STUDIOS' BREAK A WAR OF EGOS WITH IGER ON BOARD, DISNEY, PIXAR MAY IRON OUT A DEAL TO WORK TOGETHER.

Byline: Greg Hernandez Staff Writer

BURBANK - The Walt Disney Co.'s amicable divorce this week from Miramax co-founders Harvey and Bob Weinstein brings to the forefront its troubled partnership with Pixar Animation Studios, which remains unsettled.

Just as Harvey Weinstein had, Pixar founder and CEO Steve Jobs clashed bitterly with Disney CEO Michael D. Eisner, whom Jobs publicly blamed when he broke off talks in January 2004 to extend the partnership that has yielded the blockbusters ``The Incredibles,'' ``Finding Nemo,'' ``Monsters, Inc.'' ``A Bug's Life,'' ``Toy Story,'' and ``Toy Story 2.''

But with Eisner stepping down in September and his predecessor Robert Iger already calling some shots, there is a general feeling that there may be room for more conciliatory talks since the current contract does not expire until next year. Pixar has not yet aligned itself with another studio.

``I think we all hope they work it out,'' ``Incredibles'' director Brad Bird said in an interview earlier this month. ``It's the guys at the top who don't get along well. On the ground here, we're all getting along fine.''

Pixar is responsible for the content of each film while Disney handles distribution and marketing. Both Disney and Pixar said Wednesday that the situation remained unchanged and declined further comment.

In terms of Disney's financial bottom line, Miramax is tiny compared to the millions Pixar films contribute to the company's film division. All six of the movies produced during the partnership have been enormous box office hits and gone on to major success on home video.

``Miramax is not a real money-maker; the boys tend to spend as much as they make,'' said media analyst Dennis McAlpine of McAlpine Associates. ``Clearly the relationship between Disney and Pixar has worked in terms of marketing and distribution.

In November, Jobs said he wanted to see who would occupy Hollywood's executive suites after the retirements of Eisner and of Paramount Pictures' Sherry Lansing before negotiating a deal with Pixar's next distribution partner.

But that wait is shorter than Jobs or anyone had expected. Eisner is leaving in the fall, a year sooner than anticipated. Lansing, who was to step down at the end of 2005, has already been succeeded at Paramount by Brad Grey.

``Certainly there was an ego clash between Eisner and Jobs; they didn't get along well for whatever reason,'' McAlpine said. ``Iger is probably not on the bad side with Jobs, but you have to get down to financial terms. Does it make sense?''

Pixar has felt that terms of the current distribution deal weighs too heavily in Disney's favor. The two companies split the profits from each film with Disney receiving 10 percent to 15 percent of the box office revenue as a distribution fee.

When talks broke down last year, Disney said Pixar's final offer would have cost the company hundreds of millions of dollars that Disney maintains it is already entitled to under the existing agreement. Disney also claimed the proposal did not provide enough incremental returns on new collaborations to justify the changes to the existing deal.

While the loss of new movies from Pixar would be a blow to Disney, the current contract also gives it the rights to develop and produce sequels to the movies produced under the current agreement, including direct-to-video projects and television.

This does not sit well with the Pixar creative team, who would have no input into any of the sequels despite creating the characters they would be based on.

``You can tell I'm real enthused about an `Incredibles' film without me,'' said Bird, who won an Best Animated Film Oscar last month for ``The Incredibles,'' which he wrote, directed and did voiceover work in.

Disney and Pixar announced in December that their next release, ``Cars,'' will be released in June 2006 instead of this November.

The decision came shortly after Jobs had said he wanted to shift the release of all Pixar films to the spring once the partnership with Disney expires in 2006 to maximize box office potential and for a more profitable holiday season home video release.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com