Circle 7 Animation

**Circle 7 Animation** (or **Disney Circle 7 Animation**) was a short-lived division of Walt Disney Feature Animation specializing in computer-generated imagery (CGI) animation. Disney initially intended to create sequels to Pixar properties they owned, leading rivals and animators to nickname the division "Pixaren't." The studio did not release any films during its existence, nor was any of its scripts used by Pixar.

Disney named the division after Circle Seven Drive in Glendale, California, also home to KABC-TV.

## Background

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

Eisner claimed that *Toy Story 2* did not count towards the "original" film count of the agreement, as it was a sequel, though Jobs disagreed.

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

Eisner found these terms unacceptable. Pixar executive producer John Lasseter, who had personally directed *Toy Story* (1995), *A Bug's Life* (1998), and *Toy Story 2* (1999), was distraught over the breakdown of the relationship of Disney and Pixar, as he was worried about what Disney might do with the characters Pixar had created.

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

## History

In March 2005, Disney Circle 7 Animation was formed as a CGI animation studio to create sequels to the Disney-owned Pixar properties, and the studio began to hire staff shortly after. People within both Pixar and Disney saw It as a bargaining chip by people within both Pixar and Disney and as a backup plan by Eisner if negotiations fell through.

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

Bob Iger succeeded Eisner as the new CEO of Disney in 2005. While viewing a parade at Hong Kong Disneyland that fall, Iger realized how badly Disney needed Pixar because all characters less than ten years old in the parade were from Pixar's films. In late January 2006, Iger and Jobs agreed to a deal in which Disney would purchase Pixar for $7.4 billion, with Pixar's leadership (Edwin Catmull and Lasseter) taking control of Disney's animation group. Under this new deal, Pixar would make *Toy Story 3* with an all-new script; director Andrew Stanton stated that Pixar purposely avoided looking at Circle 7's script.

On May 26, 2006, Disney officially closed Circle 7 Animation and transferred about 80% of the studio's employees to Walt Disney Feature Animation, which Disney renamed it Walt Disney Animation Studios. Catmull later disclosed in his 2014 book *Creativity, Inc.* that although Pixar had been frustrated with Disney's decision to create Circle 7 Animation to develop sequels to Pixar's films, they did not hold that against Circle 7's employees, who had no part in that decision. Catmull and Lasseter were willing to absorb most of the Circle 7 workforce directly into Walt Disney Animation Studios. Indeed, they eventually appointed Andrew Millstein, the former head of Circle 7, as the Walt Disney Animation Studios general manager to handle day-to-day business affairs on their behalf.