1. BAY STATE COLLEGE
Walt Disney Studios
How did they acquire their subsidiaries?
Deborah Chan Studebaker
September 13, 2015

2. Deborah Chan Studebaker
ENT 101
Essay #1
September 13, 2015
1
Walt Disney Studios & its subsidiaries
The Walt Disney Company has been a major player in the entertainment industry for over
90 years. The foundation of the company is its production studio called The Walt Disney Studios
(The Walt Disney Company, 2015). To this day, The Walt Disney Studios has produced a large
numbers of movies, television programs, music, and live stage productions. They currently own
many subsidiaries through which they produce most of their entertainment. A few of these
subsidiaries include the Pixar Animation Studios, Marvel Studios, and Hollywood Records (The
Walt Disney Company, 2015). There can be lots of risk involved with acquiring these
subsidiaries, although there proves to be more profit and benefits from taking these risks.
In January of 2006, The Walt Disney Company announces that they have decided to
purchase Pixar Animation Studios. Pixar has been a long time partner of The Walt Disney
Company since 1991 for the purposes of finance and distribution (Gentile, 2006). Disney and
Pixar have created many animated computer generated imagery (CGI) films together through this
partnership from its very first partnered film Toy Story to Monster’s Inc., Finding Nemo, The
Incredibles, and Ratatouille (Pixar, 2015). Disney purchased Pixar for a total of $7.4 billion
dollars in hopes to restore Disney’s influence in the animated film genre. Disney’s own
animation studios has been struggling for several years producing some not so successful
animated films including Lilo & Stitch as well as some flops like Treasure Planet (Gentile,
2006). At the time, the partnership deal Pixar had with Disney was coming to an expiration date
after the movie Cars would be delivered to the public through both exhibition and distribution.
This caused Disney to start discussing how to create a new relationship with Pixar. These
discussions went back and forth a couple years. The discussion eventually ended in the decision

3. Deborah Chan Studebaker
ENT 101
Essay #1
September 13, 2015
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to purchase the animation studios. This deal would include the issuing of stocks, the gain of the
company that helped produce several award winning animated films, and new positions for
Pixar’s president and vice president involving job promotions (Gentile, 2006). Disney and Pixar
went on to produce more award winning animated films such as Up, Toy Story 3, and Brave
(Pixar, 2015). Purchasing Pixar Animation Studios proved to be a profitable investment for The
Walt Disney Company.
The Walt Disney Company acquires Marvel Entertainment in 2009 including Marvel
Studios. Disney purchased Marvel at $4 Billion allowing them to gain right’s to the wide variety
of Marvel’s characters including the Incredible Hulk and the Fantastic Four (Garrahan, 2010).
This gives Disney a whole new fan base with readers of the original Marvel comic books as well
as expanding their teenage boy fan base from the Pixar films into the Marvel films. On top of
purchasing Marvel, Disney made a deal with Paramount Pictures in 2010 to gain the distribution
rights of the that years upcoming Marvel films The Avengers and Iron Man 3. According to the
London Financial Times, this deal gives Paramount “$115 Million in cash and a share of profits
if distribution fees for the two films exceed that sum” (Garrahan, 2010). Paramount does get to
keep their worldwide distribution rights to their previous Marvel films Thor and Captain
America as well. This deal does not only benefit Disney but, it also benefits Marvel as well.
Marvel’s gain from this deal is the reclaiming of rights to most of its characters. There are still
some characters on loan to other studios though. The X-Men and the Fantastic Four are on loan
to 20th Century Fox and Spider-Man remains at Sony still (Hughes, 2014). Acquiring Marvel
Entertainment turned out to be beneficial not only to The Walt Disney Company but, to
Paramount Pictures and Marvel Entertainment as well.

4. Deborah Chan Studebaker
ENT 101
Essay #1
September 13, 2015
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For years Disney has been developing, producing, and marketing artists under a long-
established children’s label called The Disney Music Group. The year 1989 marks an important
year in the history of The Walt Disney Company’s history. This is the year Disney decided to
start a new record label that they called Hollywood Records. This new label is to be more adult-
oriented producing music for the more mature audiences. Disney Chairman Michael Eisner told
The Washington Post that, “Disney’s initial investment in the new label would be about the same
as the cost of one of its motion pictures-about $18 million to $20 million” (Farhi, 1989). In 2015,
Hollywood Records has gone on to represent and produce award winning artists including Demi
Lovato. The label also represents other artists like Grace Potter and the Nocturnals, rock band
Breaking Benjamin, and rock legends Queen (Hollywood Records, 2015). As long as Hollywood
Records can produce more award winning artists in the future, The Walt Disney Company’s
investment in it can show to be profitable.
The Walt Disney Studios have made some smart purchases and investments over the
years. From the start of Hollywood Records to the purchase of Pixar Animation Studios and
Marvel Entertainment, Disney is one of the major players in the entertainment industry. As of
2015, The Walt Disney Studios has produced and distributed a large numbers of movies and
music aimed toward both the child audience and the more mature adult audiences. Disney took
the risk of these purchases and investments only to gain more profit and benefits in the end.

5. Deborah Chan Studebaker
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Essay #1
September 13, 2015
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Works Cited
Farhi,P. (1989, November29).Disney'sNew Fantasy:AdultMusic;CompanytoStart RecordDivision.
The Washington Post.RetrievedSeptember15,2015
Garrahan, M. (2010, October19). Disneydeal onsuperheromovies.(18, Ed.) Financial Times. Retrieved
September15,2015
Gentile,G.(2006, January26). Walt DisneyCo.buyingPixarAnimationStudiosforUS$7.4 Billion. Daily
News.RetrievedSeptember14, 2015
HollywoodRecords.(2015). Artists.RetrievedSeptember16,2015, fromHollywoodRecords:
http://www.hollywoodrecords.com
Hughes,S.(2014, September16).Save us fromsmall-screensuperheroes. TheIndependent.Retrieved
September15,2015
Pixar. (2015). Our Story.RetrievedSeptember14,2015, fromPixar:http://www.pixar.com
The Walt DisneyCompany.(2015). AboutUs.RetrievedSeptember13, 2015, from The Walt Disney
Studios:http://www.waltdisneystudios.com