He was like a little kid showing me this, albeit a little kid who was hoping to convince a journalist that Fortune should devote several pages to a photo portfolio of his creation. My editors chose not to, in part because the building is not so much a jaw-dropping architectural statement. Its greatest beauty is that it is perfectly suited for its function. “It wasn’t that he was lovingly crafting a beautiful building,” says Ed Catmull. “It’s a higher thing. He was lovingly crafting a place to work in. That’s an important distinction.”
Steve’s initial design for the building was minimalist, based mostly on his particular aesthetic taste and his own ideas about how a great building can shape a great office culture. “His theory was very simple,” says John Lasseter. “He believed in the unplanned meeting, in people running into people. He knew how everybody works at Pixar, where you’re one-on-one with your computer. He had the theory of this big atrium that would be able to house the whole company for a company meeting, and that would have everything that gets you out of your office and into that center spine. It would draw you to the center, or have you crossing it, many times a day.” Steve was so set on this idea that he originally proposed that there be no bathrooms in the building’s two wings—there would be just one men’s restroom and one women’s restroom, in the central atrium. Catmull, the most masterful of the many people who had to figure out ways to manage Steve’s idiosyncratic excesses, patiently steered Steve clear of this particularly absurd example of his occasional advocacy of unrealistic means designed to achieve laudable ends. (Steve compromised and allowed bathrooms upstairs as well as in the atrium.)
Lasseter and Catmull also resisted the idea of a minimalist, glass-and-steel headquarters. It didn’t fit with either their industrial neighborhood or the rich, colorful, fantastical work being done by Pixar employees. “Pixar is warmer than Apple or NeXT,” says Lasseter. “We’re not about the technology, we’re about the stories and the characters and the human warmth.” They voiced their concern to Tom Carlisle and Craig Paine, the architects Steve had hired for the job. Carlisle and Paine hired a photographer to shoot the brickwork of the lofts in the surrounding neighborhood, and in San Francisco. Then, at the end of one of the days when Steve was working from Pixar’s Point Richmond headquarters, they laid dozens of those photos out on the table of a conference room. “He walked in and I remember him looking at all these beautiful photographs, all the details, and he walked around and around,” remembers Lasseter. “Then he looked at me and he goes, ‘I get it, I get it, you guys are right. John, you’re right.’ He got it, and he became a giant advocate for that look.”
The final result is a subtle, intuitive building. The central atrium is an enormous communal space with a first-rate cafeteria, a post office where each employee has a wooden slot for flyers, memos, personal notes, and the like, and plenty of room for informal conversations. It is bordered on the second floor by eight conferences rooms, labeled West 1 through 4 and East 1 through 4. “It’s like Manhattan,” says Lasseter. “I always hate when conference rooms get those cute names, because I don’t know where any of them are.” As movies are developed at Pixar—and there are usually four or five features and several short films in the works—the business teams allied with each film move as a group around the building, nearing the front door as their movie gets closer to its commercial release. The animators, on the other hand, don’t move. They’ve each decorated their offices to suit their own eclectic tastes: one looks like the outpost of a desert explorer; another looks like the room of a poker savant; one woman bought herself a plastic playground house from Costco and hung plastic plants in her “office,” while another created a two-story, wooden Japanese-style home with a tea service on the second floor. If you get on your hands and knees in one of the offices and press a little red button, you can crawl into the “Love Lounge,” originally a ventilating shaft that’s about five feet wide and that now sports leopard-skin wallpaper, Barry White music, and a red lava lamp. Steve signed the wallpaper: “This is why we built this building, Steve Jobs.”
“We called it Steve’s movie,” says Catmull. “This was a labor of love.” Adds Lasseter: “It took the same budget, and the same amount of time as one of our movies, and he was the director. We love it.”
Steve tried to get up to Pixar once a week. While there he met with Catmull and Lasseter, watched reels of movies in development, and huddled with folks like Lawrence Levy, the CFO, or Jim Morris, the general manager. Steve, of course, was not a movie director, nor did he try to be one. Catmull had preempted that possibility years earlier, when he wangled from Jobs a promise that he would never try to be a member of the Pixar “brain trust,” an advisory council of directors and writers and animators who weigh in on every movie as it develops. But Catmull and Lasseter did use Steve as a critic.
“One of the things we lost when Steve died was an external hammer,” says Catmull. “At some point in every film, the director gets lost in the forest. So once or twice a film, I might call Steve up and say, ‘Steve, I think we’ve got a problem.’ That’s all I would say. You never try to tell Steve what to think. I wouldn’t prep him.” Steve would drive up to Emeryville, settle into one of the small screening rooms, and watch whatever had been assembled of the movie up to that point. Then he’d offer his own critique, usually talking to the director and the whole brain trust. “Steve never said anything that hadn’t already been said by one of the other brain trust members, because they’re all really good at the storytelling,” Catmull continues. “But there is something about his presence, and he was so articulate, that he could take the same thing said by somebody else and just cut right through it. He was very careful about how he went about this. Steve would preface it by saying, ‘I’m not a filmmaker, you can ignore everything I say.’ He literally said that every time. He would then just say what he thought the problem was. Right? Only the fact that it was articulate was the gut punch. He didn’t tell them to do anything, he just told them what he thought.
“Sometimes,” Catmull says, “if it were a big enough of a gut punch he’d go for a walk with the director. Steve was this incredibly intelligent, strong-willed person who made things happen, but at the same time he enabled people. He was always big on going for walks with people. So he would take the director out on a walk, where you talked more slowly, you think through things … just talking, just a friendly back-and-forth talking. His goal was just to help them make a better movie. It always made it easier for the director to move forward. It wasn’t ever like ‘Oh, you screwed up.’ It was ‘What are we gonna do to move forward?’ The past can be a lesson, but the past is gone. He believed that.”
This kind of one-on-one mentoring was something Steve learned over time. “Early on, if somebody didn’t measure up Steve wouldn’t hide it,” says Catmull. “That kind of behavior wasn’t something I ever saw during his last ten years. Instead, he would take you off in private, and turn what could have been an embarrassing thing into something that actually became very productive and bonding. He learned; he had taken the mistakes that he made, internalized and processed them, and made some changes.”
Steve was more relaxed at Pixar than he was at Apple. “He never tried to make us like Apple,” says Catmull, “or to run us the same way.” Andy Dreyfus, a designer at Pixar who had previously worked at Apple and CKS Group, says that whenever he and his boss Tom Suiter wanted to present something to Steve, they tried to meet him at Pixar. “We were always happy when we had a Friday meeting with Steve,” Dreyfus recalls, “because Friday was the day he was at Pixar, and he was always in a good mood there.”
Week after week, year after year, Pixar provided Steve with a series of uncomplicated highs. He attended the Oscars regularly, as Pixar accumulated more and more honors. He loved showing friends preview reels from unfinished movies. “Steve was our biggest fan. Every time we did an internal reel, he would want a copy,” remembers Lasseter. “And I’d find out from people I knew, he’s showing it to every nei
ghbor at his house. Hey, everybody—come see this! He loved it. He was like a kid.”
THERE WAS ONLY one problem with Pixar, as far as Steve was concerned, and his name was Michael Eisner.
The relationship between the two high-powered men had deteriorated since they had signed the 1997 contract in which they agreed that the companies would share billing and profits equally. There had been issues between the two companies: Steve was never satisfied with the kind of attention Pixar films got from Disney’s marketing folks, and he wasn’t impressed with the plans once they finally got developed. But things had gone well. A Bug’s Life, Toy Story II, and Monsters Inc., the first three movies on the contract, had all gotten raves from critics. And it was hard to argue with their box-office results; each had debuted at number one, and each had made well over $500 million.
After delivering Monsters Inc. in 2002, Pixar was free to start negotiations with any studio for a new distribution pact. Catmull and Lasseter wanted to continue with Disney, since the company owned the rights to all the Pixar characters they’d created, and since Pixar’s films had done so well with Disney as distributor. Steve hoped Eisner would call to open negotiations, but Eisner chose to wait him out. He believed he would be able to negotiate a better deal after the release of Finding Nemo. He’d seen two previews at Pixar, and, as he wrote Disney’s board of directors, in a memo that was leaked to the Los Angeles Times, “It’s okay, but nowhere near as good as their previous films.” Eisner, of course, was dead wrong. Finding Nemo became one of Pixar’s most beloved films and grossed $868 million around the world.
Now Steve laid out a set of aggressive terms: in return for distributing Pixar movies, Disney would get 7.5 percent of the box-office gross—and nothing else. It would have no ownership of the new characters. No ownership of the films. No DVD rights. At the same time, Steve went public with his dissatisfaction with Disney, harping on the creative excellence of Pixar versus the forgettable disasters that were being released by Disney Animation: Treasure Planet, Brother Bear, and Home on the Range.
The negotiations caused Catmull and Lasseter no end of distress. “He had stayed at the negotiating table with Disney largely for me,” says Lasseter, “because of how much I cared about the characters we had created.” As the months dragged on, things just seemed to get worse and worse. Steve believed that Eisner leaked his demands to the press in an effort to make him seem greedy. In early January 2004, things seemed to reach an endpoint: Jobs told Lasseter and Catmull that Pixar would no longer negotiate with Disney. He would not work with Eisner. Not now. Not ever. “It was the worst day of my life,” says Lasseter, who, besides facing the loss of all his old characters, was now facing the prospect that Cars, which he was just finishing up, would also belong to Disney, and to a CEO who had visited Pixar just twice since the original deal was signed. Lasseter cried as he, Catmull, and Jobs announced the impasse to the Pixar staff, and he swore that the company would never again make a movie without owning the characters.
As soon as the news went public, other studios began calling. Steve played it cool. Disney would distribute Cars regardless of a new deal, and Pixar had so much cash after all its successes that it was in no rush. While Steve dickered with other studios, Eisner began to lose the support of his own company. In the fall of 2003, Walt’s nephew Roy Disney had resigned after Eisner tried to force him off the board of directors, but only after writing a sharp and public critique of the CEO. Investors who had watched Disney’s stock lag for years were tiring of Eisner’s imperiousness. When 43 percent of shareholders voted against Eisner’s reelection to the board of directors at the company’s 2004 shareholder’s meeting, the board stripped him of his chairmanship. Eisner said he would serve out the rest of his contract, which ran through 2006, but the odds against that suddenly seemed quite high.
Steve watched all this unfold with glee, especially since his threat to take Pixar elsewhere had helped undermine Eisner. He had never had anything against Disney, after all; it was just Eisner he couldn’t stand.
When Steve returned from his postoperative convalescence in the fall of 2004, he told Catmull and Lasseter that he wanted to find a way to ensure that Pixar would be in good shape even if he wasn’t around. It wasn’t that he feared an imminent death. But as he pondered a future in which he might have to further pare down his responsibilities, he knew that Pixar would survive without him more easily than Apple. It wouldn’t be easy. Steve always believed that he, Catmull, and Lasseter worked like a three-man version of the Beatles, complementing one another’s strengths while making up for individual weaknesses. The prospect of operating without Steve made Catmull nervous. “He wasn’t a [film] director, or anything like that. It wasn’t so much the creative side that would be hurt,” says Catmull. “But I’m not really a public CEO kind of person. It’s just not who I am. So if he goes, then we are actually missing a key component.”
Pixar seemed to have three options: find a new distributor and enter into an unproven relationship; build its own distribution arm, which would have entailed a massive investment of money and people to create a service that neither Catmull nor Lasseter really wanted to manage; or stay with Disney—which in fact was not an option so long as Eisner was CEO. The choices seemed even more dire given that the first two scenarios would mean that Disney, not Pixar, would own the characters from all the movies that Lasseter and his team had created under the old contract.
Disney had the theme parks, where Pixar characters lived on in new ways. It had the proven distribution network that had successfully launched every Pixar movie. And its name was still magical for Catmull and Lasseter, who grew up dreaming of joining the great animators from Disney’s fabled past. “I knew right from the very beginning that Steve’s long-term game plan was to sell to Disney,” says Catmull, even though Steve never overtly acknowledged this to him. “I never had any question about it. He was doing all this stuff, and playing these games, but I knew that was the long-term game plan.”
For three years, Steve displayed remarkable patience as he waited out Eisner. His public attitude put pressure on the Disney CEO, since his directors couldn’t see any way to secure Pixar with him still at the helm. But behind the scenes, Steve made sure that his public ire did nothing to harm the working relationship between the companies. “We were working hard to maintain a good relationship with Disney,” Catmull remembers. “When Eisner was going through his war with Roy Disney, a book was being written, [Disney War, by James B. Stewart, which was eventually published in January 2006]. Steve said, ‘Whatever we do, we don’t talk. We don’t know what’s going to happen, so they get nothing from us for the book.’ So there is nothing that came from us, because Steve didn’t want any ill will towards us at Disney.
“With things like this,” Catmull adds, “you connect a few dots and you figure, okay, I know what this means. And then the war finally comes to an end, and they bring in Bob Iger.”
IGER’S ASCENSION WAS announced in March, but he didn’t move into the CEO job until October 1. After informing Eisner that he was going to try to repair relations with Steve, he set about doing so. One month after their first phone call, he called Steve with an idea: What if there were a way for consumers to have access to view all kinds of TV episodes, both current and past, on Macs or PCs or other kinds of devices? Couldn’t Apple do for the television industry what it had done for the music industry, and become, in essence, the retail outlet for TV? Iger said he knew the idea was fraught with complexity, but that he would love the opportunity to discuss it with Steve.
“You’re kidding,” Steve replied. Iger insisted he wasn’t. “Can you keep a confidence?” Steve asked, clearly still wary of any Disney executive. When Iger said he could, Steve told him that he was very intrigued, and that he would have something to show him in a month or two.
Iger’s call had been strategic—he thought it would help his chances if Steve knew that he, unlike his predecessor, was determined to make Disney technology-friendly.
Steve was in fact impressed, and, while Iger waited to find out what Steve’s big surprise could be, the two men began to discuss a possible framework for a new film distribution deal. They couldn’t make the numbers work. At one point they considered having Disney sell back to Pixar the right to make sequels, in return for a 10 percent equity stake in Pixar. But Iger called it off. “It was a one-sided deal,” he remembers. “I’d get an announcement that the relationship is continuing, but the actual relationship wouldn’t have been good for Disney’s bottom line. We wouldn’t own the intellectual property, we’d have basically a silent ownership in Pixar, and we’d have done nothing to fix Disney Animation.”
A few weeks later, Steve visited Iger at Disney’s headquarters in Burbank. “I’ve got something to show you,” he told Iger, and pulled one of the first video iPods out of his pocket. “Would you really consider putting your TV shows on this?” he asked. “I’m up for that,” Iger replied without missing a beat. He secured the deal even faster than Steve had won Bill Gates’s investment in Apple back in 1997. Iger became CEO on October 1, and by October 5 Apple had a deal to sell downloads of Desperate Housewives, Lost, and Grey’s Anatomy episodes from the iTunes store for viewing on iPods. The two made the announcement on the stage of an Apple event a week later. “He was blown away that, one, I would even do this,” says Iger. “Two, that we could make a deal in five days without Disney lawyering it to death. Three, that I would have, I don’t know, the presence to go on his stage with Steve Jobs, even though Disney had been the mortal enemy in some ways.”
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