The Hurty Elbow blog bravely risks an immediate shutdown by Disney's lawyers (or worse) by exposing their Pixar division's incredibly valuable trade secrets on the internets; enjoy the next 35 seconds knowing that by the time you reach the end of their exposé, its creators may already be dead at the hands of a hitman who will go to the grave disavowing any connection to John Lasseter or Bob Iger. Also, be warned: The clip contains a spoiler that may ruin your upcoming viewing of Ratatouille.

• Pixar Plagiarism: Same Movie, Different Clothes [Hurty Elbow]

The Mouse House will announce within the next 10 days that it's cutting back on the number of films it makes to around eight per year — it currently releases around 18 — and will substantially reduce its workforce. All movies will be Disney-branded, meaning companies like Touchstone could be vastly diminished.

The cutbacks will be far greater than many anticipated, as Walt Disney Studios chairman Dick Cook looks to reinvent the architecture of his studio. Move reflects an effort to improve the studio's return on investment and get infrastructure back into line.

Suddenly, CEO Bog Iger's Monday morning urging of his employees to "savor" Pirates 2's record-breaking achievement seems forbodingly sinister; if any Disney cast members receive an invitation from Iger or Cook to attend a celebration to "thank" the staff for all the hard work they contributed to the movie's success, they should quickly gather their things and escape the lot, knowing that they've narrowly avoided a gruesome massacre disguised as a cheery ice cream social.

• Mouse to cut back on pix, personnel [Variety]
• Bob Iger Praises Keira Nightly [sic], Proud Of All His Cast Members [Defamer]

From: Iger, Robert [mailto:Robert.Iger@disney.com] Sent: Mon 7/10/2006 9:06 AM To: Subject: 7/10/2006 - Pirates

I try to send these when we have legitimate news to convey, or when I feel it's important to communicate something special or important, and this is one of those occasions. Actually, it's about as perfect an occasion as I can think of.

This past weekend, "Pirates of the Caribbean: Dead Man's Chest" broke the U.S. box office record for a non-holiday opening weekend, bringing in an incredible $135.7 million over its three-day opening.

This is a great achievement for the Studio and a wonderful moment for the company, which we should all savor. I want to congratulate Dick Cook and everyone at The Walt Disney Studios. They put their hearts, souls and creative guts into this, and the results are simply fantastic. Jerry Bruckheimer, Gore Verbinski, Johnny Depp, Orlando Bloom and Keira Nightly all deserve our thanks and praise too. Everyone involved in this project has created a valuable and enduring franchise for the company, something that will be enjoyed by generations of people for generations.

Should the idea of reading Iger's entire memo make you feel like Tinkerbell is trapped in your pants and occasionally brushing up against your naughty parts, the full text follows after the jump:

From: Iger, Robert [mailto: xxx@disney.com] Sent: Mon 7/10/2006 9:06 AM To: Subject: 7/10/2006 - Pirates

I try to send these when we have legitimate news to convey, or when I feel it's important to communicate something special or important, and this is one of those occasions. Actually, it's about as perfect an occasion as I can think of.

This past weekend, "Pirates of the Caribbean: Dead Man's Chest" broke the U.S. box office record for a non-holiday opening weekend, bringing in an incredible $135.7 million over its three-day opening.

This is a great achievement for the Studio and a wonderful moment for the company, which we should all savor. I want to congratulate Dick Cook and everyone at The Walt Disney Studios. They put their hearts, souls and creative guts into this, and the results are simply fantastic. Jerry Bruckheimer, Gore Verbinski, Johnny Depp, Orlando Bloom and Keira Nightly all deserve our thanks and praise too. Everyone involved in this project has created a valuable and enduring franchise for the company, something that will be enjoyed by generations of people for generations.

Consider these statistics:

· Highest three-day opening in U.S. box office history (passing "Spider-Man's" $114.8 million back in May of 2002).

· First film in box office history to pass $100 million in only two days.

· Friday's U.S. opening gross of $55.5 million is the highest single day gross in box office history (passing "Star Wars: Episode III - Revenge of Sith's" $50.0 million last year).

· Internationally, "Pirates" opened in seven territories, which represent 24% of all overseas markets, grossing $46.6 million, which is an all-time record in those combined regions (passing the previous record of $45.6 million by "Harry Potter 4," which went on to earn more than a half-billion dollar overseas).

· "Pirates" is the 51st film in Buena Vista history to pass $100 million at the U.S. box office, the most of any studio.

I also want to point out we reached another milestone this weekend, with Disney/Pixar's "Cars" passing the $200 million mark. This will be the 12th film in our company's history to reach this remarkable level of success and will tie Disney with Fox at 12 as co-industry leaders (at least until "Pirates" gets there!).

The success of these films speaks to our company's fervent commitment to creating universally appealing entertainment for consumers to enjoy around the world.

All of this is quite an achievement thanks to a truly global effort, in which we can all take great pride.

Bob

In the deal under discussion, Disney would pay a nominal premium to Pixar's current market value of $6.7 billion in a stock transaction that would make Pixar Chairman and Chief Executive Officer Steve Jobs the largest individual shareholder in Disney, according to people familiar with the situation. [...]

People familiar with the situation caution that the talks are at a sensitive stage and that the outcome isn't certain, noting that other options are possible. [...]

People familiar with the situation say the two sides could decide on a less-ambitious course, including some form of agreement for Disney to distribute movies that Pixar finances and makes.

Indeed, anything can happen during the sensitive moments of such high-level bargaining. One wrong, overly assertive move and Iger could suddenly find himself stuttering out an apology for why the talks unexpectedly shifted to the "I Thought We Agreed You'd Ask Before You Tried That, What Do You Think I Am, Your Filthy Little Playground?" Stage, leading to a much "less-ambitious" course of "self-negotiation."

• Walt Disney Is In Serious Talks To Acquire Pixar [WSJ.com, sub. req'd.]
• Previously: Waiting For Disney And Pixar To Do The Deed [Defamer]

"To the extent that Disney will pay $7 billion or more, it seems like an extremely large sum of money given that it already controls the sequel rights and existing films that Pixar created," independent media analyst Richard Greenfield said.

However, Greenfield added, much hinges on how confident Disney is in its upcoming slate of animated films.

"If you're scared that these films are going to be flops," Greenfield said, "maybe it's the right strategic decision."

No one can say for sure how Pixar-less sequels to The Incredibles or Toy Story might turn out, but if Disney's looking for an excuse to leap into Jobs' outstretched arms for animation-slate salvation, it should take a good, hard look at some mocked-up posters featuring Home on the Range and Treasure Planet's titles trailing Roman numerals.

• Pixar Stock Surges on Deal Rumor [LAT]
• Previously: Jobs And Iger Make Out Over iPod [Defamer]

Iger and Jobs certainly looked to be on good terms Wednesday, shaking hands on stage at the California Theatre and jokingly alluding to the Disney-Pixar agreement.

Jobs, by way of acknowledging that ABC is owned by Disney, got a laugh when he said, "I know these guys."

Iger also took a stab at humor.

"We've enjoyed a great relationship with Steve through Pixar and it's great to announce an extension through Apple — not Pixar," he said. "That'll be for another time."

When an anonymous request that the two men "Get a room!" interrupted their moment, Iger slyly produced a hotel key from his jacket pocket. "I'm a step ahead of you," he said, winking in Jobs' direction, an instant before an Apple executive turned a garden hose on the smoldering power couple.

• Launch of Video IPod Shines Light on Jobs, Disney Drama [LAT]
• Previously: Iger's Mission: Make Sweet Love To Steve Jobs
• Steve Jobs Plays The Dozens With Michael Eisner [Defamer]

Iger, whom Eisner endorsed as his replacement, will be paid a base annual salary of $2 million during his five-year contract and will be eligible for a performance-based bonus of at least $7.25 million a year. He also will be eligible for as much as $8 million a year in "equity-based long-term incentive awards" to be determined by the board of directors.

Iger also will receive a one-time grant of 500,000 shares of Disney stock that will begin vesting in 2008 — but only if the stock outperforms the Standard & Poor's 500 index and if Iger meets other, unspecified goals set by the board's compensation committee.

Corporate compensation experts said Iger's deal meant that if he didn't perform, he wouldn't get paid the big bucks.

Given the scrutiny that executive compensation deals have recently undergone, the hurdles that Iger must clear to earn his performance-based bonuses are formidable. For example, to collect his first $10 million dollar award, on the day of his six-month review, Iger must ride Space Mountain three times with his eyes closed—and here's the clincher—without crying "in the manner of a five year-old girl." He's never going to see that money.

• Eisner Makes an Early Exit at Disney [LAT]
• Previously: Michael Eisner Has Left The Kingdom [Defamer]
• Bob Iger Kills Muppets [Defamer]
• Disney In Transition: What Will Eisner Do? [Defamer]

This past Tuesday was supposed to have been a day of celebration at the Muppet Holding Company. The day when Kermit the Frog would be appearing on "Good Morning America" and reveal that the Walt Disney Company would be holding a 15-month-long celebration in honor of that character's 50th year in show business.

But — by the time Tuesday evening rolled around — nobody at MHC was in much of a partying mood. You see, word had just come down that — reportedly at Bob Iger's direct order — much of the senior staff at the Muppet Holding Company was being let go. Vice President and General Manager Chris Curtin was removed from power, as were most of the people that he'd hand-picked to run MHC. By the end of the day, only three senior staffers still had their jobs.

As to why these firings occurred when they did, there are now dozens of theories bouncing around the Mouse House. Some have suggested that Curtin was let go because — after 18 months of being the head of the Muppet Holding Company — he had so little to show for his efforts. That Disney is now looking to put someone much more dynamic in charge of MHC so that the corporation could then capitalize on these characters that much quicker.

While still others are suggesting that Chris was removed from his job as head of the Muppet Holding Company for strictly political reasons. That Curtin did in fact have MHC on the right track. But that Disney's new CEO was looking for a way to get the word out that the Eisner era was finally officially over.

The new CEO had to do something to celebrate his coronation and distinguish himself from the old guard, and the board resoundingly vetoed his suggestion that the Disney's iconic character be clumsily renamed "Iger Is The Boss Mouse."

• BREAKING NEWS: Iger removes head of Muppet Holding Company [Jim Hill Media]
• Previously: Disney In Transition: What Will Eisner Do? [Defamer]

• A Front Row Seat at Disneyland's Star Ceremony [Jim Hill Media]