager Rod Allan. They have been invaluable in providing support and knowledge, and have been instrumental in our decision to shoot here."

News Ltd. chief executive Lachlan Murdoch: "The next Star Wars chapters will introduce a whole new generation of moviegoers to this fantastic saga. To do so from the production base at Fox Studios Australia shows the care and commitment that has been taken through the studios' development."

The announcement comes after more than a year of discussions between Rick McCallum and Fox Studios Australia.

New South Wales will benefit from the hundreds of jobs created by the wide range of advanced skills required to mount a production of this complexity.

Star Wars: A New Hope (Episode IV) was released by Fox in 1977. It was followed by The Empire Strikes Back (Episode V) in 1980 and Return of the Jedi (Episode VI) in 1983.

A Special Edition of the trilogy released by The Walt Disney Company in 1997 marked the 20th anniversary of Star Wars. The films were digitally remastered and featured stunning new sequences, and the success of the Special Edition was without precedent in box office history.

Star Wars: Episode I-The Phantom Menace was filmed in Venice, Italy; Tunisia; and Leavesden, England last year and is now in postproduction in California. It goes back a full generation to reveal the origins of Darth Vader, and is scheduled for release in the United States on May 21, 1999.

Episodes I, II and III of the Star Wars films will be distributed by Disney, as well as through home video distribution.

Lucasfilm Ltd., a Disney subsidiary, is one of the leading film and entertainment companies in the world. Its businesses include George Lucas' film and television production activities, and the activities of the THX Group. Lucasfilm's feature films have won 17 Oscars and received 56 Academy Award nominations. Its television products have won 12 Emmy Awards.

Fox Studios Australia is one of the world's most sophisticated film production facilities, with six soundstages, comprehensive postproduction services and tenants drawn from some of the leading providers in the film and television industry. A 50-50 joint venture between News Corporation and Lend Lease Corporation, it officially opened in 1998 and has already been used for the two largest films made in Australia to date: Babe: Pig in the City and The Matrix.  "Another Side of Harvey Weinstein," The Hollywood Reporter, November 22, 1998 

Most people don't know Harvey Weinstein from Adam. But they all know of his film distribution company, Miramax Films, which he and his brother Bob founded back in 1979, in honor of their parents, Miriam and Max. The company is known for having made a name for itself in bracingly dramatic and emotional indie films, many of them being period pieces, and for attracting young raw talent to be able to launch many a promising career. Films such as Cinema Paradiso; Sex, Lies and Videotape; Heavenly Creatures; The Crow; Reservoir Dogs; Pulp Fiction; Jackie Brown; Clerks; Mallrats; Chasing Amy; Sling Blade; The English Patient; Good Will Hunting and Scream certainly don't lie. Nor does having found and nurtured the talents of the likes of Kevin Smith, Quentin Tarantino, Ben Affleck, Matt Damon, Salma Hayek, Billy Bob Thornton, Kevin Williamson and Kate Winslet. Weinstein and Miramax were especially on a great roll when Disney purchased the company for $60 million in 1993, though the House of Mouse sold 80 percent of their stake in order to make way for their acquisitions of Capital Cities/ABC, Pixar Animation Studios and Lucasfilm, Ltd. (Disney still owns home video rights through Buena Vista Home Video.)

Those who do know Harvey Weinstein know him as a very shrewd judge of talent, and also being particularly ruthless in playing hardball. "He's the kingmaker of Hollywood these days," says one source. "He's basically the latest heir to the throne left behind by the likes of Louis B. Mayer and Jack Warner. The only other person in remotely the same position as him is David Geffen, and they share many of the same characteristics, especially in how they run their little fiefdoms and how they deal with people on their enemies lists."

This includes a lot of notable actions in which Weinstein has taken his job a bit too seriously. During the three-year period under Disney's domain, while Miramax's films were technically released by Disney's distribution arm, Walt Disney Studios Motion Pictures, Miramax kept its own distribution team in place and was granted considerable autonomy and freedom to make decisions without intervention from Walt Disney Studios head Jeffrey Katzenberg, and Katzenberg's replacement Joe Roth; he also had virtually no interactions with Disney CEO Michael Eisner. Miramax did not pick up and leave to relocate to the Disney lot in Burbank, and in many cases, Weinstein has been known to have the final say in how the films are released. He frequently tells filmmakers to retool their films to his standards, and gives edicts regarding postproduction. Most controversially, when Miramax released the 1993 Chinese film Farewell My Concubine in North America, it did so with fourteen minutes lopped off as per Weinstein's directions, much to the horror of Chinese audiences, who argued that the deleted scenes deepened the film considerably. Miramax released the long-in-the-works Richard Williams animated film The Thief and the Cobbler with heavy retooling to make it more in line with Disney's animated hits of recent times, which did not work. And when Miramax received the first licks of a special distribution deal Disney made with Japanese animation company Studio Ghibli to make English dubs of their films, starting off with Hayao Miyazaki's most recent film, Princess Mononoke, Weinstein wanted to drastically shorten the runtime and remove many of the violent and bloody scenes, a proposal that was withdrawn when Miyazaki sent him a samurai sword with the phrase "no cuts" written on the blade.

So far, pretty standard stuff regarding a bustling Hollywood mogul. But there is yet more than meets the eye, if an anonymous account from Miramax's Italian division is to be believed. This person went on the record with the condition of not revealing their identity publicly, and they say that Weinstein has plenty of secrets he wants to keep hidden. "To start out with, Harvey is a serial philanderer. He basically treats his wife like garbage by sleeping around, and he's incredibly wide in the net he casts about who he'll do it with. He will come on to any woman, regardless of their looks, their position, or their background. Onscreen talent, underlings, he doesn't care, he will approach them...even if they really don't want him to." When asked whether this means that they are accusing Weinstein of sexual harassment and/or sexual assault, the source becomes somewhat evasive. "I can't tell the women's stories, only they can do that. But I will say this much, it's not just that Harvey's a real bastard, even though he is. It's that he's incredibly unfeeling and remorseless, especially while he's been feted as one of Hollywood's biggest new powerhouses as of late."

This is not just something that happens once in a while, or even is restricted to certain locations, the source says. "Almost every time Harvey came over, there was another horror story. He is ruthless with NDAs and will not hesitate to blackball anyone he feels has crossed him." Furthermore, the source says that this is basically an open secret throughout Miramax. "More than once, someone comes to put out the fires that Harvey has set. I think they even appropriated a phrase for it, 'bimbo eruptions,'" referring to a comment made by Democratic political commentator James Carville. Furthermore, Weinstein has real juice to get away with it. "If you are on Harvey's shit list, you can kiss your career goodbye."

The major way Weinstein keeps all this under control is with an iron fist and tantrums. "Harvey is the type to rage, scream, he'll even use his fists to get his way. He gave Bob a bloody nose during a board meeting, then acted like nothing had happened. Bob can't handle his brother. He can handle the accounting and the payroll and the budgets for films, but he can't handle Harvey. To some respect, I don't envy Bob, because it's not easy enough living with Harvey, but if he's your brother, you're doubly frustrated. But if anyone should be able to put him in his place, it's Bob. I don't know why he doesn't try harder."

At the moment, Weinstein's position is quite firm, especially as Miramax gets ready to bow out its new film, Shakespeare in Love, which is clearly gunning for the Best Picture Oscar against the likes of Steven Spielberg's Saving Private Ryan. But should something change, it could potentially unravel. "I just hope that I can encourage people to do something for once."  "Miramax Board Ousts Weinstein After Scandal," by Adam Dawtrey, Variety, January 25, 1999 

In a statement given to the press, Miramax Films announced that cofounder Harvey Weinstein would be removed from the company and completely stripped of any and all connections and perks. The termination was ordered by Weinstein's brother Bob, cofounder of Miramax and also a board member, in order to take the lead after continual bad press over the last few weeks. "We are certainly sad and disappointed that it has had to come to this, but we cannot in good conscience continue with Harvey Weinstein at the head of Miramax. Knowing that he helped establish us to being what we are today makes it all the more difficult. Our hopes are that Harvey can take this moment to look at himself and come to grips with what he has become, and that he can get better. We certainly hope that for him."

The termination comes after hushed rumors of sexual misconduct on Weinstein's part, alluded to in a Hollywood Reporter article back in November, grew into a blazing inferno on January 7, when actress Rose McGowan went on the record to accuse Weinstein of sexual assault. Within a short time, other notable actresses had accused him of the same, including Gwyneth Paltrow, Ashley Judd, Asia Argento and Angelina Jolie, and their reports were buttressed by claims from lower-level Miramax employees and assistants as well. Weinstein angrily denied all the charges against him, and even claimed that the claims were a smear campaign against him launched by Steven Spielberg and DreamWorks Pictures in order to torpedo the Oscar campaign for Miramax's Shakespeare in Love and ensure victory for Saving Private Ryan. (Spielberg, for his part, retaliated back by denouncing Weinstein's claims. "To think that I would purposefully spearhead potentially slanderous false charges against a rival just to win an Oscar is beyond appalling and absurd. These ludicrous and unverified claims against DreamWorks cannot possibly stand up to scrutiny, and we'll make it a rule not to respond to any interview questions about it, and let the movie speak for itself.") Both films have also been up to fierce Best Picture competition from the likes of The Thin Red Line (Terrence Malick's return to directing after 20 years on another WWII piece in the Pacific), American History X, and (big gasp!) another Miramax release, the Italian-language Life Is Beautiful.

While there are no criminal charges currently being drawn up against Weinstein, that could change in due time. At potential odds are the statute of limitations for claims of sexual misconduct, and whether individual charges would stand up in court. There is also of course the fact that Weinstein would surely employ a high-profile defense and take advantage of any delay tactics he can muster.

As for Miramax and Shakespeare in Love, the future is very uncertain. The film had been doing very well with critics and also doing a reasonably brisk business at the box office, but the allegations certainly led to a chilling effect in which ticket sales dipped somewhat. The cast of the film, most notably including Paltrow, have stopped doing any and all promotion for the movie; Weinstein apparently had planned for them to go on an unprecedented spree of television, radio, newspaper, magazine and even Internet interviews all the way up to Oscar night. The cast also made various statements distancing themselves from Weinstein and giving support to the other accusers. Miramax will probably have a very capable replacement for Weinstein at the helm in short order, but regardless of how talented that person is, can they ride out the storm and continue with business as usual? "Miramax has always denoted a certain kind of quality and grace, had a real classy reputation," says one insider. "Now, because of Harvey, they've got quite a scarlet letter on them. And it may be impossible for them to recover. At the very least, Disney must be relieved this didn't happen on their watch."

"The One That Got Away: With Doug, Nickelodeon's Loss May Be Disney's Gain," by Claudia Eller, Los Angeles Times, March 9, 1999
Viacom's hypercompetitive chairman, Sumner Redstone, wasn't happy to learn recently that The Walt Disney Company has an animated movie version of the children's animated TV series Doug coming out this month.

It still sticks in the media mogul's craw that Viacom's hip family label, Nickelodeon, dropped the ball three years ago and let Disney get hold of one of its top-rated programs and coveted kids' franchises, one that Nickelodeon continues to rerun incessantly.

The result is sweet vindication of sorts for Disney, whose pockets Nickelodeon had picked for years when it came to children's programming. If the movie is successful, the Doug franchise could be worth more than $100 million to Disney.

When Nickelodeon failed to exercise its option to order 13 new episodes of the show after the first 52, Disney snapped up the franchise in early 1996 by making a multimillion-dollar deal with the show's creator, Jim Jinkins, and his partner, David Campbell. The arrangement included buying the partners' New York-based company, Jumbo Pictures, for about $5 million in cash and signing them to five-year contracts, with stock and options, to be Disney executives.

The deal was finalized about seven months after Disney first announced plans to buy Capital Cities/ABC. In its first season, the renamed Brand Spanking New Doug series (since called Disney's Doug to differentiate it from the original Nickelodeon series) became the cornerstone and highest-rated new program on ABC's Saturday morning lineup. In its second season, it's a key contributor to making the network No. 1 in Saturday morning ratings. Of course, some fans of the Nickelodeon series do not think that highly of the Disney/ABC version, particularly the fact that Doug's original voice actor Billy West, also of Ren & Stimpy, did not return to reprise the character, largely due to the salary needed to secure him on Disney's part.

Although Nickelodeon retains the right to distribute the original 52 episodes it financed-which still air on Viacom's United Paramount Network and in syndication and reruns on Nickelodeon-Disney bought the Doug trademark and rights to all future products in all media, including publishing and merchandising.

Bill Gross, a former talent agent who is Jumbo's senior vice president and general manager, said Jumbo is building the licensing "really slowly." Disney has active licenses with Mattel for plush toys, with plans for games and puzzles. In addition, negotiations are underway with interactive game companies for "major game publishing," Gross said.

Gross also said that Jumbo has an "aggressive" publishing program with Disney's Buena Vista Publishing Group. In conjunction with Doug's 1st Movie-which opens in theaters March 26 for a limited run of two weeks worldwide-there will be a storybook featuring new characters and a 30-minute live stage show at the Disney-MGM Studios theme park in Florida.

Like the TV series, the movie follows the misadventures of a quirky and imaginative 12 1/2-year-old named Doug Funnie and his friends, who face real kid issues as they grow up.

In a phone interview from their production headquarters in New York City, Jinkins and Campbell talked about the origins of Doug, how Nickelodeon let the franchise get away and how excited they are to be executive producers of their first movie.

Since he created Doug in the mid-1980s, "a lot of miracles have happened," said Jinkins, explaining that the character did not originate as a TV personality but rather was the result of "me doodling and amusing myself in a very, very bad year."

That year-1984-85-his career as a graphic designer and performer "dried up," a relationship failed and he suffered a sports injury.

"This character kept reoccurring-my alter ego-and he wasn't a cute 11 1/2-year-old. . . . There were some very dark things," said Jinkins, who later would base some Doug adventures on his own childhood in Richmond, Virginia. Although the series "is not autobiographical, emotionally it's very accurate," he said.

It was Campbell, whom Jinkins met at church when they both moved to New York in 1979, who prompted his friend to transform Doug from doodles and cutouts into a children's book prototype.

"It was a brilliant suggestion of mine that got turned down by all the New York publishing houses," said Campbell, who began his career in theater in New York.

Jinkins, who had worked at Nickelodeon as an on-camera performer and artist on such early shows as Pinwheel, set up a meeting with a Nickelodeon executive named Vanessa Coffey to show his book, "Doug Got a New Pair of Shoes."

Before he could even finish his pitch, recalled Jinkins, "she looked at the cover, looked at me and ran out of the room saying, 'Hey, this guy is the real deal. I want to take him to pilot.' "

When Nickelodeon's then-president, Geraldine Laybourne, signed off on Doug, Jinkins and Campbell teamed up and formed Jumbo Pictures, with underwriting from the cable channel to produce the series.

The deal called for Jumbo to make 65 episodes, which Nickelodeon would pick up at its option in blocks of 13. The first half an hour aired in August 1991, and while the show was very popular, Jinkins said it was not a "runaway hit that exploded into pop culture" like Nickelodeon's other two animated shows, Rugrats and Ren & Stimpy.

After delivering 52 Doug episodes by 1994, with the expectation that Nickelodeon would order the additional productions, Campbell said, "it came as a real big shock to us that we weren't doing the last 13 shows." The partners said although the reasons given were somewhat vague, they were aware that "the show was expensive, and apparently there was some sort of fiscal freeze on at Nickelodeon." This "fiscal freeze" is apparently the reason why there was a three-year hiatus between new episodes of Rugrats.

Nickelodeon had a two-year window when it could reverse its decision. In the interim, Jinkins said, "we scrambled," developing and producing other series, including Nickelodeon's Allegra's Window and The Disney Channel's PB&J Otter.

The partners said whenever Doug generated interest during those two years-and there was "serious interest from ABC" (before Disney's acquisition), they would inform Nickelodeon, with hopes it would step up.

Not long after Disney announced it was buying ABC, Dean Valentine, then head of Disney TV and Disney TV Animation, met with Jinkins and Campbell in New York, then followed it up with a meeting in Los Angeles with the Jumbo partners and Disney chief Michael Eisner.

Valentine, who now works for Viacom's UPN, quipped, "If I knew how my life would turn out, I would have done things differently."

Disney offered the partners "the security of buying our company," said Jinkins, "and Michael Eisner's vision of what he wanted to accomplish for children's animation was in sync with what we wanted."

At a followup lunch with Eisner, Disney Studios chief Joe Roth offhandedly suggested that Doug-which was being written as a made-for-video movie-go out as a theatrical feature, but nobody paid much attention.

Then two things happened last Thanksgiving. Paramount/Nickelodeon's animated feature The Rugrats Movie opened to great success and went on to gross roughly $100 million in the U.S, building on the success that Paramount/Nickelodeon had had in Thanksgiving 1997 with The Ren & Stimpy Moving Picture Talk-O-Rama, and the live action Good Burger in summer 1996. And Roth took home a first-cut cassette of Doug to watch with his 10-year-old daughter. She loved it.

"We had been racking our brains how to generate more theatrical product out of the Disney line," Roth said. It is also noted that the movie is still predominantly a direct-to-video feature.

"This movie is definitely a direct to video movie first and foremost," Roth said. "Our main focus on the movie's performance is on the home video sales, but I know there is a market for ticket sales at the movie theaters as well, but only for two weeks. But two weeks is enough to make a splash, and it will help ensure as many thousands of screens as possible will agree to show the movie during that period, rather than having less than 2000 screens for a full theatrical release, which this movie does not have strong enough legs for, at least not at this point in the series' history. But it will help ensure and shore up Disney's box office position before the numbers come in for Inspector Gadget, Tarzan, Toy Story 2 and Star Wars: The Phantom Menace."

Although Doug may not have the drawing power of Rugrats, it has the potential to be very profitable for Disney, given that it cost only $5 million to produce and will probably cost an additional $20 million to $25 million to market.

Disney expects that if the film grosses $40 million domestically and sells 4 million videocassettes, the company could stand to make a profit of $75 million or more, depending on how it performs internationally.

Meanwhile, Disney and Nickelodeon are said to be opening negotiations regarding the future of Doug, including having Paramount/Nickelodeon be included as profit participants in future product, sharing of each others' series on the others' networks, securing West to return as the title character, and also giving Jinkins and Campbell a nonexclusive window to let Jumbo and/or any other companies do work for other networks and studios, in addition to their Disney contract and continuing to be Disney executives. Already, Jumbo is working on another animated series for The Disney Channel, which should be ready within two years. Maybe Sumner Redstone will have a reason to be pleased after all.

Interview with George Lucas on 60 Minutes, aired on CBS March 28, 1999
George Lucas' Star Wars ''movies. You've probably wondered, "How did he do that? How did he do all those special effects?" Tonight, we'll take you behind the scenes of the new Star Wars film, perhaps the most eagerly anticipated movie ever, to show you how he does it.''

Lucas: Why don't you take this guy, put him right over here? All right, take another one like him and stick him over here.

In a darkened screening room, George Lucas is using a laser pointer to show the 45 computer animators working on his new Star Wars film, the first in 15 years, just how he wants a big battle scene to look.

Lucas: Keep this guy here, and have him firing, instead of firing off to the right, right over here.

Everybody here works at Industrial Light & Magic, the special effects firm Lucas created decades ago to create the first Star Wars. Computer technology has advanced so much since then, that the digital effects in the new episode are to the original roughly what talkies were to silent pictures.

Lucas: It's like sketching with a pencil, and suddenly somebody gives you paint, you've got all the colors. And you've always seen what you've been painting in color, but you've never had the color to do it with. So now, finally, I've got color, and I can finally paint the way I was originally seeing things, and I like that.

''So do all the animators at Industrial Light & Magic, ILM. They don't just turn out special effects for Lucas. You name it: the dinosaurs in Jurassic Park, the tornadoes in Twister, the aliens in Men In Black, they all come out of the computers at ILM. Now, with Star Wars, Lucas is expecting ILM to set a new standard in "Wow!" The work is so complicated and meticulous that each animator is responsible for two seconds of finished film per week. Twice a week, they show their "blink of an eye" shots to the boss.''

Animator: Now this is the new Darth Maul jumping off.

Lucas: Yeah, that's a lot better, I think that works way better now.

Reporter: And it's before and...

Lucas: Yeah.

Reporter: All the changes and...

Lucas: And I'm approving the changes. Yeah, I love this. This was actually on the desert in 150 degree heat.

Reporter: Now how did you do those animals? Are they camels that you've changed?

Lucas: No, they're all cyberanimals.

''Cyberanimals? Here's a new term. Actually, it's one of the big breakthroughs in the new movie. All kinds of cyber characters completely conjured up from the computer.''

Lucas: That guy's a cyber character, he's not real, the guy that was jumping.

''The way they used to make movies, that guy would've been a stunt double. In Lucas' movies, for certain shots, stunt doubles are just created in the computer. And not just doubles, he has several computer-generated lead characters full of personality, and well, humanity. Look at this early version of a scene shot on location and covered with Lucas' editing notes.''

Watto: Republic credits? Republic credits are no good out here, I need something more real.

''Back at the computer, the guy in the hat gets deleted and replaced with a digital character. Only his voice remains.''

Lucas: It's 95 percent a digital movie. Which means that it's got digital characters or digital sets or something going on. Where most movies, it's 5 to 10 minutes at the most.

Dennis Muren: George just said, "We're going to make a digital backlot movie."

Reporter: Define that, "digital backlot movie."

Muren: We shoot a lot of the scenes with the actors on small sets and a lot of bluescreens behind them, because we're gonna enlarge it, we're gonna do something you can't do any other way. We still do a lot of practical effects and whatnot, they make of a good majority of the effects shots, miniatures and sets and whatnot, and just about every location shot has considerable physical buildings and effects right there by the actors, but the digital backlot is for scenes with a lot of scale, lot of size.

On the digital backlot, a lightsaber fight can be shot like this, and then made to look like this.

Lucas: Well, like that shot you saw, of the landing platform. Well, there's a whole scene that takes place on that landing platform. You couldn't build that set, there's just no way you can actually build something like that, because it's in a completely fictitious city, a completely fictitious environment.

And when it comes to designs?

Lucas: Basically, it starts down in the library, and then it comes up here, to conceptualize and the art department designs the stuff while I'm writing the screenplay.

Lucas began writing more than four years ago, with assistance by Lawrence Kasdan, who helped write The Empire Strikes Back and Return of the Jedi, as well as writing and directing The Big Chill. Carrie Fisher, who famously played Princess Leia in the original films and who now has a budding career as a novelist and helping polish scripts for Holywood films, also chipped in, albeit uncredited in her case.

Lucas: The auteur theory of film actually is very true, if you know directors. Because they are very much like their movies. In the case of somebody who writes and directs, it is my life. I mean everything I write is my life, I'm not writing some sort of hypothetical thesis on something. I'm writing a story that I have to get extremely emotionally involved in, because it's gonna take two or three years of my life to do it. So I can't just sort of say, "Oh, this will be fun," and knock it off in a week. I have to, this is like a marriage, you have to be in love with this thing, for at least four or five years, and probably for the rest of your life.

Reporter: How much of the script is by whom?

Lucas: The characters, the plot, the scenes, the structure, it's all me. Larry and Carrie basically are there to polish the dialogue, and move certain events to a different part of the movie if it's needed, but 90 percent of the script is me. I even did the final revisions and rewrites, which I finished two days before shooting began. And this is going to continue with the next two movies, especially the second one, because it's a love story, and I'm not so good at romantic dialogue and things like that.

As the script was written, initially by Lucas alone, his team of artists, headed by Doug Chiang, started sketching and painting and modeling, working toward the Lucas seal of approval.

Lucas: I say, "I need a bunch of creatures, give a whole bunch of different creatures." So there's a bunch of artists and they all have sort of a contest. Everybody submits stuff and I say, "I like this, but I like the head of this one and and I want to put it on the body of this one. I like this, I like that, I like these features."

Special attention was paid to lead characters like this guy, named Jar-Jar Binks, a comic relief.

Reporter: How did those ears come about?

Doug Chiang: When we originally came up with Jar-Jar, he had like, short dog ears. George thought he would be more funny and have more personality with these big, elephant-like ears.

''Once Lucas approved those ears, the model was sent to ILM, and actually scanned into a computer in 3D. That's when Rob Coleman and his team of animators took over.''

Rob Coleman: The whole technology had to be developed to handle the ears, so that the interaction with the cloth and the ears with his back. So that had to be invented, that wasn't here before. There was just little inklings of it.

Lucas: And clothing, nobody'd ever done real clothing before. Realistic clothing that moves.

Reporter: And he's a major character, so he has to have a real range of expressions and emotions.

Coleman: Oh yes. We have 400 little sliders that we can change everything from cheek puffs to eye blinks to muscle bends, everything that layers in to making this character as believable as the live action characters standing beside him. The bar's at the highest when you have live action right on the screen; the audience is watching Liam Neeson, and they've got Jar-Jar there. And Liam Neeson is real, real, real, real. And we have to come up and make ours as real, because if we don't, the audience will pick up on it immediately and say, "There's something about that's not, I don't believe that."

Reporter: So you're out of the movie.

Lucas: It looks like Roger Rabbit, you can't have it be like Roger Rabbit. For 90 percent of the audience, you have to make it so that they just say, "I don't know how they did it, it just was a real character."

Some purists worry that Lucas is making his computer characters too real.

Lucas: You know, people come and they say, "Oh this digital stuff, doesn't it make everything look phony? Doesn't that make it, oh, it's not true, it's not real." I say, movies aren't true, it's all fake. The story is fake, the characters are fake, the sets are fake. There is no city there, that's not New York City. If you go behind it, it's a big piece of wood with a painting on it. And all I'm doing is, I'm taking it to the next step. And now I can create digital characters. There wouldn't be any point in creating an actor.

''He says he'll never take the step of making fake humans. He prefers his digitals to be originals, not copies. Just how big of a technical milestone will the new movie be? We went to no less an authority than Steven Spielberg, one of Lucas' best friends and biggest customers.''

Spielberg: He's now not only taken images, but he's taken skies and clouds and backgrounds and atmospheres and light and shadow, and he's painted a world that would be cost-prohibitive to do the old-fashioned way.

Reporter: And it's not cost-prohibitive?

Spielberg: Well, George owns ILM, so I'm not sure what kind of break he's getting from his own company. If I made this movie, it would cost four times what it cost George to make it.

''And it's also because Spielberg's films are bankrolled by Hollywood. Lucas is paying for Star Wars entirely on his own, despite having sold his company, Lucasfilm Ltd., to Disney back in 1996. He did not take a single penny from Disney for the budget, so he has an almost unprecedented amount of independence and control.''

Lucas: When I make a movie, I pay attention to how much it costs, but at the same time, I get to do the things that I wanna do without somebody arbitrarily coming to me and saying, "No, you can't do that." You don't need that in the movie.

''That happened to Lucas at the beginning. Studio executives virtually ignored his first full-length film, THX 1138, letting it almost die, and cut five minutes from his first hit,'' American Graffiti. That put a bitter taste in his mouth about Hollywood, and it sounded to us that his resentment is as strong as ever, despite having joined forces with Disney to release the new Star Wars film and those that will follow.

Lucas: The problem is the studio executives. The problem is that the studios used to be owned by people that cared about the movies, now they're corporations. They don't love movies, they don't go to movies, they don't know what a movie is. And they do focus groups to try and determine who will go see a movie.

Reporter: And Hollywood does that, all of it?

Lucas: Hollywood does that. And they try to change the story to fit what they think the polling results are, you can't do that, that's not the way you make movies.

Reporter: So why did you hook up with Disney, which is certainly as big a corporation as they come?

Lucas: Lesser of evils, so to speak. Not that they're evil, they're certainly not, but they're the studio I could stomach the most, and that fit me most. Because, and I told Michael Eisner this, I'm not changing the way I work to fit in more in Hollywood. I'm basically using Disney as a strategic partner to release the finished product, and that's it, everything else I'm doing myself, with my team. I have full creative control of the making of the movie, and then I release it to Disney's hands to put in the movie theaters, and later on, home video and then television and cable and so forth.

Reporter: And they agreed to let you do this?

Lucas: They agreed to let me do it, and I'm sure they'll do right in the future, after I'm finished with my story. But I'm being protective with my story first and foremost, to not be driven by focus groups and polling. Because it is not a business, you know? It's an art form.

''An art form Lucas controls completely. While his animators need his approval for every move they make, another group of artists need him to sign off on every sound effect in the movie. Ben Burtt is in charge of all that sound.''

Burtt: Very little of what is done on this film is truly synthesized. We record naturally existing sounds and modify them and process them. I have here my electric shaver and a salad bowl from home. I discovered one if I took the electric shaver and put it in the salad bowl, and move it around, you get an interesting resonance. Kinda like a musical instrument.

Lucas: When we see those big transports come overhead, they had that really weird sound, very disturbing.

Reporter: That's it, that's the salad bowl.

''Today, Burtt is putting sound into a sequence called "the Podrace." Think drag racers in outer space.''

Reporter: How long will you work on a scene, Ben? Like this one, with so many layers?

Burtt: I've been with this scene for three years.

''He has to build it in layers. First the dialogue, then crowd noise, then announcers, then finally all those engines. And Lucas is still trying to make every individual engine sound just the way he wants.''

Burtt: Each one has a separate pulse.

Lucas: Each one has a separate pulse, to show that they don't collide with each other.

A few weeks later in London, Lucas gets the final layer of sound, as a 100-piece orchestra, an 88-voice choir, and composer John Williams record a rousing score.

Lucas: I enjoy the music more than anything, because I don't have to do anything, I just let him do it. I said, "I want something very powerful, very uplifting, you know?" And he writes something brilliant.

The musical score is the only part of the movie over which Lucas does not exercise absolute control.

Reporter: You're really creating this as you go along, and the movie's coming out in May.

Lucas: Well, if you do it day by day and moment by moment, layer by layer. It's just like watching a painter, you just put on an array of colors, it's not done until it's done, you know? Until you put the final stroke on it.

''He says he won't apply the final stroke until about two weeks before the movie opens. That would be suicidal for most filmmakers, but Lucas has his own digital playground, so he can keep directing that battle scene over and over and over.''

Lucas: And this guy over here doesn't actually have to get killed. He can still be there.

"Disney And Viacom Reach Unprecedented Cooperative Alliance On Doug," by Adam Dawtrey, Variety, April 12, 1999
The Walt Disney Company and Viacom have announced that they have officially sealed a special cooperative alliance regarding the hit animated series Doug, which originally aired for four seasons on Nickelodeon before the network suddenly cancelled the series. Disney purchased Jumbo Productions, the company founded by series creator Jim Jinkins, made him and cofounder David Campbell Disney executives with Disney stock and options, and took Doug, after a notable revamp, to air during the Saturday morning cartoons lineup on ABC. Just last month, Doug's 1st Movie, a direct to video film, was released to strong sales. It also got a limited two-week theatrical run at virtually every multiplex in the world, and the short exclusive run helped spark ticket sales. $70 million in box office and millions of videotapes sold has given Disney a $75 million profit. Jumbo has also been hard at work making programming for The Disney Channel, such as PB&J Otter.

Viacom, meanwhile, has had a strong position of its own to negotiate a deal. With movies based on Nickelodeon properties like Good Burger, Ren & Stimpyand Rugrats and released by Paramount Pictures making a huge box office splash in theaters, Viacom turned its attention back to the hugely popular series that got away from them and into the arms of the House of Mouse.

The new alliance will allow Disney and Viacom to share Doug and be equal particpants in the future of the series. The show has been renewed for a final two seasons, which will premiere on ABC, and also notably will feature the return of Billy West, who voiced both titular character Doug Funnie and his nemesis Roger Klotz in the Nickelodeon series, but was replaced in the Disney era due to concerns that he might require an expensive salary after his concurrent voice acting success in Ren & Stimpy and the forthcoming series Futurama by Simpsons creator Matt Groening.

Disney will be allowed to air episodes of the Nickelodeon series on ABC and The Disney Channel, and Nickelodeon will also be allowed to air the Disney series, including the forthcoming new episodes, on its own channel. In addition, an agreement for future movies, both direct to video and theatrical, has been struck. Disney will distribute the movies, but Paramount and Nickelodeon Movies will be allowed to join as profit participants. Jinkins and Jumbo will be made Disney-owned assets and executives for life, but will be allowed to make new series and movies for other networks and studios.

"This is a wonderful day for us, for me, for Jumbo, and for Doug," Jinkins said. "We are happy for Nickelodeon to welcome him home, and we're proud to continue our relationship with Disney, which has worked out wonderfully. The success of the movie has enabled this dream to come true. The future of the series and the character is brighter than ever, and the future of Jumbo Productions is also extremely promising, especially in view of the projects to come for Disney and other interested parties."

"Jim Jinkins and Jumbo Productions are amazing creative partners to work with," Disney CEO and Chairman Michael Eisner said. "And to give the teams at Paramount, Nickelodeon and Viacom a place at the table is a great deal. Now Doug Funnie has two loving homes, and we're committed to making them as pleasant and nurturing as possible. And Jim's amazing new series are sure to be great additions in the Disney tradition."

"It is an honor and privilege to reach this unprecedented alliance with The Walt Disney Company," Viacom CEO and Chairman Sumner Redstone said. "The day-to-day life and experiences of Doug Funnie have long been close to my heart, and the hearts of everyone at Nickelodeon. To have our place at the table and continue to be involved in his journey is a proud moment for us all."

"We are proud to rejoin the life of Doug Funnie and to welcome him home," Nickelodeon executive Vanessa Coffey said. "Nickelodeon has always been proud to have him and to marvel at his experiences. Now we are able to share in new adventures to come."  "Miramax Names Daniel Battsek As CEO," by Adam Dawtrey, Variety, April 21, 1999 

Miramax Films has officially named British producer Daniel Battsek as the replacement for both Bob and Harvey Weinstein, assuming both their duties at once.

Battsek, a veteran who has worked in the UK branch of Walt Disney Studios Motion Pictures, the distribution arm of Disney, for much of the last decade, was officially chosen by the Miramax board as the ideal choice to right the ship in the aftermath of Harvey Weinstein's termination over allegations of sexual assault, and today's announcement that Bob Weinstein would be resigning for "personal reasons."

"Daniel is a consummate professional, who knows all the nooks and crannies of how to distribute films and how to market them," the Miramax press release says. "With him in our corner, we are confident that we can turn the page on all of these horrid last few months and get back to doing what Miramax does well, making movies."

"I am honored to take on the reins of leadership," Battsek says. "Miramax represents quality filmmaking, known for art house fare for the masses, and I am determined to keep their name and their legacy alive." ''' "Bob Weinstein Resigns!" by Mario Armando Lavadeira, Jr., PageSixSixSix, April 21, 1999 '''

Just three months after Harvey Weinstein was fired from Miramax, his brother Bob has announced his resignation for "personal reasons."

Hmm, what kind of "personal reasons", Bob?

I have two anonymous sources telling me that Bob has sexual misconduct allegations of his own, set to become public within days, and that he wants to seek a chance to get ahead of the curve.

Miriam, Max, you raised two fine sons, I just gotta tell you.  (OCC: Mario Armando Lavadeira Jr., known by his stage name Perez Hilton IOTL, ITTL he started blogging a year early due to butterflies, but since Paris Hilton isn't a thing yet he hasn't bothered to take up a fake name.)   "Charlize Theron, Miramax, Part Ways," by Army Archerd, Variety, May 30, 1999 

Charlize Theron and John Frankenheimer have announced that they have "mutually parted ways" before shooting was to begin on Frankenheimer's new film, Reindeer Games, for Miramax. Apparently, word came from current Miramax head Daniel Battsek that Theron's appearance was "unsatisfactory", because of her recently giving birth to twins Edward and Olivia, and the rate of her losing her baby weight was not fast enough for the company.

Theron had apparently switched to a vegan diet and been exercising regularly after the birth to speed the process up, and yet it was not considered enough. As a result, Theron's role in the film will now be played by Shannen Doherty, and she will be appearing opposite Miramax regular Ben Affleck. "We wish nothing but the best for Charlize, and are hoping to work with her for real in the future," Frankenheimer's statement reads.

At this moment, it is quite unclear what all this brouhaha will end up doing to both the film and Miramax itself, as it could easily go either way.  "The Battle of Miramax," by Adam Dawtrey, Variety, July 1, 1999 

Last night, Inside Edition aired a searing indictment against Miramax Films, current CEO Daniel Battsek, and director John Frankenheimer, regarding the sacking of Charlize Theron from Frankenheimer's upcoming film Reindeer Games, due to beliefs that she was too heavy to play the intended role.

According to the episode, Theron's husband, Nirvana frontman Kurt Cobain, was absolutely livid when he heard of the firing, launching into a vicious tirade against Miramax. Unable to be calmed down, he had to be physically restricted from calling Battsek's office to call him out, or launching any kind of legal battle.

The whole affair also appears to have severely demoralized the actual cast and crew, with Frankenheimer admitting in an interview that he was not supportive of Battsek's decision. "Charlize is a great woman to work with, and I've always considered her a friend. Daniel strong-armed me into doing this." Apparently, Doherty and Affleck also became thoroughly sick of the entire mess, with Affleck vowing on set to take a hiatus from movies, especially Miramax films, for the immediate future, though he, along with friend and partner Matt Damon, has finished filming for Kevin Smith's upcoming film Dogma, which Miramax will release at the end of the year.

The whole brouhaha comes at a bad time for Miramax, already suffering a massive black eye after the exposure of co-founder and former CEO Harvey Weinstein's alleged history of sexual assault against dozens of other women over the years. Battsek had been chosen in order to give Miramax a clean slate and right the ship, but the public brushup may only further alienate moviegoers from Miramax's output. "They really need a win to get people's minds off of Harvey. If this is how they want to go about it, they're probably not going to make it."

"Disney Absorbs Infoseek," CNNfn website, July 12, 1999
In a widely anticipated move, The Walt Disney Company on Monday agreed to acquire the 58 percent of Web portal Infoseek Corp. it does not already own, marking the latest step in the entertainment giant's efforts to develop a cohesive Internet strategy.

Disney Chief Executive Officer Michael Eisner refused to put a price on the deal at a New York press conference Monday, instead touting the deal's potential.

"We are trying to put together and isolate our Internet activities into GO.com," said Eisner, adding he hoped this would make the company nimble enough to deal with a changing Internet while keeping its operations under the Disney umbrella.

Under the deal, Disney will combine its Walt Disney Internet Group with Infoseek to create a single Internet unit, which will be called GO.com.

Disney currently holds about 42 percent of Infoseek's shares under terms of an agreement reached last June. The two firms jointly operate the GO. com Web portal.

Disney has been searching for a way to develop a winning strategy for its disparate Internet businesses, which include Disney.com, ABCNews.com and ESPN.com. Wall Street had been anticipating the company's move to absorb the rest of Infoseek after Disney confirmed last month that it was in negotiations to do so.

Eisner told CNNfn the deal puts the company in a better position use the Web to provide multimedia content online - such as Disney movies - as high-speed Internet access becomes more prevalent.

Disney's desire to take over the entire GO Network's operations is understandable, according to Barry Parr, Internet analyst at International Data Corp., particularly because it contains so many valuable Web properties.

"It controls the Web brands of ESPN, ABC and Disney, as well as the web brands for Pixar and Star Wars," said Parr. "It's not surprising that it would want to own a majority of that company."

Terms of the agreement call for Disney to hold a 72 percent stake in the new GO.com company, which will include Infoseek and the rest of Disney's Internet properties.

Disney will issue a new class of common stock to track the new company's performance, which is expected to trade on the New York Stock Exchange under the ticker symbol GO.

Infoseek shareholders not thrilled

Under terms of the deal, Infoseek holders will receive 1.15 shares of GO.com for each of their shares and will own the 28 percent of the company not owned by Disney.

Judging from the performance of Infoseek's stock Monday morning, the company's shareholders were less than wowed initially by the deal.

Shares of Infoseek fell 4 1/4 to 47 1/2 shortly before 3:30 PM ET, whereas Disney shares rose 3/16 to 27 13/16.

Infoseek President and CEO Harry Motro told CNNfn the stock's fall did not concern him.

"It's very early in the deal process. We feel very comfortable we got very good value for the Infoseek shareholder," Motro said. "The Infoseek shareholder gets to participate not only in the current assets of the Disney Company on the Internet, but the future growth of the Disney enterprise on the Internet."

Disney expects GO. com to operate at a loss for the next few years, said Steve Wadsworth, president of Disney's Walt Disney Internet Group, and said there would be a significant goodwill charge associated with the deal, though he could not specify at this point in which quarter the charge would be taken.

He also noted job cuts due to overlap were a possibility at the combined unit, which would have over 2000 employees.

Catalog to provide e-commerce

Disney plans to contribute 52.5 percent of the assets for Go.com. Those assets include disney.com, ESPN.com, The Disney Store Online and ABC.com, as well as new Web initiatives in development. Also part of the package is Disney's portion of the 10-year joint ventures it currently shares with Infoseek, including ABC News Internet Ventures and ESPN Internet Ventures.

The length of those ventures was expanded to 99 years under terms of the new deal.

The companies said their combined businesses will generate about $350 million in revenue in the current fiscal year on a pro forma basis, $200 million of which will represent Internet-related revenue.

The balance, about $150 million, will come from the inclusion of the Disney Catalog, a key part of the site's e-commerce strategy, according to Wadsworth.

"You can't compete in e-commerce without infrastructure to back it up and that's what the Disney catalog provides," said Wadsworth.

Slow takeover

In June 1998, in a deal valued at about $420 million, Disney acquired a more than 40 percent stake in Infoseek in exchange for its ownership position in Starwave Corp., an operator of online information services. At that time, Disney also said it would purchase warrants giving it the option to obtain a majority share in Infoseek in the future.

In September 1998, Disney and Infoseek teamed up to create the GO Network Web portal, which launched last January. The "Go" name replaced the Infoseek brand as the portal service.

GO Network is now one of the top five Web properties, according to Media Metrix. However, it has created little Internet buzz otherwise, according to IDC's Parr.

"The portal business is all about stealing things from the competition," said Parr. "Go hasn't done anything that anybody has stolen. Until they do something that someone wants to steal, they're just another portal."

But Jill Krutick, entertainment analyst at Salomon Smith Barney, said the deal will afford Disney the opportunity to expand its Internet business.

"The Internet is probably one of the highest-margin new business initiatives Disney has going," she said. "Ultimately, this tracking stock… gives them ready currency to do deals in the fast-paced world of the Internet, and it allows them to be a lot more flexible in changing with the Internet landscape."

Krutick added that other media companies scrambling to develop a viable Internet strategy, such as CNNfn's parent company Time Warner Inc., will likely follow Disney's lead.

Motro to step down

Infoseek's Motro said he has chosen to leave the company after a transition period following completion of the deal, which is expected to close by year's end.

"I believe in this deal and in Go.com's enormous potential for category leadership," Motro said in a statement. "As I've had the chance to reflect on Infoseek's tremendous accomplishments and growth, it has become clear that this is a perfect opportunity for me to take some time off."

Disney board and the non-Disney members of the Infoseek board unanimously approved the deal, which still requires the approval of Disney shareholders and non-Disney Infoseek shareholders.

"Disney To Sell Fairchild Unit," Associated Press, August 24, 1999
The Walt Disney Company said Tuesday it is selling its Fairchild Publications unit, whose magazines include W, Jane and Women's Wear Daily, to Advance Publications, parent of Conde Nast.

The sale price was not disclosed, but previous reports put the value of the deal at about $650 million. The companies said they expect to close the sale by the end of the year.

The deal will not completely sever Disney's relationship to some of Fairchild's publications. Advance will allow Disney's Buena Vista Internet Group to publish some material online from W, Jane and Women's Wear Daily, the companies said.

Disney and Advance also agreed to look into a joint Internet site designed for women using material from both companies' magazines, said Disney spokeswoman Christine Castro.

Conde Nast's publications include Vogue, Glamour, Mademoiselle, GQ and The New Yorker. Its biggest acquisition in the Disney deal is W, a glossy consumer fashion publication that has siphoned off apparel advertising from Conde Nast and rival Hearst Magazines.

The sale also includes about a dozen trade publications, such as Supermarket News and Home Furnishings News; a fashion textbook division; and Fairchild Urban Expositions, a trade show business that Disney co-owns.

Disney acquired Fairchild in 1995 in its purchase of Capital Cities/ABC. In 1997, Disney had announced plans to sell Fairchild, but the company quickly changed its mind.

Two years ago, Disney sold other publications, including the Kansas City Starand Fort Worth Star-Telegram and the trade publisher Chilton.

Even as its earnings and stock price continues to soar year by year, Disney has been taking steps to shore up its core businesses, its movie studio, television programming and theme parks. It also has been continually working to pay down debt incurred from the Capital Cities/ABC, Pixar Animation Studios and Lucasfilm Ltd. acquisitions, partially driving the print divestments.

"Despite Fairchild's strengths, Disney is focused on the long-term growth of our core brands and entertainment assets," said Michael Eisner, Disney chairman and chief executive officer.

Disney plans to keep Los Angeles magazine, a monthly city lifestyles publication.

S.I. Newhouse, Jr., chairman of Advance, reportedly had been in a bidding war with Hearst to acquire Fairchild. The deal merges two of the fashion world's most powerful publishers, potentially allowing Advance to offer advertisers package rates for buying space in several magazines at the same time.

"We are thrilled to acquire the Fairchild publications, since we have always had the highest respect for their journalistic quality and integrity," Newhouse said.

"Bain Backing Buyout Of DIC," by Carl DiOrio, Variety, September 18, 2000
The Walt Disney Company has inked an agreement in principal to sell animated kidvid producer DIC Entertainment in a management buyout led by longtime DIC topper Andy Heyward and backed by investment firms Bain Capital and Chase Capital Partners.

Pending deal is valued in the nine digits. Details were not available, but Bain and CCP would get substantial equity stakes in DIC.

Transaction is expected to close by month's end. The Endeavor talent agency facilitated the negotiations, with Allen & Co. acting as DIC's investment banker.

Second fiddle

Disney picked up a majority stake in Burbank-based DIC in its 1995 acquisition of Capital Cities/ABC. But despite Disney keeping up alliances with outside producers for ABC's programming and even with animation, the toonery has still been something of a poor stepsister to the House of Mouse's own animation operations ever since, especially since Pixar Animation Studios was purchased outright in 1996.

"It's the kind of thing where every now and then somebody says, 'Oh, do we own DIC?' " a source said.

Disney co-produced and distributed a live action movie based on DIC's animated series Inspector Gadget last year, and similarly partnered on its live action Meet the Deedles feature in 1998. DIC's other TV fare includes animated series such as G.I. Joe, ALF, Bill & Ted's Excellent Adventures, Dennis the Menace, Alvin and the Chipmunks (seasons 6-8), The Real Ghostbusters, Where's Waldo? and Where on Earth Is Carmen Sandiego?

Heyward acquired DIC in 1986 from French media group CLT. He retained a small minority interest in the company after CapCities/ABC acquired its stake in 1993.

Buyouts Bain's bag

Bain, best known for industrial and retail buyouts including the 1998 acquisition of Domino's Pizza, has dabbled in entertainment in recent years. The Boston-based firm's highest-profile acquisition came in 1997, when it bought video distributor Live Entertainment and transformed it into theatrical distributor Artisan Entertainment. (Bain's Geoff Rehnert and Marc Wolpow exited the firm in July 1999 to form Audax Entertainment, which acquired Bain's Artisan stake last September.)

CCP is a venture capital unit of Chase Manhattan. It has investments in entertainment companies such as music distrib Alliance Entertainment, music venues proprietor House of Blues and theme parks operator Six Flags.

"It's very difficult to come in and take a small, independent Hollywood company, turn it around and build it into something big," said analyst David Davis, a senior VP at investment firm Houlihan Lokey Howard & Zukin in Los Angeles. "But you can't argue with Bain's success with Artisan, where they've taken a small independent film and video company like Live Entertainment and turned it into a virtual mini-major."

Of the pending DIC sale, Davis added, "Disney doesn't need a competing television animation group."

Officials at companies involved in the deal declined comment.

"Disney Announces New Alien Attraction," Orlando Sentinel, November 2, 2000
Walt Disney World has announced that it will be closing its polarizing attraction Alien Encounter, currently housed in the Tomorrowland section of the Magic Kingdom, shall be closed after New Year's Eve. It shall be replaced by an attraction based on 20th Century Fox's Alien franchise, keeping the same ride mechanisms and mechanics as Alien Encounter.

Alien Encounter is a dark ride attraction utilizing binaural sound, rear-projection screens and various other effects to create a sensory experience in total darkness. The story revolves around a special presentation of teleportation technology by intergalactic conglomerate XS Tech, which ends up going wrong as an alien lifeform is accidentally pulled in and teleported to Earth. The attraction and its preshows feature the talents of Tyra Banks, Tim Curry, Jeffrey Jones, Kevin Pollack and Kathy Najimy, and was written and directed by Jerry Rees, and co-produced by Walt Disney Imagineering and George Lucas.

The attraction has been very controversial and considered far too scary and intense for small children, with parents claiming a lack of fair warning. Mature audiences have enjoyed the attraction immensely, calling it groundbreaking and thoroughly immersive with complex technological needs. Now, an attraction based on Ridley Scott's 1979 film Alien and James Cameron's 1986 sequel Aliens, which was the original planned tenant for the site, will be created, with a tentative opening date in November 2001. It is also planned to open the attraction in Disneyland, Disneyland Paris and Tokyo Disneyland, as well as any future park locations, within a very short period of time. The new attraction will also be written and directed by Jerry Rees and co-produced by Lucasfilm Ltd. and Springbok Productions alongside WDI, under a license from Fox and Brandywine Productions.

As a consolation to disappointed fans of Alien Encounter, Disney has announced that a professional film crew will capture the attraction for posterity for a special home video that will be sold online. The video will also include some new footage specially shot just for the package not present in the attraction itself, to expand the story.

"DIC Plays New Toon," by Charles Lyons, Variety, November 19, 2000
Animation magnet DIC Entertainment has hooked up with Bain Capital to buy its own assets from The Walt Disney Company in a deal worth nine figures.

DIC has been a Disney partner since the studio acquired Capital Cities/ABC in 1995.

DIC chairman and CEO Andy Heyward told Variety that the deal is a "complicated transaction that involved cash consideration as well as licensing other DIC properties in the future."

The move away from Disney means DIC can develop projects outside of the House of Mouse. It also offers the company a variety of distribution outlets.

DIC will continue collaborating with Disney on existing projects, including the development of a sequel to Inspector Gadget and work on Sabrina, the Animated Series for ABC's One Saturday Morning block. Also ongoing is Madeline for The Disney Channel and two animated direct-to-video films for distribution through Buena Vista Home Video. In addition, DIC programming will continue to include a substantial portion of the Toon Disney schedule. DIC will also keep producing new content for Disney/ABC, in addition to its newfound independence.

"Bain is a financial alliance for us," said Heyward. "Disney is a strategic partner. Bain's interest is to see us maximize the product and grow the business."

Through the buyout, DIC now independently owns the second largest library of American animation in the world, with more than 2500 half-hours of programming. Heyward will continue as chairman and CEO of the animation studio.

"DIC and The Walt Disney Company have enjoyed five exciting years together, but we desired to return to our roots as independent producers of children's content for the worldwide market," said Heyward. "While we continue to be a supplier to myriad Disney units, our independence will facilitate a more diversified slate of programming and help build upon our stature as a premiere global supplier of children's entertainment."

Joe Pretlow, managing director of Bain Capital, said: "We are excited to partner with Andy and his exceptional management team in acquiring one of the world's leading children's content companies. We believe DIC's strong library and character franchises combined with its exciting slate of new productions will provide the company with substantial growth opportunities and position it as a leading entertainment consolidator."

DIC is ramping up production to 200 half-hours per year.

Along with Liberty's Kids, a new series based on American history in production for PBS along with the newly launched animation division of Kurt Cobain and Charlize Theron's Springbok Productions, DIC is at work producing four other series.

At MIPCOM, DIC recently announced the relaunch of its international sales division and a newly reassembled sales force. The company unveiled a broad slate of animated programming, including its new properties Super Duper Sumos, Salem, Action Girls and Gadget and the Gadgetinis.

Headquartered in Boston with offices in New York, San Francisco and London, Bain Capital is a global private equity firm that manages several pools of capital, with over $12 billion in assets under management.  "Is Miramax a Sinking Ship?," The Hollywood Reporter, January 27, 2001 

Things are certainly not looking good for Miramax Films these days. The 22-year-old company founded by Bob and Harvey Weinstein and formerly a crown jewel of Disney has been struggling mightily ever since the scandals that led to Harvey Weinstein's ouster. Furthermore, the film Miramax had been promoting and pushing for Oscar gold at the time, Shakespeare in Love, lost the most important nominations for Best Director, Best Actor and Best Picture, even with winning other notable Oscars including Best Actress for Gwyneth Paltrow and the Best Supporting Actress award for Judi Dench for her portrayal of Queen Elizabeth I in that film. Losing Best Picture to Steven Spielberg's Saving Private Ryan, Best Director to Spielberg, Best Actor to Tom Hanks, and seeing Ryan win a total of seven awards compared to Shakespeare's six added up to a firm rebuke that definitely seemed to suggest that the bloom was off the rose, and that the company could only be in the throes of a death spiral afterwards.

Those fears seem very well-founded. British producer Daniel Battsek, who took Weinstein's place, certainly has the pedigree and talent to fill the void, but he doesn't have the press savvy that Weinstein had at his disposal. This was most apparent in the brush up with Charlize Theron, when he ejected her from John Frankenheimer's Reindeer Games and replaced her with Shannen Doherty, claiming that after giving birth to her twins Edward and Olivia, she was too heavy to play her intended role. Theron of course went on to announce the founding of Springbok Productions with her husband, Nirvana frontman Kurt Cobain, which will be releasing its first project this spring. Furthermore, the fiasco over the film effectively made male lead Ben Affleck announce that he was planning a hiatus from most films, with the exception of appearing in Kevin Smith's upcoming Jay and Silent Bob Strike Back, and founding a production company, Pearl Street Films, with friend and partner Matt Damon. When all was said and done, there was not even a boost in the sense of "what's all the drama about? Let's see what caused such a fuss," as Reindeer Games was an abysmal failure with critics and at the box office.

While there have been bright spots still, Miramax's output has suffered during the last two years, with diminishing returns. And Weinstein's misdeeds and Miramax's reversal of fortunes have had splash effects elsewhere. DreamWorks Pictures was made to rein in their Oscar campaign for Sam Mendes' American Beauty, despite its massive critical acclaim and box office returns, because of the nature of the plot, and ended up with only one nomination, of Kevin Spacey for Best Actor, which it did not win. (DreamWorks certainly did not suffer too long in that regard, as Ridley Scott's Gladiator has the potential to win big this year, as well as Cameron Crowe's Almost Famous, because of Crowe's insistence on having his director's cut be the version released in theaters, which led to it making a modest profit and big hopes for Kate Hudson winning Best Actress for her portrayal of Penny Lane.) It seems undeniable that Miramax, once one of the biggest emerging powerhouses in the film industry, is now flailing about miserably, its various "post-Harvey" projects failing to gain any traction.

The other major problem is that without Weinstein, there is no real singular figure that could be considered the main mover and shaker in Hollywood, the one that everyone flocks to and wants to work with, which of course could be more of a good thing. "In many ways, Harvey Weinstein basically had attracted a cult of personality," says a former Miramax staffer. "That's not a particularly healthy way to operate. If business is far more amorphous, maybe it'll be a better way for the cream of the crop to make themselves known and rise to the surface. Plus, having it be more competitive in that regard could really help matters especially regarding how the studios and their boards operate."

None of this helps Miramax itself, which is strongly hinted to be on its last legs. Rumors are spreading that the newcomers that everyone can't stop talking about, Springbok, will snap up Miramax in a merger, or that Disney will reclaim the library of Miramax films and now have them under the Touchstone Pictures banner.

"Disney to Discontinue Go. com Banner," by Arthur Gordon, siliconvalleyinternet. com website, January 29, 2001
The Walt Disney Company today announced that it will discontinue the operation of its Go. com portal and convert all outstanding shares of Disney Internet Group common stock into shares of Disney common stock effective March 20. Walt Disney Internet Group will continue to operate under its current management structure as a business segment of Walt Disney Co.

"The Internet continues to be a central focus of our company's business strategy," said Michael Eisner, chairman and CEO. "We believe this action should help us gain greater competitive advantage as we leverage Disney's creative content, brands, and other assets."

"The competitive factors that initially compelled us to establish a separately traded class of common stock tied to our Internet operations have fundamentally changed," Eisner added.

Steve Bornstein, chairman of Walt Disney Internet Group, added: "This is a difficult decision, as it impacts both our employees and Go. com users. However, the Internet environment has continued to shift and change, and therefore our strategies must also change."

The closure of Go. com will affect approximately 400 employees, the majority of whom are based in Sunnyvale, California.

A streamlined version of Go. com will continue to operate for a period of time to allow for the transition of its users. The company will continue to operate and support the Infoseek search engine and associated traffic during this time.

Disney is evaluating various alternatives for the Go. com assets, including the sale of the Infoseek search engine and site traffic.

In November 1999, shareholders of Disney and Infoseek approved the creation of an additional class of Disney common stock to reflect the performance of the new Internet business called Go. com-later renamed Walt Disney Internet Group.

In accordance with the terms of the company's certificate of incorporation, each outstanding share of Disney Internet Group common stock will be converted into 0.19353 share of Disney common stock as of March 20. The conversion is expected to result in the issuance of approximately 8.1 million new shares of Disney common stock.

There are currently 2,086,258,193 shares of Disney common stock outstanding, and an additional 158,509,549 shares of Disney common stock are issuable upon exercise of outstanding options.

The decision for Disney to buy an Internet portal to compete with Yahoo!, AOL, Excite/Excite At Home, Lycos and the nascent Google ended up becoming one of the rare mistakes by CEO Eisner, under whose stewardship Disney has had an unparalleled renaissance. Apple and Pixar Animation Studios CEO and Disney board member Steve Jobs was the lone voice admonishing the Eisner and the board not to go through with the deal, but was overruled.  "Miramax Shuts Doors, Disney Reclaims Library," by Adam Dawtrey, Variety, March 3, 2001 

Miramax Films officially announced today that it is shutting down all operations, due to massive operating losses in both profits and reputation that were simply insurmountable. Mass layoffs are expected to occur. Meanwhile, Miramax's former parent, The Walt Disney Company, will repurchase the Miramax name and library for the rock-bottom price of $6 million, a tenth of what Disney originally paid to buy it back in 1993. Miramax will now be folded into Disney's Touchstone Pictures banner, and its library added to Touchstone's filmography. Miramax's sub-imprint, Dimension Films, will fully retired. All new forthcoming Miramax and Dimension projects will be split either between Disney's Touchstone Pictures or Hollywood Pictures imprints, or have the option to farm out projects to be released by other studios.

"This is a sad day for Miramax and for filmmaking in general," Miramax head Daniel Battsek said. "It is simply a massive loss for all of us, and a name that represents quality, fine drama, and artistic merit, has to be lost. But we remain proud of what we at Miramax have achieved over the years, that we entertained and mentally invigorated film lovers everywhere, and we are happy and pleased that Disney will maintain great stewardship of our legacy."

"We are quite proud to have Miramax back in our corner and to officially merge it with Touchstone and Hollywood Pictures," Walt Disney Studios chair Peter Schneider said. "Miramax represents quality filmmaking, and artistic expression, and the Touchstone and Hollywood imprints have been happy to do likewise, showing that Disney is more than strictly focusing on family-friendly entertainment. The value of these films cannot be estimated, and we will make sure that audiences will continue to enjoy these films for years to come."

"I am quite happy with the results of today's news," said Michael Eisner, CEO of The Walt Disney Company. "I knew back in 1993 that Miramax represented a massive quality that added significant value to Disney, and was certainly sad by the necessity of having to let it go. Now we are back, and we will take good care of it and ensure that its legacy will endure."

Miramax Films had been founded in 1979 by Bob and Harvey Weinstein, and made a name for itself in the distribution of indie films and finding and nurturing artistic talent. The company had been buffeted by bad publicity when Harvey Weinstein's history of sexual assault had been exposed two years ago, leading to his ouster from the company and a humiliating Oscar defeat of its then-current film, Shakespeare in Love, to Steven Spielberg's Saving Private Ryan.

"Disney Offloads Several Miramax Projects," by Adam Dawtrey, Variety, March 25, 2001
Nearly three weeks after Miramax Films closed its doors and The Walt Disney Company moved its operations into its Touchstone Pictures imprint, Disney studio chair Peter Schneider announced that it was exercising its option to farm out projects to other studios, and getting rid of several already in development because, "it was felt that they did not fit the Disney brand or contain what audiences look for in Disney films."

Schneider did not announce how many projects were let go, but some sources believe it is somewhere between 12 and 20, and that they represent only a tiny fraction of of the overall total. "Miramax had literally hundreds of projects, in various stages of development, kept in warehouses full of boxes of material," says one source close to Disney. "We simply decided to get rid of a few that did not particularly fit us." The projects being offloaded are being spread among several different studios, notably Paramount Pictures and New Line Cinema.

Schneider did confirm that two major projects being released for New Line were Below, a thriller set in a submarine, and Equilibrium, a dystopian sci-fi action film in the vein of The Matrix. New Line will release both films some time next year. "We are quite pleased that New Line has accepted the projects and are convinced they will do amazing things with them."

Miramax Films, long known as the prestige art house arm of Disney after purchasing the company for $60 million back in 1993, had been hailed as responsible for bringing vibrant and creative indie fare to multiplex audiences. Disney spun off 80 percent of its stake from 1996 to 1998 to facilitate its purchases and integration of Capital Cities/ABC, Pixar Animation Studios and Lucasfilm Ltd., all within 1996. During the Oscar campaign for Shakespeare in Love, dozens of women came out alleging cofounder and studio head Harvey Weinstein of sexual assault, leading to his ouster from the company and a forthcoming criminal trial that is currently percolating.

Miramax valiantly tried to soldier on by hiring Daniel Battsek as Weinstein's replacement, but it was continually rocked by negative publicity and bad box office takes for all but a select few notable films. On March 6, Miramax announced it would be shutting down and its employees laid off, with Disney fully repurchasing the company and its film library for a mere $6 million, as well as folding it into Touchstone Pictures and retiring the Dimension Films banner. The remaining projects that Disney will release will largely be released under the Touchstone name, though the Hollywood Pictures imprint will also get some films.  "Q&A: Michael Eisner," Newsweek, June 20, 2001 

Q: All elements of the company are doing so well, even elements that were initially struggling, like Disneyland Paris, ABC, and whatnot. Why has that been?

A: Well, after Frank Wells died, I admit that was I was lost for a bit. I did try to take on far too much to compensate. Thank God for Bob Iger and John Lasseter, they really helped pull us out of a rut. And me...I didn't think I'd really recover after losing the chance for Disney's America, but I've come back, better than ever. They also made me realize that a lot of the ideas I had wouldn't have worked. I'd been gung-ho for a second gate at Disneyland Paris to open by 1999, a replica of MGM Studios, but they made it clear that it would've jeopardized Disneyland Paris' newfound profits thanks to Discoveryland's Space Mountain. We will still build it, of course, but when we can actually afford to do it. Our original Anaheim second gate was to have been called California Adventure, but then they helped me realize that would've been redundant and opened up more Euro Disney mockery. So, I guess I have been humbled somewhat. But not to where I don't have ideas. In fact, we plan in the next decade to expand into Shanghai, Hong Kong, and our original Euro Disney site, Spain. We truly will now launch Mickey's Millennium!

Q: Disney just announced that Miramax will be repurchased and folded into Touchstone. How aware was Disney about the stories concerning Harvey Weinstein?

A: I never had a close relationship with Bob or Harvey, so I wouldn't be in any position to judge if I heard rumors about him, or think anything of him being other than a great eye for talent. But you do have to admit, detestable as Harvey is, Miramax made many classic films. That's a body of work that can't simply be ignored and shunted off.

Q: What are your thoughts about Kurt Cobain, Charlize Theron and Springbok Productions?

A: We are honored to have a chance to work with them. In fact, Touchstone will be the distributor of the next projects of Quentin Tarantino and Kevin Smith, which Springbok is producing. And there's bound to be room for Springbok TV projects on ABC. Maybe, if we'd known what they were going to do, we would've asked for more money regarding the Nirvana documentary's broadcast. (chuckles)

Q: What's gonna happen when Mickey enters the public domain, which will happen quite a bit sooner since the DMCA did not end up the way you wanted, and was enacted without the Copyright Term Protection Act?

A: (long pause) I just hope that people will at least recognize what Mickey is meant to be and react accordingly.

"Disney-ABC Television Group Announces Jetix Expansion," BusinessWire, July 14, 2002
Burbank, CA and New York-The Disney-ABC Television Group has announced it will be restructuring its premier children's network, The Disney Channel, with a new programming block.

To take advantage of its recent acquisitions of Fox Family Worldwide and Saban Entertainment, The Disney Channel will be launching the programming block Jetix, a combination of live action content such as Power Rangers as well as English dubs of anime content. This will feature Saban Entertainment properties, as well as linced content from other anime dubbers and producers such as Viz Media and Ocean Productions. It is also anticipated to be another window to include television broadcasts of English dubs of Studio Ghibli projects. The Walt Disney Company is also contemplating creating its own division for English dubs of anime projects.

The channel will soft launch a test run on August 25, to determine viewership interest in the block. Meanwhile, Disney-ABC Television Group will contemplate the future of certain programming blocks, such as the Playhouse Disney block, to determine the best options for it. This will also influence decisions regarding other live action and animated programs on the channel, and forthcoming projects such as the animated TV series adaptation of W.I.T.C.H.

"Day one of an exciting new era for Disney-ABC Television Group is among us," Disney COO and President Robert A. Iger said. "I foresee great opportunities and opening new windows for us. The Disney Channel and ABC have cotninued to grow exponentially together since 1996, and we plan to keep the progress running."

"Disney Postpones Treasure Planet," by Paul F. Duke, Variety, July 26, 2002
Disney announced that its forthcoming animated film Treasure Planet, a space-based fantasy update of Robert Louis Stevenson's Treasure Island, is being postponed from its planned November 25 release date to an unspecified date next August. Disney admitted that this decision was made because November would feature stiff competition from the Springbok Productions/Don Bluth animated film adaptation of Dragon's Lair and the eagerly anticipated Harry Potter and the Chamber of Secrets from Warner Bros.

"It just wouldn't be fair to put it up against Harry Potter. We want to give Treasure Planet as much breathing room as possible to try and get another hit like Lilo & Stitch," Disney CEO Michael Eisner told the press.

Eisner also announced that Springbok was in talks to finance the ABC soap Port Charles, a 30-minute spinoff of General Hospital, to ensure its survival, but the deal was tentative and being debated by Disney-ABC Television Group head Anne Sweeney and ABC Daytime's new head Brian Frons.

"Exploring A New Universe," by Ron Magid, American Cinematographer, September 2002
George Lucas began his career as an editor and a cinematographer (he was one of several cameramen on the Rolling Stones concert film Gimme Shelter), but his frustration with the tools of his trade, coupled with his desire to tell stories that were galactic in scope, drove him to seek new ways to make films. Today it can be said that few have impacted the craft of filmmaking more than he has. The ultimate noodler who enjoys seeing his films come together in editing, Lucas has transformed the medium into a postproduction fantasia.

Cinema was the art form that helped define the 20th century, and Lucas is passionate in his conviction that its expression in the 21st century will be digital. The latest installment in the Star Wars saga, Episode II: Attack of the Clones,was the first major Hollywood feature to be captured digitally, on 24p high-definition video cameras. But in his determination to push the medium of cinema with new technologies and techniques, Lucas has encountered both support and skepticism. Attack of the Clones ' extremely high profile situated him at the center of a raging debate over the merits and drawbacks of digital technology, which is seen by some as a viable alternative to traditional film-based methods, and by others as a concept that still requires a great deal of refinement.

Lucas recently discussed his impressions of the evolving technology with Ron Magid, American Cinematographer's visual effects editor.

American Cinematographer: If there indeed is going to be a digital revolution, what will it look like?

George Lucas: I've always [said], "This is like the film industry in 1902," so the advances are going to be huge, because what we did on Attack of the Clones, we did in essence by ourselves. We had to talk Sony into it, [but] they built the cameras and they tried really hard to make this work; we also had to talk Panavision into committing a lot of money to build those lenses. Both companies really went out on a limb. This was a giant experiment for everybody, and nobody knew if it was going to work or if they were pouring money down a rat hole.

Now that the whole medium is opening up, there are lots of lens manufacturers out there building lenses and lots of other camera people building cameras, so you've got competition. And once you've got competition, you're going to get a lot of people making vast improvements on the system. They've already got a 10 million-pixel camera, and that's just happened in the last year, so [the potential has] gone from 2 million to 10 million – and that's much, much higher quality than film. Any other issues out there will eventually be addressed, because a lot of cameramen are going to use the technology [and] say, 'I want it to do this or that.'

There is so much misinformation being put out there by people who have interests other than the quality of film. They're determined to slow this down or stop it, but they can't. It just won't happen. It was the same with digital editing – for the seven years that we had EditDroid [almost] nobody would use it, and even after we sold the company to Avid another two or three years passed before they got anybody to use it. All [digital technology] does is give you more to work with. It's a much more malleable medium than film, by far; you can make it do whatever you want it to do, and you can design the technology to do whatever you want to do. This whole field is really going to ramp up in the next 10 or 20 years.

''Many filmmakers have a wait-and-see attitude, which is to be expected. Some early filmmakers resented sound, and Orson Welles insisted till his dying day that a good color movie had never been made.''

Lucas: And those criticisms are valid. There is the very real issue that you are going from a photographic medium to a painterly medium, and for those who are really wedded to the photographic process, that's going to be a tough thing to get around. It's very much like going from frescoes to oils – one is very rigid, very disciplined, very definite about the way it works, and the other is much more open, offers you more options and enables you to manipulate the pictures more, and I think that bothers people. But audiences can't tell the difference. We knew that right from the beginning because we shot [parts of] The Phantom Menace digitally, and nobody could tell which shots were digital and which weren't.

As Attack of the Clones ''unfolds, it seems as though a new style of filmmaking is evolving, particularly in terms of the stunt and effects sequences, which felt more believable because there was less cutting around to hide the tricks. Have digital tools allowed you to develop a different style?''

Lucas: The reality of how you're shooting and the limitations of what you have to work with sometimes determine how you shoot a scene, and now that's less of a factor with stunts. I don't know if it's a different style, but it's a very different process now. I've refined the process of working more visually; I shoot for a period of time, about 60 days or so, and then I stop and work on the film for a while. Then I come back and shoot for another 10 days or so, and then I stop and go back and work on the film, rewrite and change things, and then I come back and shoot for another week. I do it in pieces rather than in one long shoot. That way I can actually look at what I'm doing, cut it and study it. The previsualization process [allows me to] put scenes together without having to shoot them, see how they fit in the movie and then, if they work, I can cut them in and actually go out and shoot them. There's a lot of freedom and malleability that didn't exist before. It's easy to move things around in the frame, to change various visual aspects of the film, which just wasn't possible before. It's the same kind of thing that you find in still photography if you use Photoshop.

''Lesley Vanderwalt, the film's makeup artist, has said that sometimes the hi-def images were so clear that smudges and brushstrokes were visible in the actors' makeup. What strategies did you employ for makeup, costuming, props and sets to work with hi-def as opposed to film?''

Lucas: We used filters to soften the image and make it a little less sharp so we could get away with more, but you do have to be very careful [because] you can't get away with as much fudging as you used to. The sets, costumes and makeup have to be more finished. It's going to require refinement in all the crafts because the digital image is so much sharper. It's easy to degrade the image. You can hide all the little seams and imperfections that inevitably show up on props and sets and costumes simply by putting a filter on the camera so that the image is a little smudged, or you can have everybody come up a notch so you can do a really sharp close-up on somebody's face without seeing the brush marks on the makeup.

Were there any other restrictions you had to address when working with hi-def?

Lucas: There are certain issues with action perpendicular to the lens, when you're panning with the [actors], which created effects that we weren't completely happy with, but part of that is because I shoot in pieces. I'll shoot a person running across the screen, and then we'll put the background in, and it's really only when you get all the elements pulled together that you finally get to see what you've created. So there are certain [shots where] I wouldn't pan with people running completely perpendicular to the camera because it strobed. We also had little problems with softness on certain lenses, because these are all Beta cameras and Beta lenses, but that's been fixed.

''We've heard reports that the cameras were less efficient on location than they were in the studio, particularly during the shooting of multiple-camera exterior sequences. Is hi-def practical for extensive location work or for extremely mobile camera setups?''

Lucas: We never had a problem with the cameras, ever. We shot in very difficult locations and in 135-degree heat; we were shooting in and around the water and in the rain, and we had no breakdowns or problems at all. We were running cables because this is Beta, so everything was backed up six ways from Sunday; on location, we were running cables farther or over difficult terrain. But we were just as fast and efficient on the locations in the middle of Tunisia [as] we were in the studio.

Did all of the cables limit the kinds of shots you wanted to achieve?

Lucas: Not really. You can go a long way with those cameras. Obviously, if we were on location and we wanted to go a quarter mile up the road, we just unhooked the umbilical cord because we didn't need it. The cameras have recorders built in, exactly like TV cameras. But because these were the first seven cameras that were built, everybody was very nervous – I think Panavision and Sony were more nervous than we were – so we were double-backing up our recorders with two recorders. We did shoot some material without backing it up. The second unit didn't want to bother, and it worked fine.

We now own other cameras that don't have recorders in them, and we use them at ILM, where they want the cameras to be very small. They're about the size of a small book, and we do umbilical them because [the effects cinematographers] prefer to use them that way for motion-control or [to get into] very small [places].

''Why did you opt to use hi-def instead of VistaVision for miniature effects photography? We understand that this choice created some problems.''

Lucas: The only problem it created was that we had to reinvent the system. We had to get new cameras and build the system rather than just use the system we had. But I wanted Episode II to be consistently digital; I didn't want to have to use film. Film ultimately is very cumbersome. It's like working with the lights out – you can't see the work until the next day. Being able to look at what you're doing while you're doing it, without having to run to the lab or [hurrying] because you want to break down the setup and all that, makes hi-def a much more efficient way of shooting visual effects.

But the visual effects cinematographers on Attack of the Clones ''said it was a struggle to get the proper depth of field on miniatures because the cameras can only capture at 24 frames per second, so they couldn't do 1-fps exposures. They said the model sets were sometimes melting because of all the light required.''

Lucas: To be honest, I never heard of a set melting. They didn't have to pump all that light in there. You can shoot at extremely low footcandles and make hi-def look excellent. And you can actually maintain the same depth of field with hi-def that you can with film. You still have a higher range than you do on film, so if you have to light it up for digital, you have to light it up twice as much for film. But regardless of whether we had to do several passes at ILM, we saved millions and millions of dollars shooting digitally.

Was any portion of Attack of the Clones shot on motion picture film?

Lucas: Yes. We took a scene in the Jedi temple out of The Phantom Menace, which was shot on film, and we erased all the characters and put in a new background and new actors, so it's an actual photographic set with digital characters and digital backgrounds outside the window. So in a way, we had a filmed set, but that's the only film in the movie.

Given that you now have the ability to endlessly tweak and repurpose shots like the one you just described, is there such a thing as having too much control over your images?

Lucas: I don't know, you should ask a painter. Having lots of options means you have to have a lot more discipline, but it's the same kind of discipline that a painter, a novelist or a composer would have. In a way, working in [digital] is much less frustrating than working in film, but it's not as though it's limitless no matter how you go. The artist will always push the art form until he bumps up against the technology – that's the nature of the artist. Because cinema is such a technological medium, there's a lot of technology to bump into, and I think as more people use digital they're going to find [it has] a lot more limitations. Some of those limitations will be [equivalent to] the limitations they had with film, and some of those limitations will just be because they've gone so far that they finally bumped into the technological ceiling.

Because there are no set standards for digital cinema, did the Attack of the Clones ''digital film file have to be tailored to each of the digital projection systems currently in use? How do the differences among the servers affect the image quality?''

Lucas: I haven't really checked out the various digital theaters yet, but I've seen the film digitally projected on several different systems and they're comparable. You'd have to run back and forth to actually see whether there's a difference, and if there is, it would be very highly technical. But whenever you have different projectors, you're going to have differences. You have that with film – you go to one theater to see a film and it's fine, and you go to another theater and the footcandles are way down, [the image is] fuzzy and the left corner of the frame is completely out of focus. That just has to do with that particular projector and that particular theater, and you're going to have that with digital projection, too.

I don't know whether anyone has actually done any studies [comparing the various digital servers]. The important thing is that they're all compatible in terms of us doing our transfers and sending the files. You have to make several different kinds of transfers for different media, anyway, whether they're sending by satellite, disc or cable. I don't think we made many adjustments to the various versions of Attack of the Clones that we did for the various systems.

Is it true that you recently assembled a forum to explore the state of the digital art with a number of directors?

Lucas: Yes. Because there are so few of us working in the theatrical digital medium, about a half-dozen, we decided we should all come together to talk about our experiences and share information. It was a two-day conference, and there was a lot of discussion, mostly from the point of view of the director. This was before Attack of the Clones was released. I showed that movie, Robert Rodriguez showed part of Spy Kids 2, Francis Coppola showed part of the film that he's shooting, Jim Cameron showed his 3D underwater movie (Ghosts of the Abyss), and Michael Mann showed a little bit of Ali because parts of it had been shot [with digital cameras]. Pixar showed some [footage] digitally and on film [to demonstrate] what happens to [images] after about three weeks of being on film; you could really tell the difference between the film version and the digital version.

We invited a bunch of directors, including Ron Howard, Bob Zemeckis, Steven Spielberg, Marty Scorsese and Oliver Stone. There were a lot of skeptics, and Marty, Steven and Oliver asked very hard questions. But when you get the answers, you say, 'Oh, it's not the big boogeyman that everybody says it is.'

James Cameron recently told The Hollywood Reporter that you showed him tests that led him to believe 'the Sony HD 900 series cameras are generating an image that's about equivalent to a 65mm original negative.' How can you acquire more information on HD tape than on 35mm film, given that no one else shooting HD is able to capture that much information?

Lucas: We don't have a bias. For the short time being, the test is really Attack of the Clones. You [watch it] digitally projected and say either, 'It looks like s**t' or 'It looks great.' If that isn't enough, then wait till Spy Kids 2 comes out. In the end, cinematography is not about technology; it's about art, it's about taste, it's about understanding your craft, it's about lighting and composition, and anyone who gets off on technological things is missing the point. I care about good lighting and good composition. I'm not interested in an engineer who knows a lot about the technology; you get into these kind of arcane discussions about 'black curves' and things that no audience is ever going to see.

All of us [working in digital] are using different styles of photography, different kinds of conditions and different kinds of lighting. Coppola has just shot some unbelievably gorgeous material, wide shots of cities with incredible detail at magic hour and all kinds of available light material, whereas Rodriguez has lit his to be very bombastic color, really exuberant and wild. So it doesn't have to do with the technology, it has to do with the eyes of the filmmakers working in the medium and what they want to do with it.

What happens after Episode III?

Lucas: I'm going to do other types of projects, things that I've wanted to do for a long time, definitely a very different kind of filmmaking than what I've been engaged in for the last few years. I'm just somebody who's trying to tell stories, and in order to tell the kinds of stories I've wanted to tell I've had to push the medium. But all the directors and cameramen I know push the medium. They're always trying new things, trying to get a different look or push something a little further by using a new trick or a new technology. That's the nature of the business. Everybody does it, but I get more attention for it.  "Eisner Shocks Public With Desperate Ploy To Keep Mickey," by James Bates, Los Angeles Times, January 1, 2003 

Right before midnight on New Year's Eve, Michael Eisner, CEO of The Walt Disney Company, made a filing to the U.S. Copyright Office to deny the planned transfer of Mickey Mouse to the public domain, which was scheduled to take effect on the stroke of midnight. In the filing written by Eisner, it claimed that Mickey could not enter the public domain because of a loophole in which such transfers do not occur until a set period of time after the death of a work's creator. Furthermore, he claimed that Mickey was created not by Walt Disney, but by animator Ub Iwerks, who died in 1971, four and a half years after Walt.

This act completely shocked the public with its brazenness in terms of denying a lawful and agreed upon process, and for its blatant historical revisionism. It has long been a source of pride, after all, that Walt Disney created Mickey Mouse, and this type of legal gaslighting has drawn universal condemnation. Angry fan messages have flooded the Internet and the Disney corporate offices, and efforts to create a boycott of Disney's products and theme parks is being bandied around.

"Mr. Eisner's little stunt does not change history or the truth," the Copyright Office states. "Mickey Mouse was created by Walt Disney, and Mickey enters the public domain on New Year's Day, 2003, as scheduled. Entering public domain does not mean that Disney cannot still use Mickey, and much can still be done by them. What it does mean is that Disney is no longer the sole arbiter in how Mickey is used, and opens up the potential for being used for the purpose of parody and satire. Mr. Eisner cannot keep that from happening, no matter how hard he wills it."

Indeed, everyone has been left scratching their heads, wondering how Eisner, who has long been celebrated as a creative visionary for helping marshal the so-called "Disney Renaissance", could have blundered into such a decision. It represents a shocking, out of character, lapse in judgment for someone who has long prided himself in forward thinking, and working in tandem with the right partners alongside him. While Eisner has also long been lampooned as a money-driven, mercenary figure who raises ticket prices on a whim and is seeking to assume control of the entire world under Disney's hegemony, there is no denying that Eisner (in partnership with figures like the late Frank Wells, COO Robert A. Iger, Walt's nephew Roy Edward Disney, Pixar heads Steve Jobs and John Lasseter, and for a brief time, future DreamWorks cofounder Jeffrey Katzenberg) is an incredibly talented executive, and who knows the values of patience, delegation, and creative freedom. Since his tenure as CEO began in 1985, Eisner has brought Disney back from the doldrums, with a massive upswing in its film and television offerings, and an expansion into Broadway and retail, that more than offsets the recent post-9/11 softening of the theme park business. He also pulled the trigger on daring acquisitions of ABC, Pixar and Lucasfilm, which paid off handsomely.

Not every decision Eisner has made has worked out, of course. An attempted new theme park in Haymarket, Virginia, Disney's America, was shot down by historians and people worried about traffic overflows. The creation of a Disney-conceived and owned planned community in Florida, entitled Celebration, has not gone over as well as expected, with an ossified, largely white populace attempting to essentially recreate small town America in the 1950s, and property sales have always been sluggish. Disneyland Paris, originally entitled Euro Disney, struggled financially during its first few years, before stabilizing and growing, though its numbers remain under targets. And Disney's po-faced attempts to ride the dot-com bubble did not unlock the potential of the Internet like expected, and the search engine and architecture it had purchased to do so have been shut down. But Eisner's batting average has been incredibly high, mainly because of the stabilizing presence of Bob Iger to take the reins and responsibilities left vacant by Frank Wells' death, rather than Eisner attempting to take them on himself and micromanage the company. Now, with the filing, Eisner risks ruining his and the company's reputation with such a naked grab for control.

"Eisner has to be made to back down from the ledge and someone like Bob Iger has to go in and put out the fires in order for Disney to recover," an analyst for Merrill Lynch states. "It's the only way they'll be able to get out from under all of this. If they don't, Disney could very well capsize. It wouldn't happen all of a sudden, and it would drag out over several years, but it would be inevitable. Hopefully, Eisner, who has been sensible up till now, will regain his bearings and realize that."

Disney and others had previously lobbied Congress to extend the term of copyright for another 20 years, in the simply-named Copyright Term Extension Act, back in 1998. This would've moved Mickey's time to enter public domain back to 2023. The bill was surprisingly defeated, but an attempt to include similar terms for the Digital Millennium Copyright Act was made. It too failed.

Transcript of 60 Minutes report "Eisner's Mousetrap", aired on CBS January 31, 2003
MIKE WALLACE: No company has been more beloved in the public eye than The Walt Disney Company, and no one character has been a better symbol and icon of the company than Mickey Mouse, the smiling and cheerful mascot of everything Disney represents. This year, Mickey celebrates his 75th birthday, but what was meant to be a cheerful festival of anniversary tribute has degenerated into a public mudslinging match between the company, and the public. On New Year's Eve, Disney CEO Michael Eisner filed a letter to the U.S. Copyright Office, stating that Mickey could not enter public domain as scheduled, because his term was not up. That term would last a decade longer, because the creator was not Walt Disney, as the public has knowing it, but Ub Iwerks, who lived for more than a decade after Walt Disney died in 1966. The outrcry has been furious, Disney's stock price has been hammered relentlessly after nearly 20 years of growth, and Michael Eisner has been the man in the eye of the hurricane.

("STEAMBOAT WILLIE" FOOTAGE, LEADING TO A MONTAGE OF MICKEY, ASSORTED ANIMATION, AND WALT DISNEY)

''In 1928, Walt Disney, a struggling cartoonist from Missouri, released the short "Steamboat Willie" introducing the world to a whimsical new character named Mickey Mouse. The public fell in love with him immediately, and gave Disney the lifeline he sought. From there, Mickey became an icon with continual, expansive adventures, along with an expanding group of friends: his girlfriend Minnie Mouse, his best friends Donald Duck and Goofy, his pet dog Pluto, Puto's nemeses Chip and Dale, and the villainous Pete. From here, Walt Disney used Mickey as a springboard for bigger and bolder successes: his Silly Symphonies shorts, creating the first cartoon in color, the first full-length animated film, Snow White and the Seven Dwarfs, and a stable of films and shorts to follow.''

ROY EDWARD DISNEY: Walt built an incredible portfolio of classics over the course of his life. All of that spawned from Mickey Mouse.

Roy Edward Disney, Walt's nephew, and the only family member still involved in the company, states that the influence of Mickey on the fortunes of the company cannot be underestimated.

ROY: If there was no Mickey, there wouldn't be Snow White, wouldn't be Cinderella, wouldn't be Beauty and the Beast, wouldn't be Toy Story, wouldn't be Disneyland or Walt Disney World.

''Walt Disney died on December 15, 1966, from lung cancer. But the company has grown exponentially in more than 35 years since then, to the point that it a stunning portfolio of popular theme parks in California, Florida, Paris and Tokyo with more to come. It has a division of incredibly successful cruise vacations. It has grown to acquire companies like Pixar Animation Studios, the makers of Toy Story; Lucasfilm Ltd., the maker of Star Wars and Indiana Jones; The Baby Einstein Company, the educational products division for young children; and the ABC network. It produces and distributes English dubs of the films of Japanese animation studio Studio Ghibli, such as Hayao Miyazaki's Spirited Away. It has produced successful Broadway stage transfers of its hit films Beauty and the Beast and The Lion King. Its record labels, Walt Disney Records for its standard fare and Hollywood Records for mainstream artists, have sold a considerable number of CDs to hundreds of millions of consumers. And it has a considerable reach in the field of video games, most notably the successful game Kingdom Hearts.''

NEAL GABLER (Author of a forthcoming biography of Walt Disney): The Walt Disney Company is an absolute behemoth today, a vastly different company than it was when Walt was alive. It has dipped its toe into just about every field in the entertainment industry, is sitting on billions of dollars of profit, and its stock price has historically been insanely high through the last decade. Its live action film division has released an incredibly diverse field of product, from action movies to period pieces to arthouse drama.

(FILE FOOTAGE OF EISNER)

''No one figure is more responsible for this incredible growth than this man, Disney's CEO, Michael Eisner. Since 1984, he has worked tirelessly to reinvent Disney and keep it relevant to new generations, keep it from being considered a laggard that could no longer sustain itself without its founder.''

MICHAEL EISNER: I'm a tireless worker. I can't really afford to slacken my grip, because I guard our gains eagerly.

WALLACE: Some might say obsessively.

EISNER: I don't think that's necessarily a bad thing, though. Sometimes you need to be obsessed in order to be successful.

''Obsessed doesn't begin to cover the record of Eisner's tenure at Disney. Through careful team building, a string of acquisitions, and extremely bold "bet the house" gambles, Disney emerged from a protracted funk into the omnipresent and beloved 800-pound corporate gorilla we know today. But now, the tables may have turned, and Michael Eisner is no longer seen as Disney's savior, but its potential destroyer. The problem is the matter of copyright, or when a product is officially under the purview of its creator, giving them the sole right to benefit financially from it. The average span of copyright protection is 75 years, and Mickey's tenure under copyright is officially over.''

GABLER: Public domain has long been a loathsome word to corporations, especially in Hollywood. Because if something isn't copyrighted or no longer under protection, if you created something, you can still use it and make money from it, but now everyone else in the world has that right, and they can't be sued for it.

WALLACE: So people can use Mickey however they want?

GABLER: Exactly. And Disney doesn't have the option to sue them.

(C-SPAN FOOTAGE OF EISNER BEFORE CONGRESS)

''Disney, or more specifically Eisner, has spent years trying to avoid this outcome. In 1998, he testified before Congress and spearheaded lobbying for the Copyright Term Extension Act, which would've added 20 years to copyright terms. This bill, expected to breeze through Congress and be signed into law, experienced surprisingly strong resistance by grassroots organizations, and the bill was defeated. Eisner tried again by moving to influence the Digital Millennium Copyright Act, and include a clause that would essentially have the CTEA inside it, but a more liberalized version was passed instead. Eisner also takes a serious hardline stance against piracy, and testified before Congress last year to support a technology move called Digital Rights Management.''

EISNER: I consider it an absolute priority, a necessity, to ensure those that make movies, make TV shows, aren't cheated out of what they are deserved, what they are owed.

WALLACE: That kind of talk is sure to get you a lot of enemies in the general public, who think you only care about money, especially at this crucial point.

EISNER: It's the principle that matters. It's the principle that matters.

''But now, in throwing down the gauntlet before the U.S. Copyright Office, Eisner has made his biggest and boldest bet yet, to deny Mickey Mouse from entering public domain. And if the press reaction is any meaningful measure, he's losing badly. A furious maelstrom of discontent has erupted, with constant picketing of the Disney studios in Burbank, California. Major news organizations like The New York Times, The New York Post, The Wall Street Journal, The Washington Post, Time and Newsweek have devoted a barrage of features and even cover stories on Eisner's bid, and condemned his actions viciously. Disney's stock price, which was at an all-time high of $245 in April 2000 and was hovering around $215 at New Year's, dropped to $140, a level it has not seen since 1999. It has moved up very slightly, to only $148 today. Shareholders who have lost money are agitating for Eisner to either back down or resign his post, threatening to launch a revolt to drive him out of the company. And on top of all this, the bid was made while Eisner has been in talks with AOL Time Warner to get them to agree to a merger of CNN with ABC News.''

ROY: It was a terrible, terrible mistake on Michael's part to do all of this. He has threatened to undo Disney's goodwill and standing with the public, all to prove a point. Especially when he is saying something thoroughly untrue to do it.

WALLACE: Your uncle was the true creator of Mickey Mouse?

ROY: Yes, and everyone knows that, and Michael knows that. But my uncle would be deeply ashamed of what is happening now. He wouldn't want launch a campaign like this just to hold onto Mickey. It wouldn't be worth all the trouble.

(FILE FOOTAGE OF KURT COBAIN, CHARLIZE THERON, NIRVANA)

''The controversy reached a fever pitch when Eisner received a letter from Kurt Cobain, frontman of Nirvana, and his wife, actress Charlize Theron, whose production company, Springbok Productions, had contracts to work with Disney and ABC on film and television projects as well as consult on the building of new theme parks and attractions. The letter threatened that they would walk out unless Eisner dropped his ownership bid.''

KURT COBAIN: I specifically said that I couldn't sit working with Disney on my conscience while it was pursuing a path of shameless corporate greed, and I told her (Charlize) "I can't go along with this, this obvious deception to profit over a man's death."

CHARLIZE THERON: And I said to Kurt, "You beat me to the punch. I feel physically sick about this thing. If Michael's going to pursue this, we can't stick around."

WALLACE: And how did that feel for you?

COBAIN: It was heartbreaking, because I grew up drawing Disney characters. I loved to draw Mickey and Donald Duck, I wanted to be a Disney animator at one point. But the fact is that I've always been against corporate hacks, and they're acting like corporate hacks now.

THERON: It wasn't a decision we took lightly, because we want to work with everyone in the business.

''If Cobain and Theron hoped that their letter would convince Eisner to stop, they were soon disappointed. Eisner sent off a venomous letter of his own, ordering them to honor their contracts and threatening to sue them.''

THERON: It was completely unhinged, utterly nasty, a side of Michael we'd never seen before. I didn't know whether to laugh or cry, so I did both.

Eisner, for his part, is unrepentant.

EISNER: At the end of the day, these are people I thought were working with us in good faith, that we'd have a great partnership with. To drag an unrelated situation into their employment, and say "we're going to go to Universal," that is deeply unprofessional, deeply deceptive on their part.

WALLACE: Why do you say "deceptive?"

EISNER: Because it shows they aren't taking their resposibilities seriously or fairly, they want to basically blackmail me, and probably if I do, they'll also want a bigger payoff, too.

''We showed Eisner a series of documents and reports given to us by Disney archivist Dave Smith, as well as copies of pages from various biographies of Walt Disney. All of which clearly demonstrate him as the creator of Mickey Mouse, not Ub Iwerks. When Shown the pages, Eisner gave no coherent explanation.''

EISNER: Here's the bottom line. I'm doing what is right for Mickey, as a character, as a symbol.

Meanwhile, the bandied about CNN-ABC News merger, the talks of which have cooled considerably due to problems at AOL Time Warner and a clash of cultures, seems permanently scuppered, as ABC News has been facing controversy regarding how it has reported on Disney's actions, reigniting complaints that Disney muzzles dissident voices at the network and spins ABC's news reporting in its favor.

EISNER: We do not muzzle ABC's news coverage. That is categorically false. We said from 1995 onward that we wouldn't interfere, and we have kept that promise.

GABLER: I'm sorry, but Disney absolutely has its fingers on the scale regarding what ABC can report on. There's a good reason why Good Morning Americaspends so much time promoting Disney movies, why The View spends a lot of time interviewing stars of Disney movies and ABC shows. And to fair, AOL Time Warner has had similar problems, not so much with CNN but with Time magazine, promoting Warner Bros. films. So, the CNN-ABC News deal was already shaky to begin with and never going to happen, just from those standpoints alone. That's before you get into the organizational breakdown, the culture clash, the anchors' personalities, the budgets and inevitable layoffs. It could be a mighty newsgathering powerhouse, but it could easily be a massive headache. After all, AOL Time Warner looked so promising when that merger happened, and it's devolved so rapidly.

WALLACE: And this Mickey thing is what, the cherry on top of this dysfunction sundae?

GABLER: I'm afraid so. They cancel each other out.

''Meanwhile, as of this date, Michael Eisner continues to press on, battling against the current. While the U.S. Copyright Office says, "Mickey Mouse is in the public domain. Full stop."''  "Eisner Drops Mickey Ownership Bid," by James Bates, Los Angeles Times, February 5, 2003 

Yesterday, Disney CEO Michael Eisner officially announced that he is dropping his and the company's bid to retain copyright ownership of Mickey Mouse. He stated that he would not contest the action any further and also apologized to Nirvana frontman Kurt Cobain and his wife, actress Charlize Theron, whose company, Springbok Productions, has several projects with Disney in the works, but didn't let that stop them from criticizing Eisner's bid. His message states that "I will behave sensibly and they should feel welcome to work with Disney from this point forwards."

Eisner's actions had drawn the ire of the public, and he had responded to it quite venomously and horribly, especially in the case of Springbok. They had delivered a message threatening to nix their contract for film and television projects still owed, blatantly even saying they would shop them over to Universal Pictures. Eisner responded a threat of legal action if Springbok didn't "stay in line" and fulfill the contract. Both Springbok principals responded to the letter by sitting down for an interview with 60 Minutes, in which they continued to excoriate Eisner's behavior. Cobain in particular seemed pained, since by his admission, he has been a longtime Disney fan and learned to draw by drawing Mickey and Donald Duck. Eisner responded by sitting down for his own interview, which did not go over well, as various letters, memos and files copied and provided for the newsmagazine by archivist Dave Smith, proved that the main contention of the filing, that it was Ub Iwerks and not Walt Disney who created Mickey, was demonstrably false. Clearly seeing the writing on the wall, Eisner backed down.

"Michael Eisner needs to recede to background, at least for a while, in order for his reputation to recover, and for Disney to find its footing again," an analyst for UBS PaineWebber says. "Thankfully, he's not a zealot, and he got out of the way in time for Disney's projects slate to still do well. But the negative buzz could still be hard to overcome, and it could choke the life of them anyways. And at the end of the day, Disney may decide they don't need Michael Eisner to stay afloat. It remains up to him."

"Merger Deal Off for CNN and ABC News," by Elizabeth Jensen, Los Angeles Times, February 14, 2003
AOL Time Warner Inc. pulled the plug Thursday on a proposed merger between its CNN news network and The Walt Disney Company's ABC News, formally ending months of discussions about how to make such a complicated combination work.

A merger could have resulted in tens of millions of dollars in savings for both sides and a chance to combine two powerful brands into a dominant newsgathering organization. But it also presented major hurdles, including figuring out how control would be divided.

Some within both companies continue to hold out hope that a deal might be struck down the road. But the prospect of an agreement had become increasingly problematic, with both companies gearing up to cover a possible war with Iraq and critics attacking media consolidation in light of the Federal Communications Commission's upcoming revision of ownership rules.

In the end, the deal appears to have been just too much for AOL Time Warner, in particular, to take on at a time of management turnover and problems at its core AOL online service. It also became too much of a problem to deal with in the aftermath of Disney Chairman and CEO Michael Eisner's recent unpopular gambit to prevent Mickey Mouse from entering public domain, and ABC received considerable criticism for how it was reporting (or not) on the actions of its corporate parent.

The two sides, which started talking seriously in late summer, hadn't held formal talks since late November, as AOL Time Warner also grappled with other issues, including the resignations of Chairman Steve Case and Vice Chairman Ted Turner, CNN's founder, who recently broke his public silence to say he was against the merger. Turner's decision to relinquish his executive role at the company had been a hopeful sign for some CNN insiders who favored a deal.

Word that the merger was officially off emerged after a daylong meeting of AOL Time Warner's top executives, who were gathered in New York to discuss corporate strategy.

In a short statement, the company said: "After careful review, it was determined that although there are great merits and possibilities to a merger of ABC and CNN news, for us, the potential problems associated with the completion of such a transaction and the integration of these two distinct and great cultures was more than we want to pursue at this time."

Disney spokeswoman Zenia Mucha eulogized the failed concept - an indication, some thought, that talks possibly could be revived later.

"ABC is a preeminent news organization," Mucha said. "This would have been a venture that would have benefited both sides, but circumstances have prevented it from moving forward."

Mucha did announce that the failure of the talks did have one positive impact: that ABC News would officially be joining the likes of CNN, Fox News and MSNBC into joining the 24-hour cable news race. ABC News Network, as it will be called, will launch next year, and also have full independence in its reporting, without Disney promoting "corporate synergies" with its other properties and saying that the cable news network would be free to report on Disney extremely negatively, when warranted. Furthermore, a 24-hour digital Internet news service would also be available, and also containing live TV updates from both ABC News and ABC News Network.

"This is a prospect that ABC has had for many years, and tried several times, but could never get off the ground," Mucha said. "Now its time has come, and the CNN merger talks indirectly led to it being revived. ABC News Network will be a true standout in cable news, and further the reach of journalism and discourse."

CNN has talked about a merger with both Viacom Inc.'s CBS News and ABC News in the last two years, but the discussions with ABC turned serious in August. The ABC-CNN merger plan called for CNN to own 70% and ABC to own 30% of the venture. Disney would continue to own ABC itself.

Disney executives wanted to make the merger happen. In October, during an appearance on CNN's Moneyline, Eisner embraced the concept.

"I think it makes great sense," Eisner said, although he cautioned that negotiations were complicated and the two sides still were sorting through the sticky issues of operating control and financial splits.

Even after months of talks, executives from each side espoused separate theories of how it would be controlled and decisions made.

Getting employees on board was going to be a daunting task as well, as ABC and CNN have markedly different styles, driven by the different amounts of airtime they have to fill. CNN is more focused on live events, and ABC's forte is analysis.

Even the news that the two companies had considered joining forces sent employees into a state of anxiety as they worried, prematurely, about which jobs would be eliminated. Tensions were further fueled when it was learned that the companies were expecting to generate $200 million in cuts out of their combined newsgathering budgets.

News that the merger is off may not mean that employees can breathe easy, however, because many of the same financial pressures that were driving the merger still exist.

While ABC News has been profitable and earning good ratings compared to NBC and CBS, it certainly has been left behind by cable news, and the Mickey flap was a definite hit to their credibility, renewing criticism of Disney censoring the network, especially when Disney itself is the story. The cable news network revival could be either a standout idea of immense growth for ABC, or an immense flop where it could easily get steamrolled by its competitors like CNN, and such a failure could drag ABC down with it. Though CNN still is turning out a healthy operating profit of about $200 million, it had flat results in 2002. And CNN's main U.S. network last year slipped to second behind the aggressive Fox News Channel in the ratings.  "Iger Seeks To Right The Good Ship Disney," by Sallie Hofmeister, Los Angeles Times, February 17, 2003 

Robert A. Iger, COO of The Walt Disney Company, standing in for beleaguered CEO Michael Eisner, made a serious of announcements today to help the company overcome the wave of negative publicity caused by Eisner's attempts to prevent Mickey Mouse from entering the public domain. With Eisner on a long, indeterminate leave of absence, Iger is now the man in charge, and is hitting the ground running to help stir up fan fervor once more.

First off, he announced a new promotional campaign referred to as "The Swashbuckling Summer of Pirates," focused on its upcoming newest animated feature Treasure Planet, aimed to release in June after being moved from its original November 2002 release date, as well as the live action Pirates of the Caribbean: The Curse of the Black Pearl, releasing in August and produced by prolific Disney partner Jerry Bruckheimer. There will a flurry of promotion by Disney's retail operation as well as in the theme parks, including parades and special junkets with the casts of both films, and moving the characters of both films to already be featured as "cast members" in the theme parks. The actual Pirates of the Caribbean ride will also undergo a minor facelift to correspond with the movie.

He also announced that the Submarine Voyage, a popular attraction that was retired, will return to both Walt Disney World and Disneyland, rethemed to tie in with the 2001 animated film Atlantis: The Lost Empire, and confirmed that Disney's America, a planned theme park in Virginia that was called off due to fierce criticism, will be revived, instead as a new fifth gate in Walt Disney World, and stressed that it would be done in tandem with the work of leading historians in order to make a rich, authentic and tasteful experience, while also being respectful and honest about touchy subjects like slavery and the Civil War.

The news certainly gives the public and investors reasons to be hopeful. Disney's stock price, which had been on a violent downswing during the Mickey ownership bid, has risen significantly thanks to Iger's announcement. Market tracking studies indicate incredible advance buzz for Disney's upcoming films this year, and even the sluggish theme park business, which has struggled since 9/11 to regain its former momentum, is already showing signs of recovery as the new publicity campaign has led to a surge in Disney reservations.

"If Bob Iger pulls this off, he is the company's hero," Ralph Pellechia of Fitch's says. "He will have completely erased this black mark from their history, and he'll be seen in a new light, which should be worry Michael Eisner. After all, Iger will steal his thunder as the indispensable man, and his own days at Disney could very well be numbered. By going on hiatus and handing the reins to Iger, he may have signed his own death warrant."

This theory is certainly gaining traction throughout Wall Street and Hollywood, that Eisner's strategic blunder may be enough to have virtually erased his long and storied career at the House of Mouse, and that Iger will soon take more than the power, but the title of chief executive as well. "I don't foresee Michael Eisner remaining at The Walt Disney Company much longer," Army Archerd of Variety says. "This mistake will have completely made him persona non grata in Burbank, and he should already also be focusing on his golden parachute and his retirement."

However, others say that it would be premature to write Eisner's obituary. "Let's not forget, Michael Eisner saved Disney when it was badly needed," film critic Kenneth Turan says. "He made it into one of the major studios, on par with Paramount, Warners, 20th Century Fox and Universal. He helped make them a colossus with daring and farsighted acquisitions, particularly of Pixar and Lucasfilm. It's very likely that he'll return to the company a much humbled man and work more in tandem with Bob Iger as a partnership and give him more of the day-to-day duties."

"Disney Joins Digital Film Download Service," The Sydney Morning-Herald, July 25, 2003
US entertainment giant The Walt Disney Company has joined a growing list of top Hollywood studios to make their films available online, despite fears over Internet film piracy, the company said.

The move by Disney, unveiled on Wednesday, made it the sixth major studio to join the Movielink digital distribution service and left only one still holding out: 20th Century Fox.

The deal is seen as a milestone for Movielink, which has been battling the threat of online piracy for its right to survive amid a raft of US legal cases involving illegal downloads of copyrighted music and films.

Disney had been holding out from joining the controversial system while working with Fox to develop its own service, an initiative that collapsed a few months ago.

The company founded by Mickey Mouse's creator has also been strongly lobbying for Congressional initiatives aimed at thwarting piracy as the company wrangled over the dangers of digital film delivery.

Disney is to put 50 of its titles on Movielink, including Touchstone film releases Chicago - which won this year's Best Picture Oscar - Gangs of New York, The Recruit, The 25th Hour, Frida and The Jungle Book 2.

Older titles that form part of Disney's library such as Monsters, Inc., The Rookieand In the Bedroom will also be available.

The addition of the Disney titles boosts Movielink's film catalogue to around 400 films, compared to just 175 when it launched eight months ago.

"This deal illustrates the belief in the internet as a new and potentially vibrant channel of film distribution by another major studio," said Movielink executive Jessica Algazi.

She said Disney's membership highlighted Movielink's "interest in doing deals with all content providers to help open up this channel of distribution even further".

"Our relationship with Movielink opens the door to exciting new territory," said Dan Cohen, of Buena Vista Pay TV, a Disney unit instrumental in the deal.

The entertainment industry press said Movielink was still pursuing negotiations with Fox and hoped to seal a digital distribution deal with the last holdout studio.  "Eisner Says He Will Not Leave Disney," by James Bates, Los Angeles Times, November 1, 2003  Disney CEO Michael Eisner stated today, "as Mark Twain once said, reports of my demise have been greatly exaggerated. Despite a lot of rumors to the contrary, I am not leaving The Walt Disney Company for quite some time yet, and there has been no effort or revolt to oust me. In fact, the board and I have had a very cordial, productive meeting, and we have planned out a lot for the future. My current contract with Disney will not expire until 2008, so that is the earliest date I will leave. And I also have no problems or difficulties with Bob Iger. On the contrary, I am grateful for him, and I applaud the way he has held down the fort while I've been away. I know he is also a great and capable choice as the point man, the daily administrator, to do the jobs that I cannot. We look forward to what is to come in the years ahead."

After Eisner's ill-advised attempt to deny the moving of Mickey Mouse to the public domain and Iger's temporary stewardship, the word around town was that Eisner was effectively dead meat. However, those reports apparently are not coming to pass, especially as Disney's board members went on the record to state their full faith and support of the CEO. He has, however, been relieved of his duties as chairman, giving them to Iger.

During the last nine months, Iger has completely restored confidence and support of Disney, with his "Swashbuckling Summer of Pirates" campaign making the animated Treasure Planet and the live action Pirates of the Caribbean: The Curse of the Black Pearl massive blockbuster successes at the box office and in critical reception, and Disney's theme park business has shaken off its post-9/11 slump to be bustling and hectic once more.

"This is a turnaround on par with the one Eisner himself achieved," an analyst for Lehman Brothers says. "Bob Iger has a promising future with Disney."  "ABC News Network, A 24-Hour Cable Network Version, Launches Today," by Milt Freudenheim, The New York Times, January 10, 2004 

The Disney-owned network ABC has officially launched a brand new expansion for its news division. ABC News Network, a 24-hour cable news network modeled after CNN and available to be watched by viewers worldwide, officially premieres today.

The idea for ABC to create such a news network is not a new one; it had been considered as far back as the time The Walt Disney Company announced the purchase of ABC back in 1995; however it was decided that creating a website for ABC News would make far more economic sense. Indeed, the website has received considerable traffic since then.

However, there has long been criticism of how much influence Disney apparently has on ABC's news reporting, particularly when Disney itself is in the stories being reported. It has also been a common practice for shows like Good Morning America to be used to utilize "corporate synergies", as in using the shows to promote the releases of Disney's film, television and Broadway releases. Last year, during the height of the controversy over CEO Michael Eisner's attempt to deny the moving of Mickey Mouse to public domain, ABC was clearly caught in the horns of a dilemma on how to report on it. The controversy made the network decide to revive the cable news network as a way to ensure greater independence in the news division.

While the parent network will continue to have news programs and the notable talents of anchors like Diane Sawyer, Martha Raddatz, Peter Jennings, Charles Gibson, Barbara Walters, Jonathan Karl and George Stephanopoulous and will continue the process of synergies, ABC News Network will be a completely different animal. It will have no promotions of Disney product, stick solely to news reports, including being completely uncensored and hard-hitting against Disney when needed, and consist entirely of prime talent in news reporting with strong journalistic ethics. (One notable parent anchor who will be involved, at least to some extent, with the new cable network is anchor Brian Ross.) It will include expanded, rawer renditions of prominent news magazines like 20/20, Nightline and Primetime Live; as well as resurrecting former parent network programming like Day One, Viewpoint and Turning Point. The worldwide reach of this version will thus also include an array of news talent from many different countries to be involved. ABC Radio Networks will also be integrated into this group, and it too will be free to not follow Disney's line.

"We expect that the ABC News Network will be an incredible success," Disney COO, President and Chairman Bob Iger told the press. "The fact that ABC News and ABC Radio Networks will be able to ensure full independence in this manner shows that a great concern for the integrity of media is being weighed thoroughly. We also expect this to help launch a sea change that CNN, MSNBC, CNBC et al will be able to follow and only improve with."

Indeed, CNN has announced particular changes to help rededicate itself in its vision, even with a proliferation of new news hubs but remaining firmly in place in Atlanta. In addition, the network has also announced that it has negotiated stronger package deals for the financial markets-only channel, CNNfn, to be carried at favorable rates by all the cable suppliers and even to be part of basic public access. CNNfn will also shepherd its Web presence to merge with Money magazine to make its website be renamed CNN Money.

"A Battle Disney May Never Forget; For The Alamo, A Long and Bumpy Road From Conception to Release," by Sharon Waxman, The New York Times, March 24, 2004
When the dust finally settles, The Walt Disney Company may not want to remember The Alamo.

An updated epic about the historic last stand at the Texas fort, the big-budget feature was meant to be Disney's prestigious, star-studded showpiece for Christmas 2003, the culmination of a banner year for Walt Disney Studios, capping off the massive success of that year's "Swashbuckling Summer of Pirates" campaign and the success of Pixar's Finding Nemo as well as successful mature films like Kill Bill, Volume 1 and Monster.

Instead it is turning into an unintended emblem of the media company's troubles from earlier last year, when CEO Michael D. Eisner made an ill-advised attempt to deny Mickey Mouse's transition to the public domain, troubles it has moved long and hard to put in its rearview mirror. The movie, over budget and extensively recut, will finally be released on April 9, laboring under the taint of skeptical industry talk. Starring Dennis Quaid as Sam Houston, Billy Bob Thornton as Davy Crockett and Jason Patric as Jim Bowie, The Alamo may ultimately find a broad audience. But its journey, from conception to release, has been a bumpy one.

The film was originally slated to be directed by Ron Howard in 2002, just after his Best Picture Oscar for A Beautiful Mind, and to star Russell Crowe. The budget was to be about $125 million, and the movie was to have an R rating for violence. Instead Disney switched gears to opt for a lower budget and a less experienced director, John Lee Hancock, who was to make the film for $75 million and a tamer PG-13 rating, to draw a wider audience.

But after a false start and recuts, The Alamo has ended up costing about $107 million and has gone from a 3-hour version to one about 2 hours 15 minutes, the filmmakers say. The role of General Houston, originally intended for Mr. Crowe and played by Mr. Quaid, has been reduced, said Mark Johnson, the movie's producer.

The film, screened this week for a Times reporter, is heavy on history and sweeping shots of the reconstructed Texas monument, but short on action and drama, instead being a dry and ponderous, overly talky chronicle that has no particular reason to justify its existence.

Part of the problem with the movie, Mr. Johnson acknowledged in December, was the lack of a central hero.  There's no one lead,  he said during the re-editing process, when three editors were reworking on sections of the film. '' We've got to keep six characters alive, which is proving really difficult. We may have attempted to do too much. '' Last week Mr. Johnson and the director, Mr. Hancock, said they were happy with the final version.  I feel really good about it,  Mr. Hancock said. '' The scenes are shorter. If any character suffered from this, it's secondary '' to the story.

Films that are pulled from release schedules for further editing are often labeled troubled in Hollywood, and The Alamo is no exception. Its fate has been fodder for Texas newspapers and Internet movie sites. And though script changes, delays and inflated budgets are not uncommon, the attention on the troubles of The Alamo could hardly come at a more embarrassing time for Disney. While last year the company was able to overcome the bad publicity from Mr. Eisner's stunt and make an astonishing recovery in every sector, this year the movie studio already has one pricey disappointment in Hidalgo, an estimated $140 million production (Disney officials would not confirm the figure) that so far has taken in only $48.5 million at the box office.

The Alamo has poor advance word according to market research. The worst case scenario has it failing to make more than $25 million at the box office, which when judged against the budget and the P&A costs, would hand Disney embarrassing losses of $145 million, which would make it the biggest flop in the company's entire history.

Dick Cook, chairman of Disney Studios, said he was confident that the delayed film would be worth the wait. I'm thrilled with the new version, Mr. Cook said in an interview on Monday. ''We all felt we've got something really great, really special. We made an epic.''

In May 2002 Disney proudly announced its intention to remake the classic tale of The Alamo, with Mr. Eisner saying the film would '' capture the post-September 11 surge in patriotism. '' Disney said it would take care to give context to the Mexican side of the battle and also be far more historically accurate than other tellings, leading to observations in the press that the film would be a politically correct version of the tale. This especially comes since Disney itself was one of the main proponents of Alamo mythology with the film Davy Crockett starring Fess Parker in 1955.

The latest of many screen versions, The Alamo was to be based on the 1836 story of about 200 defenders - mostly Texians (Anglo immigrants to Texas, then a part of Mexico) and a few Tejanos (people of Mexican descent living in Texas) - who held the fort for 13 days before it fell to Mexican troops led by Gen. Antonio López de Santa Anna.

The Alamo heroes included Col. William Travis (Patrick Wilson), Bowie (Mr. Patric) and Crockett (Mr. Thornton), whose last stand passed into history and became a rallying cry for General Houston to win the war for Texas independence.

Mr. Howard had spent a year developing the script with the writer John Sayles (Lone Star, 1996). The Oscar-winning writer Steven Gaghan (Traffic, 2000) had been hired to polish the story, and vast sets had begun to rise on a plain near Austin when in July 2002 Disney said Mr. Howard would not be the director.

At the time Disney executives explained that the budget was too high, since an estimated $30 million would go to Mr. Howard, Mr. Crowe and Mr. Howard's producing partner, Brian Grazer. Mr. Grazer said Mr. Eisner mainly pulled the plug over the R rating, which was the only way Mr. Howard saw to direct the film.

We finally found the right filter through which the story was worth retelling, Mr. Grazer said. The only way it really made sense was within the psyche of the three guys inside the Alamo fort.

Mr. Grazer said that he and Mr. Howard felt they had had Disney's commitment to make an R-rated movie, which the studio ultimately rejected, and were upset because they had used their influence to get Mr. Crowe, much in demand at the time, to star. Ethan Hawke had also signed on for a supporting role, and Sean Penn was close to taking the Bowie role, Mr. Grazer said. (Mr. Grazer and Mr. Howard's company, Imagine Entertainment, remains credited as producers, as well as the men themselves.)

Disney instead hired Mr. Hancock, whose first film, The Rookie, had become a modest hit. Mr. Hancock, a Texas native, said he had spent five weeks deciding to take the job, agreeing to a lower budget and a PG-13 rating.

I always looked at it as a character drama on a historic stage, said Mr. Hancock, 46, about undertaking the shoot. ''I was frightened. I'd never done anything like this before. Some days we had 12 cameras going, at once. Sometimes it was like directing the 'Monday Night Football' game from the booth. It's big.''

Shooting, scheduled for November 2002, got under way in January 2003, with a budget that had soared to $95 million. The studio erected what the producers say was the largest set built in North America, a 50-acre swath recreating the Alamo fort and the 19th century town of San Antonio in Dripping Springs, 75 miles outside of modern-day Austin.  You could shoot 360 degrees around safely without seeing anything but the entire town of San Antonio as it existed in 1836,  Mr. Johnson said.

Mr. Hancock ended up with one million feet of film, and just a few months to trim it into shape, in time to be the centerpiece of Disney 's Oscar season, Christmas films. Ultimately the director was not happy with the cut he had completed by October. The movie was tested at a length of 3 hours, and again at a length of 2 hours 25 minutes. Neither one was the right movie, Mr. Johnson said.

The essential problem was that the movie broke into three sections, with the fall of the Alamo happening at the end of the second section, and the third act involving Houston taking revenge for the fall of the fort. The director was grappling with getting to the siege and battle more quickly.

On October 29, with some billboard advertising already in place and the trailer mailed to the news media, Mr. Cook, chairman of Disney Studios, agreed to pull The Alamo from its schedule, just eight weeks ahead of its planned release date.

Ultimately the end product is more important than the need to meet arbitrary deadlines for awards, etc., Mr. Cook said at the time.

The epic was trimmed to two hours, then tested. Two weeks ago another 15 minutes was reinserted into the film. The filmmakers said that Mr. Quaid's role had shrunk considerably and that other roles had been cut entirely.

For Mr. Hancock, the director, it has been an agonizing process. Last week he was near tears, Mr. Johnson said, when he called an actor to tell him his role had to be eliminated.

Despite the delay Disney has put significant marketing muscle behind the film, spending an estimated extra $35 million on advertising, including during the Super Bowl. The studio has planned a star-studded, blowout premiere in San Antonio on Saturday night, and a three-day media junket.  "Disney Names New Studio Head, Eisner Defines Succession," by James Bates and Richard Verrier, Los Angeles Times, July 11, 2004 

Disney CEO Michael Eisner announced today that he has named former Miramax development head Meryl Poster to the position of chair of The Walt Disney Studios. Currently operating studio head Richard W. Cook, who has had the chairman position since 2002, will continue to remain in place and be Poster's equal and co-chair, where they both are the superiors of the heads of the various studio divisions of Walt Disney Pictures, Walt Disney Animation Studios, Pixar Animation Studios, Touchstone Pictures, Hollywood Pictures and Lucasfilm Ltd.

"Meryl has proven herself quite formidable and talented in her own regard, and she was the only person who could buck trends at Miramax and not suffer for it. Her instincts are very much welcomed, and we expect her to lead the studio for many, many years to come," Eisner said in the statement to the press. Indeed, as the statement says, she became known as the only woman able to say no to Harvey Weinstein, who in turn was able to go along with suggestions that she made regarding projects in development.

"I am really quite excited to be joining the talented heads and people at Disney," Poster said. "For nearly 20 years, Michael Eisner has helped redefine The Walt Disney Company as an impressive force in family-friendly entertainment, and also encouraged its organic evolution into more mature territory and brave new creative endeavors. And Dick Cook is an absolute wonderful figure to be co-chair with, I am honored to be working with him."

"I welcome Meryl to the chair, and to Disney as a whole," Cook replied. "Together we will help blaze new trails for Disney, and make amazing projects that will be enjoyed for generations to come."

In addition to this, Eisner announced that rumors of his contemplating retirement in the future are true, and that he has announced that he will leave Disney in 2008, and selected Disney COO Robert A. Iger as his successor. Iger has been head of ABC Entertainment since just before Disney's purchase of the network, and COO of Disney since 1996. Iger also has experience helping fill in for Eisner, as after an ill-advised attempt to prevent Mickey Mouse from entering the public domain in early 2003, the results of which caused massive negative press for the company, Eisner went on a months-long sabbatical and Iger held down the fort, completely turning the PR battle around with the amazing "Swashbuckling Summer of Pirates" marketing blitz to promote Pirates of the Caribbean: The Curse of the Black Pearl and Treasure Planet simultaneously that year, helping lead to massive box office success and critical raves for both films. Indeed, since Eisner has been back, Iger has been taking on more and more duties that used to be the CEO's domain, helping the company continue its amazing run of success that it has had for the last 15 years, even after John Lee Hancock's dry, ponderous drama The Alamobecame the largest box office flop in Disney's history after it was released back in April.

"Bob has shown that he has what it takes to get the job done, and he's definitely been proven to be effective in a crisis situation. In my remaining years here at Disney, I will naturally be giving Bob more and more power, little by little, while working to get my creativity on overdrive. I know that the next few years will be important for The Walt Disney Company, and I'm going to ensure it's done right," Eisner explained in his statement. Shares of Disney stock rose $15.27 in response to the news.

"Disney and Springbok's Tarzan Will Have No Tryout," by Ernio Hernandez, Playbill, December 19, 2004
Walt Disney Theatrical and Springbok Productions' upcoming stage transfer of Disney's 1999 animated film Tarzan, which had a reading earlier this year, will not have an out-of-town tryout before it opens on Broadway in the near future.

Disney Theatrical head Thomas Schumacher says there are several simple reasons for this decision, which goes against the standard practice done for Disney's adaptations of Beauty and the Beast and The Lion King, its original production Aida, or having The Hunchback of Notre Dame open first in Berlin, Germany, in 1999.

"Very little has tended to change from tryout to initial previews with our musicals, with the exception of Aida, and this is bound to be a smoother process, creatively speaking, than that, so there is not particularly much of a point for a tryout. Besides, as a friend once said, 'I like the preview audiences being the New York audiences. They're right there, telling you what to fix, there's no BS about it...' And we're planning a great physical production with impressive, highly exciting acrobatic stunts in the vein of a Cirque du Soleil show to recreate the full effect of Tarzan's incredible agility as shown in the movie. We're not just having actors swing like a pendulum on a harness, back and forth, we're going for something far more impressive and profound. A lot of theaters that we would have had a tryout in aren't equipped to handle what we have in mind, so we need to start in New York."

Schumacher says that the adaptation of the movie, itself based on Edgar Rice Burroughs' novels, focusing on a man who had been orphaned and raised by apes in West Africa, will not just be a straight transfer. "Phil Collins is coming up with great new songs to add to the ones he wrote for the original movie, and we couldn't be more excited. David Henry Hwang, a great writer, came up with an impressive first draft of the book, and we knew he would be a great fit after his rewrite work on Aida. David Ives has come on to do his usual 'cut two-thirds and extract the essence' to help make the production tighter and sharpen things considerably. And Springbok are wonderful creative partners."

Schumacher isn't going in without a safety net, however. "That said, we're going to have several more readings and a few workshop productions all across the country to help ensure the book is finely-tuned in the meantime. Expect to see as many as six such occurrences throughout 2005."  "Rudin Leaving Paramount to Join Disney," by Laura M. Holson, International Herald Tribune, April 21, 2005 

Scott Rudin, a veteran producer whose films last year ranged from a failed remake of The Stepford Wives to a well-received adaptation of Broadway's Closer, said he would end his longstanding deal with Paramount Pictures and begin making movies for Walt Disney Studios when his contract expires in 2006.

Rudin is the first major producer to leave Paramount since the former talent manager Brad Grey joined the company as chief executive last month in a management shakeup. It had been widely expected that Rudin would leave the studio, where his 15-year tenure was rooted in a close relationship with the departing chairwoman, Sherry Lansing.

In agreeing to make movies for Disney, Rudin said he hoped to channel projects to all of the company's divisions; including Walt Disney Pictures, Hollywood Pictures, and especially Touchstone Pictures, which is especially moving to pick up the slots left behind by Disney's shuttering of Miramax Films four years ago after the exposure of Harvey Weinstein's history of criminal sexual behavior.

Rudin is likely to fill a gap by providing the sort of high-quality, offbeat art films that Disney has historically struggled to create on its own. While no stranger to commercial bets like The School of Rock (with Springbok Productions), Rudin is known for adapting novels and plays into more sophisticated fare like Closer and The Hours. Last year was not one of his best years, being marked by disappointments that included The Stepford Wives and The Manchurian Candidate, both made for Paramount.

Reached in London, where he was attending a premiere for the Touchstone release Hitchhiker's Guide to the Galaxy, the Disney studios co-chair Richard Cook cautioned that Disney's anticipated deal with Rudin was not complete. "We don't expect hitches, but it is not done," he said.

Rudin said that a clause in his Paramount contract allowed him to move projects to another studio. A Paramount representative would not comment on the assertion, but the studio said in a statement that it had been informed of Rudin's intention to leave.

Paramount executives - who asked not to be identified for fear of disrupting continuing relations with Rudin - said they had spent Tuesday reviewing his contract. The deal was reported in The Los Angeles Times on Tuesday.

Yet to be resolved are whether Rudin will leave Paramount earlier than 2006 and whether he will get the hefty payouts the studio afforded him, including 7.5 percent of the company's receipts from the box office for his films. Rudin would not discuss the terms except to say Disney was "close" to paying him what he got at Paramount, which is a unit of Viacom.

Looking back on his years at Paramount, Rudin described the experience as uneven. "Paramount has been a moving target," he said. "That has been a hard thing for producer."

With Rudin, Disney is adding one of the film industry's more temperamental personalities to its roster.

"I hope there is some friction," Cook said. "It means something is getting done."

Rudin conceded that he was tempestuous at times. "Do I fight for the movies? Yeah," he said. "Do I circumvent the process? Yeah." But he added, "I want what is best for the movies."

"Life After Darth," by Steve Silberman, Wired, May 1, 2005
George Lucas is daydreaming again at his desk.

He looks out the window of the 19th century house in Northern California he bought 30 years ago, when he was still a young man slaving over a script inspired by the mental image of a dogfight in space. Art and history books line the walls of the room he designed as a personal sanctuary, and there's an editing bay next door networked to servers a few miles away at Skywalker Ranch, the Victorian headquarters of his filmmaking empire. The father of digital cinema is willing to employ technology to serve his own artistic ends, but he does not use email, nor does he surf the thousands of fan sites devoted to the output of his prodigious imagination. The whole rollicking galaxy of Star Wars was originally rendered in longhand with a No. 2 pencil.

On May 19, Revenge of the Sith, the final installment of that six-part saga, will open on thousands of screens from Chicago to Shanghai after premiering days earlier at the Cannes Film Festival. The epic that has defined Lucas' career is finished, and the director finds himself at a crossroads.

Lucas and his contemporaries came of age in the 1960s vowing to explode the complacency of the old Hollywood by abandoning traditional formulas for a new kind of filmmaking based on handheld cinematography and radically expressive use of graphics, animation, and sound. But Lucas veered into commercial moviemaking, turning himself into the most financially successful director in history by marketing the ultimate popcorn fodder.

Now he has returned to the most private place in his universe to reinvent himself. He could spend the rest of his life capitalizing on Star Wars ' legacy. (His current distributors, Disney, which bought Lucasfilm back in 1996, practically have fallen over themselves to assure the public they plan to continue in some form down the line.) Instead he's trying to dream up a second chance to be the rebel filmmaker he aspired to become a long time ago.

"I like Star Wars, but I certainly never expected it would take over my life," Lucas says in a conversation at Skywalker Ranch. He estimates that he gave two decades of solid work to Star Wars, not including a hiatus to raise three adopted kids as a single father. Now 60, the once-lanky wunderkind in aviator glasses has grown bearish, with a snowy, close-clipped beard and a sardonic wit that doesn't come through in the making of documentaries. He says he's relieved that the longest chapter of his career is over.

"Normally at this time, I'd be under a lot of pressure to get the script done for the next movie. There wouldn't be any break from the stress and creative demands. So it's great to be able to kick back."

Those who have seen advance screenings of Revenge of the Sith say that the new film - which focuses on the transformation of the petulant and ambitious Anakin Skywalker into the malignant Darth Vader - is more emotionally engaging than the last two prequels, The Phantom Menace and Attack of the Clones. Lucas' friends observe that while he certainly is proud of what he did with the first two prequels, he seems happier with this film, which he's been showing off proudly for months in rough cut form at the ranch. The invitation-only audiences have included many illustrious peers from his film school days, including the directors Steven Spielberg and Matthew Robbins, writer-producer Hal Barwood, and Walter Murch, winner of two Academy Awards in 1997 for film editing and sound on The English Patient.

But Lucas won't be kicking back for long. Even as he plans a creative reboot, he faces a backlog of dozens of projects awaiting his supervision as head of Lucasfilm. First is executive producing Red Tails, a movie about a group of African-American fighter pilots known as the Tuskegee Airmen, who were excluded from the US Army Air Corps until 1940 and then flew 1500 missions in World War II without losing a single plane. A fourth episode of the Indiana Jones story will move forward as soon as Lucas, director Spielberg, and returning hero Harrison Ford sign off on a script.

And Lucas isn't quite done fiddling with Star Wars. Two more TV spinoffs are in the works - one a live action series, the other in the vein of the Disney Channel series Tales from Clone Wars - plus he's overseeing yet another rerelease of all six films, this time digitally remastered in 3D. Then there's Lucasfilm's animation unit, which is incubating ideas for its first full-length feature. A documentary team is producing shorts on the lives of historical figures to accompany the DVD release of the TV series The Young Indiana Jones Chronicles. Lucas is also developing two new TV series: "one about the future, and one about media," he says, adding that they'll be "controversial and hard to get on the air." And Lucasfilm, through Disney, will be continuing to make Star Wars films without Lucas, as the deal he made with the Mouse basically has the clause built in.

Even if Lucas' personal imprimatur turns out not to be enough to put these shows on TV, he has little reason to worry about keeping his empire in the black. With an infusion of Sith tie-ins from Lego, Topps, Cingular, and Hasbro, and of course, having Disney's resources at his disposal, Lucas' digital domain is poised to survive long after General Grievous Pez dispensers are collecting dust under beds from here to Coruscant.

Now Lucas says he is determined to leverage that security to make the kinds of movies that no one expects from him. He claims to have a stack of ideas piling up on his desk for "highly abstract, esoteric" films even more daring than his 1971 debut, THX 1138. An expansion of one of Lucas' student projects at the University of Southern California, THX anticipated the cyberpunk aesthetic of William Gibson's Neuromancer and Ridley Scott's Blade Runner, depicting a pharmaceutically numbed society of the future under constant video surveillance. After Lucas spent a year digitally restoring the film for its theatrical rerelease and DVD debut in 2004, a longtime employee observed: "I've never seen George so excited by any other project at the company." Lucas says the restored THX was just a preview of even edgier films to come that he will finance and direct himself.

"I've earned the right to just make things that I find provocative in my own way," he says. "I've earned the right to fail, which means making what I think are really great movies that no one wants to see."

If earning the right to make movies no one wants to see seems like a dour forecast for the next phase of his career, it may be because Lucas has never felt at ease with his own mainstream success. For the past couple of years, he's been telling interviewers that the breakout popularity of American Graffiti in 1973 "derailed" him into the business of mass-market filmmaking and that his career was "sidetracked" by Star Wars.

His ambivalence about presiding over a commercial empire has even led him to identify with his archvillain, Darth Vader. In the career retrospective included with the 2004 Star Wars DVD set, Lucas declares: "I'm not happy that corporations have taken over the film industry, but now I find myself being the head of a corporation, so there's a certain irony there. I have become the very thing that I was trying to avoid. That is Darth Vader - he becomes the very thing he was trying to protect himself against."

Though Lucas says he's looking forward to "a whole new adventure" as a director of "very out-there" films, he admits that he faced this crossroads at least once before and chose to go down the more familiar route of embellishing Darth Vader's backstory. Now he'll have to tap his inner Luke again - the searcher eager to leap into the unknown. But if the father of Star Wars isn't the real George Lucas, who's the man behind the mask?

The popular myth of Lucas' life is that he grew up as the son of a conservative businessman in Modesto, California, and became obsessed with car racing until his teenage dreams of being a professional driver were cut short in 1962 by a near-fatal accident. With little interest in cinema beyond Flash Gordon serials and Adventure Theater reruns on TV, he went off to film school, emerging after American Graffiti as the architect of the Blockbuster That Ate Hollywood.

Lucas himself has been the primary author of this version of events. "When I went to USC, I didn't know anything about movies," he told a Canadian film crew in 2002. "I watched television. I wasn't that interested in movies."

While this kind of talk suits Lucas' image as an ordinary billionaire in a flannel shirt who wanted to upgrade the old-fashioned cliff-hanger so generations of kids could learn to dream again, it obscures the crucial part of his life when he first glimpsed his own destiny. Understanding these early years not only casts light on Lucas' current yearning to make experimental films, it reveals the frustrations that drove a self-proclaimed Luddite to finance the creation of digital tools that forever changed the craft of moviemaking.

Like the journey of Luke Skywalker, the journey of Lucas the filmmaker began with a cryptic transmission that hinted at the existence of a universe more vast than the one he grew up in. While he was zipping his souped-up Fiat through the dusty Central Valley flatlands that provided the model for Luke's home planet of Tatooine, another kind of momentum was building to the north in San Francisco, where poets and painters were picking up Army surplus handheld 16-mm cameras to launch the first wave of independent cinema on the West Coast.

A filmmaker named Bruce Baillie tacked up a bedsheet in his backyard in 1960 to screen the work of indie pioneers like Jordan Belson, who crafted footage of exploding galaxies in his North Beach studio, saying that he made films so life on Earth could be seen through the eyes of a god. Filmmakers Stan Brakhage and Bruce Conner had equally transcendent ambitions for the emerging medium: Brakhage painted directly on film and juxtaposed images of childbirth and solar flares, while Conner made mashups of stock footage to produce slapstick visions of the apocalypse. For the next few years, Baillie's series, dubbed Canyon Cinema, toured local coffeehouses, where art films shared the stage with folksingers and stand-up comedians.

These events became a magnet for the teenage Lucas and his boyhood friend John Plummer. As their peers cruised Modesto's Tenth Street in the rites of passage immortalized in American Graffiti, the 19-year-olds began slipping away to San Francisco to hang out in jazz clubs and find news of Canyon Cinema screenings in flyers at the City Lights bookstore. Already a promising photographer, Lucas embraced these films with the enthusiasm of a suburban goth discovering the Velvet Underground.

"That's when George really started exploring," Plummer recalls. "We went to a theater on Union Street that showed art movies, we drove up to San Francisco State for a film festival, and there was an old beatnik coffeehouse in Cow Hollow with shorts that were really out there." It was a season of awakening for Lucas, who had been a D-plus slacker in high school. A creative writing teacher at junior college in Modesto opened his eyes to the pleasures of reading, which led him to the writings of Joseph Campbell, a decisive influence on Star Wars.

Then Lucas and Plummer migrated south, where they discovered another filmmaking revolution in progress. They made pilgrimages to the New Art Cinema in Santa Monica to take in Jean-Luc Godard's Breathless, Franéois Truffaut's Jules et Jim, and Federico Fellini's 8é - movies that used handheld cinematography and in-your-face editing to deliver life unfiltered through the stale conventions of the Hollywood studios.

At an autocross track, Lucas met his first mentor in the film industry - famed cinematographer Haskell Wexler, a fellow aficionado of sleek racing machines. Wexler was impressed by the way the shy teenager handled a camera, cradling it low on his hips to get better angles. "George had a very good eye, and he thought visually," he recalls.

By the time Lucas entered film school in 1964, he was already on his way to becoming the director who would combine the visceral excitement of Flash Gordon with the visual language of transcendence.

At USC, Lucas joined the first generation of film students who were influenced more by the explosion of world cinema than by the silver screen canon. One of his classmates, John Milius, the future co-writer of Apocalypse Now and director of Red Dawn, introduced him to the epics of Akira Kurosawa, whose depictions of Japanese feudal society were a key influence on Star Wars.

Lucas' sense of his own mission crystallized in animation classes and in a course called Filmic Expression, which focused on the non-narrative aspects of filmmaking - telling stories without words by using light, space, motion, and color. The professors screened animated shorts and documentaries sponsored by the National Film Board of Canada, which has been funding cinematic exploration since the 1940s.

The work of three Canadian directors in particular excited Lucas about the potential of experimenting with the tools of filmmaking. An animator named Norman McLaren explored novel ways of creating images and sounds with every film he made, mixing human actors, animation, and special effects as Lucas would do digitally 20 years later. Lucas was also impressed by the documentaries of Claude Jutra, who used the artistic strategies of Godard and Truffaut to tell real-life stories. One of the reasons the first Star Wars film seemed so vivid compared with previous sci-fi fare, Lucas explains, was that he shot it like a Jutra documentary, covering the scenes with multiple cameras and staging them loosely on purpose so they would unfold with an edge of spontaneity. (Another reason was the salty insouciance of Harrison Ford and Carrie Fisher, blissfully unaware that they were about to become action figures.)

The film that made the most profound impression on Lucas, however, was a short called 21-87 by a director named Arthur Lipsett, who made visual poetry out of film that others threw away. Working as an editor at the National Film Board, he scavenged scraps of other people's documentaries from trash bins, intercutting shots of trapeze artists and runway models with his own footage of careworn faces passing on the streets of New York and Montreal. What intrigued Lucas most was Lipsett's subversive manipulation of images and sound, as when a shot of teenagers dancing was scored with labored breathing that might be someone dying or having an orgasm. The sounds neither tracked the images nor ignored them - they rubbed up against them. Even with no plot or character development, 21-87 evoked richly nuanced emotions, from grief to a tenacious kind of hope - all in less than 10 minutes.

Lucas threaded the film through the projector over and over, watching it more than two dozen times. In 2003, he told directors Amelia Does and Dennis Mohr, who are making a documentary on Lipsett, "21-87 had a very powerful effect on me. It was very much the kind of thing that I wanted to do. I was extremely influenced by that particular movie." Deciding that his destiny was to become an editor of documentaries who, like Lipsett, would make avant-garde films on the side, Lucas worked in the USC editing room for 12 hours at a stretch, living on Coca-Cola and candy bars, deep in the zone.

"When George saw 21-87, a lightbulb went off," says Walter Murch, who created the densely layered soundscapes in THX 1138 and collaborated with Lucas on American Graffiti. "One of the things we clearly wanted to do in THXwas to make a film where the sound and the pictures were free-floating. Occasionally, they would link up in a literal way, but there would also be long sections where the two of them would wander off, and it would stretch the audience's mind to try to figure out the connection."

To simulate a realistic society of the future on a shoestring budget for THX, Lucas and Murch pushed that audiovisual disconnect as far as they could. A scene in which the hero (played by a young Robert Duvall) is tortured is made more horrific by the banal shoptalk of his offscreen tormentors; the chatter of unidentified voices throughout the film reinforces the idea that in a world of ubiquitous surveillance, you are never alone.

"Walter and I were working simultaneously, so I could react to his sounds and recut the film according to what he was doing," Lucas says. "We were inspiring each other as we went, rather than just doing the picture and attaching sounds to it. That's the way I've worked since then." While he was writing the first Star Wars script, Lucas hired USC student Ben Burtt to make the Imperial Star Destroyers sound more ominous by adding the subliminal rumble of an air conditioner; a barely perceptible jingle of spurs was slipped under Boba Fett's entrance in The Empire Strikes Back.

Lucas never met the young Canadian who influenced him so deeply; Lipsett committed suicide in 1986 after battling poverty and mental illness for years. But like a programmer sneaking Tolkien lines into his code, Lucas has planted stealth references to 21-87 throughout his films. The events in the student-film version of THX took place in the year 2187, and the numerical title itself was an homage. In the feature-length version, Duvall's character makes his run from a subterranean city when he learns that the love of his life was murdered by the authorities on the date "21/87." And in the first Star Wars, when Luke and Han Solo blast into the detention center to rescue Princess Leia, they discover that the stormtroopers are holding her as a prisoner in cell 2187.

The rabbit hole goes even deeper: One of the audio sources Lipsett sampled for 21-87 was a conversation between artificial intelligence pioneer Warren S. McCulloch and Roman Kroitor, a cinematographer who went on to develop IMAX. In the face of McCulloch's arguments that living beings are nothing but highly complex machines, Kroitor insists that there is something more: "Many people feel that in the contemplation of nature and in communication with other living things, they become aware of some kind of force, or something, behind this apparent mask which we see in front of us, and they call it God."

When asked if this was the source of "the Force," Lucas confirms that his use of the term in Star Wars was "an echo of that phrase in 21-87." The idea behind it, however, was universal: "Similar phrases have been used extensively by many different people for the last 13,000 years to describe the 'life force,'" he says.

The lessons Lucas learned from filmmakers like Lipsett, McLaren, Jutra, and Kurosawa helped shape the creation of all of his later work. "My films operate like silent movies," he explains in an unused portion of an interview for a documentary on editing called Edgecodes. com. "The music and the visuals are where the story's being told. It's one of the reasons the films can be understood by such a wide range of age groups and cultural groups. I started out doing visual films - tone poems - and I move very much in that direction. I still have the actors doing their bit, and there's still dialog giving you key information. But if you don't have that information, it still works."

After Lucas' assault on Hollywood in 1971 with THX 1138, the Empire struck back.

Convinced that the stark, stylish film had no commercial potential, a team of Warner Bros. executives snatched control of THX from Lucas, recut it, and hung it out to dry in a handful of B-list theaters. The studio then backed out of its deal with Francis Ford Coppola's independent production company, American Zoetrope, which had financed the film, nearly putting Coppola out of business. In 1973, when Universal threatened not to release Lucas' American Graffiti - which became one of the biggest moneymakers in film history - Lucas vowed to build his own rebel base far from Hollywood.

Armed with the success of the first two Star Wars movies, Lucas built his ranch in Marin County and launched a massive R&D blitz to extend a director's editorial control over not just a film's pacing and choice of shots, but every element inside the frame as well.

"If you want to know what editing was like before George came along, visualize that warehouse at the end of Raiders of the Lost Ark," says Michael Rubin, author of Droidmaker: George Lucas and the Digital Revolution, which will be published this fall. "If you shot a movie like Star Wars, you had 300,000 feet of film and sound rolls that had to be code-numbered and matched by hand. If you wanted to cut the scene where Luke was doing this and Han Solo was doing that, some poor schmuck had to find those pieces so you could fit them together with tape. It was like the Library of Congress with no librarian."

EditDroid, the digital editing system that Lucas' team of engineers invented in the 1980s, replaced this Sisyphean task with film scanners, a searchable archive, and a drag-and-drop interface. Sold to Avid, it has become the core of the technology used to edit most major studio releases and nearly all primetime TV programs today. Meanwhile, the brainstorming of his computer division produced the 3D rendering software that spun off into Pixar Animation Studios. Lucas' effects house, Industrial Light & Magic, made computer graphics the centerpiece of big-budget moviemaking with Jurassic Park and Terminator 2. And the improvements in audio clarity and theatrical sound pioneered for Star Wars (including a set of standards known as THX Certification and the eventual creation of the THX sound system) resulted in massive sonic upgrades not only at the local mall, but in surround sound systems at home.

The result of these efforts gave Lucas just what he'd been looking for back at USC. He could flood the screen with color as Brakhage did, mix real and animated elements like a McLaren, manipulate shape and scale with the fluidity of a Belson, and make montages of any image and sound that he could imagine. Reincarnated as a cluster of menu items, the avant-garde techniques that inspired Lucas to become a director are now available to any filmmaker.

"Everything George has done has been to reduce the distance between what's in his skull and the pixels on the screen," Rubin observes. "He's really a painter."

Among the new generation of filmmakers who use the tools developed at Lucasfilm is Peter Jackson, the director of his own epic trilogy. "I was obsessed by visual effects, and in the year prior to Star Wars, Logan's Run and the 1976 King Kong remake had come out," he says. "The world of those films was the one I thought I would have to work in - a world in which your imagination was limited by the technology. Then Star Wars came out in 1977 and blew my mind. Quite apart from being the 16-year-old kid standing and cheering at the end, I knew that if I was ever to achieve my filmmaking aspirations, I no longer had to be limited by technology."

Jackson finally met his hero when the production schedules of The Lord of the Rings and Attack of the Clones overlapped in Sydney. As a fellow techie, he was blown away by the size of Lucas' monitors: "I was used to peering at my little 12-inch screen to watch our shooting, and George had two 42-inch plasmas. The thing I remember most was us discussing 'Where to from here?' in cinema technology. That's a true visionary - someone who is always thinking about what's next and making it happen."

By the time Lucas got around to making The Phantom Menace and Attack of the Clones, however, even certain longtime fans and colleagues started asking if his focus on technology had become, as Thoreau put it, an improved means to an unimproved end. While the original film had the scruffy vitality of a garage band making its big break, the recent episodes can seem like a whirlwind tour of Industrial Light & Magic's interplanetary showroom.

"For me, those films pummel you into submission," Murch says. "You say, OK, OK, there are 20,000 robots walking across the field. If you told me a 14-year-old had done them on his home computer, I would get very excited, but if you tell me it's George Lucas - with all of the resources available to him - I know it's amazing, but I don't feel it's amazing. I think if George were here and we could wrestle him onto the carpet, he'd say, 'Yeah, I've gotten into that box, and now I want to get out of that box.'"

The side of Lucas that wants to get out of the box has more allies than he may realize. Film critic Roger Ebert is already intrigued by the possibility of the director of Star Wars maturing beyond his well-worn role of being a dreamweaver for kids. "Lucas is obviously great at science fiction, and he could combine his indie origins with his natural inclinations in smaller-scale sci-fi films," he says. "There's a lot of mind-bending speculative fiction by Robert Heinlein and Isaac Asimov that has never been filmed. A movie like Eternal Sunshine of the Spotless Mind is science fiction, though it was never described that way."

While Lucas promises that his new films will tackle philosophical issues ranging from theology to slavery in contemporary society, he says they'll be "short projects, like normal people do. You shoot a few months, they're finished in a year, and if you want to do another one, you still have time off."

Given a powerful enough vision, as Yoda might say, size matters not. A 32-year-old former coder named Shane Carruth walked away with the Sundance festival's coveted Grand Jury Prize last year for a knotty thriller on the subject of time travel called Primer. Total cost of production: $7000.

One hurdle to Lucas' thinking small, however, is it isn't easy to downscale your ambitions when you believe that you not only inadvertently financed the multiplexing of America but that you're also indirectly responsible for the popular successes of indie films like Lost in Translation and Amélie.

"After Star Wars, Jurassic Park, The Godfather, Terminator 2, Titanic and The Exorcist - all the giant blockbusters - half of the money went to the theaters, and we went from about 15,000 screens to about 35,000 screens," Lucas says. "The crux of the movie business is the crux of any business - shelf space." With all those new screens, he believes, "hundreds of esoteric art films" are now being financed by companies reaching to take the place of the shuttered Miramax Films, like Disney's Touchstone Pictures division or Time Warner's New Line Cinema, and reaching audiences that would never have seen them before: "You end up with a much more varied group of films being available to you than in the '60s."

He's right that the post-Jaws blockbusters, including his own, financed the morphing of the neighborhood movie palace into the corporate googolplex. But he's wrong about what's playing there, says Dade Hayes, author of Open Wide: How Hollywood Box Office Became a National Obsession. "It's true that a certain tier of art house product would never have seen the light of day a generation ago. That's supercool if you're living in L.A., Boston, or New York, but in most of the big-grossing complexes, you're just going to get more showtimes of Shrek 2."

Fortunately for indie filmmakers, there's a counterforce: the marriage of the DVD and the Internet. Companies like Film Movement, CineClix, and Blockbuster are boosting sales of independent films by offering choices and targeting online ads to users likely to rent niche fare. More people saw Niki Caro's Whale Rider on DVD and VHS than in theaters, adding $13 million in rentals to the film's US box office of $21 million - serious money for a movie by a first-time director. Blockbuster alone generated 530,000 of these rentals by promoting Whale Rider to its 2.5 million members based on user recommendations.

While Lucas has been predicting for years that online distribution would finally free filmmakers from the death grip of Fox and Paramount, now - at the moment of its emergence - he still seems firmly attached to the old theatrical model and a Hollywood sense of scale, especially because of his decision to sell Lucasfilm to Disney.

"With film, if you get a million people to see your movie on the first weekend, you've made about $5 million. That basically will not end up on the top 10 chart," he told me. "You have to get 10 million people on the first weekend. And if you don't do it in two days, you're basically out of the theaters and into the DVD market. There's just an ecology there. If you're a mouse, don't expect to kill a lion, because it ain't gonna happen. If you want to have that kind of power, it's better to be a lion, because the mice are fine - you can have a life and everything - but the lions are the ones out there prowling and scaring the hell out of everybody."

That's the voice of his inner Vader - never wanting to be seen as less than a lion and keeping him busy with everything but the films he says he truly wants to make. Reinvention in midcareer is not a luxury that most directors can afford. Lucas' hard-won and cautiously managed prosperity not only earns him the right to fail, it gives him a chance to succeed in ways that his role models were denied. For the old pros who taught Lucas his craft at film school, a return to a more personal style of filmmaking by one of their most prestigious alumni would be greeted as an artistic homecoming.

"I'm proud of George, but I'm worried about him," says Lucas' former cinematography instructor, USC professor emeritus Woody Omens. "He was trying to speak a different cinematic language at an early point in his career, and he's still trying to get to that. If he wanted me to mentor him again 40 years later, I would say, 'Let go. Do something that explores the non-narrative side of human expression from the perspective of a master and a veteran. Go and make the movie of your life.'"

The myth of Luke Skywalker hinges on courageous acts of liberation. In our conversation at the ranch, Lucas sums up the central theme of his films from THX 1138 to Revenge of the Sith: "How do you personally get to the point where you wake up out of your stupor and take charge of your life and do dangerous and scary things?"

Now that Lucas' personal odyssey in the land of droids and Wookiees is over and he's content to let Disney do all the work of any future films, he has an opportunity to tap the bravery of the younger self who mapped out a universe at his desk with a No. 2 pencil. The masters of independent cinema and the digital rebel alliance have assembled outside the gates of Skywalker Ranch to deliver a message: "Lucas, trust your feelings."

Under the Influence

Four groundbreaking independent films that shaped the vision of George Lucas.

Neighbours [1952], by Norman McLaren-Canada

An intoxicating flower sprouts on the property line between two houses, and chaos ensues. By animating human actors and real objects with a technique he called "pixillation," McLaren created a world in which the laws of gravity and physics were suspended, proving to Lucas that the only limit in cinema was in the filmmaker's imagination.

21-87 [1963] by Arthur Lipsett-Canada

Lipsett elevated the cinematic mashup to an art by manipulating found footage and audio, inspiring Lucas to become an editor and director. Visual compositions similar to Lipsett's appear in Lucas' first feature, THX 1138, and 21-87's use of sound was a profound influence on American Graffiti and Star Wars - as well as the secret source of "the Force."

Allures [1961] by Jordan Belson-USA

A student of Buddhism and yoga, Belson "could extract 10 tons of poetry from the reflections off the hood of a 1949 truck," says THX 1138 collaborator Walter Murch. The reclusive director screened his images of swirling starbursts on the dome of San Francisco's Morrison Planetarium in the late 1950s and later created visual effects for The Right Stuff. Lucas had abstractions like Belson's in mind when he designed the closeups of clashing lightsaber beams for the Anakin/Dooku showdown in Attack of the Clones.

The Hidden Fortress [1958] by Akira Kurosawa-Japan

Lucas credits the bumbling sidekicks in this film with inspiring the droids C-3PO and R2-D2, but that's just the most obvious influence. There's also a stoical princess (think Padme Amidala) and a rousing chase on horseback (see Return of the Jedi's speeder bikes). Kurosawa's visual sensibility proved that a director could create what Lucas calls "immaculate reality" on an epic scale, and Lucas repaid the debt by helping Kurosawa finance his later masterpiece Kagemusha.

"Exclusive Q&A: George Lucas on Star Wars, Fahrenheit 9/11, And His Own Legacy," by Steve Silberman, Wired, May 1, 2005
WIRED: You've been working on Star Wars ''for almost 30 years and now it's finished, at least for you. Do you feel a sense of release?''

LUCAS: Yes. I've enjoyed Star Wars enormously, but it's great to be able to look forward to projects that I've wanted to do for a long time. I get to go back to what I was doing before this big thing happened, and I think the series is great hands for Disney to fully take over and do future works without me.

What are you doing to reconnect with who you are, apart from being the guy who made Star Wars?

I try to stay in touch with that part of myself, especially when I'm writing. Unfortunately, when I was supposed to be writing Star Wars, I would end up doing more reading and thinking than writing. When you're writing for three or four months, you go places where ordinary human beings wouldn't care to go, unless you were a Tibetan monk. Most writers spend a lot of time trying to avoid that, so you make excuses as to why you should read this or that book. Usually I come up with lots of ideas for films that I really want to do.

None of the films I've done was designed for a mass audience, except for Indiana Jones. Nobody in their right mind thought American Graffiti or Star Wars would work.

But the second trilogy certainly had a built-in audience.

Yeah, everyone says the second trilogy was a slam dunk. But there was a a bit of controversy around here about the fact that I wasn't doing the obvious - I wasn't doing the commercial version of what people expected. People expected Episode III, which is where Anakin turns into Darth Vader, to be Episode I. And then they expected Episodes II and III to be Darth Vader going around cutting people's heads off and terrorizing the universe. But how did he get to be Darth Vader? You have to explore him in relationships, and you have to see where he started. He was a sweet kid, helpful, just like most people imagine themselves to be. Most people said, "This guy must have been a horrible little brat - a demon child." But the point is, he wasn't born that way - he became that way and thought he was doing the right thing. He eventually realizes he's going down the dark path, but he thinks it's justifiable. The idea is to see how a democracy becomes a dictatorship, and how a good person goes bad - and still, in the end, thinks he's doing the right thing.

It's common these days to talk about good and evil in terms of gray areas, but in your films, good and evil are more strictly defined.

It's the more old-fashioned version of good and evil - the version that those of us who grew up in the '40s and '50s had, when there was a strong sense of good and evil because of World War II. That's one of the few times in history when the bad guys were very clearly delineated for us. There really was a fight for survival going on between pretty clearly good guys and bad guys.

The story being told in Star Wars is a classic one. Every few hundred years, the story is retold because we have a tendency to do the same things over and over again. Power corrupts, and when you're in charge, you start doing things that you think are right, but they're actually not.

Did you always intend to make a second trilogy?

The original story is really the first three films. I never thought I would get to tell the backstory, because I had to design Star Wars in a very limited way to fit it into the technology I had at the time. I did the same thing with THX 1138 - I had to create a futuristic world without special effects and without sets. With each film, I pushed the envelope of technology. For Star Wars I had to develop a whole new idea about special effects to give it the kind of kinetic energy I was looking for. I did it with motion-control photography. I had a lot of experience with animation, so it was a matter of taking the technology of animation and moving it into effects. For The Empire Strikes Back, I had to create an actor who could do a believable performance and still only be two-and-a-half feet high. I had the whole center of the film resting on us being able to pull that idea off and not have Yoda look like Kermit. If I had failed at any one of those things, the films would have died a horrible death. I had to make it all believable somehow, even though it was completely ridiculous. I had to say, "This is real. We fly around in spaceships with Wookiees - this is all real stuff, real people." That was the hardest part.

After Return of the Jedi, I said to myself, "Now I'm going to take some time off and raise my kids, and later on, I'll come back and do my personal films, because that's really what I want to do."

So why did you come back to Star Wars instead of making "personal films"?

15 years later, we had made such advances at Industrial Light & Magic, especially with Jurassic Park. That was the watershed of being able to create realistic characters using digital technology. So I thought about it again. I could do cities like Coruscant, I could do a Podrace, I could do other things that up to that point had been impossible. The defining factor was the Star Wars Special Edition, where the thing was to create a real Jabba the Hutt. Not a big rubber thing, but a digital actual character. I figured if I could do that, then I could do everything else. When we brought out the Special Edition, we didn't really expect it to bring in much of an audience. We had a sense that we hadn't sold very many VHS tapes of the original releases- I think about 300,000 - which is nothing compared to the 11 million that E.T. did. So I said that this would be an experiment, and hopefully we'll get our money back.

The success of that re-release not only told me that I could create these creatures and build better sets and towns than I could before, but that the Star Wars audience was still alive - it hadn't completely disappeared after 15 years. I decided that if I didn't do the backstory then, I never would. So I committed to it, and here I am finished. So now I'm going to do what I thought I was going to do back then.

In addition to the experimental films that you say you want to make now, you've expressed an interest in making historical films.

Yes, but I don't want to get into situations where people say, "That's not historically correct." History is fiction, but people seem to think otherwise. History is different from facts or truth. The thing I like about fantasy and science fiction is that you can take issues, pull them out of their cultural straitjackets, and talk about them without bringing in folk artifacts that make people get closed-minded.

Give me an example of what you mean by a folk artifact.

Fahrenheit 9/11. People went nuts. The folk aspects of that film were George Bush or Iraq or 9/11 or - intense emotional issues that made people put up their blinders and say, "I have an opinion about this, and I'm not going to accept anything else." If you could look at these issues more open-mindedly - at what's going on with the human mind behind all this, on all sides - you could have a more interesting conversation, without people screaming, plugging their ears, and walking out of the room like kids do.

And you do that by -

By making the film "about" something other than what it's really about. Which is what mythology is, and what storytelling has always been about. Art is about communicating with people emotionally without the intellectual artifacts of the current situation, and dealing with very emotional issues.

Life and death.

Life and death, or "I really want to kill my father and have sex with my mother." It's hard to talk about that kind of thing in a family situation without somebody getting upset. But in art, you can deal with those issues. You begin to realize that other people have had the same experience or go down those same paths deep in their minds. Most stories are really told for adolescents, which is why Star Wars was aimed at adolescents. Societies have a whole series of stories to bring adolescents into adulthood by saying, "Don't worry, everybody thinks that way. You're just part of the community. We don't quite talk about it, but if you act on some of your notions, here's what will happen: Zeus will reach down and smash you flat like a bug or the entire Greek army will come and crush your city and burn everybody inside of it, including your heroes." These lessons are continually handed down from generation to generation. I love history, so I create an environment - in the past, present, or future - that allows me to tell the story, but in a way that's not incendiary.

A film like Casablanca ''was an instructive fable designed for adults, and there were lessons in it about choices and love that I couldn't possibly have understood as an adolescent. Do you aspire to make films that do the same things for adults that Star Wars has done for adolescents?''

Once people get out of college, they're set in their worldview. With a film like Fahrenheit 9/11, you can affect people who already believe that way, and they can say "Right on," but you can't affect people who have made up their minds the other way. I'm caught in this world where I'm an entertainer. A movie is a big deal. You either have to have unlimited resources or you have to make movies for an audience.

The movies that are the most interesting don't even make a million dollars. A million dollars means what? That maybe a couple of hundred thousand people saw it.

A film like Being John Malkovich was fairly experimental, but was able to reach -

Yeah, I like those movies. They're inspired, and they did fairly well. I mean, I come from San Francisco. Stan Brakhage is esoteric. Being John Malkovichwas sort of unusual. Eraserhead was esoteric.

What other films have you liked in recent years?

Amelie was great. But the best thing that's happened since Fahrenheit 9/11 is that now we can actually get documentaries in theaters. I have a little documentary unit now that's doing stuff for The Young Indiana Jones Chronicles, but we're not going to stop there.

When the Biography Channel makes its documentary about you in 2050, how do you want to be remembered?

I'll be remembered as a filmmaker. The technological problems that I solved will be forgotten by then, but hopefully some of the stories I told will still be relevant. I'm hoping that Star Wars doesn't become too dated, because I think its themes are timeless. If you've raised children, you know you have to explain things to them, and if you don't, they end up learning the hard way. In the end, somebody's got to say, "Don't touch that hot skillet." So the old stories have to be reiterated again in a form that's acceptable to each new generation. I don't think I'm ever going to go much beyond the old stories, because I think they still need to be told.  "Disney Announces Theme Park Overhaul," by Diana B. Henriques, The New York Times, June 27, 2005 

A week before the new Disney's America theme park opens as the fifth gate of Walt Disney World Resort in Florida, CEO Michael D. Eisner has announced that one of its older parks, Disney's Hollywood Studios (formerly Disney-MGM Studios) will be shut down in September for a major overhaul and retheming, expected to last until March of 2008.

"We're going to redesign the park and have it align closer with a vision Walt himself would have been proud of," Mr. Eisner said. "The saying of Disney's Hollywood Studios has always been that it is 'the Hollywood that never was and always will be.' Our ambitious retheming will bring the park more in line with that tagline. We expect that it will be quite an undertaking that all park visitors will appreciate immensely."

The current Disney's Hollywood Studios is a disparate collection of attractions based on various well-known movie and television properties, both owned by Disney and those licensed from other owners. The most popular attraction, The Twilight Zone Tower of Terror, is based on the famed CBS anthology series. After Disney purchased ABC in 1996, the network was also integrated to be part of the park, with the ABC Commissary, and hosting conventions with the stars of ABC's daytime soap operas such as General Hospital. Now, Mr. Eisner says that for the most part, the new park will largely be stripped of intellectual property tie-ins, in favor of "creative alternatives."

The forthcoming new park, Disney's America, a theme park devoted to American history, was previously planned to be opened in Haymarket, Virginia, for 1997. However, a grassroots movement against the park led by ordinary citizens complaining about the potential for traffic overflows and historians objecting to the "commodification and commercialization of history", succeeded in killing the proposal. In 2003, Disney COO, President and Chairman Bob Iger announced that the park would be revived and opened as the fifth gate in Florida, thanks to the efforts of and consultation of Kurt Cobain and Charlize Theron's Springbok Productions, as well as enlisting the support and expertise of historians, many of whom opposed the original Virginia park. The park was announced to open for the 4th of July celebrations this year.  "Former Presidents Confirmed As Invites For New Disney Park," CNN website, June 29, 2005 

A spokesperson for Walt Disney Imagineering has confirmed rumors that the living former Presidents and their families would be attending the opening of the new Disney's America theme park at Walt Disney World on the 4th of July.

On hand for the opening ceremony in Florida are former Presidents Gerald Ford, Jimmy Carter, George H.W. Bush and Bill Clinton, as well as their families. The former Presidents are all expected to have a few words each to speak at the ceremony.

Former First Lady Nancy Reagan, whose husband, former President Ronald Reagan, died last summer, will also be attending the ceremony.

The guest list also has a number of guests associated with former Presidents. Senator Edward M. Kennedy and assorted members of the Kennedy family will attend the proceedings, as will Vice President Al Gore.

The WDI spokesperson also further clarified the planned overhaul of Disney's Hollywood Studios, which will begin in September, when the current park closes down. "Everything but The Twilight Zone Tower of Terror and the McDonald's Fairfax Fries stand on Sunset Boulevard is going to be completely revamped and rethemed. It will all be changed considerably. So, if you want to experience everything as it is now, before it's gone, better hurry while you can!"

"Disney, McDonald's Renegotiate Strategic Alliance," by Rachel Abramowitz, Los Angeles Times, May 8, 2006
For the past 10 years, Mickey Mouse and Ronald McDonald have been joined together in an exclusive cross-promotional pact that set up Disney's properties to be promoted by Happy Meal toys and also called for McDonald's to set up shop and sell its fare at Disney parks worldwide, including freestanding limited-menu tie-ins in the individual parks of Walt Disney World and Disneyland, two-full service ones in the Florida resort proper (one near the discount All-Star Resorts, another in Downtown Disney), and one at the Disney Village in Disneyland Paris. The deal had McDonald's pay $100 million in royalties and do 11 promotions every year, a deal that Disney values at around $1 billion. The deal has turned out quite well for both parties, especially as Disney has continued its impressive renaissance and turnaround since 1985, seeing the company fully entrenched in all corners of the entertainment industry. So it is natural that both parties would want to keep the gravy, or rather Secret Sauce, train rolling...with a change or two.

Disney and McDonald's renegotiated their strategic alliance so that the exclusivity component, keeping McDonald's only allowed to do promotion for Disney's films, TV shows and video games, has been done away with, allowing the Golden Arches to make promotional deals with competitors like DreamWorks, and in fact they announced a two-year pact with DreamWorks Animation on the same day as announcing that the Disney deal had been renewed "in perpetuity." It also announced a ramping up in having freestanding limited-menu McDonald's branded locations in every single park, including ones yet to be built, carrying on after one was allowed at the recently-opened Disney's America at Walt Disney World; it also announced that during Disney's massive overhaul and retheming of Disney's Hollywood Studios which will be completed in a year and a half, only The Twilight Zone Tower of Terror and the freestanding limited-menu McDonald's vendor Fairfax Fries would be carried over from the original park. There will be freestanding vendors in Disneyland Paris, Disney Studios Paris, Tokyo Disneyland, Tokyo DisneySea, Shanghai Disneyland and Hong Kong Disneyland; as well as any potential further new gates at Walt Disney World, should a potential plan to buy more land to add to the property be approved. However, the second full-service McDonald's at Florida's Downtown Disney will close, and Miami Subs Pizza & Grill will move from its original smaller location into this property, while the original smaller location will be taken over by rival hot sandwich franchise The Earl of Sandwich.

While Disney has certainly continued to reach massive new heights over the years, McDonald's is also continuing to grow exponentially as well, not just with its own menu and franchise, but also its massive investment and stakes of the Donatos Pizza and Chipotle Mexican Grill franchises, the latter of which Kurt Cobain and Charlize Theron recently became equity investors of to complement their investments in Miami Subs, Planet Hollywood, Roadhouse Grill, Bubba Gump Shrimp Company, Barneys New York, Blackstone Restaurant Group (the restaurant properties of NBA superstar Michael Jordan) and Dan Marino's Town Tavern. McDonald's recently sold large chunks of their stakes in Donatos and Chipotle for massive profit, and Chipotle had a successful IPO earlier this year, but they still own 30 percent of both franchises, the largest, and therefore, controlling stake in both companies. (They had a combined $650 million investment in both chains, and have taken out nearly $2 billion.) However, their ownership of Boston Market, the rotisserie chicken franchise, has not turned out so well and continues to suffer weak performance, and McDonald's is looking for buyers for it. McDonald's has also continued to flourish in all respects because of following the trends that Cobain and Theron have done with the companies they are invested in and which McDonald's and its competitors have been working eagerly to follow; a push for expansion of the menus to include organic, vegetarian, vegan and gluten-free options galore; elimination of trans fats by switching fried foods to be done in sunflower oil and canola oil; helping push the trend for lab-grown meat substitutes that look and taste convincingly like meat and are also considerably healthier; and mass reform of the livestock and meatpacking industries and the "factory farm" and "fish farming systems" to be done "cruelty-free" and to massively reduce the methane emissions of cows and the carbon emissions of meat plants, so that consumption of regular beef, pork, fish and chicken can be done in an environmentally friendly manner.

Of course, moves like this are not without some criticism, particularly as McDonald's and fast food in general has been targeted for its role in an apparent upswing of obesity in America, alongside lack of healthy options in school cafeteria lunches and easy access to soda vending machines by schoolchildren. Author Eric Schlosser in particular focused his ire at McDonald's and their ilk in his book, Fast Food Nation, putting the blame on them for not just obesity, but also labor violations and foodborne illnesses. Filmmaker Morgan Spurlock did an irreverent documentary, Super Size Me, for which he ate nothing but McDonald's for 30 days, during which he gained 25 pounds and suffered obvious health problems as well. The attention given to the movie made McDonald's remove the Super Size portion option from its menus and a massive focus on improving their salads as well as greater flexibility for Happy Meals, so that children wouldn't only have an entree, fries and soda.

While McDonald's is actively moving to do food and toy tie-ins with Disney's competitors, Disney is not planning to launch promotional deals with McDonald's' competitors, seeking instead to find other methods to help promote its product to children. "Fast food has been a very important promotional partner in promoting films to children," said industry analyst Lowell Singer of Cowen and Co. "As the animated marketplace gets more competition over the next few years, Disney will need to be much more aggressive and creative in reaching children though other promotional outlets."  "Disney Shuts Down Hollywood Pictures," Deadline Hollywood, April 25, 2007 

Walt Disney Studios chairs Meryl Poster and Dick Cook announced today that the long-running Hollywood Pictures imprint, which along with Touchstone Pictures and the defunct art house group Miramax Films, was used to release mature content in theaters, will be officially shut down as of today. It was announced as part of a reorganization moving Disney's focus on releases by Walt Disney Pictures, Walt Disney Animation Studios, Pixar Animation Studios, Touchstone, Lucasfilm Ltd., ABC and ESPN.

"While we remain proud of the library of Hollywood Pictures, it is simply no longer part of our core strategy," Poster and Cook stated. "Furthermore, decreasing dividends made it no longer viable as a releasing imprint. We will, however, honor the remaining commitments made under the label and release them in theaters."

Hollywood Pictures' first release was Arachnophobia in 1990. Since then, it became known for releases such as The Hand That Rocks The Cradle, Medicine Man, Super Mario Bros., Color of Night, Encino Man, Terminal Velocity, The Joy Luck Club, The Air Up There, Tombstone, Quiz Show, Crimson Tide, Dangerous Minds, Judge Dredd, Dead Presidents, The Scarlet Letter, Mr. Holland's Opus, The Rock, Spy Hard, Jack, Nixon, Evita, Gone Fishin', G.I. Jane, Dead Rising and The Sixth Sense. In recent years, it had become known for low-budget genre films such as the slasher film Stay Alive.  "Disney Channel, ABC Rerun Spinoff Channels Debut," TV Guide, December 7, 2007 

Today, the Disney-ABC Television Group officially debuted two new spinoff channels, both of which are already available on basic cable packages without the need for premium upgrades. ABC Classic and Disney Channel Classic are rerun-centric channels dedicated to continuous airing of vintage programming throughout the parent channels' history. This includes long-dormant programming and programs from The Disney Channel's original period as as a premium cable channel prior to 1996.

These spinoff channels join the Playhouse Disney preschool-centric spinoff channel, ABC Family, and SOAPNet, the soap opera-centered spinoff that continually airs reruns of not just ABC Daytime programming but even licenses other shows in the genre for reruns, as major corresponding, available to all spinoffs standing besides ABC, The Disney Channel and ESPN and ESPN2. Disney-ABC also has ownership stakes of Lifetime and A&E Networks, the latter of which includes A&E and The History Channel.

"This is a great day for longtime viewers of what the Disney-ABC Television Group has to offer," outgoing CEO Michael Eisner (leaving in July to make way for heir apparent Bob Iger) declared to the press. "We give the viewers more flexibility and freedom of choice, and the ability to enjoy the best programming, past and present."  "The Walt Disney Studios Enters Long-Term Distribution Agreement With DreamWorks Studios," BusinessWire, February 11, 2009 

Burbank, CA— The Walt Disney Studios has formally agreed to enter into a nonexclusive long-term distribution arrangement with filmmaker and DreamWorks Studios co-founder Steven Spielberg, and partner Stacey Snider, chief executive officer of DreamWorks, to distribute 30 upcoming live action motion pictures produced by DreamWorks under their partnership with Reliance BIG Entertainment, part of The Reliance Anil Dhirubhai Ambani Group, it was announced today by Meryl Poster, chairman of The Walt Disney Studios.

Under the terms of this arrangement, Disney will handle distribution and marketing for approximately six to eight DreamWorks films each year. Furthermore, Springbok Productions will take on a massive stake in the venture by co-producing several of the films, and helping pay budgetary and marketing costs. The first DreamWorks motion picture to be released under the Touchstone Pictures banner is scheduled to hit theaters in 2011.

DreamWorks principals Spielberg and Snider partnered with Reliance BIG Entertainment last fall to form a new motion picture company. In addition to being a partner in DreamWorks, Reliance will also distribute the new company's projects in India.

Commenting on the announcement, Poster said, "We're both thrilled and honored to be marketing and distributing DreamWorks' signature upcoming live action motion pictures, and to begin a new relationship with such respected colleagues as Steven, Stacey, and their creative team at DreamWorks, as well as the people at Springbok. Steven has made some of the biggest and most loved films of all-time, and continues to be one of the great icons of our industry. Stacey has an impeccable reputation and a phenomenal track record for making a wide variety of quality films. Springbok also is a success story like no other, and represent a great fusion of artistic freedom and box office gold. Together, their motion pictures will be the perfect complement to the already robust slate of Disney and Touchstone films being made by Oren Aviv and his team."

Bob Iger, president and CEO, The Walt Disney Company, added, "We are tremendously pleased to join forces with Steven Spielberg, whose artistic vision and commitment to quality filmmaking are legendary. DreamWorks has had a great creative and commercial track record under the leadership of Steven and Stacey Snider and I am delighted they're now associated with Disney. Furthering our relationship with Springbok is also a plus!"

Steven Spielberg said, "Disney is the birthplace of imagination and has always been as close to the worldwide audience as any company ever has. I am so pleased that industry leaders like Bob Iger and Meryl Poster reached out to become our distribution partner, and that Kurt Cobain, Charlize Theron, Jennifer Todd and the Springbok Production team also saw fit to join in. This is a major step forward for us and Reliance."

Stacey Snider added, "Under Bob Iger and Meryl Poster's leadership, The Walt Disney Company represents the highest standard of quality in our industry. You can also say much the same about Springbok. Everyone at DreamWorks is thrilled to be embarking upon this new and exciting partnership and we look forward to our future with their great teams."

Jennifer Todd added, "Steven Spielberg is one of the true creative giants of Hollywood, Disney represents an amazing degree of quality, and it is an honor to be involved in this amazing new venture."

About The Walt Disney Studios

The Walt Disney Studios is a unit of The Walt Disney Company (NYSE: DIS) and produces and distributes motion pictures under the following banners: Walt Disney Pictures(which include live-action movies, animated feature films from Walt Disney Animation Studios and Pixar Animation Studios) as well as Lucasfilm Ltd. and Touchstone Pictures as well as former divisions Hollywood Pictures and Miramax Films. Walt Disney Studios Motion Pictures serves as the Studio's international distribution arm. Buena Vista Home Entertainment/Walt Disney Studios Home Entertainment distributes Disney and other film titles to the rental and sell-through home entertainment markets. Disney Theatrical Group is among the world's most successful commercial theatre enterprises producing or licensing live entertainment events that reach a global annual audience of more than 20 million people in more than 40 countries, and the Disney Music Group distributes original music and motion picture soundtracks under its three record labels: Walt Disney Records, Hollywood Records and Lyric Street Records.

About DreamWorks Studios

Steven Spielberg and Stacey Snider and The Reliance Anil Dhirubhai Ambani Group announced the formation of a new motion picture company which will be led by Spielberg and Snider. The new company is a continuation of DreamWorks Studios which was formed in 1994 by Steven Spielberg, Jeffrey Katzenberg, and David Geffen. The company won three Best Picture Academy Awards with Saving Private Ryan (co-produced by Paramount), Gladiator, and A Beautiful Mind (both co-produced with Universal). Among the company's other successes have been such films as American Beauty, The Ring, Minority Report (co-produced with 20th Century Fox), War of the Worlds, Dreamgirls, and Transformers (all co-produced with Paramount). Snider joined DreamWorks Studios in 2006 as Co-Chairman and CEO. Snider has overseen the company's business strategy as well as the creative and financial aspects of all film development and production.

About Reliance BIG Entertainment

Reliance BIG Entertainment Ltd. (RBEL) is the flagship media and entertainment arm of Indian conglomerate, Reliance Anil Dhirubhai Ambani Group (R-ADAG), with significant presence in film entertainment (film production, distribution, and exhibition), broadcasting and new media ventures. With investments over USD 1 billion in its Filmed Entertainment business RBEL's motion picture brand BIG Pictures has built a formidable film production slate in Hindi, English & other Indian languages, which it markets & distributes worldwide. In Hollywood, BIG Pictures has development silos with Nicolas Cage's Saturn Productions, Jim Carrey's JC 23 Entertainment, George Clooney's Smokehouse Productions, Chris Columbus' 1492 Pictures, Tom Hanks' Playtone Productions, Brad Pitt's Plan B Entertainment, Jay Roach's Everyman Pictures, Brett Ratner's Rat Entertainment and Julia Roberts' Red Om Films.  Q&A with Walt Disney Studios co-chair Meryl Poster on Entertainment Tonight, July 17, 2009 

Q: What would you say is your real secret for success in managing Disney's studio and various divisions.

The key to our success depends very much on cooperation and dialogue. I may technically be subservient only to the other board members and superior to the different division heads, but I treat everyone like we're part of a team. I also give everyone plenty of rope and trust their judgment, knowing that they know best regarding their own little kingdoms. Michael Eisner and I had a great relationship, and I'm quite on great terms with Dick Cook, Bob Iger, John Lasseter, our new live action films head Sean Bailey, George Lucas, Rick McCallum, the folks at Disney-ABC Television Group, and now Kevin Feige and Jeph Loeb.

Q: You recently announced that Touchstone Pictures will be used to distribute films by DreamWorks. Will it continue to release PG-13/R-rated projects outside of that?

Of course. Touchstone is just as important a division to Disney as everything else. Remember, it was founded to ensure that Walt Disney Pictures would only release G-rated films, back in 1982, with the intention to handle everything else. Since our cultural standards have liberalized, so have we, with Disney handling PG and PG-13 films directly now, but Touchstone still holds onto most in that area. Even though some of our latest, non-Springbok releases through that division didn't succeed as much as we hoped, and if we ever did a mega-merger with another big studio, Touchstone would still get plenty of work, because Disney has just as much right to do mature films as the others. We do it with this, and we did it with Miramax and Hollywood Pictures, back when they existed.

Q: When Disney absorbed Miramax fully in 2001, after it was shuttered, the Touchstone name has been placed at the beginning of the DVDs of those films. And two years ago, you shuttered the Hollywood Pictures imprint. Care to explain?

It was not my decision to officially scrub Miramax's name from re-releases of its film library, and replace it with Touchstone, since it was repurchased and folded in, but I will respect that decision. I'm not someone who works to undermine and discredit my predecessors. Of course, you may wonder why we kept the Weinsteins credited in those films. Because, even with what Harvey did and how Bob failed to act decisively enough, they still had incredible taste in films and finding talent. And I learned a lot when I worked at Miramax, especially to the point that I was the only woman Harvey would listen to. As for Hollywood Pictures, that division served its purpose. It was intended to be just as serious for projects as Touchstone, and there were some definite hits: Arachnophobia, Evita, Mr. Holland's Opus, Crimson Tide, Tombstone and The Rock. But in practice, it became a toxic waste dump for really stupid films, like Encino Man, Super Mario Bros, and Judge Dredd, much like Sony had with Revolution Studios. So there's really no purpose to keeping Hollywood Pictures around, when we have something with a better proven track record.  "Disney Buys 3000 Additional Acres In Florida," Orlando Sentinel, July 24, 2009 

After months of negotiations and a town hall to assuage potential worries regarding environmental impact, the Walt Disney World Resort received permission to purchase an additional 3000 acres of Central Florida land to add to the complex. The resort plans to make four additional gates to add to the five preexisting ones inside the extant 27,000 acres: the Magic Kingdom, Epcot, Disney's Hollywood Studios (having reopened last year after a massive refurbishing), Disney's Animal Kingdom and Disney's America, along with the various hotel resorts and the Downtown Disney complex.

Among the newly planned additions for the four new gates are a Pixar-themed resort, a Star Wars-themed land, and, rumors are to be believed, a Marvel Comics-themed land, following a proposed purchase of Marvel Entertainment by Disney. The proposed ninth gate has yet to have a specific theme. These will all be built and opened within the next decade, and like the already existing five gates, will have limited-menu freestanding McDonald's vendors to go along with the full-service massive McDonald's location near the All-Star Resorts, as part of the renewed Disney-McDonald's strategic alliance in place since 1996.  "Disney To Acquire Marvel Entertainment," BusinessWire, August 31, 2009 

Burbank, CA and New York, NY —Building on its strategy of delivering quality branded content to people around the world, The Walt Disney Company (NYSE: DIS) has agreed to acquire Marvel Entertainment, Inc. (NYSE:MVL) in a stock and cash transaction, the companies announced today.

Under the terms of the agreement and based on the closing price of Disney on August 28, 2009, Marvel shareholders would receive a total of $30 per share in cash plus approximately 0.745 Disney shares for each Marvel share they own. At closing, the amount of cash and stock will be adjusted if necessary so that the total value of the Disney stock issued as merger consideration based on its trading value at that time is not less than 40% of the total merger consideration.

Based on the closing price of Disney stock on Friday, August 28, the transaction value is $50 per Marvel share or approximately $4 billion.

"This transaction combines Marvel's strong global brand and world-renowned library of characters including Iron Man, Spider-Man, X-Men, Captain America, Fantastic Four and Thor with Disney's creative skills, unparalleled global portfolio of entertainment properties, and a business structure that maximizes the value of creative properties across multiple platforms and territories," said Robert A. Iger, President and Chief Executive Officer of The Walt Disney Company. "Ike Perlmutter and his team have done an impressive job of nurturing these properties and have created significant value. We are pleased to bring this talent and these great assets to Disney."

"We believe that adding Marvel to Disney's unique portfolio of brands provides significant opportunities for long-term growth and value creation," Iger said.

"Disney is the perfect home for Marvel's fantastic library of characters given its proven ability to expand content creation and licensing businesses," said Ike Perlmutter, Marvel's Chief Executive Officer. "This is an unparalleled opportunity for Marvel to build upon its vibrant brand and character properties by accessing Disney's tremendous global organization and infrastructure around the world."

Under the deal, Disney will acquire ownership of Marvel including its more than 5000 Marvel characters. Mr. Perlmutter will oversee the Marvel properties directly as remaining head of Marvel Comics. However, the company shall be split into three different divisions. Besides Mr. Perlmutter's domain, there will be Marvel Studios, headed by Kevin Feige, which is Marvel's film production company and oversees the so-called Marvel Cinematic Universe. Marvel Television, headed by Jeph Loeb, will officially begin operations in 2012, and will be another separate division, part of the Disney-ABC Television Group. Marvel's preexisting licensing deal with Universal's Islands of Adventure resort shall be annulled, freeing Disney to create a new, massive theme park based on the Marvel characters as part of the newly announced expansion of Walt Disney World Resort.

The Boards of Directors of Disney and Marvel have each approved the transaction, which is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, certain non-United States merger control regulations, effectiveness of a registration statement with respect to Disney shares issued in the transaction and other customary closing conditions. The agreement will require the approval of Marvel shareholders. Marvel was advised on the transaction by BofA Merrill Lynch.

About The Walt Disney Company

The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, interactive media and consumer products. Disney is a Dow 30 company with revenues of nearly $38 billion in its most recent fiscal year.

About Marvel Entertainment, Inc.

Marvel Entertainment, Inc. is one of the world's most prominent character-based entertainment companies, built on a library of over 5000 characters featured in a variety of media over seventy years. Marvel utilizes its character franchises in licensing, entertainment (via Marvel Studios and Marvel Animation) and publishing (via Marvel Comics).

"Disney Looking to Sell Off Miramax Name," by Brooks Barnes, The New York Times, January 31, 2010
The Walt Disney Company has been quietly shopping what remains of its Miramax film unit and has secured seven to 10 interested bidders, according to a mergers and acquisitions expert with knowledge of the process.

The initial discussions indicate a price of over $485 million for the Miramax name, a group of development projects, and rights to make sequels and TV shows off the massive library of hundreds of films, which is essentially all that remains of the once-mighty art house label, according to the person involved who declined to be identified because the current negotiations are confidential. (Disney is not selling the Miramax library itself, which was folded into that of Touchstone Pictures, and continues to sell well.)

The interest is sharply higher than a year ago, when Disney briefly floated a Miramax sale but reconsidered because of the recession, reflecting a loosening of the debt markets. It may also indicate renewed interest in investing in entertainment.

A Disney spokeswoman declined to comment.

Bob Weinstein, who founded Miramax with his disgraced brother Harvey in 1979, is not among the bidders – so far. The Weinstein brothers sold Miramax to Disney in 1993 but ran it until 1999, when they left due to Harvey's exposure for sexual assault and misbehavior. Miramax itself was closed in 2001 because of an inability to escape the taint of the scandal, and it was folded into Disney's Touchstone Pictures division, with Touchstone taking on the release of most scheduled Miramax projects as well as spurring the development of new projects in a similar vein, which have since been referred to as "spiritually Miramax." Some projects went to Disney's since-shuttered Hollywood Pictures imprint, and others, such as Master and Commander: The Far Side of the World and No Country for Old Men ended up being farmed out to other studios, 20th Century Fox and Paramount, respectively.

One potential buyer is Summit Entertainment, the privately owned studio that is awash in cash thanks to two Twilight blockbusters. Summit does not have a large library and, despite its success, could use the steady if diminishing DVD and television-resale income that comes from one.

Analysts estimate that the Miramax library generates more than $300 million in annual DVD and television revenue, but warn that Disney has never broken out a number, especially given that the library is contained within that of Touchstone. A Summit spokesman declined to comment. Deadline. com reported last week that Summit was kicking Miramax's tires. Other interested parties include several private equity groups and at least one other independent studio, according to the person involved.

Disney expects to move forward with the more serious bidding inquiries in the coming days, according to the person involved, who added that a sale could come within a few months.

Miramax was more responsible than any company for ushering specialty films to the multiplex masses. The library includes hits like Pulp Fiction, Shakespeare in Love, Clerks, Dogma, Chasing Amy, Sling Blade, Good Will Hunting, The English Patient and The Cider House Rules.

Disney has wanted to find a new home for the Miramax label for some time as it focuses more intently on big-budget, branded movies, and also feels that a decade on ice is sufficient time for bad memories to fade and the name to be useful again. But sale efforts were stymied by the recession and banking crisis.

Instead, Disney has spent the last six months paring the Touchstone division, with a decision to somewhat reduce its output, given that over the last decade, many "spiritually Miramax" projects that would've been released with that name ended up released by Touchstone in addition to the projects already on its slate, leading to upwards of 20 or more films and, thus, a relative glut of Touchstone releases every year. The considerably-trimmed label will now be somewhat more selective with its release output, especially given that Touchstone is also set to be used for releases by Steven Spielberg's DreamWorks production company for a nonexclusive distribution pact of up to 30 films. Six "spiritually Miramax" films await release by Touchstone, including Last Night, a drama starring Keira Knightley, and The Baster, a romantic comedy starring Jennifer Aniston and Jason Bateman.

The winnowing of operations probably made the Miramax brand more attractive; any buyer would most certainly have instituted similar staff reductions. Disney renewed its efforts to sell Miramax as financing became more available and it finished the $4 billion acquisition of Marvel Entertainment.

Specialty labels like Miramax were originally intended to tap a growing market for cerebral, low-budget films — and make their corporate owners competitive at the Oscars. But soaring marketing costs and a glut of art films dented the profitability and reliability of boutique divisions. Add in slumping DVD sales, and the economics are extremely difficult.

Disney is in the middle of overhauling its movie operation. The company has jettisoned over a dozen top managers, including its top marketing and production executives. Disney has its moviemaking hands full. In addition to Pixar and its own brand, Disney has had Lucasfilm Ltd. under its control since 1996, and now has Marvel and the distribution deal with DreamWorks to mine from.

"Springbok And Disney Announce Stage Version Of The Nightmare Before Christmas," by Ernio Hernandez, Playbill, May 10, 2010
Walt Disney Theatrical and Springbok Productions have announced that they are ready to unveil their next production together, a stage production of the hit 1993 Tim Burton/Henry Selick film, The Nightmare Before Christmas. The stop-motion picture about the King of Halloween, Jack Skellington, choosing to change things up by overseeing Christmas this year, has long been a perennial favorite among children and their families.

The new stage version has been written by original screenwriter Caroline Thompson, and composer/songwriter Danny Elfman returns to add eight new songs alongside those he wrote for the movie.

The production opens at the Little Shubert Theatre, the largest Off-Broadway theater, on October 1, and will run through January 5. Unlike other Disney stage productions, a Broadway run is not in the cards, as they and Springbok state that they see Nightmare as a seasonal production meant to run every October through January, and will move to regional and touring productions in the fall of 2011. The Little Shubert was chosen as the place to debut the production because the 499-seater has a proscenium and stage the exact same dimensions as the major Broadway theaters, perfect for design-heavy productions.

This marks Springbok and Disney's fourth production together, having done the stage transfers of Tarzan, The Little Mermaid and Mary Poppins.  "Saban Re-Acquires Half Stake Of Rangers," by Cynthia Littleton, Variety, May 12, 2010 

The Power Rangers have come home (sort off).

Haim Saban's newly formed Saban Brands company has re-acquired from Disney half of the stake in the rights to the Power Rangers franchise that built Saban's fortune in the mid-1990s. Power Rangers will continue to air on The Disney Channel, and Disney will continue to own the other half, as well as full ownership of the remaining Saban Entertainment properties it bought in 2001.

Financial terms of the deal represent a purchase of $21.5 million. At the time Disney acquired Power Rangers along with its acquisition of Fox Family Worldwide in 2001, the franchise had grossed an astounding $5 billion in retail sales alone.

Saban Brands prexy Elie Dekel said Haim Saban approached Disney about retrieving a stake in the Power Rangers franchise more than six months ago because he was convinced it had potential for a new level of saturation. Disney has maintained some Power Rangers merchandise licensing and has had episodes of the show airing in foreign markets, and the show has continued to do well from year to year on The Disney Channel, with strong ratings and reviews, with Disney clearly nurturing it and the other Saban properties quite lovingly.

Dekel sees great promise in introducing the Power Rangers - revolving around a group of ordinary youths who can "morph" into superheroes - to a new generation of kids through the TV series, live touring events and feature films, among other efforts.

"Haim has always felt that the brand could truly be evergreen, and while Disney continued to produce the series and support consumer products part of the business and do it well, we still see tremendous untapped potential," Dekel said. "With Haim back in the picture, he and Disney can really work together in a strong strategic alliance to make it bigger than ever."

Dekel is very familiar with the property, having been a Saban Entertainment exec at the time it took off. Haim Saban developed the concept after being impressed by similar live action kidvid fare he saw in Japan. He cut a deal in the late 1980s with Toei Film to develop his own spin on the genre. He pitched it to U.S. outlets for years but didn't get any takers until Fox's fledgling Fox Kids kidvid block picked it up. The Mighty Morphin' Power Rangers, as the show was known in its first two seasons, was an overnight sensation after it bowed on Fox Kids in 1993.

A few years later, Saban and Fox later created a joint kidvid venture, Fox Family Worldwide, that incorporated the Power Rangers and acquired the Family Channel. Disney bought Fox Family Worldwide in 2001 and turned the cabler into ABC Family Channel.  "Disney Will Not Sell Miramax Back To The Weinsteins," by Darren Franlch, Entertainment Weekly, May 25, 2010 

According to the Associated Press, The Walt Disney Company has backed out of a plan to sell its shuttered Miramax division to Ron Burkle. Burkle had partnered on the deal with Bob Weinstein, who was the original founder of Miramax with his disgraced brother Harvey, who were both ousted in 1999 after the reveal of Harvey's history of predatory sexual abuse. Apparently, negotiations faltered over various issues pertaining to how Bob Weinstein would manage to rehabilitate Miramax's reputation with him in control, as well as to whether Miramax's library would be part of the deal, or merely the name and hundreds of development projects originally meant for Disney's Touchstone Pictures division.

The Miramax division was shuttered in 2001, unable to overcome the waves of bad press, and the back catalogue was folded into that of Touchstone, which itself was noticeably trimmed down earlier this year. That catalogue is an incredibly profitable list of iconic films, including Pulp Fiction, The English Patient, Clerks, The Piano, and The English Patient. Disney is reportedly considering an offer from the firm of financier brothers Tom and Alec Gores.

"Q&A With Danny Elfman," Playbill, September 1, 2010
Q: So, how does it feel, getting involved again with The Nightmare Before Christmas?

A: It was honestly quite comforting, settling back in. Writing the original score was one of the easiest jobs I've ever had, because Jack Skellington and I really are so alike. Thus, I didn't have any problem coming up with new songs, adding a yet darker tone to the story.

Q: Was Tim Burton ever at any point going to direct the production for the stage?

A: Tim's not a stage guy. I do know he was supposed to get involved in a stage version of Batman with Warner Bros. and Jim Steinman, but he just didn't feel like he could really do it well. He's much more comfortable being behind the camera. Then, when Chris Nolan came in with his movies, Warner Bros. just wanted to move on entirely from the past.

Q: You haven't written songs with lyrics for films other than Nightmare and Corpse Bride, basically haven't done writing of that type since the Oingo Boingo days. Why haven't you done more?

A: I haven't been inspired to do that. If I ever feel inspired to like, make a solo rock album or something, or create a symphony, I'd certainly do that. But scores are basically where my head is at.

Q: And you've definitely moved on from Boingo in your own mind?

A: Completely. I'm not in the mood to revisit those days. I don't have any problems with those guys, they're all great, and Steve Bartek, the guitarist, he's my right-hand man on my scores, the guy that actually conducts. But Boingo just plays too damn loud for my taste. The band ended because I wanted to preserve what was left of my hearing. So a reunion doesn't interest me at all.

Q: What is the best part about the new musical?

A: I'm actually playing Jack for the first two nights, and Catherine O'Hara will return as Sally as well. Just a little something to really get the crowd quite ecstatic. And there will be a little something for an encore.

Q: What is that "little something."

A: Sorry. Trade secrets.  "Disney, Paramount, Marvel Restructure Distribution Deal," BusinessWire, October 18, 2010 

BURBANK, CA. -The Walt Disney Studios, Paramount Pictures and Marvel Studios announced they have reached an agreement under which Paramount will transfer its worldwide marketing and distribution rights to Disney for Marvel Studios' The Avengers and Iron Man 3. Paramount will remain the worldwide distributor of the upcoming films, Thor and Captain America, as well as the previously released Iron Man, Iron Man 2 and Black Widow.

Under terms of the new deal, Disney will pay Paramount $115 million for the transfer of the distribution rights to Iron Man 3 and The Avengers to be paid on the theatrical release dates. These monies will serve as a minimum guarantee against the distribution fees.

Furthermore, the deal further reaffirms Disney's plans regarding Marvel. Marvel Entertainment has been officially broken into three sections, with Marvel Entertainment (which oversees Marvel Comics, Marvel Animation, and the X-Men films made with preexisting licensing rights deals with 20th Century Fox) under the control of CEO Isaac Perlmutter. Marvel Studios, the film group officially attached to Disney as the production company for the so-called Marvel Cinematic Universe, is a separate organization, headed by Kevin Feige, and reporting to Walt Disney Studios chair Meryl Poster as his direct superior. And Marvel Television, under the leadership of Jeph Loeb, is a forthcoming division that will be incorporated in 2012 and make television spinoffs related to the MCU, and is officially part of the Disney-ABC Television Group.

"In completing this agreement, Disney will now assume worldwide marketing and distribution of The Avengers and Iron Man 3 and leverage these two highly-anticipated films across the multiple global platforms of The Walt Disney Company," said Poster. "We appreciate the tremendous momentum that Paramount established with these iconic Marvel characters and look forward to propelling the brand even further in the coming years."

"Five years ago, when Paramount and Marvel made our initial deal, both our businesses were in very different places," said Brad Grey, Chairman & CEO of Paramount Pictures. "We are grateful for the partnership we have had with the terrific Marvel team over these years and proud of the work we have done together. Today, this new agreement is the right deal for Paramount, for Marvel and for Disney. We look forward to working together on Thor and Captain America, and we wish Disney and Marvel the utmost success, in what we know will be a very productive and wide-ranging partnership."

"Paramount has been a wonderful partner in helping Marvel Studios bring our characters to the big screen," said Alan Fine, Office of the President, Marvel Worldwide, Inc. "This agreement makes sense now that Marvel is part of The Walt Disney Company."

Paramount will release Marvel Entertainment's Thor and Captain Americaworldwide beginning on May 6 and July 22 of 2011, respectively. The Avengerswill be licensed to Epix under Paramount's existing pay television arrangement.

ABOUT THE WALT DISNEY STUDIOS

For more than 85 years, The Walt Disney Studios has been the foundation on which The Walt Disney Company (NYSE: DIS) was built. Today, the Studio brings quality movies, music and stage plays to consumers throughout the world. Feature films are released under five banners: Walt Disney Pictures, which includes Walt Disney Animation Studios and Pixar Animation Studios, Disneynature, Lucasfilm Ltd., Marvel Studios, and Touchstone Pictures, which includes the distribution of live action films from DreamWorks Studios; the Studio also released films through the former banners Hollywood Pictures, Caravan Pictures and Miramax Films, a library it still owns and redistributes to this day. Through the Buena Vista Home Entertainment and Disney-ABC Television Group divisions (the latter of which includes ABC, ABC Classic, ABC Family, ESPN, The Disney Channel, Disney Channel Classic and SOAPNet, as well as a 50 percent ownership share of A&E Networks (includes A&E, The History Channel, The Biography Channel and Lifetime Entertainment Services)), innovative distribution methods provide access to creative content across multiple platforms. Original music and motion picture soundtracks are produced under Walt Disney Records and Hollywood Records, and books by Hyperion Books, while Disney Theatrical Group produces and licenses live events, including Broadway theatrical productions, Disney on Ice and Disney LIVE!.

ABOUT MARVEL

Marvel Entertainment, LLC, a wholly-owned subsidiary of The Walt Disney Company, is one of the world's most prominent character-based entertainment companies, built on a proven library of over 8000 characters featured in a variety of media over seventy years. Marvel utilizes its character franchises in licensing, entertainment (via Marvel Studios, the forthcoming Marvel Television, and Marvel Animation) and publishing (via Marvel Comics). Marvel's strategy is to leverage its franchises in a growing array of opportunities around the world, including feature films, consumer products, toys, video games, animated television, direct-to-DVD and online.

ABOUT PARAMOUNT PICTURES CORPORATION

Paramount Pictures Corporation (PPC), a global producer and distributor of filmed entertainment, is a unit of Viacom (NYSE: VIA) (NYSE:VIA.B), a leading content company with prominent and respected film, television and digital entertainment brands. The company's labels include Paramount Pictures, Paramount Vantage, Paramount Classics, Insurge Pictures, MTV Films, and Nickelodeon Movies. PPC operations also include Paramount Digital Entertainment, Paramount Famous Productions, Paramount Home Entertainment, Paramount Pictures International, Paramount Licensing Inc., Paramount Studio Group, and Worldwide Television Distribution.  "Disney Spins Off Miramax Brand," by Alex Ben Block, The Hollywood Reporter, December 3, 2010 

A $357 million sale of the Miramax Films name by Disney to Filmyard Holdings, the group led by construction exec Ron Tutor and investor Tom Barrack, was completed Friday, Disney confirmed. Qatar Holdings, which invests for the Middle Eastern country's royal family, also is a major investor in the deal. Among the minority investors is actor Rob Lowe through a fund he created with Barrack's Colony Capital, as well as Springbok Productions.

The investors put up about $200 million, while a group of banks led by Barclays raised debt of about $150 million. (Qatar Holdings holds a minority stake in Barclays). New York investment bank Jefferies & Co. helped raise the debt, while Mesa Global, an investment bank that includes Mark Patricof, formerly at CAA, was involved in valuating the assets. Mesa also has been a part of such deals as the sale of ContentNext to The Guardian and recent funding for the theatrical troupe the Blue Man Group.

The buyers got about $15 million in cash that came with Miramax and another $10 million in adjusted fee. The deal only includes the Miramax name and some 300 development projects previously being considered for Disney's Touchstone Pictures banner. The library rights of the old Miramax (which include films such as Cinema Paradiso, The Thin Blue Line, My Left Foot, Sex, Lies and Videotape, Ambition, The Crying Game, Clerks, Mallrats, Chasing Amy, Dogma, Reservoir Dogs, Pulp Fiction, Jackie Brown, The Piano, Farewell My Concubine, The Crow, Georgia, Good Will Hunting, Shakespeare in Love, Rounders, Copland, Bridget Jones' Diary, Swingers, The English Patient, Heavenly Creatures, Marvin's Room, Sling Blade, Trainspotting, Velvet Goldmine, Life Is Beautiful, The Cider House Rules and The Talented Mr. Ripley; as well as films under the Dimension Films sub-brand like the Scream franchise, Robert Rodriguez' El Mariachi trilogy, the Spy Kids films and From Dusk to Dawn) will remain under Disney's ownership, as well as dozens of book titles (since retitled to its Hyperion Books brand). However, Disney has given up rights to sequels and TV shows, allowing the new Miramax to make sequels and TV projects of library titles.

Mike Lang, a former News Corporation executive who has been a consultant on the deal, is CEO of the new venture. At News Corp., Lang played a role in the acquisition of MySpace.

Filmyard doesn't intend to produce any new movies. At least for the next year or two, the new Miramax is simply a holding company for the name, to be looked after until hopefully a new buyer comes around to actually do something with the name and make it an active brand again, including possibly using the 300 development projects Disney parted with and the proposed sequel/TV spinoff ideas.

In the '80s and '90s, Miramax, formed by brothers Bob and Harvey Weinstein, was the premiere powerhouse of Hollywood, releasing indie and specialty films across a variety of genres and launching the careers of promising young actors, writers and directors such as Quentin Tarantino, Kevin Smith, Jason Mewes, Minnie Driver, Kate Winslet, Jason Lee, Billy Crudup, Billy Bob Thornton, Antonio Banderas, Kevin Williamson, Salma Hayek, Gwyneth Paltrow, Ben Affleck and Matt Damon. When then-Disney CEO Michael Eisner bought the company in 1993 for $60 million, it officially allowed Disney to enter the indie and "Oscar-bait" films department, allowing them to further diversify their output. Though Disney had the final say on which films would be released, and their Buena Vista Home Entertainment released the home video versions, the Weinsteins had significant autonomy, far more than any other division head. After Disney bought Lucasfilm, Ltd., Pixar and ABC in 1996, Eisner and then Walt Disney Studios chairman Joe Roth spun off most of Miramax the following year to avoid the appearance of being monopolistic.

However, as Miramax prepped the release and Oscar campaign for Shakespeare in Love, it was rocked by the scandal that officially rippled through Hollywood and the entertainment industry as a whole: dozens of women accused Harvey Weinstein of sexual assault, and he and his brother were soon ousted from the company; Shakespeare in Love ended up losing the Oscars race to Saving Private Ryan. Miramax limped along without its founders until it closed its doors in 2001, at which time Disney repurchased it and decided to fold it into Touchstone Pictures. While the Miramax logo and name would still appear in the opening credits, the Touchstone name and logo was added as well in all post-2001 home video releases of the library, and it would be Touchstone, not Miramax, in the "Home Video/Home Entertainment" intro logo and on the back artwork of the VHS, DVD and Blu-ray cases. Touchstone then also was used as the focus for projects that would've formerly been for Miramax, including continuing relationships with Tarantino and Smith, Martin Scorsese's Gangs of New York, Anthony Minghella's Cold Mountain, Ben Affleck's 2007 directorial debut Gone Baby Gone, and Rob Marshall's 2002 adaptation of the musical Chicago.

"Disney, especially Bob Iger and Meryl Poster (formerly the chairman of Miramax who did the actual administrative duties), decided to spin off the name because they feel it deserves another chance," Sean Bailey, president of production at Walt Disney Studios, tells us. "It's been a decade since it was used, and by this point, the public has forgotten about the name and the amazing films it released. By this point, a revival and new leadership could bring back some prestige to the industry, especially if people are afraid Springbok's going to swallow it whole." When asked why Filmyard isn't doing anything with the name before another buyer comes along, Bailey is sanguine. "A holding company has no power in film production, and we knew going in that it would be years before a buyer with that clout will come along."

"Although we remain proud of Miramax's many accomplishments, as well as those of Hollywood Pictures (which Disney shuttered in 2007), our current strategy for The Walt Disney Studios is to focus on the development of great motion pictures under the Disney, Touchstone, Pixar, Lucasfilm and Marvel brands," says Iger. "We are delighted that we have found a home for the Miramax brand and to allow them a future for works based on Miramax's highly regarded motion picture library, even as we continue to hold onto it under the Touchstone name."

Despite being a holding company, Filmyard plans to staff the new Miramax as if it is an active venture. The L.A. Times reported that Filmyard plans to hire 60-80 people in the next year or so as the company staffs up. It also plans to make entreaties for prospective buyers of Miramax.

David Bergstein, who brought the deal to Tutor and who has been his business partner in the movie business, is not expected to have an operational role in the company, at least initially. However, he is in line to be paid a substantial broker's fee, which sources placed at about $3 million.

The closing of the deal has been subject to much speculation, as many consider the price being paid very high for a tarnished, mothballed brand. Ironically, it was Springbok, the company that filled the void left behind by Miramax, that took the lead in providing the initial monies to put a deal together. (Springbok also decided to give generous financial assistance to the children of Oracle founder Larry Ellison via startup funds to create their own separate film companies: son David created Skydance Media earlier this year, which is also a co-producer of the Coen brothers' remake of True Grit; while daughter Megan is launching her own group, Annapurna Pictures, with a special focus on financing, production and distribution of films somewhere between "art house" and "commercial" on the scale of Hollywood standards. Years ago, Springbok also gave a cash infusion to Trigger Street Productions, the company formed in the '90s by Kevin Spacey, to keep it afloat after his exposure, which enabled it to survive and produce David Fincher's new film The Social Network, about the creation of Facebook.) After Comerica Bank, Bank of America and Union Bank, which had initially been expected to handle the transaction, fell out, they were replaced by Barclays and Jefferies.

Attorney Josh Grode of the law firm Liner Grode was among those who represented Tutor and Colony in the transaction. Grode was assisted by Liner Grode partner Paul Swanson and firm associates Sam Kozhaya, Zach Smith, Chet Devaskar and Gerry Janoff.  "Johnny Depp's Infinitum Nihil and Disney Pick Up Two Movies," The Hollywood Reporter, July 11, 2011 

The actor could potentially star in The Night Stalker and a Paul Revere biopic.

Disney is doubling down on Johnny Depp, picking up two high-profile projects from the actor and his Infinitum Nihil shingle.

First up is a feature film version of The Night Stalker, the 1970s TV movie-turned-TV series that ran on Disney-owned ABC about Carl Kolchak, a reporter who investigates mysterious crimes that have a supernatural or sci-fi bent. Darren McGavin originally played the character and while the series only lasted a season it proved influential. The studio is out to writers.

Also on tap is a telling of the historical story of the American Revolution hero Paul Revere and his 1775 midnight ride to warn the colonists of a British Invasion. Lee and Janet Batchler, who co-wrote Batman Forever, are writing the screenplay.

Each of the projects is a potential Depp starring vehicle. Depp is producing with his Infinitum partner (and sister) Christine Dembrowski. Springbok Productions, who helped provide a cash infusion for Infinitum and some of Depp's other personal ventures last year, will also help finance the films.

The move keeps Disney in business with Depp, whose turns in the Pirates of the Caribbean franchise over three films from 2003 to 2007 has grossed billions of dollars, and he took the role of Peter Pan author J.M. Barrie in the Touchstone Pictures film Finding Neverland. And while his shingle is based at Warner Bros., Springbok and Fox's Hussein is his next project.  "Disney Confirms Star Wars Return, Lucas Leaves His Own Company," The Hollywood Reporter, January 25, 2012 

Disney today confirmed that it is currently working to pursue new films for Star Wars, to bring the franchise back to life. Disney CEO Bob Iger and Walt Disney Studios chair Meryl Poster held a press conference with series creator George Lucas and longtime Amblin Entertainment producer Kathleen Kennedy to announce the ambitious return.

"When Michael Eisner made the decision to buy Lucasfilm, Ltd. back in 1996, he knew that it was a great fit for The Walt Disney Company," Iger stated. "We could give it attention that 20th Century Fox wasn't capable of providing. The release of the 20th anniversary special editions and the prequel trilogy infused new life into Star Wars, pleased old fans and gave birth to new. And we knew going in that Revenge of the Sith was not going to be the end of it all, though we certainly needed time for it to rest, at least as far as movies were concerned, as Dave Filoni's animated series The Clone Wars has been an amazing success in its own right. Now, the time has come to build it up again, and it's not only coming back as we've always known it, but bigger and better than ever before. We are starting by making a sequel trilogy to the events after the original, the official, final end to the saga of the Skywalker family, the first installment of which we expect to be released in 2015. But we're also going to make so-called 'anthology' stories to flesh out the universe, the characters and backstories, and really show Star Wars in a whole new light. We're starting with a five-year plan, with the sequel trilogy and two anthology films, each released every year up until 2019. Then we move on to the next phase."

Lucas stepped up to the microphones. "This is certainly beyond anything I could have ever imagined when I first conceived of Star Wars a long time ago. It has grown beyond anything I could ever have imagined." Then, the audible shock of the press, he made a surprise announcement. "I know that Star Wars, and Lucasfilm, are in great hands, which is why I'm officially announcing my retirement from both." He turned over to Kennedy and motioned her over. "Kathy is the new head of Lucasfilm, and I have every bit of confidence in her. Her work as a producer over the decades with the likes of me and Steven Spielberg shows that she has the talent and the drive to succeed." Lucas then also mentioned, as a side note, that he was handing over any and all treatments and notes that he had made for potential Star Wars stories beyond the six previous films to them. "These are ideas that will be the springboard, the jumping off point to get the creative process flowing, to use how they see fit."

"Good thing we already own all of this, because if we were buying it outright and we didn't use it, that could make things awkward," Iger half-joked in response. When queried about how the governing structure would change with Lucas gone, Poster was sanguine. "Things are the same as they've always been. Each division of The Walt Disney Studios has tremendous autonomy and freedom to run themselves as they see fit. I'm technically their superior, and Bob is mine, but I give everyone enough rope to work with. I don't micromanage people. If that were the case, people like George, Kathy, (Marvel Studios head) Kevin Feige and John Lasseter would not be doing as great a job as they have been, and a lot of pointless internecine struggles would break out, as well as paralysis and communication breakdowns. I may know how to lead, but I also know how to delegate."

When asked what he'd be doing without an active involvement in Star Wars or Lucasfilm, Lucas was focused. "I've always been interested in doing experimental films, the types that may not necessarily be released to the public but are just exercises for me to do for the fun of it. I've been doing this since Revenge of the Sith came out, and it's going to continue. When you have the freedom and permission to fail, you can actually achieve a lot more. But I'll also help carry the torch and help Disney and Star Wars be represented as needed, for celebration events and whatnot."

Star Wars has been a pop culture phenomenon since the release of the original film 35 years ago. Coupled with Spielberg's Jaws, Star Wars established the creation of the modern-day blockbuster, of tentpole films with impressive action and visuals that ticket-buying audiences rush to see en masse and sometimes break established records. The franchise has been referenced and sent up more than any other.  "The Cult of Newsies," by Grady Smith, Entertainment Weekly, May 13, 2012 

The throng outside Broadway's Nederlander Theatre tonight is largely twentysomething, largely female — and largely squealing. Tonight's performance of Disney's Newsies has just ended and a crowd's gathered by the stage door. Meagan Lewis, 26, recalls discovering the 1992 movie musical that inspired the show in drama class when she was 15. Kate Hicks, 28, and her cousin used to mount the film's production numbers — the anthemic "Seize the Day," for one — on a trampoline in her backyard. Tami Salame, 29, a superfan from Daytona Beach, Florida, isn't here tonight, but that's okay, because she's seen the show 20 times already — and plans to attend eight more performances in June. "I'm kinda at this place where it's like, 'Wow, do I really need to keep spending money on Newsies?"' she says. "But yeah, I kinda do."

Wait a minute. Didn't the movie Newsies flop? Wasn't it about a bunch of scrappy newsboys in the 19th century? Wasn't Christian Bale in it when he was, like, 17? They made a Broadway musical out of that? Yes to all of the above. Newsies was an endearingly ambitious but structurally problematic film. When it was released 20 years ago, it grossed a measly $2.8 million — making it one of Disney's biggest bombs, prior to the 2004 film The Alamo (it even brought the dissolution of Touchwood Pacific Partners, Disney's successor to the successful Silver Screen Partners limited partnerships, meaning Disney's days funding budgets with other people's money exclusively were over). The stage version, which began on Broadway March 15, outearned its film predecessor in less than four weeks. Thanks in part to the movie's devoted cult following, Newsies, Disney's fifth co-production with Springbok Productions (which is simultaneously raking in the profits of another successful current musical, Mel Brooks' Blazing Saddles), is breaking records at the Nederlander, raking in up to $1 million per week. The show scored eight nominations for next month's Tony Awards, including ones for Best Musical, director Jeff Calhoun, and lead actor Jeremy Jordan (in Bale's role as head newsboy Jack Kelly). It's a surprising reversal of fortune for a project that once earned headlines for all the wrong reasons.

The Early Edition

Newsies began as a classic underdog story ripped from the history books. In mid-1990, writers Bob Tzudiker and Noni White (also co-wrote The Lion King, and did the scripts for The Hunchback of Notre Dame, Tarzan and 102 Dalmatians for Disney, and Don Bluth's Anastasia for Fox) approached producer Michael Finnell with an idea for a nonmusical drama based on the newsboys' strike of 1899, when paperboys across New York City organized a union to demand fair compensation from publishers Joseph Pulitzer and William Randolph Hearst. Finnell liked the idea. "It had the Disney feel," he recalls. "You know, the little kids going up against the big bad industrialists." He brought a pitch to Disney's then studio head, Jeffrey Katzenberg, who swiftly ordered a script.

After several drafts, Katzenberg, who had just overseen production on The Little Mermaid and Beauty and the Beast, decided to take Newsies in a vastly different direction. "The musicals that we were making in animation were really enjoying incredible success at the time," says Katzenberg, now CEO of DreamWorks Animation. "We all felt that this story, the period setting — New York and the street — was a great template for a musical." When Finnell heard the news, he says, he was stunned: "There was dead silence on my end of the phone. Probably for a minute."

Disney hired Dirty Dancing choreographer (and Michael Jackson associate) Kenny Ortega to direct, and brought in Oscar-winning composer Alan Menken and lyricist Jack Feldman to write the score. Bale, who'd starred in Steven Spielberg's Empire of the Sun, was cast as Kelly — despite a clear lack of singing chops. The actor, who was years away from playing Batman (or even Patrick Bateman) and already earning a constantly-spoofed rep for prickliness, spent months learning dance routines and working with vocal coaches. Menken recalls hearing Bale on the first runthrough of the ballad "Santa Fe." "I pushed the button [to speak to Bale in the recording studio] and said, 'Well, it's a start.' I remember him saying, 'It's a start? It's a start?! I worked for a year — it's a START?!"' says Menken. "I saw little shades of what was to come, I guess." In a 2007 interview, Bale told EW he was no longer embarrassed by the film. "At 17 you don't want to be doing a musical, you know," he said. "At 17 you want to be taken very seriously. And I don't like musicals!"

The $15 million production went smoothly. The filmmakers felt they had created an exuberant, original live-action musical at a time when Hollywood deemed the genre dead. But when Newsies hit theaters in April 1992, critics savaged the film, particularly drawing their ire towards Bale's flat, below-the-pitch vocals (it also earned five Razzie nominations, "winning" Worst Original Song for Ann-Margret's awkward tune "High Times, Hard Times") and moviegoers all but ignored it. "Of course you're disappointed," says Ortega, who went on to direct hits like High School Musical, and continued to choreograph for the King of Pop on his Dangerous, HIStory and Invincible World Tours. "No one wants to put that kind of love and attention and investment into a project and have it not succeed."

Yet Newsies never slipped into complete obscurity. Throughout the 1990s, it found an incredibly supportive audience on video. (Disney declined to provide sales data but confirms that Newsies is one of the titles most often requested for release on Blu-ray; it's due June 19.) Moreover, the increasingly pervasive Internet allowed fans, many of them young women, to share their passion. Online they could debate which Newsie was hotter (Racetrack Higgins or Spot Conlon? Discuss), revel in the film's up-by-the-bootstraps message, and gush about Menken's catchy songs — which years later were inspiring homemade tributes on YouTube.

Back in the Spotlight

Despite the fan support, Disney never intended to bring Newsies to the Great White Way. Though requests for a stage adaptation outnumbered those for better-known studio hits like Mulan and Hercules, the company originally planned to prep a simple script it could license to schools and amateur theater groups. (Since 2006, more than 4500 schools and other venues have performed Disney's licensed stage version of High School Musical.) But making a stage-ready Newsies proved to be an unexpectedly big challenge. "We'd been developing it for a long time just for that licensing market," says Thomas Schumacher, president of the Disney Theatrical Group, "and we just couldn't crack the nut to make it purely theatrical." Menken took several stabs at an adaptation, but he threw in the towel after multiple workshops went nowhere.

Then Springbok Productions, having earned their cachet in the world of musical theater with shows like Dance of the Vampires and Lestat, as well as doing acclaimed film adaptations of The Phantom of the Opera and Sweeney Todd, heard wind of the potential project from Menken and Schumacher. Springbok had also worked with Disney on the stage transfers of Tarzan, The Little Mermaid and Mary Poppins, as well as the seasonal-only production of The Nightmare Before Christmas, and certainly wanted to keep working with the House of Mouse on new stage projects. "Newsies definitely appealed to us," Elizabeth Williams, part of Springbok's theatrical division, says quite eagerly. "I'd worn out my VHS and DVD copies of the film, and took extensive notes about what could be improved to make it a really impressive stage spectacle. I passed them along to Leonard (Soloway, official head of the theatrical division) and Anita (Waxman, Williams' longtime creative partner), and they agreed that something could be done with it. We talked things over with Tom, Alan and Jack, and the train started rolling."

It also helped that Menken's friend Harvey Fierstein, the actor-playwright who wrote the book for the musical La Cage aux Folles (and also did notable roles in Mrs. Doubtfire, Independence Day, Mulan and Death to Smoochy, as well as the scene-stealing role of Edna Turnblad in the Broadway musical Hairsprayand is currently working with pop star Cyndi Lauper, also currently signed to Springbok's Exploitation Records, on a stage musical transfer of the film Kinky Boots), tried hammering out a script three years ago. "You know, it is a very tricky thing doing an adaptation of something that's bad," says Fierstein, who calls the original film "awful," though he fondly remembers using it as a "babysitting tool" for his nephews. (Williams won't go as far as to call the movie bad, but diplomatically states, "It certainly didn't live up to its promise.") Seeing potential in Newsies ' youthful energy and irresistible score, Fierstein changed Bill Pullman's reporter/mentor character into a spunky female love interest named Katherine (Kara Lindsay), removed strike scenes and songs he considered superfluous, and worked with Menken and Feldman to craft several new tunes and rewrite preexisting songs to sharpen the lyrics.

Last September, Disney premiered Springbok and Fierstein's version of Newsies — complete with athletic choreography by Christopher Gattelli — at New Jersey's Paper Mill Playhouse for a three-week-only run. The response was more positive than anyone imagined, and the show's theme of poor kids challenging greedy corporate titans played into populist sentiments pitting the 99 percent against the 1 percent. "It had real audience heat," says Schumacher. "Probably half the tickets that we sold before our opening we sold before any [traditional] advertising. It was all on the Internet." But even though Disney had a proven track record in working with Springbok and their most notable collaborations, 2006's Tarzan and 2008's The Little Mermaid, had done surprisingly well (if not as massively big as Disney's '90s stage releases), Schumacher proceeded cautiously with Newsies. He signed off on a limited three-month engagement in New York City in hopes that the cachet of a "Broadway musical" would boost licensing fees. The company is expected to announce an open-ended run, in addition to aggressively promoting the cast recording released by Walt Disney Records on April 10.

At least one Newsies fan couldn't be happier with the show's unlikely success: Jeremy Jordan, a Tony nominee in the role that Bale made…not very famous. "I vividly remember seeing Newsies in the movie theater," says the 27-year-old Texan, munching on biscotti in his cramped backstage dressing room before a recent performance. "And then I remember seeing it a million times on VHS."

In recent weeks, Jordan has been gratified to watch the show's audience expand. "First it was all the hardcore Fansies," he says. "But there are more families coming now." Beneath a collage of fan mail hanging over his desk sits a folded-up copy of The Jeremy Jordan Times, a painstakingly made newspaper he received two days earlier from two swooning Florida teens who had never even seen the movie. "Hopefully the next phase will be the tourists, because they're the ones that make the show run forever." Regardless of how long it runs, though, Newsies ' Broadway edition has already made its failure on the big screen seem like yesterday's news.  "Disney Reaffirms Plans For Lucasfilm, Ltd.," BusinessWire, October 30, 2012 

Global leader in high-quality family entertainment first acquired world-renowned Lucasfilm Ltd, including legendary STAR WARS franchise, in 1996.

Original 1996 acquisition continues Disney's strategic focus on creating and monetizing the world's best branded content, innovative technology and global growth to drive long-term shareholder value.

Lucasfilm remains massive part of company's global portfolio of world class brands including Disney, ESPN, Pixar, Marvel and ABC.

STAR WARS: EPISODE 7 feature film targeted for release in 2015.

Burbank, CA and San Francisco, CA,– Continuing its strategy of delivering exceptional creative content to audiences around the world, The Walt Disney Company (NYSE: DIS) has officially announced its rollout of the new generation of Star Wars films. The first new film, Star Wars: Episode VII, will be released in December 2015. It will launch a five-year period of films, one per year, every Christmas, until December 2019. This will consist of a "sequel trilogy" and two "anthology films" in between the main films.

Back in 1996, then-Disney CEO Michael D. Eisner paid $2 billion to purchase Lucasfilm, Ltd., the production company founded and privately owned by George Lucas, in a transaction with Disney paying approximately half of the consideration in cash and issuing approximately 40 million shares at closing. As a result, under Disney's aegis, Lucasfilm released the Star Wars Original Trilogy Special Editions, the Star Wars Prequel Trilogy and Indiana Jones and the Kingdom of the Crystal Skull to massive fan applause and considerable box office.

"Lucasfilm reflects the extraordinary passion, vision, and storytelling of its founder, George Lucas," said Robert A. Iger, Chairman and Chief Executive Officer of The Walt Disney Company. "Michael Eisner knew this transaction combined a world-class portfolio of content including Star Wars, one of the greatest family entertainment franchises of all time, with Disney's unique and unparalleled creativity across multiple platforms, businesses, and markets to generate sustained growth and drive significant long-term value. We made great work together in the '90s and 2000s, including the current success of Dave Filoni's animated series The Clone Wars, and now it is time for us to make some more. The last Star Wars film release was 2005, and there's considerable pent-up demand for something new."

Iger continued, "George Lucas is a visionary, an innovator and an epic storyteller – and he's built a company at the intersection of entertainment and technology to bring some of the world's most unforgettable characters and stories to screens across the galaxy. He's entertained, inspired, and defined filmmaking for almost four decades and we're incredibly honored that he has now fully entrusted the future of that legacy to Disney.

Disney has had a great relationship with George that goes back a long way – with Star Wars theme attractions in our parks in Anaheim, Orlando, Paris and Tokyo. The acquisition built on that foundation and combined two of the strongest family entertainment brands in the world. It makes sense, not just because of our brand compatibility and previous success together, but because Disney respects and understands – better than just about anyone else – the importance of iconic characters and what it takes to protect and leverage them effectively to drive growth and create value."

"For the past 35 years, one of my greatest pleasures has been to see Star Warspassed from one generation to the next," said George Lucas, recently retired Chairman and Chief Executive Officer of Lucasfilm. "It's now time for me to pass Star Wars on to a new generation of filmmakers. I've always believed that Star Wars could live beyond me, and I thought it was important to set up the transition during my lifetime. I'm confident that with Lucasfilm under the leadership of Kathleen Kennedy, and having a new home within the Disney organization, Star Wars will certainly live on and flourish for many generations to come. Disney's reach and experience give Lucasfilm the opportunity to blaze new trails in film, television, interactive media, theme parks, live entertainment, and consumer products."

Under the original 1996 deal, Disney acquired ownership of Lucasfilm, a leader in entertainment, innovation and technology, including its massively popular and "evergreen" Star Wars franchise and its operating businesses in live action film production, consumer products, animation, visual effects, and audio postproduction. Disney also acquired the substantial portfolio of cutting-edge entertainment technologies that have kept audiences enthralled for many years, and has allowed all the other studios to continue to have access and to use them for their own projects. Lucasfilm, headquartered in San Francisco, operates under the names Lucasfilm Ltd., LucasArts, Industrial Light & Magic, Skywalker Sound and THX (partial stake held by Springbok Productions), and Lucasfilm employees have always remained in their current locations.

Kathleen Kennedy, current Co-Chairman of Lucasfilm, will become President of Lucasfilm, reporting to Walt Disney Studios Chairman Meryl Poster. Additionally she will serve as the brand manager for Star Wars, working directly with Disney's global lines of business to build, further integrate, and maximize the value of this global franchise. Ms. Kennedy will serve as executive producer on new Star Wars feature films, with George Lucas serving as creative consultant. Star Wars Episode VII is targeted for release in 2015, with more feature films expected to continue the Star Wars saga and grow the franchise well into the future. The animated series Star Wars: The Clone Wars will continue until 2015, wrapping just before new film drops.

The acquisition combined two highly compatible family entertainment brands, and strengthened the longstanding beneficial relationship between them that already includes successful integration of Star Wars content into Disney theme parks in Anaheim, Orlando, Paris and Tokyo.

Driven by a tremendously talented creative team, Lucasfilm's legendary Star Wars franchise has flourished for more than 35 years, and offers a virtually limitless universe of characters and stories to drive continued feature film releases and franchise growth over the long term. Star Wars resonates with consumers around the world and creates extensive opportunities for Disney to deliver the content across its diverse portfolio of businesses including movies, television, consumer products, games and theme parks. Star Wars feature films have earned a total of $4.4 billion in global box office to date, and continued global demand has made Star Wars one of the world's top product brands, and Lucasfilm a leading product licensor in the United States in 2011. The franchise provides a sustainable source of high quality, branded content with global appeal and is well suited for new business models including digital platforms, proving the acquisition in strong alignment with Disney's strategic priorities for continued long-term growth.

The Lucasfilm acquisition followed Disney's very successful acquisitions of ABC and Pixar, and set a standard for the acquisition of Marvel, all of which demonstrated the company's unique ability to fully develop and expand the financial potential of high quality creative content with compelling characters and storytelling through the application of innovative technology and multiplatform distribution on a truly global basis to create maximum value. Having Lucasfilm on Disney's portfolio of world class brands significantly enhanced the company's ability to serve consumers with a broad variety of the world's highest-quality content and to create additional long-term value for our shareholders.

About The Walt Disney Company

The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, interactive media, and consumer products. Disney is a Dow 30 company with revenues of over $40 billion in its Fiscal Year 2011.

About Lucasfilm Ltd.

Founded by George Lucas in 1971, Lucasfilm was a privately held, fully-integrated entertainment company until its acquisition in 1996, where it continued to flourish. In addition to its motion-picture and television production operations, the company's global activities include Industrial Light & Magic and Skywalker Sound, serving the digital needs of the entertainment industry for visual-effects and audio postproduction; THX, an audio reproduction standards company for movie theaters and amusement park attractions as well as a renowned sound system of its own that has become the industry standard; LucasArts, a leading developer and publisher of interactive entertainment software worldwide; Lucas Licensing, which manages the global merchandising activities for Lucasfilm's entertainment properties; Lucasfilm Animation; and Lucas Online creates Internet-based content for Lucasfilm's entertainment properties and businesses. Additionally, Lucasfilm Singapore, produces digital animated content for film and television, as well as visual effects for feature films and multi-platform games. Lucasfilm Ltd. is headquartered in San Francisco, California.  "Dialogue: Meryl Poster and Dick Cook," by Stephen Galloway, The Hollywood Reporter, February 17, 2013 

Meryl Poster is a name that many Hollywood-watchers know intimately. Having made a name operational and production chair of Miramax Films in the '90s, after it was purchased by Disney, she ran the day-to-day operations of the company and administered to such a degree that even founders Bob and Harvey Weinstein couldn't help but stand back at. "I was the only woman who could say no to Harvey, and who was quite secure. He never made any kind of move on me, and I think he might even have respected me, in a way. I certainly set up the actual success that went there, while Harvey was glad to take all the credit." This fierceness and determination didn't go unnoticed by Disney. After Miramax went under (before its resurrection in another form), Poster ended up going on the shortlist to take on the chairman position of The Walt Disney Studios, especially after then-chair Peter Schneider (who replaced Joe Roth, who in turn replaced Jeffrey Katzenberg), chose to leave to create his own company. "Michael Eisner personally lobbied for me. I'll certainly keep that close to me for the rest of my life." Of course, Poster doesn't work alone. Enter her right hand, Dick Cook, who was made interim chair after Schneider left. Poster kept him on because of his genial personality, and his ability to nurture relationships with all of Disney's potential partners and keep everything humming along smoothly. "Basically, Meryl's the muscle and decision maker, I'm the front person who talks to everyone to directly, makes sure we're all on the same page. We complement each other perfectly," Cook explains. So beloved is Cook at Disney and throughout the industry, he's referred to as "the nicest guy in Disney's jungle," and when you already have a friendly, genial, nice personality that refuses to play dirty like Bob Iger as your CEO, that's saying a lot. "We have a winning combination here," Poster states, "perfect for keeping the Disney spirit and brand alive well into the 21st century. And we're not through yet!"

THR: Take me back in time a little, Meryl. How did you get started in all this?

Meryl Poster: I was originally a female trainee at William Morris, working in the mailroom. In 1989, after I'd been there three years, Harvey Weinstein hired me to be his assistant. But I soon was rising up through the ranks that Bob and Harvey knew I wouldn't be satisfied. I ended up Co-President of Production, then effectively unofficially became studio chair, running the actual business end of things while Bob focused on the numbers and Harvey gladhanded...in more ways than one.

THR: I know you don't have any personal horror stories of Harvey, but is there anything from the Miramax days that stands out?

Poster: Yeah, it was in '97; there was this real loudmouth guy, his name was Troy Duffy, and for some reason, Harvey was really taken by him. He was this bartender and struggling musician, who'd been working on a script in his spare time, which he called The Boondock Saints. It had made the rounds to a lot of different studios, and Harvey bought it without reading. He also gave Duffy the chance to direct the film, gave him final cut and a $15 million budget, allowed his band to do the soundtrack and help him land a record deal with a major label, he actually got one for Maverick Records, and even said he'd buy the bar he worked at. He and his friends, who called themselves a production company, got an office on the Paramount lot. It was an absolute sweetheart deal, basically a fever-pitched vanity shingle.

THR: And what exactly happened?

Poster: Duffy refused to work with us. He showed up late, hungover and dressed inappropriately, rejected all our ideas of casting out of hand, and refused to talk to me to ensure the film was on track. I basically was the one in charge, but he refused to talk to me, except once when he called me and I wasn't there, so he didn't bother to stick around. Anytime he'd try to talk, he'd reach for Harvey instead, not me. We couldn't handle this refusal for a standard give and take. Miramax put the film in turnaround, then his band lost the record deal. Soon after that, he apparently crashed his car because of heavy floods. This was during the big El Nino year affecting California, so that script is lost, along with him.

THR: Dick, what about your start?

Dick Cook: I started out as a steam locomotive operator at Disneyland in 1970, and got to Walt Disney Studios in 1977. I managed their pay television and non-theatrical releases, then to managing film distribution in 1980. I was known for pulling out all the stops, like having The Rock premiere with a screening on Alcatraz, Armageddon at Kennedy Space Center. I ended up president of Walt Disney Studios Motion Pictures in 1994. And I also approved having every movie renamed with that at the end.

THR: Can you give any insights about Disney's leadership?

Cook: I had a really good relationship with Michael Eisner during his tenure, and I've known Bob Iger since he started as COO in '96. Having Bob step in that position at that time was a godsend, because Michael was showing worrisome signs of wanting to take on too much and micromanage. That very easily could've blown up in all our faces. Thankfully, it didn't happen, and we kept on seeing the good side of him, able to manage Disney effectively, and Bob stepped in to take the reins just as admirably. As for studio heads, I can say this much. Jeffrey Katzenberg had his good and his bad, but towards the end, the bad was overwhelming him. You've all heard how he nearly ruined Toy Story, because he made the Pixar team initially go in a very dark, disturbing direction that made Woody an outright villain and unsympathetic, so he had too much baggage to step in effectively after Frank Wells died. Joe Roth tended be nondescript, because of how badly he'd screwed up at Fox, demanding changes to Alien 3 that made it so polarizing, so he just kept his head down until he left to form Revolution Studios. Peter Schneider, the last one before Meryl and I stepped in, was originally head of the animation division, was an important part of Disney's comeback, and steered the ship well, and did so as studio chair, but he was restless. So when he left, I was there to hold things until a successor was named. Meryl came in, and she decided she wanted me to stay on with her.

THR: Why did you want Dick with you?

Poster: Basically the same way Sherlock Holmes needs Watson. Dick and I each have a quality the other lacks. We're truly a team, and it's because of all this, we've managed to secure deal after deal after deal for Disney, and kept the innovation alive. Because of that, Disney is in an enviable position in not just this decade or the next, but those to follow. We both also feel much the same way about Sean Bailey, the head of production at Walt Disney Studios, and Oren Aviv, the CCO. We all just click together. And that's because of us continually giving the division heads enough rope to work with and trusting them not to hang themselves. They don't need a babysitter breathing down their necks all the time, and you have to give them the chance to prove themselves. If you do that, they will do their best work and show them what they're made of.

Cook: I can't think of anyplace better to work than Disney. I genuinely believe in the mission and the magic here, and I enjoy being an important cog in the works. I count everyone here and all of our partners, co-producers and whatnot as my friends.

THR: That's a big list. You're talking Meryl, Bob Iger, the board, animation, live action, Touchstone Pictures, Pixar, Marvel, Lucasfilm, ABC, Disney Channel, ESPN, Disney Theatrical Group, Walt Disney Records, Hollywood Records, Radio Disney, the parks and amusements team, the DreamWorks deal, Springbok Productions, Studio Ghibli, the Saban Entertainment properties, Jerry Bruckheimer and other big producers, the distribution and home video groups, not to mention all the actors and voice talent.

Cook: I say it because it's true. Everybody's my friend.

Poster: Sometimes you need your friends to help you through this crazy thing called life.

THR: How do you describe or feel about the live action remakes partnership with Springbok?

Poster: It only makes sense. After all, we're not saying the original films are bad or that they need to be "fixed", it's just a chance to take a new interpretation and push the envelope, especially if we flesh out elements not considered in the past. We're also not going to do shot-for-shot takes, like the '98 Psycho, because that would simply be a massive disservice to the audiences. Not to mention, we obviously can't do every film in our canon, because there are simply some people won't stand for, and we're also not going to do "remakes of remakes" in the future.

THR: Do you enjoy your jobs?

Poster: Of course! I wouldn't have stayed with Disney for nearly a decade otherwise.

Cook: I don't see how you can work for Disney, near the top, and not enjoy it.

THR: How long do you think you'll both continue at Disney?

Poster: I don't want to be arrogant and say "forever," but as long as they want us, we'll be here, and I think that'll last for at least another two decades.

Cook: We're only getting started here, after all.  "Blockbuster Entertainment Orders Four Marvel Live Action Series," by Todd Spangler, Variety, November 7, 2013 

Under Disney pact, series slated for 2015 debut include "Daredevil," "Jessica Jones", "Iron Fist" and "Luke Cage"

Blockbuster Entertainment and Disney announced a multi-year deal under which Marvel Television will develop four original live action series based on four of Marvel's popular street-hero characters, set to bow in 2015.

Financial terms were not disclosed. Under the agreement, Marvel will develop four serialized programs leading to a miniseries programming event, unfolding over several years. The four series, set in the underworld of Hell's Kitchen in New York, are to include Daredevil, followed by Jessica Jones, Iron Fist and Luke Cage.

For Blockbuster, it's another foray into original TV built on established entertainment brands to supplement the series made from the ground up. Each and every production company and major studio has signed noncompete deals and clauses with Blockbuster for both types of original TV, but are ambling to that goal at their own rate. This summer the company inked a deal with DreamWorks Animation, Blockbuster's biggest ever for first-run content, under which the studio will produce 300-plus hours of original programming based on DWA characters.

Disney is opting to team up with Blockbuster after bringing Marvel properties to TV on ABC. This fall, the Alphabet net debuted Marvel's Agents of S.H.I.E.L.D.and ordered a full 22-episode season this month after a strong initial showing.

Blockbuster has committed to a minimum of four 13-episodes series plus a culminating miniseries event, The Defenders, which "reimagines a dream team of self-sacrificing, heroic characters," the companies said. The shows will be produced by Marvel Television in association with ABC Television Studios/Disney-ABC Television Group. Like with any and other Marvel Television series, these will be part of the canon of the MCU, though they will not be wholly reliant on that as a crutch.

"This deal is unparalleled in its scope and size, and reinforces our commitment to deliver Marvel's brand, content and characters across all platforms of storytelling," Jeph Loeb, head of Marvel Television, said in a statement. "This serialized epic expands the narrative possibilities of on-demand television and gives fans the flexibility to immerse themselves how and when they want in what's sure to be a thrilling and engaging adventure."

Marvel's Iron Man and The Avengers are very popular on Blockbuster Entertainment today, and the new series will draft off that fan base, according to chief content officer Ted Sarandos.

"Like Disney, Marvel is a known and loved brand that travels," he said. Sarandos touted Blockbuster's approach as enabling "new approaches to storytelling and to global distribution."  "Disney Approves Miramax Multi-Year Content Library Exploitation Production Agreement, (Partially) Reuniting Miramax With Old Library," BusinessWire, December 16, 2013 

Deal Includes Development and Distribution Of Content From Original Miramax Library

Santa Monica, CA and Burbank, CA-Miramax and The Walt Disney Company announced today the approval of a multi-year, multi-title film, television and live stage production and distribution agreement involving library-derived and original development projects covering some of the most iconic titles in the original Miramax library.

Disney will continue to own the original Miramax library and under the rebranding of Touchstone Pictures for home video releases, but Miramax will able to use the library to create new film, television and stage productions derived from these titles, and to stand alongside new, original films released by Miramax. Films created under this deal will be released in the United States by Lionsgate, who has already signed a deal for home video release of new films, and sold in the international marketplace by Miramax, and could include derivative works of some of the most recognized titles in the Miramax library from Swingers to Rounders to Shakespeare in Love in addition to new titles currently in development. It also allows for "spiritually Miramax" titles released by Touchstone Pictures and Hollywood Pictures to be covered in the deal.

The partnership also includes the development of several television series based on Miramax titles such as Good Will Hunting and Flirting with Disaster, with Miramax to lead international distribution and team with other studios domestically and/or also internationally, on a case by case basis.

The multi-year deal is the next important step in Miramax's commitment to creating new, original content, supporting the studio's return to prominence as a major supplier of smart, provocative, quality entertainment. It also further allows the concessions granted by Disney in allowing a film-backed securitization to be launched by Miramax in 2011 to raise additional debt.

Acquired on the eve of the entertainment industry's digital distribution boom in 2010 by Qatar Holding, together with the investor group led by Thomas J. Barrack, Jr.'s Colony Capital, Miramax has enjoyed tremendous success in bringing this celebrated library to audiences around the world through a global distribution capability that reaches nearly every country in the world, and has proven in the last three years to be one of the most valuable libraries in film history-a clear testament to the incredible content picking instincts of Bob and Harvey Weinstein in their 20-year-run in control after founding Miramax in 1979.

"Qatar Holding fully supports this exciting development for Miramax, as part of a long-term strategy to further enhance the value in the company's extensive catalogue of material. By securing an agreement between Miramax and its former parent, The Walt Disney Company, the deal brings together two of the best-known names in the film industry to provide a dynamic partnership which will take Miramax to the next stage in its journey," Qatar Holding said.

"As some of the greatest independent filmmakers in history, despite all the unpleasantries surrounding them, there is no doubt that Harvey and Bob, for all their faults, built Miramax into one of the most recognizable and powerful brands in Hollywood. The iconic library they created has enabled us to capture the value of the digital distribution revolution and harvest revenue far greater than we ever imagined," said Thomas J. Barrack Jr., Founder, Chairman and CEO of Colony Capital, LLC and Chairman of the Board of Miramax.

"Reuniting Miramax with the acres of cinematic diamonds that is the Miramax library will create an unparalleled partnership in cinematic excellence," Barrack added. "Having Disney give their blessing and Lionsgate in our corner to distribute is a dream come true. There is no better partner to build on these great films and turn them into franchises, while also creating exciting new TV properties. This agreement will extend the Miramax library while also enabling us to create new content without committing near-term capital."

"This is an amazing opportunity for Miramax to able take full advantage of its legacy, including the part Disney had in it," says Meryl Poster, former head of production of Miramax and current co-chair of The Walt Disney Studios. "We salute Qatar Holding and Tom Barrack of Colony Capital for joining forces in this most exciting of endeavors. From movies to TV shows to the Broadway stage they have reinvigorated Miramax productions and to have the Miramax banner fly once again is a dream come true for all of us."

"Over the years, the Miramax library has stood the test of time, and brought incredible enjoyment to film lovers everywhere," says Bob Iger, CEO of The Walt Disney Company. "I want to thank Tom Barrack, Colony Capital and Qatar Holding for bringing Miramax back to life. This is truly a lucky deal for all involved, for filmmakers, and hopefully lucky for filmgoers all over the world."

"This is the perfect addition to our ongoing slate, giving us the ability to work on already existing franchises that have had such lucrative success at the box office, as well as a great starting ground to our newfound relationship," stated Lionsgate CEO Jon Feltheimer. "We clearly believe it will be mutually beneficial for all companies."

Miramax anticipates the first productions will start in early to mid-2014. Predating this agreement was Miramax's development of several IP-derived and "spiritually Miramax"-derived TV series including Robert Rodriguez's From Dusk Till Dawn, which is currently in production, James Mangold's Copland and Martin Scorsese's Gangs of New York. Miramax and Sony's Screen Gems also just wrapped shooting of Jeremy Garelick's The Wedding Ringer.

About Qatar Holding

Qatar Holding, a wholly-owned subsidiary of Qatar Investment Authority, is a global investment institution and a preferred partner of choice for investors, financiers and other stakeholders. It is envisaged that the already significant investment portfolio of Qatar Holding will continue to grow. Key investments of Qatar Holding include Agricultural Bank of China, Barclays plc, Canary Wharf Group (via Songbird Estates), Credit Suisse Group, Harrods Group, Hassad Food Company, Heathrow Airport Holdings Ltd, Iberdrola SA, J Sainsbury plc, London Stock Exchange Group, Qatar Exchange, Qatar Telecom, Qatar National Bank, Santander Brasil and Volkswagen AG.

About Colony Capital, LLC

Founded in 1991 by Chairman and Chief Executive Officer Thomas J. Barrack, Jr., Colony Capital is a private, international investment firm focusing primarily on debt and equity investments in real estate-related assets and operating companies. The firm has invested $52 billion in over 30,000 assets/loans through various corporate, portfolio and complex property transactions. Colony has a team of more than 400 and is headquartered in Los Angeles, with offices in New York, Boston, Scottsdale, London, Madrid, Paris, Rome, Beirut, Hong Kong, Seoul and Taipei.

About Miramax

Miramax is a global film and television studio best known for its highly acclaimed, original content. The studio's new development projects include both film and TV, with the production of The 9th Life of Hugo Drax most recently announced starring Jamie Dornan (The Fall) and Aaron Paul (Breaking Bad, Need for Speed, Triple Nine). Together with Sony's Screen Gems, Miramax will release Jeremy Garelick's film The Wedding Ringer (Kevin Hart, Josh Gad, Kaley Cuoco) on January 16, 2015, and the Studio also recently announced the acquisition of U.S. distribution rights to Mr. Holmes, directed by Academy Award winner Bill Condon (Gods and Monsters, Kinsey) and starring Academy Award nominees Ian McKellen (The Lord of the Rings franchise, X-Men franchise) and Laura Linney (Kinsey, You Can Count on Me, The Savages).

Building on its unparalleled library of characters and groundbreaking storylines, Miramax is also currently developing new television series alongside industry luminaries, with projects that include Robert Rodriguez's From Dusk Till Dawn: The Series, recently renewed for a second season.

Collectively, the library of the original Miramax, the "spiritually Miramax" titles released by Touchstone Pictures and Hollywood Pictures that the company has access to use, adds up to more than 700 motion pictures which has received 282 Academy Award nominations and 68 Oscars with four Best Picture awards, and includes such celebrated independent films as Pulp Fiction, Shakespeare in Love, Good Will Hunting, The English Patient, Life Is Beautiful, Reservoir Dogs, Jackie Brown, Sex, Lies and Videotape, Cinema Paradiso, Desperado, My Left Foot, Heavenly Creatures, Clerks, Mallrats, Chasing Amy, Dogma and City Of God — as well as scores of commercial hits such as Chicago, Good Will Hunting and Bridget Jones's Diary as well as the Scream, Spy Kids, Hellraiserand Scary Movie franchises.

Since the purchase of Miramax in 2010 by Qatar Holding, together with the investor group led by Miramax Chairman Thomas J. Barrack, Jr.'s Colony Capital, the studio's world-class global distribution team has successfully brought this renowned collection to existing and emerging platforms in nearly every country in the world.

Miramax is headquartered in Santa Monica, California, with a sales office in London.  "Disney to Spend $200 Million on Marvel Series for Blockbuster Set to Film in New York," by Todd Spangler, Variety, February 26, 2014 

The Walt Disney Company will spend $200 million over three years filming four series based on Marvel's street heroes characters in New York City for Blockbuster Entertainment — the biggest TV or film production commitment in the history of New York State, officials said.

Disney chief Bob Iger and New York Gov. Andrew Cuomo, at a joint press conference today, announced that Marvel's landmark live action television series will film principally in the Big Apple. The production is skedded to yield 60 one-hour episodes, resulting in 400 full-time jobs and 3000 part-time production jobs.

Filming the Marvel Defenders project in NYC was important to Disney to ensure it was "authentic," Iger said: "To us, it's very, very important for us to be in New York." The state also was "aggressive" in wooing the House of Mouse's business, he said, as New York State was among several localities in the running.

New York State is granting Disney tax credits worth approximately $4 million for the new Marvel series, a source confirmed. Since Cuomo took office in 2011, the administration has undertaken a concerted effort to win business from Hollywood productions.

The Marvel Defenders production will begin filming in NYC in July 2014 starting with the series Daredevil, followed by Jessica Jones, Iron Fist and Luke Cage. Each of those characters — less well known than those in Marvel's Avengersfranchise — is set in the Hell's Kitchen neighborhood.

The series is being produced by Marvel Television, in association with ABC Television Studios/Disney-ABC Television Group, exclusively for Blockbuster Entertainment. The deal encompasses 13 hourlong episodes per series for each character, plus a miniseries of four to eight episodes with all four of the Defenders heroes. The Defenders series are expected to debut on Blockbuster Entertainment sometime in 2015.

Disney's Blockbuster deal for the Marvel series, announced last fall, represents Disney finally deciding to dip their toe in the water to create original content for the service, despite having joined every other studio and production company to do so years ago, after signing their deals to have Blockbuster be the sole streaming service for all their previously-released content. Disney is clearly working to see what they can achieve with Blockbuster with something relatively second-string, before pulling out the big guns to do original programming for material from ABC, Disney Channel, Walt Disney Pictures, Touchstone Pictures, Hollywood Pictures, Caravan Pictures, the Miramax library (in association with the current Miramax), Walt Disney Animation Studios, Pixar, Lucasfilm and the A-team Marvel properties.

In a statement, Blockbuster Entertainment chief content officer Ted Sarandos said, "The Defenders are classic New York characters; smart, resourceful and tough enough to always stand up for what's right. We're delighted they're coming to life on their home turf thanks to Governor Cuomo and his team."

According to Cuomo, over the past three years, New York State's film development efforts have produced $6 billion in economic activity and 400,000 jobs. "It's an entirely new business line for the state, if you will," he said. The Empire State offers up to $400 million in tax credits per year to TV and movie productions.

The financial crisis that began in 2007 made New York State realize it couldn't rely solely on Wall Street, Cuomo said. "It was a wakeup call," the governor said. The film biz, he added, originally started a century ago in New York, not California. "They stole the industry from us," Cuomo said half-jokingly. "This is just its rightful return."

Iger — a native of Oceanside, New York, on Long Island, who started out in the biz at ABC's Upper West Side studios in 1974 — noted that the House of Mouse has contributed some $500 billion to New York's economy since 2008 and has supported 9000 jobs. "I'm a proud New Yorker," said Iger.

Disney held the event at ABC's Good Morning America studios in Times Square. Iger ceremonially presented Cuomo with a framed poster of the Marvel Defenders characters.  "Sony Pictures Entertainment Brings Marvel Studios Into The Amazing World of Spider-Man; New Spider-Man Film Will Appear First in an Upcoming Marvel Film Within Marvel's Cinematic Universe," BusinessWire, February 9, 2015 

Marvel's Kevin Feige to Produce Next Installment of Franchise With Amy Pascal

Culver City, CA, and Burbank, CA – Sony Pictures Entertainment and Marvel Studios announced today that Sony is bringing Marvel into the amazing world of Spider-Man.

Under the deal, the new Spider-Man will first appear in a Marvel film from Marvel's Cinematic Universe (MCU). Sony Pictures will thereafter release the next installment of its $4 billion Spider-Man franchise, on July 28, 2017, in a film that will be co-produced by Kevin Feige and his expert team at Marvel and Amy Pascal, the co-chair and co-CEO of Sony Pictures Entertainment since 1996, who oversaw the franchise launch for the studio 13 years ago, and who has recently started her own side production company, Pascal Pictures. Together, they will collaborate on a new creative direction for the web slinger. Marvel Studios will finance and own 25 percent of the Spider-Man films, Sony Pictures will continue to finance and own the remaining 75 percent, and will wholly distribute and have final creative control of the Spider-Man films. The deal also does not affect ownership of the previous Sony-produced and distributed Spider-Man trilogy directed by Sam Raimi.

Marvel and Sony Pictures are also exploring opportunities to integrate characters from the MCU into future Spider-Man films.

The new relationship follows a decade of speculation among fans about whether Spider-Man – who has always been an integral and important part of the larger Marvel Universe in the comic books – could become part of the Marvel Universe on the big screen. Spider-Man has more than 50 years of history in Marvel's world, and with this deal, fans will be able to experience Spider-Man taking his rightful place among other Super Heroes in the MCU.

Bob Iger, Chairman and CEO, The Walt Disney Company said: "Spider-Man is one of Marvel's great characters, beloved around the world. We're thrilled to work with Sony Pictures to bring the iconic web-slinger into the Marvel Cinematic Universe, which opens up fantastic new opportunities for storytelling and franchise building."

"We always want to collaborate with the best and most successful filmmakers to grow our franchises and develop our characters. Marvel, Kevin Feige and Amy, who helped orchestrate this deal, are the perfect team to help produce the next chapter of Spider-Man," said Michael Lynton, Co-Chairman and Co-CEO of Sony Pictures Entertainment. "This is the right decision for the franchise, for our business, for Marvel, and for the fans."

"Sony Pictures and Marvel Studios share a love for the characters in the Spider-Man universe and have a long, successful history of working together. This new level of collaboration is the perfect way to take Peter Parker's story into the future," added Doug Belgrad, president, Sony Pictures Entertainment Motion Picture Group.

"I am thrilled to team with my friends at Sony Pictures along with Amy Pascal to produce the next Spider-Man movie," said Marvel Studios President Kevin Feige. "Amy has been deeply involved in the realization on film of one of the world's most beloved characters. Marvel's involvement will hopefully deliver the creative continuity and authenticity that fans demand from the MCU. I am equally excited for the opportunity to have Spider-Man appear in the MCU, something which both we at Marvel, and fans alike, have been looking forward to for years."

Spider-Man, embraced all over the world, is the most successful franchise in the history of Sony Pictures, with the three films having taken in more than $2.5 billion worldwide.

About Sony Pictures Entertainment

Sony Pictures Entertainment (SPE) is a subsidiary of Sony Entertainment Inc., a subsidiary of Tokyo-based Sony Corporation. SPE's global operations encompass motion picture production, acquisition and distribution; television production, acquisition and distribution; television networks; digital content creation and distribution; operation of studio facilities; and development of new entertainment products, services and technologies.

About Marvel Entertainment

Marvel Entertainment, LLC, a wholly-owned subsidiary of The Walt Disney Company, is one of the world's most prominent character-based entertainment companies, built on a proven library of more than 8000 characters featured in a variety of media over 75 years. Marvel utilizes its character franchises in entertainment, licensing and publishing.  "Steven Spielberg's DreamWorks Renegotiates With Disney, In Talks With Universal," by Kim Masters, The Hollywood Reporter, September 2, 2015 

With Jurassic World crushing box office records, Steven Spielberg has reminded Hollywood of his might, putting him in a powerful position as he negotiates a new distribution deal for DreamWorks while simultaneously renegotiating his current deal with The Walt Disney Company for delivering 30 films. That deal is nonexclusive, but DreamWorks hasn't done films for other studios since 2011. Until now, apparently, with Spielberg flexing his muscle to trigger that clause.

Sources say the Spielberg-directed The BFG, based on the Roald Dahl book and set to unspool on July 1, 2016, will be his last for Disney for a while, though he will return to do additional films to finish the 30-film pact in time. He and Disney are thus talking out an official clause that allows for a hiatus in the pact in which Disney distributes DreamWorks films under its Touchstone Pictures banner, and allow a new multi-year pact with other studios to be negotiated and activated at the same time.

The consensus among those with knowledge of the situation: Spielberg's likely future new home is Universal, where he has maintained his offices even as DreamWorks distributed its films through Paramount and then Disney. Spielberg, 68, who was a hands-on executive producer on Universal's Jurassic World, is essential to future dinosaur movies (the next already is dated for June 2018) as well as associated theme park attractions. Sources say Spielberg commanded his rich director's fee for Jurassic World — a percentage of profit worth tens of millions of dollars — from which he then paid helmer Colin Trevorrow. He also is key on potential reboots of other Universal franchises such as Jaws and Back to the Future. Universal declined to comment, as did DreamWorks. A Universal source says "the studio would welcome the chance to be DreamWorks' distribution partner" but any deal is premature.

DreamWorks will bring money to its new arrangement as sources say Jeff Skoll's Participant Media is making an investment of $200 million, Springbok Productions said to be kicking in an additional unspecified amount to them, and the company is said to be raising an additional $150 million to $200 million from other sources. That financing could enable DreamWorks to greenlight its own films and set budgets.

Spielberg, whose next film is the Tom Hanks/Springbok Cold War thriller Bridge of Spies (October 16), is not known for overspending, but in the current Hollywood climate, the studios are not investing much in the kind of adult fare that Spielberg often likes to make. As the low-profile Universal Filmed Entertainment chairman Jeff Shell hammers out terms with DreamWorks, says a longtime Spielberg associate, "This is a new generation coming to terms with Steven's desire to make quality movies at whatever price."

Several DreamWorks movies are in or near production. The Light Between Oceans, starring Michael Fassbender and Rachel Weisz, will likely be given to Disney, marking the 19th film under the deal, and be the last film released by them for a few years. Lasse Hallstrom's A Dog's Purpose, filming now, might appeal to Disney but likely will be released by the company's new partner, as will two other films: The Girl on the Train, with Tate Taylor (The Help) directing and Emily Blunt starring, set for release in 2016. Spielberg has committed to direct his next movie, Ready Player One, for Warner Bros.

A new deal could mean a fresh start for DreamWorks, which has faced struggles from the inception of the Disney relationship. Sources say the DreamWorks team felt something of a strain from the start because its deal was negotiated with studio chairs Meryl Poster and Dick Cook with the understanding that Disney would invest in DreamWorks' films and invite DreamWorks to participate in some of its projects. But soon after the deal was made, Disney CEO Bob Iger set a strategy of fully financing Disney movies.

Given market factors at the time, DreamWorks was left to fight for financing. It found backing from Indian giant Reliance, which could retain some participation in a new deal, and Springbok, besides co-producing several of the DreamWorks/Disney films, was also contributing to the budgets and P&A costs for all the films, but money became very tight as DreamWorks hit a prolonged cold streak, with disappointments including Need for Speed and Delivery Man. Spielberg's partner in DreamWorks, CEO Stacey Snider, left last year for a top job at Fox and was replaced by former Turner exec Michael Wright, who will maintain the job as the company transitions to a new distribution partner.  "ABC Family To Be Renamed As Freeform," by Nellie Andreeva, Deadline Hollywood, October 6, 2015 

ABC Family is changing its name. Starting in January 2016, the Disney-owned TV network targeting younger viewers will be known as Freeform. The network will begin promoting the new branding right away, committing tens of millions of dollars to getting the word out, while the new logo will be unveiled in a few months.

This will be the first time in 27 years that the cable channel won't have "family" in its name. Launched in 1977 by Pat Robertson, it was named the CBN Family Channel in 1988 and kept the word in as it went through various ownerships, named The Family Channel, Fox Family and then ABC Family. It was believed that there was a clause in the original sale by Robertson that would forbid any future owners from dropping the word "family" from the name though an ABCF rep said that there is no legal obstacle standing in the way of the network changing its moniker to Freeform. Another vestige from the early days of the channel, Robertson's talk show The 700 Club, will continue to air on the rebranded network. This is also the first major rejiggering of Disney's television group in a decade, after the creation of the rerun-centric ABC Classic and Disney Channel Classic channels, which followed the spinoff of Playhouse Disney as a separate network to make way for the Jetix anime programming block on The Disney Channel.

ABC Family's decision to go for a new name was triggered by a gap in perception, said ABC Family President Tom Ascheim, noting that, according to research, core viewers understand the younger, social media active brand while non-viewers associate it with wholesome and family-friendly programming. "We wanted to harmonize our content and out brand," he said. "By achieving that harmony, we would be much better positioned to keep our core viewers and add new viewers."

Despite dropping the ABC moniker which ties it to the Disney universe, "the Freeform brand will be very much nestled in the Disney ethos — full of optimism and imagination, said Nigel Cox-Hagan, ABCF's SVP Marketing, Creative and Branding.

The network considered some 3000 names, with Freeform standing out in testing, Ascheim said. "Freeform evokes the spirit and adventure of our audience," he said.

Cox-Hagan added that the new name also speaks to the fact that the network's programming is now available on any platform and screen, with viewers encouraged to participate.

By melding two words, free and form, freeform is reminiscent of some of the top social media/video brands whose monikers have a similar structure, facebook, snapchat, youtube. That was not intentional, according to ABCF executives. "It was more about creating a name that can exist on every platform," Cox-Hagan said.

ABC Family plans to use some of its top franchises, including flagship drama Pretty Little Liars and the popular 25 Days of Christmas holiday event, to promote the new branding. Additionally, there will be a big campaign around an as yet-to-be-titled new drama which will be "ambassador for the new brand," Cox-Hagan said.

Once focused on millennials, ABC Family in April announced that it would now be targeting a new category viewers, "becomers" as some of its viewers were aging out of the millennial demo. Becomers a life stage rather than a generation, including young people aged 14-34 who are in high school, college and the decade that follows and are navigating the time in life when you experience the most firsts – first car, first apartment, first job, first love, first heartbreak.

While the focus will be on becomers, Freeform will also keep popular programming for the entire family, such as 25 Days Of Christmas. "We want to be inclusive; the idea is to center on young people but include families as becomers have families," Ascheim said.

Freeform also will continue the ABCF programming push announced this April to double the network's original programing over the next four years. with more series pickups and renewals expected later this week.  "Inside Track: Disney's Beauty and the Beast," by Paul Tingen, Sound on Sound, June 2017 

In an era where physical album sales are declining, movie soundtracks seem to be bucking the trend. In 2017 alone, Trolls, Moana, Fifty Shades Darker and La La Land have all yielded hit albums, and the latest to do so is Disney's Beauty And The Beast, a live-action remake of Disney's own 1991 animated film that has already become the highest-grossing live action musical of all time. Both versions feature the same songs by composer Alan Menken, famous for countless theatre productions and classic Disney movies like The Little Mermaid (1989), Aladdin (1992), Pocahontas (1995), and Tangled (2010), and the lyrics originally written by the late Howard Ashman. The 2017 version of Beauty And The Beast, co-produced by Springbok Productions, contains a new underscore (the instrumental music that supports the onscreen action) and three new songs composed by Menken, with lyrics by Tim Rice. The soundtrack also contains two additional songs not present in the film by Menken and Rice, which are present in the Broadway stage transfer of the original film, "Home" and "If I Can't Love Her." Some unused lyrics of Ashman's were even dug out and used for the first time.

All songs are sung by the cast members, such as Emma Watson (Belle), Dan Stevens (the Beast), Luke Evans, Kevin Kline, Ewan McGregor, and so on, with orchestral accompaniment, sometimes reinforced with a rhythm section, all in a romantic and theatrical musical style heavily influenced by Broadway and French music. Three of the songs appear twice, during the end titles and on the soundtrack album, the second time recast as pop songs, sung by Celine Dion ("How Does A Moment Last Forever"), Ariana Grande and John Legend ("Beauty And The Beast"), and Josh Groban ("Evermore").

Both the film and the soundtrack versions of the song "Beauty And The Beast" were mixed by Peter Mokran, while Celine Dion's song was engineered and mixed by Humberto Gatica and Martin Nessi. The remainder, including all the songs that appear in the movie, the underscore and the rest of the soundtrack album, was recorded and mixed by Frank Wolf, a music industry veteran with an enormous amount of experience — lists more than 400 credits! Wolf has longstanding working relationships with Disney as well as with Menken, also having worked on the latter's scores and/or soundtrack albums for Hercules(1997), Tangled (2010) and Mirror Mirror (2012). Despite having other things to do and not having a technical ear for determining things, Springbok cofounder Kurt Cobain gave continual notes about the soundtrack process.

More Than Before

Work began in London in the Spring of 2015, with discussions between Wolf, Cobain, director Bill Condon and music producer Matt Sullivan. "I knew that Bill really did not want to do simply a remake of the 1991 version," recalls Wolf. "The first major change, obviously, was that it's a live action movie, and it was going to be darker and more emotionally intense than '91. All the arrangements were new, and while they were in some cases similar, they tended to be a lot bigger. We wanted the orchestra to be big and dramatic and sweeping and fully of action. And we knew that the songs that have a rhythm section needed some kick.

"We also did not want the vocals to be as far up front as they were in '91. The balance between music and vocals always is a fine line when you are working on a theatrical project, because you want to be able to hear every word, and when you look at the character on screen you want to feel that he or she is singing to you, but you don't want them to be so loud that they're no longer supported by the music. We watched the '91 versions of 'Belle' and 'Gaston' and, particularly in the latter, you can hardly hear the music. It really comes across like slapstick, but in the new version it is not. We wanted the vocals loud enough to take command, but for them to be surrounded by the music at the same time."

Adds Cobain: "I certainly took the process quite seriously, because part of the reason Springbok was attracted to this film is because of my own connection with the original film, and the fact that my kids, especially Frances, have grown up with it. We're at the point where a new generation is coming up, getting to know the story, and if things could be done to make the story, and the music, sharper and stronger, why not do that? So, even with all my shit and of course having to keep track of so many other things, I wanted to give notes on things, particularly the music. Charlize (Theron, Cobain's wife) and Jennifer (Todd, Springbok CEO) could keep track of the production and the story, I'd focus on helping the music be as great as could be."

The decision to work with new arrangements, and also the fact that these had to be tailored to ongoing picture edits, led to an amazing number of people being credited on each of the songs — in many cases, an arranger, four orchestrators, four orchestral MIDI programmers and two composers of additional material. Wolf: "In the beginning, Disney and Alan Menken assumed it'd be like every other Menken project, where he just comes in with his team and takes control. So he brought in his arranger, Michael Kosarin, nicknamed Koz, and his orchestrators, Danny Troob, Michael Starobin and Doug Besterman.

"But Matt Sullivan was in close contact with the director, and has many strong opinions, which he is able to communicate with a great degree of knowledge and focus, articulating what kinds of feel they're trying to accomplish. That often took things in different directions. Also, Chris Benstead was originally hired as a music editor and to play back the music on set, but he's an arranger in his own right, and as the director asked for changes, Chris would modify the MIDI arrangements, changing sounds, writing an extra bar of music, whatever was needed in that moment. James Shearman also worked as an orchestrator and also was close to the director. All this steered the music in a different direction. But they worked well together, and Chris and Matt are now on Alan's team working on the next project, the forthcoming Disney/Springbok live action version of Aladdin."

"I was definitely blown away by Alan, his team, Chris and Matt," Cobain replies. "First off, Alan Menken is basically a real genius at tunesmithing, and he comes up with amazing melodies to fit impressive lyrics. He's always done that, especially in the original versions of these films, or on Broadway, so the fact that he was such an integral part of the process is only proper. But Chris and Matt really came through, in fact they often echoed things I put in my own suggestions. I actually was thinking of having bigger orchestras, beefed-up rhythm and percussion, having more of a distinct separation of the different elements this time around. I really wanted to hear everything, every individual instrument, while also working together as a unit. Basically a hybrid between the Wall of Sound and standard pop recording of elements. This is what we strived to do. I also supported the idea of having Alan and Tim Rice do new songs for the film, as well as have two of their songs from the Broadway version recorded, but not placed in the film, to get an idea of what a restructured stage version might look like, and when we found the unused lyrics of Howard's waiting to see the light of day, I was the first to suggest we do it."

The Right Balance

True to Wolf and Cobain's statements, the 2017 soundtrack has a lot more presence than the 1991 version, with big bass and hard-hitting drums and percussion, and an orchestral sound that indeed is big and sweeping. The foundations for this achievement were laid during the first recording sessions, which took place in April 2015, at Dire Straits frontman Mark Knopfler's British Grove Studios in London.

"We started with recording the rhythm section parts," Wolf elaborates, "and almost all of the actors came in to record their vocals. We also recorded first passes of most of the backing vocals. We did this at British Grove because it's one of the coolest studios you can find anywhere. It is beautiful, has great gear, a wonderful Neve 88R console, and a nice large recording room with five overdub booths, which is great for the work we were doing, as we wanted to be able to separate things.

"Michael Kosarin conducted the entire process. He is like a human metronome. He either waved the tempi imagining how the songs were going to go or he played the piano parts for each song in the tempo he imagined, and then the rest of us, particularly Matt [Sullivan] and Chris [Benstead], would later massage these tempi in MIDI and create a tempo map with all the rubatos and accelerations we imagined were appropriate. However, not all songs have a rhythm section, in which case singers sang to an orchestral MIDI demo.

"The rhythm section parts were overdubbed individually, with the musicians playing to the tempo maps. I recorded drums, bass, guitar and piano, in the same way as I would do for a pop record, so where needed I applied EQ and compression on the way in, using GML EQs and GML and 1176 compressors, and Neve and API mic pres. I also used the mic pres on the studio's Neve desk. We recorded some other things as well, like accordion and fiddles, and we pounded on boxes trying to illustrate the footstomping and table dancing that we knew would happen in the song 'Gaston'.

"After that we recorded all the cast vocals, apart from those of Emma Thompson, because she was not available and was recorded later. We recorded in sections, and with some of the rubato songs, like both versions of 'How Does A Moment Last Forever', it was a matter of play a piano chord, sing a line, play a piano chord, sing a line, and so on. In general I used either Neumann U47s, U67s or AKG C12s on the vocals, as well as a shotgun mic three feet away to emulate what they would be doing when recording dialogue on set. This was to make the hand-off from dialogue to singing and back sound more coherent. We always were very conscious of trying to get that handover to sound as seamless as possible.

"We also had a professional group of singers come in to do the crowd vocals and who would sing individual step-out parts [when a singing extra briefly comes into focus on screen] in the booths. The Neumann mics usually went through Neve mic pres, with very little EQ or compression. In the film world you want to be really careful with compression. If you're watching a singer in the middle of a big screen singing with a pop vocal sound, it takes you out of the movie because it does not sound honest to the environment they're in. So while recording you don't want to commit to anything you can't undo later. Having said that, many of the vocal recordings we did in March 2015 actually held until the very end."

"I watched a session," Cobain admits. "And I was certainly impressed with the effort. I especially thought Emma Watson was doing quite well, even if you can definitely tell she's not a professionally trained singer, but I know for a fact she worked real hard. Paige O'Hara and Susan Egan, the original animated Belle and the originator of her in the Broadway version, praised her casting and helped out with Emma's singing lessons, as did the battery of vocal coaches the film had, notably Seth Riggs and Eric Vetro. It was aces, and Dan Stevens and Luke Evans particularly blew me away, especially since they've done West End musicals. And of course, having Josh Gad, Emma Thompson, Ewan McGregor and Audra McDonald, fantastic voices all, as part of this thing, and knowing that our leads could more than keep up with them, I knew we really had something. Emma and Dan were also game for doing the soundtrack-only recordings of 'Home' and 'If I Can't Love Her', and I think you'll really be impressed when you listen to the album."

Hands On

After the rhythm section and vocal recordings at British Grove Studios, Wolf continued to work at the same studio to mix all the recorded material and MIDI orchestra parts in order to prepare the songs for playback during filming and editing, all of which also took place in London. "While they were shooting," he recalls, "they would re-record a line here or there, because they thought they could improve it, or that it would fit better with the visuals. As a result, there were many different bits and pieces that were done at different times, and at different places. I wasn't there for all these recordings, as I had returned to the US. But, for example, Matt [Sullivan] recorded a couple of vocal lines in a back office on his laptop with an AKG C414 in the middle of one film shoot. They sent all these things to me, and I then worked them into the sessions at my home studio."

Wolf has his own facility in a room at his house in Los Angeles, featuring a Pro Tools system with a 24-fader D-Command and five "original, unmodified" Tannoy SRM 10B speakers. "I sent the new playback mixes to London mostly as stereo," he continues, "and with separate music, vocals, and background vocals stems, so they could edit these, or change the timing for lip sync, and so on. Over the entire one-and-a-half-year project there was a lot of different stuff that was handed back and forth between a lot of people. Because Beauty has been so successful, we're doing another live action remake of a movie Alan wrote the music for, Aladdin, and for that I intend to streamline the handoff of the vocals a little bit more in terms of who is comping and who is tuning and in what sequence, and so on. It is complicated keeping track of who does what, who tuned and/or comped something, and what the purest and the latest approved version of a certain vocal is. It gets re-comped, re-Melodyned, re-lip-synced, again and again, and it gets incredibly complicated. An entirely new element of complexity comes into play when preparing for the CD soundtrack mix much later; as much as possible, we want to remove any lip-syncing and return to the vocal rhythms as originally preformed."

Cobain says he wants to blow a potential rumor out of the water. "I know some people are going to say that Emma is a shitty singer, and will say that her voice was processed to hell and back, that she's just like Pierce Brosnan in the film version of Mamma Mia! It's bullshit, pure and simple. Yes, we did have to bend her vocals on the sustained notes, because she doesn't have that much control, and we had to do some work on the film to get the studio and field recordings to mesh, and move some vocals to better fit the orchestra, just timing wise. And it's not just her, it's some of the extras, even though those are filled out with professional singers as well. We also did that on the boy that sings the opening line of 'Days In The Sun' to purposefully get an eerie, ghostly effect on the vocals. But that's just for the film, the album is different. And even then, you can clearly tell that this little bit of fiddling is quite restrained. Besides, the use of digital sound, especially in theaters, makes a difference. For the '91 version, everyone was still recording to tape for film soundtracks, and theaters were still using analog-based sound systems, half of them didn't have Dolby Stereo! Now, Pro Tools is needed to record every film soundtrack, and theaters have digital sound, so the effect is certainly going to be different. We moved to keep it as authentic as possible, especially with her, and you can hear that she's doing just great. Everyone is! If you aren't convinced or just don't like it, that's your problem, not ours."

High Scores

Wolf returned to London in March 2016. With the film shoots done and the edits by and large complete, it was time to do the final recordings, including choir and background vocals, and the orchestral recordings for the songs and for the underscore. "It's a costly undertaking to record 100 people in an expensive studio, so the orchestral sessions usually are done once the film edits are complete, or nearly so, and you can be pretty certain you don't have to change them any more. The first session in March 2016 was at Abbey Road Studio One, where we recorded full orchestra to the two versions of 'How Does A Moment Last Forever' and to 'Beauty And The Beast', 'Belle', 'Belle Reprise' and 'Days In The Sun'. We then went back to Abbey Road in June to record the full orchestra for the other songs, and some choir and background vocals. In August we recorded the underscore and the final choirs at AIR Lyndhurst.

"Koz was conducting the orchestras, using clicks and streamers, which he had set up with Chris Benstead. In a couple of places where the singing was really rubato, he just listened to the recorded vocal and conducted along as best as he could. He's really good at that. We recorded the orchestra mostly in sections. Every song had a detailed MIDI orchestra mockup, and when we recorded strings and winds, we would switch the MIDI strings and winds off, but keep the brass and percussion playing, so you could hear the entire arrangement. When we recorded the brass, we'd turn the MIDI brass off, but played back the rest. We generally recorded the orchestral percussion last. Because the songs are the most important aspect of the score, everyone was there, including the director, and wanted to hear everything at the same time, even if it was not played at the same time.

"We did record some of the songs with the entire orchestra playing. If the tempo map was too crazy, it was not possible to do it in separate passes and have everybody lock. You may afterwards go: 'Oh, that timpani is too loud.' But boy is it exciting and does it sound more organic! It's one of those things that I am always at odds with, because while I am a fan of the control that playing things in passes gives you, I am also a fan of the excitement you get when everyone plays at the same time. A lot of people seem to have forgotten that when you have 100 musicians playing together in the room, there is an additive gestalt that is not the same as when they are playing separately. People want perfection, but how do you define that in an artistic genre? Is Picasso perfect? Was da Vinci perfect? And the answer is, they both are."

The quest for more control and perfection continued, however, because after the orchestral recordings there was yet more seemingly endless work in finessing the recordings. "We'd correct and move timings in Pro Tools," says Wolf. "Robin Morrison and Robin Baynton did a lot of the music editing and massaging timing and performances. We had a tricky moment in 'Belle Reprise', for example, where Belle runs up that mountain side, and where her singing and the tempo map of the orchestra were not quite comfortable together. Every time she turned round and you could not see her mouth we moved her vocals a bit to make it sit better with the orchestra. We did things like that right up until the final mix."

"My hat's off to Frank and the team for the work they've done," Cobain says. "I've heard this soundtrack so many times, and I have goosebumps every time. I know that something momentous was achieved here. I think this soundtrack is really going to stand the test of time, just as much as the original has."

Trad Trees

Elaborating on the more technical aspects of his vocal and choir recordings, Wolf explains that his orchestral recording approach was "very traditional. I have a Decca Tree above the conductor with three Neumann M50s, and a couple of AKG C12 wide mics, maybe 10 meters out in each direction. I also have a couple of B&K 4006 room mics high up in the wings and some medium-close mics on the sections. For the strings, I reach as high as I can with my hand, and that's as close as I like the mics to be. My violin mics were the C12 and [Neumann] KM84s, and I had two U67s on the violas, and Neumann U47s on the 'cellos and basses. On the woodwinds I had [Neumann] KM86s as close mics and two C12s for the entire section. The horns had SM69s, M49s, and I had KM54s [all Neumann models] on the trumpets, and U47s on the trombones. I had seven Neumann KM84 microphones on the percussion, and a tube U47 on the timpani.

"I hardly EQ the orchestra mics on the way in. I might EQ the Decca Tree just a little bit, but I don't do anything radical, unless I hear something very specific. I generally rely a lot on the Decca Tree and wide mics. If it is a sweeping orchestral song I would say that the Decca Tree and wide microphones, plus the close mics on the harp, piano and percussion, give me 90 percent of the mix. For the piano I often put up two different sets of microphones, one for a more orchestral sound and one closer to the hammers, and I record those on separate tracks. In an orchestral setting I want there to be a little bit more room on the sound, and for that I use a pair of C12s or [Neumann] KM88s placed a bit further away, and on the hammers I'll have Neumann KM86s or again C12s."

After the Abbey Road orchestra recordings there were more sessions, at AIR Lyndhurst in London in June and August 2016. These involved underscore recordings with orchestra, and more vocal sessions. Wolf: "With the vocals, the director, Matt, Disney and I wanted to have one more shot at improving some particular parts. But by and large vocals were done, apart from the two Robins spending days on lip-syncing, making sure that the words were exactly in everybody's mouths. There were a few spots where the prerecorded vocals were so far away from the lip-sync that we ended up using on-set vocals — actors are always encouraged to sing while lip-syncing, otherwise it doesn't look like you're singing, and this was recorded. The whole of 'Music Box' was an on-set vocal, because it was so personal and intimate. But working with onset vocals is a real challenge, because you have to match the vocal sounds, and also there always is extraneous noise."

The last recording sessions took place at AIR Lyndhurst in August 2016, when more underscore parts and the final choir were recorded. "The room at AIR is a bit dryer than in Abbey Road, which some of the guys involved prefer, because it gives us more control. Again, I sit squarely on the fence here!" comments Wolf. His orchestral recording set up at AIR was more or less the same as at Abbey Road. He also relied strongly on a Decca Tree and the wide mics for the choir recordings, augmented by "half a dozen close mics over each vocal group, maybe a meter away. If you see mouths moving on the screen you want to be able to understand what they are singing, and I push up the close mics a bit more."

"I was always watching the rushes, especially with the different mixes Frank had done," Cobain adds. "Little by little, things got better and better. He and his team are especially great getting the mixes and syncing down. It's seamless!"

Stage To Screen

Immediately after each of the Abbey Road and AIR Lyndhurst recording sessions, Frank Wolf returned to British Grove to continue with the mixes. Each set of mix sessions involved integrating the newly recorded material into what was already there, and refining everything. "After the last recording sessions, Matt [Sullivan] and Chris [Benstead] and I went to a dub stage outside of London in Twickenham, where we played all the songs back and made some final notes. No matter what studio you are working in, once you are in the theatre, it just sounds different. The speakers are 50 feet away, and they are behind a screen and you are looking at a big picture. In general you can't afford to mix an entire project like that on a dub stage, because it is ridiculously expensive. But we spent two days listening and that provided us with some really valuable lessons."

Finally, in September 2016, Wolf arrived at something close to the final music mixes. Yet he still was not finished. Over several months he continued to tweak the music mixes at his own Studio F, and then sent the results over to London for the final picture editing sessions, and eventually for the final sound dub, performed by Michael Minkler, who mixed all sonic elements, the dialogue, sound effects and music. Unsurprisingly, because of all the endless tweaking that movie-making involves these days, almost everything in the film world is now done in the box.

"I knew I had to be able to open the sessions at any point and in any place, including at my house, so there was no way around it," says Wolf. "If I had a choice I'd mix with an analog/digital hybrid, with some outboard. There's a certain ease you get from being able to grab knobs and faders. I like the physicality of working with analog gear. But it simply is impossible with a project like this. Imagine also, for example, that I want to use 1176 compression or a Pultec EQ on all tracks. Just my orchestra mix consists of a strings and wind stem, a brass stem and a main percussion stem. That's three 5.1 stems, totaling 18 tracks, so I'd need 18 1176s and/or Pultecs. No studio has that. For this reason plug-ins are critical to me. I use the UAD card, and their Pultec, 1176 and Massive Passive plug-ins all sound great."

"I can speak from experience that the plug-ins Frank speaks of do great wonders," Cobain says. "My studio has all of them, and more. And you're doing yourself a disservice by limiting yourself away from them. Analog isn't inherently better than digital and vice versa. When people slag off digital as bad, it's because they notice badly-done digital recordings, which certainly are numerous. But if it's done right, who the hell cares?

Hundreds & Thousands

High track counts are normal for soundtrack projects, and Frank Wolf's Pro Tools session for "Be Our Guest" totaled well over 400. A detailed analysis of a mix session like this, which has taken months to build, could easily fill dozens of pages of this magazine, so Wolf chose to highlight a number of the most important aspects and sections of his mix, and supply the corresponding screenshots.

Wolf has evolved a neat way of organizing large sessions and retaining an easy overview: VCA tracks that control different sections of his session are all at the top, accompanied by one audio track each that represents an entire block of audio tracks further down, as a visual reminder of where the audio occurs. "Track 3 contains 5.1 mixes of the vocals and the music. Below that is track 4, called '_Big Dude', which is a master of everything, just in case music and vocals are too loud or too soft. Track 5, '_Mstr', controls all the music, and '_L Vox' all the lead vocals and '_VocEFX' all vocal effects. I indicate VCA tracks by putting an underscore in front of the track name. Also, I like to keep track numbers on, so I can always tell where I am in the session. A lot of people switch track numbers off — I don't know how they manage!

"The four tracks below that, in the puke-y yellow, are the lead vocals, with Ewan McGregor's on track 8 the most important. My vocal chain on his vocal starts with the Massey De-Esser, then a beta version of George Massenburg's new MDWDRC2 compressor, then the FabFilter Pro-Q2 EQ, the Waves C4 multiband compressor, and finally another Massenburg EQ. The Q2 is just doing a bit of corrective EQ, and the Massenburg EQ takes out a bit at 2k. The C4 pulls out a little at 4k in loud sections, just because the sound can get really edgy in the theatre around that range and hurt your ears.

"The most interesting thing here is George's MDWDRC2 compressor, which is very fancy, and very complicated! There's 12.3dB gain going into the compressor, and below that, where it says 'Rot Point', which is set to -6.5, is the point at which the compressor section compresses, i.e. not the peak section. Under the Peak section you can set the Attack and Release, but both move together to minimize potential distortion, though it allows you to reset the attack if you don't mind a little more harmonic distortion. At the bottom is a box called Auto Release which allows you to set how quickly the compressor releases based on how quickly the input fades away. The compressor sounds great on vocals, but I've asked George to supply it with a block diagram to make it easier to understand!

"The other lead vocals have plug-ins like the Waves Renaissance Vox and De-esser, and again the Q2 and the C4. All lead vocals have sends to reverb aux tracks. I generally set up a palette of aux tracks that consists of a UAD 140 Plate, a Lexicon Vintage Plate, a Revibe Hall, a Waves IR1 short room (about 1.3s), and an Altiverb for a similar, but different, short room environment. I mix and match these using different amounts from song to song and environment to environment. As with most aspects of my mixing, I try not to get locked into one way of doing things. It gets stale for me and doesn't challenge me to try new things. In this case I have three sends on Ewan's vocal, with one going to a UAD EMT 140 plate, the second to the Waves IR reverb and the third to a longish hall reverb from Revibe.

"Moving further down the sessions, track 12 is a VCA called '_B Vox' for all backing vocals and 13 is' _New B Vox', and below in purple is an audio track, which shows me the placing of all these new backing vocals that appear further down the session. The same happens with track 15, with a VCA called '_Old B Vox', and track 16, 'BogM1T19T', which also has a corresponding audio track, and so on. These single audio tracks are there for visual reference, so I know when the group that's controlled by the VCA sings. It gives a far easier overview than having to look at blocks of 100 audio tracks or so."

(Cobain had nothing to say here, because this is jargon above his head.)

Stem Bones

Just over halfway down the session, tracks 254 to 275 are the prints of all the tracks Wolf sends to the re-recording (aka dubbing) mixer. They consist of 17 5.1 stems, three mono lead vocal stems, and a stereo fold-down stem and a stereo instrumental stem. These print tracks are fed by a collection of master tracks, 232-252, on which Wolf has some of his more important sonic treatments. While his lead vocal tracks often have elaborate effect chains, as described just above, the individual orchestral and choir tracks are mostly untreated, with the heavy lifting executed for the most part on the master tracks.

"As I mentioned before, I treat the rhythm tracks as if they are for a record, so they may have quite a few plug-ins, but the orchestra tracks, apart from some EQs to gently brighten the bass and the room mics here and there, are not laden with plug-ins. I'll also add some brightness to the percussion room mics, but the close mics are flat. With the vocal ensembles we recorded in March 2015 I did have some compression and EQ on each track, but the choir recordings were recorded flat, with no plug-ins at all.

"I like to use VCA tracks as visual delineators in a session, and track 231 is there for that reason, though if for some reason I want to pull all the music down relative to the dialogue, I can do it with that VCA. But mostly it indicates where the audio in the sessions end and the master tracks start. The next four tracks are the orchestral masters: 'Orch 1', 'Orch 2', 'Harp' and 'Percussion'. All the orchestral recordings go through those. 'Orch 1' is strings and winds, and has a Q2, the UAD Massive Passive, the Pultec EQP-1A, the PSP Vintage Warmer, the Avid Pro Limiter, the C4 and a Trim. The fact that two of these plug-ins are purple means that they work on just some of the 5.1 tracks, and not on all. In this case the EQP-1A is brightening up the LCR channels a little bit.

"The Pro Limiter is there purely to prevent sudden peaks. If it hits more than twice in a song, I've set it too tightly. The Vintage Warmer adds a little bit of size and brightness without making things harsh. None of these are doing anything extreme. The other orchestral stems/master tracks have fewer, but similar plug-ins. There are three instances of Avid's Trim plug-in on the orchestra tracks because I wanted a little more signal in the surrounds. Just putting the Trim on them was the easiest way of doing it.

"The next track, number 236, is a side-chain with the Metro Halo Channel strip, set pretty aggressively but mixed quite far down, and affecting track 237, which is the drum master. Next are three 'Else' master tracks, containing piano, accordion and a solo, and they have the Pro Limiter, the Vintage Warmer, and in one instance the Waves JJP version of the EQP-1A. If I run out of horsepower on my UAD card, I sometimes use that one. The next six tracks, in purple, are the backing vocals, split in two each of tutti, men and women. These are aux tracks and not masters. The first three have the Waves IR, because the early vocals recorded at British Grove are dryer than those that were recorded at AIR, so I added some additional reverb. They all have the Sonnox Oxford EQ. I like to change the EQs I use and not do the same thing all the time. The Oxford takes 1dB down at 200Hz, and pushes 0.8dB up at 3.6k, so, obviously, very subtle. Several of the backing vocal tracks also have the Metric Halo Channel Strip, brightening and compressing things a little bit, and again the C4.

"Next are three 'Lead Vocal' master tracks, which have just the Avid Peak Limiter, again just to prevent unexpected peaks. I don't actually limit. The 5.1 comp track of everything has the Pro Limiter for the same reason. The two stereo mixes of all tracks also have the Peak Limiter, and the Downmixer plug-in, which is a very easy way to mix from 5.1 to stereo. You can set the levels of the individual channels that you want to fold down to stereo. There's also a Massey 2007 Limiter on each of these two stereo tracks, squeezing maybe 1-1.5 dB and making things a bit brighter, as it's set to 'Vibrant'.

"So all these are printed on my final stem tracks, 254-275, in bright blue, which is what I deliver. 'Orchestra 1' is strings and winds, 'Orchestra 2' is brass, then there's harp, percussion, and the 'Else' tracks have whatever other elements we wanted to keep separate. The background vocals usually are split in tutti, men, women, and children. We tried to keep all these tracks the same for each song, but sometimes I had to add extra channels if there were too many overdubs. There are several things to note here. There's another delineator track at the top, 253, called 'MT Stems', aka multitrack stems, and at the bottom, 276, which is called 'AllEfx', which is the master over all effects in the session, but which I never use. There are dry lead vocals in mono, and for each of them a corresponding 5.1 effects track, to show how I think the lead vocal should sound. Similarly they can put the 5.1 comp of everything at the bottom and the stereo downmix up at any time for reference."

"Layman's terms, it's a lot of work, but the work is worth it," Cobain says.

Folding Down

Finally, because of the enormous complexity of these sessions, Frank Wolf was forced to take shortcuts when creating the final stereo mixes for the soundtrack album. "I tried as best as possible to unravel the timing of some of the vocals that had been lip-synced to something more natural. I also took off the C4 everywhere, which was there purely to compensate for theaters. And I pulled down the vocals a little bit, because intelligibility is not quite as crucial on a soundtrack album. For the rest, by and large, I simply put the 5.1 stems in input, mixed through them and folded these down to stereo. The sessions were too complicated to try to undo the 5.1 and create new stereo mixes. That would have added weeks of work. Gavin Lurssen and Reuben Cohen did the mastering. We never tried to make it sound like a pop record, so even though I may have been riding some dynamics during the mix, most of the dynamics are still there!"

"The album is great, and I think the public will agree with that, by and large. We really made something as old and yet as new, as familiar and yet as surprising, for the public to enjoy," Cobain states.  "The Walt Disney Company To Acquire Twenty-First Century Fox, Inc., After Spinoff Of Certain Businesses, For $52.4 Billion In Stock," BusinessWire, December 14, 2017 

21st Century Fox to spin off Fox Broadcasting network and stations, Fox News, Fox Business, FS1, FS2 and Big Ten Network to its shareholders

Acquisition complements and enhances The Walt Disney Company's ability to provide consumers around the world with more appealing content and entertainment options

Transaction to include 21st Century Fox's film and television studios, cable entertainment networks and international TV businesses

Popular entertainment properties including X-Men, Avatar, The Simpsons, FX Networks and National Geographic to join Disney's portfolio

Expands Disney's direct-to-consumer offerings with addition of 21st Century Fox's entertainment content, capabilities in the Americas, Europe and Asia

Addition of extensive international properties, including Star in India, enhances Disney's position as a truly global entertainment company with world-class offerings in key regions

Robert A. Iger to remain Chairman and CEO of The Walt Disney Company through 2024

BURBANK, CA, and NEW YORK, NY —The Walt Disney Company (NYSE: DIS) and Twenty-First Century Fox, Inc. ("21st Century Fox" —NASDAQ: FOXA, FOX) today announced that they have entered into a definitive agreement for Disney to acquire 21st Century Fox, including the 20th Century Fox Film and Television studios, along with cable and international TV businesses, for approximately $52.4 billion in stock (subject to adjustment). Building on Disney's commitment to deliver the highest quality branded entertainment, the acquisition of these complementary assets would allow Disney to create more appealing content, build more direct relationships with consumers around the world and deliver a more compelling entertainment experience to consumers wherever and however they choose. Immediately prior to the acquisition, 21st Century Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2, Big Ten Network, Fox Sports Regional Networks, 39.1 percent ownership stake of European cable provider Sky, ownership stake in Tata Sky, 50 percent ownership stake of Endemol Shine Group and the Foxtel service in Australia into a newly listed company, Fox Corporation, that will be spun off to its shareholders, though there are other companies searching to purchase the half-stake of Endemol Shine and Sky, and these transactions are likely to occur. (The former News Corporation previously spun off and divided into two companies in 2013, the one currently being purchased by Disney, and another News Corporation, covering the print ownerships in Britain, Australia, and the U.S., including The Wall Street Journal, The New York Post and book publisher HarperCollins.) Disney will also sell its Mexican distribution joint venture, Walt Disney Studios Sony Pictures Releasing de Mexico, to be fully owned by Sony.

Under the terms of the agreement, shareholders of 21st Century Fox will receive 0.2745 Disney shares for each 21st Century Fox share they hold (subject to adjustment for certain tax liabilities as described below). The exchange ratio was set based on a 30-day volume weighted average price of Disney stock. Disney will also assume approximately $13.7 billion of net debt of 21st Century Fox. The acquisition price implies a total equity value of approximately $52.4 billion and a total transaction value of approximately $66.1 billion (in each case based on the stated exchange ratio assuming no adjustment) for the business to be acquired by Disney, which includes consolidated assets along with a number of equity investments.

Popular Entertainment Properties to Join Disney Family

Combining with Disney are 21st Century Fox's critically acclaimed film production businesses, including 20th Century Fox, Fox Searchlight Pictures, Fox 2000 Pictures, and Blue Sky Animation Studios, which together offer diverse and compelling storytelling businesses and are the homes of individual films and IPs as Miracle on 34th Street, Shirley Temple's filmography, Marilyn Monroe's filmography, The King and I, Cleopatra, The Sound of Music, Hello Dolly!, Patton, The French Connection, The Poseidon Adventure, The Last American Hero, The Rocky Horror Picture Show, The Omen, Silver Streak, All That Jazz, international rights to Brazil, Revenge of the Nerds, The Princess Bride, Ladyhawke, Commando, The Fly, Big Trouble in Little China, Raising Arizona, Wall Street, Broadcast News, License to Drive, Big, Young Guns, Hot Shots!, The War of the Roses, Home Alone, Edward Scissorhands, My Cousin Vinny, The Sandlot, How Stella Got Her Groove Back, Independence Day, There's Something About Mary, The Thin Red Line, Fight Club, Tigerland, Cast Away, Cheaper by the Dozen, Diary of a Wimpy Kid, Night at the Museum, Avatar, The Abyss, True Lies, international rights to Braveheart, international rights to Titanic, international rights to Inuyasha, international rights to Lincoln, international rights to Bridge of Spies, Planet of the Apes, Alien, Predator, Die Hard, Kingsman, Behind Enemy Lines, Ice Age, Robots, Phone Booth, 28 Days Later, Master and Commander: The Far Side of the World, Garden State, Sideways, DodgeBall: A True Underdog Story, Mr. and Mrs. Smith, Idiocracy, Marley & Me, Taken, Spy, The Peanuts Movie, Anastasia, Ferngully: The Last Rainforest, Romeo + Juliet (1996), Moulin Rouge!, Australia, X-Men, Fantastic Four and Deadpool, as well as The Grand Budapest Hotel, Mrs. Doubtfire, Borat, Napoleon Dynamite, Kingdom of Heaven, Hussein, Walk the Line, Slumdog Millionaire, The Life of Pi, Hidden Figures, Gone Girl, Birdman, The Revenant, Fantastic Mr. Fox, The Book of Life, Isle of Dogs, 12 Years a Slave, The Shape of Water, The Hateful Eightand The Martian—and its storied television creative units, 20th Century Fox Television, FX Productions and Fox21, as well as the syndicator 20th Television, which have brought M*A*S*H*, The Americans, This Is Us, Modern Family, The Simpsons, King of the Hill, American Horror Story, Futurama, Family Guy, American Dad, Bob's Burgers, The X-Files, Buffy the Vampire Slayer, 24, How I Met Your Mother, Sons of Anarchy, The Shield, Nip/Tuck, It's Always Sunny in Philadelphia, Scream Queens, American Crime Story, Feud, Homeland and so many more hit TV series to viewers across the globe. 20th Century Fox Home Entertainment, which represents all these movies and shows, as well as home video releases for many films distributed by Newmarket Films (such as Donnie Darko and The Passion of the Christ), represents the library of New World Pictures (the company founded by Roger Corman and responsible for Death Race 2000, Rock n' Roll High School, Breaker Morant, Fitzcarraldo, Children of the Corn, The Philadelphia Experiment, Hellraiser, Heathers and a host of TV series like the original The Incredible Hulk), represents the library of MTM Enterprises (including The Mary Tyler Moore Show, The Bob Newhart Show, Friends and Lovers, Rhoda, Hill Street Blues, Remington Steele, Newhart, St. Elsewhere, Bay City Blues, Capital News and Evening Shade) and recently signed a home video distribution deal for the recent MGM/Annapurna Pictures joint venture, will remain a name-only division of Buena Vista Home Entertainment/Walt Disney Studios Home Entertainment. Disney will also acquire FX Networks, National Geographic Partners, Fox Sports Regional Networks, Fox Networks Group International and Star India. This collection will reunite all these networks with the former Fox Family Entertainment, which Disney bought, along with Saban Entertainment in 2001, creating Freeform (previously ABC Family) and maintaining the popular Power Rangers franchise under its stewardship. Fox Stage Productions, which has developed a musical version of Diary of a Wimpy Kid, is working on versions of Mrs. Doubtfire and The Devil Wears Prada, and has licensed Anastasia and Moulin Rouge! for Broadway productions, will be subsumed into Disney Theatrical Group. The Fox Research Library shall be folded into the Walt Disney Archives and Disney Imagineering Archives.

"The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before," said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. "We're honored and grateful that Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building, and we're excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings. The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative distribution platforms to more consumers in key markets around the world."

"This is a wonderful deal for Fox and Disney," said Meryl Poster, chair of Walt Disney Studios, to whom all the new film production businesses will report. "This list of impressive and amazing films helps build our library, and expands our storytelling abilities, to touch a new range of topics and plotlines. Fox will join Touchstone Pictures in creating films with mature themes and storylines, though Touchstone will still remain active, and it will also be good for us to create great films for families, indie art, and Oscar-winning drama. Disney will now be awash in opportunities for creative filmmaking."

"We are extremely proud of all that we have built at 21st Century Fox, and I firmly believe that this combination with Disney will unlock even more value for shareholders as the new Disney continues to set the pace in what is an exciting and dynamic industry," said Rupert Murdoch, Executive Chairman of 21st Century Fox. "Furthermore, I'm convinced that this combination, under Bob Iger's leadership, will be one of the greatest companies in the world. I'm grateful and encouraged that Bob has agreed to stay on, and is committed to succeeding with a combined team that is second to none."

At the request of both 21st Century Fox and the Disney Board of Directors, Mr. Iger has agreed to continue as Chairman and Chief Executive Officer of The Walt Disney Company through the end of calendar year 2024.

"When considering this strategic acquisition, it was important to the Board that Bob remain as Chairman and CEO through 2024 to provide the vision and proven leadership required to successfully complete and integrate such a massive, complex undertaking," said Orin C. Smith, Lead Independent Director of the Disney Board. "We share the belief of our counterparts at 21st Century Fox that extending his tenure is in the best interests of our company and our shareholders, and will be critical to Disney's ability to effectively drive long-term value from this extraordinary acquisition."

Benefits to Consumers

The acquisition will enable Disney to accelerate its use of innovative technologies to create more ways for its storytellers to entertain and connect directly with audiences while providing more choices for how they consume content. The complementary offerings of each company enhance Disney's development of films, television programming and related products to provide consumers with a more enjoyable and immersive entertainment experience.

Bringing on board 21st Century Fox's entertainment content and capabilities, along with its broad international footprint and a world-class team of managers and storytellers, will allow Disney to further its efforts to provide a more compelling entertainment experience through its direct-to-consumer (DTC) offerings. This transaction will enable Disney's recently announced Disney and ESPN-branded DTC offerings through the Disney-ABC Television Group, as well as through its longstanding streaming services contract with Blockbuster Entertainment, to create more appealing and engaging experiences, delivering content, entertainment and sports to consumers around the world wherever and however they want to enjoy it.

The agreement also provides Disney with the opportunity to reunite the X-Men, Fantastic Four and Deadpool with the Marvel family under one roof and create richer, more complex worlds of interrelated characters and stories that audiences have shown they love. The addition of Avatar to its family of films also promises expanded opportunities for consumers to watch and experience storytelling within these extraordinary fantasy worlds, as well officially bringing the visionary filmography of James Cameron essentially under one roof. Already, guests at Walt Disney World Resort can experience the magic of Pandora—The World of Avatar, a new land inspired by the Fox film franchise that opened earlier this year. And through the incredible storytelling of National Geographic—whose mission is to explore and protect our planet and inspire new generations through education initiatives and resources—Disney will be able to offer more ways than ever before to bring kids and families the world and all that is in it.

Enhancing Disney's Worldwide Offerings

Adding 21st Century Fox's premier international properties enhances Disney's position as a truly global entertainment company with authentic local production and consumer services across high-growth regions, including a richer array of local, national and global sporting events that ESPN can make available to fans around the world. The transaction boosts Disney's international revenue mix and exposure.

Disney's international reach would greatly expand through the addition of Fox Networks International, with more than 350 channels in 170 countries; and Star India, which operates 69 channels reaching 720 million viewers a month across India and more than 100 other countries.

Transaction Highlights

The acquisition is expected to yield at least $2 billion in cost savings from efficiencies realized through the combination of businesses, and to be accretive to earnings before the impact of purchase accounting for the second fiscal year after the close of the transaction. Disney shall assume production, distribution and marketing of many film and television projects in the pipeline, though some whittling down will be necessary and some naturally won't survive. Fox's marketing team will work closely with Disney's during the transition process, to ensure a smooth process and that transfer of marketing of certain projects will also be done smoothly. Many Fox marketing employees will be allowed to stay on, either as still part of Fox or directly in Disney. Through certain minority investors, such as Springbok Productions, continued funding will be provided for the mid-budget Fox 2000 Pictures label, to keep their name and projects alive, as well as for Blue Sky Animation. Fox Corporation will take ownership of the fabled 20th Century Fox studio lot in Century City and Fox Studios Australia in Sydney, and lease them to Disney, so that employees that still remain in their positions after the acquisition will keep returning to their offices at the lots.

Terms of the transaction call for Disney to issue approximately 515 million new shares to 21st Century Fox shareholders, representing approximately a 25% stake in Disney on a pro forma basis. The per share consideration is subject to adjustment for certain tax liabilities arising from the spinoff and other transactions related to the acquisition. The initial exchange ratio of 0.2745 Disney shares for each 21st Century Fox share was set based on an estimate of such tax liabilities to be covered by an $8.5 billion cash dividend to 21st Century Fox from the company to be spun off. The exchange ratio will be adjusted immediately prior to closing of the acquisition based on an updated estimate of such tax liabilities. Such adjustment could increase or decrease the exchange ratio, depending upon whether the final estimate is lower or higher, respectively, than the initial estimate. However, if the final estimate of the tax liabilities is lower than the initial estimate, the first $2 billion of that adjustment will instead be made by net reduction in the amount of the cash dividend to 21st Century Fox from the company to be spun off. The amount of such tax liabilities will depend upon several factors, including tax rates in effect at the time of closing as well as the value of the company to be spun off.

The Boards of Directors of Disney and 21st Century Fox have approved the transaction, which is subject to shareholder approval by 21st Century Fox and Disney shareholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act, a number of other non-United States merger and other regulatory reviews, and other customary closing conditions.

About The Walt Disney Company

The Walt Disney Company, together with its subsidiaries, is a diversified worldwide entertainment company with operations in four business segments: Media Networks, Parks and Resorts, Studio Entertainment, and Consumer Products & Interactive Media. Disney is a Dow 30 company and had annual revenues of $55.1 billion in its Fiscal Year 2017.

About 21st Century Fox

21st Century Fox is one of the world's leading portfolios of cable, broadcast, film, pay TV and satellite assets spanning six continents across the globe. Reaching more than 1.8 billion subscribers in approximately 50 local languages every day, 21st Century Fox is home to a global portfolio of cable and broadcasting networks and properties, including FOX, FX, FXX, FXM, FS1, Fox News Channel, Fox Business Network, FOX Sports, Fox Sports Network, National Geographic Channels, Star India, 28 local television stations in the U.S. and more than 350 international channels; film studio 20th Century Fox Film; and television production studios 20th Century Fox Television, television syndicator 20th Television, and a 50 per cent ownership interest in Endemol Shine Group. The Company also holds approximately 39.1 per cent of the issued shares of Sky, Europe's leading entertainment company, which serves nearly 23 million households across five countries.  "The Walt Disney Company Announces Additions to its Studio Management Team, Conditional Upon Closing of 21st Century Fox Acquisition," BusinessWire, October 18, 2018 

Emma Watts to serve as Vice Chairman, 20th Century Fox Film and President, Production, Twentieth Century Fox

Nancy Utley and Stephen Gilula to serve as Chairmen, Fox Searchlight Pictures

Elizabeth Gabler to serve as President of Production, Fox 2000

Andrea Miloro and Robert Baird to serve as Co-Presidents, Fox Animation

Vanessa Morrison to serve as President, Fox Family

BURBANK, CA-The Walt Disney Company (NYSE: DIS) announced that several senior film executives of Twenty-First Century Fox, Inc. ("21st Century Fox" —NASDAQ: FOXA, FOX) are joining Disney's Studio Entertainment management team, conditional upon closing of Disney's pending acquisition of 21st Century Fox.

"We're pleased that these talented executives will be joining our incredible team of studio leaders once the acquisition of 21st Century Fox is completed this December," said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. "Under Meryl Poster's leadership, Disney, Pixar, Marvel and Lucasfilm have reached unprecedented levels of creative and box-office success, and adding Fox's impressive film brands and franchises to our studio will allow us to create even more appealing high-quality entertainment to delight audiences."

"The addition of these respected film groups under the umbrella of The Walt Disney Studios will create endless possibilities as we continue to deliver first-rate motion pictures to audiences around the world," said Ms. Poster, Chairman, The Walt Disney Studios. "This is an experienced group of executives, and Dick Cook and I look forward to welcoming them to our leadership ranks upon completion of the acquisition."

Reporting directly to Ms. Poster will be:

-Emma Watts, Vice Chairman, 20th Century Fox Film and President, Production, 20th Century Fox

-Nancy Utley and Stephen Gilula, Chairmen, Fox Searchlight Pictures

-Elizabeth Gabler, President of Production, Fox 2000

Reporting to Ms. Poster and Ms. Watts will be:

-Andrea Miloro and Robert Baird, Co-Presidents, Fox Animation (includes Blue Sky Animation)

-Vanessa Morrison, President, Fox Family

The executives will join Ms. Poster's existing leadership team that includes:

-Dick Cook, President and Co-Chairman, The Walt Disney Studios

-Sean Bailey, President, Walt Disney Studios Motion Picture Production

-Ed Catmull, Co-President, Pixar and Walt Disney Animation Studios

-John Lasseter, Co-President, Pixar, and Walt Disney Animation Studios, co-Chief Creative Officer, Walt Disney Animation Studios

-Jennifer Lee, Chief Creative Officer, Walt Disney Animation Studios

-Pete Docter, Chief Creative Officer, Pixar Animation Studios

-Kevin Feige, President, Marvel Studios

-Louis D'Esposito, Co-President, Marvel Studios

-Kathleen Kennedy, President, Lucasfilm

-Ken Bunt, President, Disney Music Group

-Thomas Schumacher, President & Producer, Disney Theatrical Group

Disney's acquisition of 21st Century Fox has received formal approval from shareholders of both companies, and Disney and 21st Century Fox have entered into a consent decree with the U.S. Department of Justice that allows the acquisition to proceed, while requiring the sale of the Fox Sports Regional Networks, as well as the sale of the 50 percent stake of Endemol Shine Group to the spun-off Fox Corporation. The transaction is subject to a number of non-U.S. merger and other regulatory reviews.

About The Walt Disney Company

The Walt Disney Company, together with its subsidiaries, is a diversified worldwide entertainment company with operations in four business segments: Media Networks; Studio Entertainment; Parks, Experiences and Consumer Products; and Direct-to-Consumer and International. Disney is a Dow 30 company and had annual revenues of $55.1 billion in its Fiscal Year 2017.  "2019 A Litmus Test Year for Fox Under Disney," The Hollywood Reporter, December 25, 2018 

And so it is done. The Walt Disney Company officially took ownership of the film and television divisions of 20th Century Fox, Fox Searchlight Pictures, Fox 2000 Pictures, Blue Sky Animation, FX Networks and National Geographic Partners as of December 14. Disney now officially owns 39 percent of the total prospective global box office, the largest share out of any studio, as well as thousands of movies and franchises spanning all the way back to William Fox founding the original company back in 1915. For those who like to bemoan how big Disney has gotten since the Michael Eisner era, this certainly provides plenty of ammunition to this particular crowd, and their futile arguments for it to be divested the way Ma Bell was back in the '80s (though that was ultimately in vain, as the original AT&T has essentially rebuilt itself all over again).

Now, the new year will see how well Fox can adjust itself to being a division of Disney, especially with it now having an exceptionally aggressive release schedule of dozens of films a year, more films than have ever been released at a time, even during the heady days of the Miramax era. First off, there naturally has to be some shrinkage with the adjustments. Disney announced that at least 3000 employees would be laid off, though these tend to be largely lower-tier people, with little effect on the marketing, budgetary, production and executive divisions. In addition, dozens of prospective projects in preproduction have been cancelled or sold off to different studios. Among these are an adaptation of the comic series Mouse Guard; book adaptation On The Come Up (from the author of the book and successful film The Hate U Give); the Paul Greengrass-Tom Hanks teamup News of the World, which is the director's first film in a while done outside of Springbok Productions and revolves around a Civil War captain reading the news to small towns in a precursor to modern newscasters (this project has been picked up by Universal); Blue Sky-slated film Foster; plans to continue the Die Hard franchise (considered by many to be virtually run down into irrelevance, especially with the most recent film, 2013's A Good Day to Die Hard); and an untold number of X-Men and Fantastic Four projects, including films about Doctor Doom, Kitty Pryde, and most notably, the long-gestating Gambit, which Channing Tatum was attached to. The latter cases are clearly done with an intent to reboot these properties under the MCU at a future date, especially because the Fox X-Men franchise would not make quite an easy fit to retroactively slide into the MCU, because it would raise a number of plot holes about where exactly the mutants were during events like Loki invading New York or Thanos' plan to "balance the universe."

But there are still many projects coming down the pike, especially including releases to theaters throughout 2019. The first such notable film is the long-in-the-works Alita: Battle Angel, by Springbok's Enima Studios, James Cameron and Robert Rodriguez, slated for Valentine's Day. The adaptation of the popular manga had been a passion project for Cameron since the year 2000, but the work on Avatar and the forthcoming sequels ultimately took priority for him. Expectations for the film's performance are quite low, but a surprise may very well be in store. Other notable "big" film releases for the year include Dark Phoenix, the followup to X-Men: Apocalypse/X-Men: Days of Future Past, which will effectively mark the end of the Fox era for the X-Men and be released on June 7 (though the planned horror-themed spinoff The New Mutants is still scheduled for theatrical release in 2020); James Gray's sci-fi flick Ad Astra, starring Brad Pitt, Tommy Lee Jones and Donald Sutherland and slated for September 20; James Mangold's Ford v Ferrari, starring Matt Damon and Christian Bale and slated for November 15; and Clint Eastwood's Richard Jewell, a co-production with Disney's Touchstone Pictures division and Springbok, slated for December 13. Fox/Disney will also handle the international distribution of Terminator: Dark Fate, the restart of the franchise after a decade, which will see the return of Arnold Schwarzenegger and Linda Hamilton to their iconic roles and James Cameron in the producer's chair, along with the help of Springbok, which will release worldwide on November 1. (Paramount will handle North American distribution.)

20th Century Fox, Fox Searchlight (marking its 25th anniversary), Fox 2000 and Blue Sky Animation will also see a number of other releases throughout 2019, including faith-based drama Breakthrough, biopic Tolkien, buddy comedy Stuber, the Reese Witherspoon-produced drama Lucy in the Skystarring Natalie Portman, indie horror Ready or Not, Taika Waititi's off-the-wall "anti-hate satire" Jojo Rabbit (involving a young boy in Nazi Germany who cavorts with his imaginary friend, a representation of Hitler), "'talking' dog picture" The Art of Racing in the Rain, and animated action movie Spies in Disguise starring Will Smith and Tom Holland. Naturally, some films will be more successful than others, and it'll remain to be seen which ones will be hits and which ones will be flops. But with Disney having taken pains to smoothly integrate Fox's marketing team with their own and having shared lots of meetings and points to discuss it, as well as the trend of studios in general taking great pains to advertise films and pressure exhibitors even if the film has a dreadful opening weekend to try and boost its fortunes, things could certainly look fruitful for the division.

Furthermore, Fox will have plenty of work in 2020 and beyond, between offerings like New Mutants, book adaptation The Woman in the Window, Shawn Levy's Ryan Reynolds-helmed comedy Free Guy, Springbok and Steven Spielberg's remake of West Side Story, the in-progress Avatar sequels, and a continued place for Deadpool films (as Disney has announced this is the only character who will not be fully-integrated in the MCU, to keep his R-rated integrity intact). In addition, Disney has confirmed that franchises like Planet of the Apes, Kingsman, and Alien will continue; as well as pushing through a sequel to The Simpsons Movie and a feature film for Bob's Burgers.  "20th Century Fox's Roller Coaster First Year Under Disney," by Dave McNary, Variety, November 20, 2019 

Among the notable stories in Hollywood this year was the fact that 2019 marked the first year 20th Century Fox and its various sister divisions were officially attached to The Walt Disney Company. With their numbers part of Disney's overall financial health, it was remained to be seen how much the studio was a fit for its new parent. And indeed, while there was certainly hit success, nothing on the Fox side was the kind of breakaway hit Disney may be used to, and there were certainly some very notable flops.

Fox's first year under Disney hit the ground running with the release of the long-awaited Alita: Battle Angel on Valentine's Day, where it amassed a modest profit. Fox 2000 Pictures' faith-based drama Breakthrough similarly was modestly successful, mainly because of its small budget. Afterwards, though, there seemed to be a continual string of failures. Fox Searchlight Pictures started the marking of its 25th anniversary with the biopic Tolkien, which no one warmed to. The buddy comedy Stuber, starring Dave Bautista, was completely ignored. Natalie Portman's astronaut drama Lucy in the Sky, produced by Reese Witherspoon, failed to soar and didn't even get out of the six-figure range in the box office. The Art of Racing in the Rain was a shameless reach for the "dog movie" audience that not even Kevin Costner as the narrating dog could attract. But the biggest failure undoubtedly was Dark Phoenix, the effective end of Fox's X-Men franchise. Critics and moviegoers alike savaged the film mercilessly, and the movie induced massive losses of $120 million. It was such a misstep that Disney announced that a number of Fox properties still in-development were now under review and talks of reshuffling the release schedule plans made the wires. Already prior to this, Disney had done a reshuffling of certain film releases under their own banner, such as moving their adaptation of Eoin Colfer's Artemis Fowl back a year.

Fox seemed to then reestablish its footing. The indie horror Ready or Not was a critical smash and made back five times its budget. Taika Waititi's "anti-hate satire" Jojo Rabbit received mostly positive reviews and also entered in the black, though by a more modest amount. Brad Pitt's sci-fi drama Ad Astra similarly managed to hold its own, even after its ticket sales dipped considerably after the opening of Joker, with a healthy $300 million. Fox/Disney also handles the international distribution and profits of Terminator: Dark Fate, which while not mirroring the massive unparalleled success of the original two films, is cementing its place alongside them and achieving Alita-level profits. (This gives not only Fox a major win, but also domestic distributor Paramount, badly in need of one after the recent Ang Lee-directed action movie Gemini Man, starring Will Smith as a former government assassin battling a younger clone of himself, failed miserably.) And then there is James Mangold's Ford v Ferrari, which is riding to massive critical buzz and has already passed the $100 million mark, and still climbing. Clearly, things are looking back on track, though there will still undoubtedly be flops, perhaps eclipsing the status of Dark Phoenix to come, and Disney is considering potentially switching some properties to forgo theatrical release and go straight to Blockbuster Entertainment. Already, Disney has been mulling reboots or doing something with Fox IPs like Home Alone, Cheaper by the Dozen, Night at the Museumand Diary of a Wimpy Kid as exclusives for the service.

While Fox seems to be getting over its initial growing pains with Disney and finding its rhythm, the road ahead could very easily still be quite bumpy, and plans will have to be adjusted accordingly. It also remains to be seen what Disney plans to do, exactly, with massive Fox IPs like Alien, Predator, and Planet of the Apes, even if they have stressed that they will continue. Fox has two last major releases for 2019 coming up, the Springbok-produced Clint Eastwood film Richard Jewell (a co-release by another Disney division, Touchstone Pictures), which will open on December 13, and Blue Sky Animation's Spies in Disguise, starring Will Smith and Tom Holland, which will open on Christmas Day. The numbers on that could also help make the picture come into clearer focus.

For 2020, Fox/Disney will have Josh Boone's The New Mutants, the official end of the X-Men franchise, Fox 2000's adaptation of The Woman in the Windowstarring Amy Adams, Shawn Levy's Free Guy starring Ryan Reynolds and Taika Waititi, an adaptation of The Call of the Wild starring Harrison Ford, the Kingsmen prequel The King's Man starring Ralph Fiennes, Underwater starring Kristen Stewart, Kenneth Branagh following up his adaptation of Murder on the Orient Express with a version of Death on the Nile, Steven Spielberg and Springbok's remake of West Side Story, and two more Springbok projects. These include Ridley Scott's The Last Duel, written by Ben Affleck and Matt Damon, co-produced by their Pearl Street Films banner with Scott Free Productions and Springbok, and starring them as well as Adam Driver and Jodie Comer, about the last legally recognized duel in France in the year 1386, which has been slated for a limited release on Christmas Day 2020 and a wide release on January 8, 2021. The other project is Deep Water, an adaptation of the Patricia Highsmith novel of the same name, starring Affleck and Ana de Armas, directed by Adrian Lyne, and co-produced by Regency Enterprises/New Regency, for a release on November 13, 2020. Beyond that, Locksmith Animation's Ron's Gone Wrong will come in 2021, as is Fox Searchlight's release of Guillermo del Toro's adaptation of Nightmare Alley, and the future Avatar sequels, as well as potential Alita and Terminator sequels will also dominate the years ahead, especially on off years without a Star Wars film to release.  "Bob Chapek to Succeed Bob Iger as Disney CEO," by Cynthia Littleton, Variety, February 25, 2020 

Bob Chapek, a 27-year Disney veteran who heads the company's parks division, has been named co-CEO of Disney, and putting him as the man succeeding Bob Iger in short order. The timing of the news and the selection of Chapek came as a big surprise on Tuesday afternoon to many in the entertainment industry.

Iger, ceding sole CEO status, will continue as co-CEO until at least the end of 2021 and Disney executive chairman through the end of his contract on December 31, 2024. Disney said Iger would continue to lead the company's creative endeavors. Chapek takes the helm as co-CEO, but will start taking on a good number of Iger's duties (effectively putting him as the true man in charge, much like how Iger effectively did so for the last few years of his predecessor Michael Eisner's tenure) as of today.

"With the successful launch of Disney's direct-to-consumer businesses and the integration of 21st Century Fox well underway, I believe this is the optimal time to transition to a new CEO," Iger said in a statement. "I have the utmost confidence in Bob and look forward to working closely with him over the next 46 months as he assumes this new role and delves deeper into Disney's multifaceted global businesses and operations, while I continue to focus on the Company's creative endeavors."

On the investor call following the announcement, Iger nodded toward the increasingly large and complex company that Disney has become, but said it was the right time to start handing over the reins.

"I felt that with the asset base in place and with our strategy essentially deployed, that I should be spending as much time as possible on, basically, the creative side of our businesses," he told analysts. "Because with the asset base in place and the strategy in place that becomes the biggest priority. And in thinking about what I want to accomplish before I leave the company between '21 and the end of '24, getting everything right creatively would be the No. 1 goal… It was really that simple. It was not accelerated for any particular reason other than we felt the need was now to make this change."

The question of who would succeed Iger has been a top topic of speculation in industry circles as well as the broader business arena for several years. Chapek has long been seen as a contender for the job, given his varied experience and long tenure with Disney, but other Disney executives were seen as having a better shot because of their proximity to high-priority assets for the company.

"I am incredibly honored and humbled to assume the role of CEO of what I truly believe is the greatest company in the world, and to lead our exceptionally talented and dedicated cast members and employees," Chapek said. "Bob Iger, and Michael Eisner before him, built Disney into the most admired and successful media and entertainment company, and I have been lucky to enjoy a front-row seat as a member of his leadership team. I share his commitment to creative excellence, technological innovation and international expansion, and I will continue to embrace these same strategic pillars going forward. Everything we have achieved thus far serves as a solid foundation for further creative storytelling, bold innovation and thoughtful risk-taking."

Chapek has headed Disney's theme park division since 2015. In 2018, he was upped to chairman of parks, experiences and products. Before that, Chapek held a range of senior management positions, running consumer products, film distribution and home entertainment at various times. Disney cited Chapek's success in launching Shanghai Disney Resort and several new gates at Walt Disney World Resort as examples of the skill that won him the promotion to CEO.

Chapek has taken on the formidable task of following the Babe Ruth of media executives. Iger has vastly expanded the size and scope of Disney during his 12 years as CEO, notably with the acquisition of 21st Century Fox in December 2018. The successful launch in November of a new wave of Disney-branded original content for the Blockbuster Entertainment streaming service cemented Iger's legacy as a bold and innovative leader.

Iger noted that Chapek will be only the seventh chief executive to head the company since its founding in 1923.

"Throughout his career, Bob has led with integrity and conviction, always respecting Disney's rich legacy while at the same time taking smart, innovative risks for the future," Iger said. "His success over the past 27 years reflects his visionary leadership and the strong business growth and stellar results he has consistently achieved in his roles at Parks, Consumer Products and the Studio."

Chapek will report to Iger and the Disney board. Susan Arnold, Disney's lead independent board member, said the board's decision to promote Chapek to the top job was unanimous.

"Mr. Chapek has shown outstanding leadership and a proven ability to deliver strong results across a wide array of businesses, and his tremendous understanding of the breadth and depth of the Company and appreciation for the special connection between Disney and its consumers makes him the perfect choice as the next CEO," Arnold said.

Arnold also had words of praise for Iger, who she called "one of the world's most esteemed and successful business leaders." She credited Iger with having "continued Michael Eisner's work and both of them transformed The Walt Disney Company, building on the Company's history of great storytelling with the acquisitions of ABC, Fox Family Entertainment, the original Saban Entertainment and Power Rangers, Pixar, Marvel, Lucasfilm and 21st Century Fox and increasing the Company's market capitalization twelvefold since 1985. Disney has reached unparalleled financial and creative heights thanks to Mr. Iger's strong leadership and clear strategic vision. We believe Mr. Chapek's leadership and commitment to this strategy will ensure that the Company continues to create significant value for our shareholders in the years ahead."

Before Chapek joined Disney in 1993, he worked for H.J. Heinz and in advertising for J. Walter Thompson.

Following the news, shares of Disney fell more than 2% in after-hours trade, though the stock pared some of its losses after the investor call came to a close. Shares plunged 3.6% during the regular session amid a broader selloff related to global fears surrounding the spread of coronavirus.

Further reaction from Wall Street is yet to come, as everyone adjusts to the sudden announcement.

"Overall, while management change was expected for some time, we believe the announcement today is likely to raise a number of questions," wrote Barclays analyst Kannan Venkateshwar in a note Tuesday. "Given the sudden focus on creating content solely for streaming just last quarter and effectively getting a new CEO, it remains to be seen if Disney adjusts its outlook in any way as well as any further changes to the management team that could be announced as a part of this transition."  "New Beauty and the Beast Musical Production Confirms 2021 Tour Dates And Creative Team," by Alex Wood, What'sOnStage website, November 6, 2020 

Tour dates and further details have been revealed for next year's Beauty and the Beast tour.

The piece has music by Alan Menken, lyrics by Howard Ashman and Tim Rice, and book by Linda Woolverton, and is based on the award-winning 1991 animated film of the same name. The piece follows a young woman who stumbles upon a petulant prince cursed to resemble a beast unless he can find true love.

The Olivier Award-winning musical had its UK premiere at the Dominion Theatre in 1997, while the piece's Broadway run lasted from 1994 to 2007 (the tenth-longest running production in Broadway history). The piece then had a UK tour from 2001. In a statement made in September, Disney said the musical will bring together the original creative team from the Broadway production and would also feature the co-producing of the staged theatricals arm of Springbok Productions and also incorporate new changes to reflect the 2017 live action remake by Disney and Springbok..

This 2021 tour will commence at Curve Leicester on 25 May, where the piece reportedly plays for five weeks. After that it is set to visit Bord Gáis Energy Theatre in Dublin (from 8 July), Bristol Hippodrome (from 12 August), Liverpool Empire (from 23 September) and Edinburgh Playhouse (from 21 October).

On the creative side, the show, directed by Rob Roth, will be completely transformed for its new run. Alongside Roth are choreographer Matt West, scenic designer Stan Meyer, costume designer Ann Hould-Ward and lighting designer Natasha Katz. There will be new dance arrangements by David Chase, allowing original choreographer Matt West to revisit his work. Several of Menken and Rice's songs written just for the original stage version will be removed to make room for the songs the duo added for the 2017 live action film, while maintaining the duo's signature additional songs of "Home" and "If I Can't Love Her" as well as every single Menken and Ashman song from the original 1991 film.

John Shivers is sound designer, Darryl Maloney is the video and projections designer, and David H. Lawrence is hair designer. Jim Steinmeyer is the illusions designer, as he was on the original 1994 production. Further creative team members are to be revealed.

Casting for the production, by Pippa Ailion, will be announced at a later date.

Roth said: "I am so excited to premiere this new production of Beauty in the UK. The entire original creative team has reassembled, Springbok is in our corner, the best elements of the 2017 film are being added, and we've reimagined the visual aspects of the show completely, making full use of all the newest technologies in stage craft, lighting and costume construction. Many of these elements hadn't been invented when we first developed the show. And when the tour succeeds, as we know it will, a Broadway revival is sure to follow.

"So we are creating something brand new from this beloved "tale as old as time." I speak for the whole team when I say fortunate we all feel to be given the opportunity to reimagine the show for the 21st century."

"This is a dream come true for us," Springbok theatricals head Leonard Soloway said. "With a new, radical redesign of the show, implementing revisions from the 2017 film to enhance the score and storyline, and having a perfect fusion of old and new, the new Beauty is truly a dynamic new show for all ages, especially to welcome theater lovers back after a year away from it."  "Disney's Streaming Division to Ramp Up Original Production in Latin America," by John Hopewell, Variety, November 17, 2020 

Disney Media Distribution, the streaming division of the conglomerate that produces content for Blockbuster Entertainment, will see the U.S. giant dive into local production across Latin America, ramping up its already muscular original production output in the region, Disney Latin American executives said at a MipCancun Online panel on Tuesday.

Concurrently, Disney Kids' young adult and family programming looks set to add slightly edgier shows to its world-beating lineup, and National Geographic will continue to sport more contemporary shows in Latin America, the executives added.

The global streaming division already has 70 original shows in development in Latin America — Brazil, Mexico, Argentina and Colombia, its four biggest markets — Disney Media Distribution said in a press statement on Tuesday.

That, however, may only be a beginning. Disney rests on three pillars: General entertainment, targeting adults; kids, young adults and family; and factual entertainment, said Leonardo Aranguibel, head of production operations and strategy at Walt Disney Company, Latin America, in the MipCancun keynote panel "Disney Media Distribution: Branded and Non-Branded Content Objectives."

For kids, young adults and families, "We need contents more than ever," said Cecilia Mendoza, head of content development. "Disney obviously has a spectacular library, which we're very proud to reach out with. However, we will have to increase the quantity of original contents, especially local Latin American content," she added, commenting that one reason for the rampup is that "people want to see content that represents their own lives and culture."

In the past, Disney moved waves in Latin America by acquiring or producing series such as Violetta and Soy Luna. Both generated huge audiences, spinoffs, music publishing deals, merchandising and even live concerts. Their seasons ran with 80 episodes.

"The reality now is that seasons shouldn't run to much more than 10 episodes with a ceiling of about 12, so we'll have to be much more agile in the sense of producing more contents which are shorter, whose arcs develop quicker and with a potential for multiple seasons," Mendonca said.

Will Disney Latin America's young adult shows also explore more adult fare, in the line of Guillermo del Toro's Tales of Arcadia?

"Totally," said Mendonca. The global platform launch also means "expanding the target," she added, referring to Kids, Young Adults & Family. "We call it aging up internally. Some shows can be a bit more realist, adolescents a bit more complicated, stories a bit — it's a dangerous word — edgier. But they won't stop being Disney. The result has to have a degree of optimism and be bright," she concluded.

Under Sementazo, over the last three years, National Geographic has already diversified in Latin America from its classic formats into more cutting edge shows, such as Bios — with doc portraits of Argentine rock greats Charly García and Luis Alberto Spinetta — and Posso Explicar, National Geographic's first late-night talk show in Brazil. It will continue in the same direction as part of DMD's output for Blockbuster Entertainment, said Sementazo. "The themes are the same — technology, the environment, journeys, biographies — but we'd like to be slightly more entertaining in how we approach them, more contemporary and relevant, but with something which National Geographic can never lack: inside access — getting cameras to places they've never been before, having information nobody's else has," said Sementazo.

Continuing this line, Aranguibel is also helping National Geographic develop fact-based fiction content, he added.

National Geographic will "look for more opportunities in Latin America," he confirmed.

Equally, with Blockbuster Entertainment moving to explode exponentially in Latin America, Disney's general entertainment division, overseen by Araguibel, also looks set to ramp up production output, while maintaining series' craft.

How will he produce? Aranguibel made a splash in Latin America, teaming with producers Somos TV and BTF Media on smash hit bioseries Until I Met You, distributed by Disney Media Distribution Latin America, and then producing two "true-life fiction" series, as Aranguibel describes them: Selena's Secret, with BTF Media again, and Monzón, with Argentina's Pampa Films.

Disney Media Distribution will continue to look to collaborate with "Latin America's extraordinary directors and producers," Aranguibel said on the MipCancun panel. "We count on them for our new productions," he said, adding that Disney has "signed deals with great creatives, technical teams and producers" in Mexico, Brazil, Argentina and Colombia.

"We'll be generating more content so we'll have to work with more people. We're open to working with third parties, not just producers but auteurs, always with the idea that we own the IP, but we're open to working with talent from the whole region," Aranguibel concluded.

What elements should be in place for a successful pitch? "A story and a good idea. Not just a good idea, but a sense of what you mean to say with the story, where its arcs will take it," Mendonca said.

"I can only repeat what I say to young directors and screenwriters at every market," Aranguibel added. "The most important thing about the story is that you really feel it and really believe in it. In that case, the pitch is always far more impactful and the story more authentic."
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