stanford gsb disney m&a of pixar vs marvel
TRANSCRIPT
The Incredibles vs. The Avengers:
A Comparison of Disney’s Most Significant Acquisitions
Stanford Final Project Vaisakh Shankar, GSB Erik Teensma,
Angelo Ocampo & Dani Smith July 12, 2016
What comes to your mind when you think of Disney?
Which acquisition was
more valuable to Disney?
vs.
Historical DIS Stock Price
Pixar Acquisition Marvel Acquisition
Black: DIS Pink: NASDAQ Purple: S&P 500
Invest $1,000 on July 12, 2006 Get $3,813 on July 12, 2016
Annualized Return of 14.31%
Pixar Additional Films Revenue Budget Video Sales Inside Out (2015) $857,400,000 $175,000,000 $106,600,000 The Good Dinosaur (2015) $331,900,000 $175,000,000 $50,000,000 Finding Dory (2016) $603,300,000 $200,000,000 NA Total $1,792,600,000 $550,000,000 $156,600,000
Marvel Additional Films Revenue Budget Video Sales Avengers Age of Ultron $1,405,000,000 $267,000,000 $74,000,000 Ant Man $519,000,000 $130,000,000 $56,179,000 Captain America Civil War $1,150,000,000 $250,000,000 NA Total $3,074,000,000 $647,000,000 $130,179,000
Revenue Generation Metrics Pixar (2006-2014) Marvel (2009-2014) Number of films since acquisition 8 8 Worldwide Grosses $4,781,944,543 $6,304,740,356
Gross Film Revenue from Pixar: $6,574,544,543 /2 = $3.3B to DIS Gross Film Revenue from Marvel: $9,378,740,356 /2 = $4.6B to DIS
Media Networks
44%
Parks and Resorts
31%
WD Studios 14%
Consumer Products
9%
Interactive Media
2%
DIS 2015 Revenue
0
5000
10000
15000
20000
25000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Rev
enue
($M
)
Disney Revenue Comparison by Segment
Parks and Resorts
WD Studios
Interactive Media
Media Networks
Consumer Products
Walt Disney Animation
Studio Founded
1923
Steve Jobs creates Pixar,
Inc.
1986
1991
Pixar approaches
Disney
Co-production agreement
Expiration of agreement
Disney acquires Pixar, Inc. for $7.4B
1997 2006 2006
Adopted the director
driven and production approach of
Pixar
Strategy
! Need for Competitive advantage
! Superior Product Quality
with Pixar’s Acquisition
! Change the “Profitability over quality” view
“Strategy is a commodity and execution is an art” - Peter Drucker, Management Consultant
" Pixar’s People Technology & Patents " Leadership Matters
Marketing (S.T.P.)
Corporate Governance
Talent Management
Marvel Films (later Marvel Studios, Inc.)
1993 1996
Bankruptcy
2009
Disney acquires Marvel Entertainment
for $4.2B
Strategy
Marketing Governance & Talent
! International Expansion and Penetration of its Business into different
markets
! Strategic Ties with new Partners – Limited theme
park options
! Growth and Market Expansion
! 3D branding Strategy
! Marvel’s local culture was preserved
! Intellectual Property ! 8,000 character
library
Pixar
Corporate Governance Preservation & Adoption of
Local Culture
Marketing Market Leadership & Brand
Positioning
Financials Gross Revenue = $3.3B
11 Films
Talent Acquisition Edwin Catmull & John Lasseter
Marvel Corporate Governance
Preservation of Local Culture
Marketing Co-branding, 3D Branding,
& Market Expansion
Financials Gross Revenue = $4.6B
11 Films
Talent Acquisition Intellectual Property
“The question isn’t did Disney pay too much but how expensive would it have been for Disney if Pixar fell into someone else’s hands.” -Barry Ritholtz, Chief Investment Officer at Ritholtz Capital Partners
Questions?
Pixar (PIXR)
Marvel (MVL)
0
10
20
30
40
50
60
1994 1996 1998 2000 2002 2004 2006 2008 2010
MVL Stock Price Breakdown of $4.2B Purchase Price
Bankruptcy Protection
$525M Loan
Appendix
1923 Walt Disney Forms The Disney Brothers Studio 1928 Mickey Mouse Debut
1932 First full-color cartoon 1937 First Animated Film 1940 Walt Disney Music Launches
1955 Disneyland CA opens 1966 Walt Disney Dies
1983 Disney Channel Launches 1989 Disney MGM Studios Merge
2005 Disney Content on iTunes 2006 Disney Acquires Pixar 2009 Disney Buys Pixar
1991 First Disney Pixar Deal Launched 1995 Disney.com Launches
1920 2010
Informational Sources • “To Acquire or Not to Acquire.” HBS Case. • “To Acquire or Not to Acquire, An Update.” HBS Case. • “The Marvel Way: Restoring a Blue Ocean.” HBS Case. • “How Marvel Went from Bankruptcy to a $4B Buyout.” HBR Article. • “Disney Buys Marvel: Designing 3D Brands.” HBR Article. • “How Pixar Fosters Collective Creativity.” HBR Article. • “Managing Creativity, Lessons from Pixar and Disney Animation.” HBR Article.
Image Sources • http://wallpaper.zone/img/4837952.jpg • http://meucerebro.com/wp-content/uploads/2015/03/mickey-mouse-walt-disney-e1425528419962.jpg • http://images-cdn.moviepilot.com/images/c_fill,h_533,w_1024/t_mp_quality/pqbwos19zemuejogca7l/marvel-
studios-disbands-their-creative-committee-what-does-this-mean-for-the-mcu-598227.jpg • https://mlcarmon.expressions.syr.edu/trfindustryforces/wp-content/uploads/sites/2/2014/10/7f017abb-f3d9-40c4-
a841-d9d686dc9a56-Pixar-Movies.jpeg • http://img1.cartoonscreencaps.com/Galleries/Finding_Nemo/Finding_Nemo_Screenshot_0069.jpg • https://images4.alphacoders.com/818/81856.jpg • https://atlantaladylitwits.files.wordpress.com/2012/05/the_avengers_wallpaper1.jpg • http://www.bestwallpapershq.com/wp-content/uploads/2016/04/wall_e_game-wide.jpg • http://www.twitrcovers.com/wp-content/uploads/2012/09/Pixar.jpg • http://wallpapercave.com/wp/61wPtic.jpg • http://cdn.collider.com/wp-content/uploads/2015/05/marvel-studios-logo.png • http://vignette1.wikia.nocookie.net/pixar/images/f/fb/Pixar_Wallpaper.jpg/revision/latest?cb=20120917224617 • https://images4.alphacoders.com/369/36924.jpg • http://www.wallpaperinhd.net/file/6661/2880x1800/stretch/walt-disney-characters-(1920x1200)-wallpaper-22.png • http://evansheline.com/wp-content/uploads/2011/09/pixar_luxo.png • https://65.media.tumblr.com/af4be8dbdbc47f6aa98948fe4c57341e/tumblr_mn0tqaUCw11s5jjtzo1_500.png • http://vignette2.wikia.nocookie.net/testing-123/images/9/9c/Disney_pixar_logo.png/revision/latest?
cb=20141128134954 • http://images.clipartpanda.com/mickey-mouse-face-clip-art-classicmickhead.gif • http://www.jamrockentertainment.com/IMAGES/apinocchio.gif • https://s-media-cache-ak0.pinimg.com/736x/6d/16/2f/6d162f9417d607b0f953010c1764f972.jpg • http://vignette2.wikia.nocookie.net/goldenthroats/images/e/ed/Disneypeterpan.jpg/revision/latest?
cb=20150420144526 • https://s-media-cache-ak0.pinimg.com/564x/79/93/9c/79939cd743bd405b41ba52fd24fcb82d.jpg • https://a.dilcdn.com/bl/wp-content/uploads/sites/25/2014/02/Dramatic-Snow-White-and-the-Seven-Dwarfs-
Poster.jpg • https://s-media-cache-ak0.pinimg.com/736x/64/f4/07/64f40735cb2012cc3fd5cc8fca011369.jpg