From the Magazine
November 2019 Issue

“We Could Say Anything to Each Other”: Bob Iger Remembers Steve Jobs, the Pixar Drama, and the Apple Merger That Wasn’t

As he exits Apple’s board, the Disney chief reminisces about his unlikely friendship with its mercurial founder—and how their radical visions aligned to save two companies.
Bob Iger and Steve Jobs in 2006.
Double Vision
Bob Iger and Steve Jobs in 2006, eight months after the Disney-Pixar deal. “Look what we did,” Jobs later said.“We saved two companies.”
Bloomberg

In January 2006, I joined Steve Jobs in Emeryville, California, to announce Disney’s acquisition of Pixar, the acclaimed animation studio chaired by Steve. I had become CEO of Disney just three months prior, and the deal represented an enormous opportunity—and risk—for the company and me personally. The plan that day was to release the announcement after the stock market closed at 1 p.m. PT, then hold a press conference and a town hall meeting with Pixar’s employees.

Just after noon, Steve pulled me aside. “Let’s take a walk,” he said. I knew Steve liked to go on long walks, frequently with friends or colleagues, but I was surprised at the timing and suspicious about his request. I wondered whether he wanted to back out of the deal or renegotiate its terms.

I looked at my watch. It was 12:15. We walked for a while and then sat on a bench in the middle of Pixar’s beautiful, manicured grounds. Steve put his arm behind me, which was a nice, unexpected gesture. He said, “I’m going to tell you something that only Laurene”—his wife—“and my doctors know.” He asked me for complete confidentiality, and then he told me that his cancer had returned.

“Steve,” I said, “why are you telling me this now?” “I am about to become your biggest shareholder and a member of your board,” he said. “And I think I owe you the right, given this knowledge, to back out of the deal.”

It was 12:30, only 30 minutes before we were to announce. I wasn’t sure how to respond, and I was struggling to process what I’d just been told, which included asking myself whether what I now knew would trigger any disclosure obligations. He wanted complete confidentiality, so it would be impossible to do anything except accept his offer and back away from a deal I wanted badly, and we needed badly. Finally I said, “Steve, in less than 30 minutes we are set to announce a seven-plus billion-dollar deal. What would I tell our board, that I got cold feet?” He told me to blame him. I then asked, “Is there more that I need to know about this? Help me make this decision.”

He told me the cancer was now in his liver and he talked about the odds of beating it. He was going to do whatever it took to be at his son Reed’s high school graduation, he said. When he told me that was four years away, I felt devastated. It was impossible to be having these two conversations—about Steve facing his impending death and about the deal we were supposed to be closing in minutes—at the same time.

I decided to reject his offer. Even if I took him up on it, I wouldn’t have been able to explain why to our board, which not only had approved it, but had endured months of my pleas to do so. It was now 10 minutes before our release was to go out. I had no idea if I was doing the right thing, but I’d quickly calculated that Steve was not material to the deal itself, although he certainly was material to me. We walked in silence back to the atrium. That night I took my wife, Willow Bay, into my confidence. Willow had known Steve for years, since long before I knew him, and instead of toasting what had been a momentous day in my early tenure as CEO, we cried together over the news. No matter what he told me, no matter how resolved he would be in his fight with cancer, we dreaded what was ahead for him.

Fun and Frames
Director John Lasseter and Jobs at Pixar, 1997.


By Diana Walker/SJ/Contour/Getty Images.

That Steve and I were standing on that stage together at all was something of a miracle; before I became CEO, Disney’s relationship with Pixar—and Steve—was in tatters.

In the ’90s, Disney struck a deal to coproduce, market, and distribute Pixar’s films, starting with the enormously successful Toy Story, the world’s first full-length digitally animated feature. Toy Story represented a seismic creative and technological leap—and it grossed nearly $400 million worldwide. It was followed by A Bug’s Life in 1998 and Monsters, Inc. in 2001. Taken together, those three movies grossed well over a billion dollars worldwide and established Pixar, at a time when Disney Animation was beginning to falter, as the future of animation. Over the next 10 years, Disney released five additional Pixar films, including the hugely successful Finding Nemo and The Incredibles.

But the relationship between Steve and my predecessor, Michael Eisner, started to falter. Attempts to renegotiate the terms of the deal or to extend the relationship met with failure, frustration, and rancor, and in January 2004, Steve made a very public, in-your-face announcement that he would never deal with Disney again.

The end of the Pixar partnership was a huge blow, from both a financial and a public-relations standpoint. Steve was one of the most respected people in the world, and his rejection and withering criticism of Disney had been so public that any mending of that fence would be seen as a big early win for me as Disney’s brand-new CEO. Plus, Pixar was now the standard-bearer in animation, and while I didn’t yet have a complete sense of just how broken Disney Animation was, I knew that any renewed partnership would be good for our business. I also knew that chances were slim that someone as headstrong as Steve would be open to something. But I had to try.

I called Steve when it was announced I would succeed Michael as CEO, and while the call was hardly an icebreaker, we agreed to talk down the road. Two months later, I reached out again. My ultimate goal was to somehow make things right with Pixar, but I couldn’t ask for that initially. Steve’s animosity toward Disney was too deep-rooted.

I had an unrelated idea, though, that I thought might interest him. I told him I was a huge music lover and that I had all of my music stored on my iPod, which I used constantly. I’d been thinking about the future of television, and believed it was only a matter of time before we would be accessing TV shows and movies on our computers. I didn’t know how fast mobile technology was going to evolve (the iPhone was still two years away), so what I was imagining was an iTunes platform for television, “iTV,” as I described it. Steve was silent for a while, and then finally said, “I’m going to come back to you on this. I’m working on something I want to show you.”

A few weeks later, he flew down to Burbank. “You can’t tell anyone about this,” he said. “But what you’re talking about with television shows—that’s exactly what we’ve been imagining.” He slowly withdrew a device from his pocket. “This is our new video iPod,” he said. It had a screen the size of a couple of postage stamps, but he was talking about it like it was an IMAX theater. “This is going to allow people to watch video on our iPods, not just listen to music,” he said. “If we bring this product to market, will you put your television shows on it?” I said yes right away.

Steve responded to boldness. Among his many frustrations was a feeling that it was often too difficult to get anything done with Disney. Every agreement needed to be vetted and analyzed to within an inch of its life, and that’s not how he worked. I wanted him to understand that I didn’t work that way, either, that I was empowered to make a call, and that I was eager to figure out this future together, and to do so quickly.

Blood Brothers
Jobs and Iger announce their first of many deals, 2005.


By Paul Sakuma/A.P. Photo.

That October, five months after that first conversation (and two weeks after I officially became CEO), Steve and I stood onstage together at the Apple launch and announced that five Disney shows—including two of the most popular on TV, Desperate Housewives and Lost—would now be available for download on iTunes, and for consumption on the new iPod.

The ease and the speed with which we got the deal done, combined with the fact that it showed an admiration for Apple and its products, blew Steve’s mind. He told me he’d never met anyone in the entertainment business who was willing to try something that might disrupt his own company’s business model.

Those months spent talking with Steve began—slowly, tentatively—to open up into discussions of a possible new Pixar deal. Steve had softened, but only a little. He was willing to talk, but his version of any new agreement was still very one-sided in Pixar’s favor. The reality was, Steve had all of the leverage in the world. He never seemed worried about walking away.

It was around this time that I had a radical idea: Disney should buy Pixar.

In my first board meeting as CEO, I explained that it was imperative for me to figure out how to turn Disney Animation around. Throughout the late ’80s and early ’90s, the division had produced hit after hit: The Little Mermaid, Beauty and the Beast, Aladdin, and The Lion King. But then, amidst a number of high-profile management conflicts, the unit began to falter. The next several years would be dotted by a slew of expensive failures: Hercules, Atlantis, Treasure Planet, Fantasia 2000, Brother Bear, Home on the Range, and Chicken Little. Others—The Hunchback of Notre Dame, Mulan, Tarzan, and Lilo & Stitch—were modest successes, but none came close to the creative or commercial successes of the prior decade.

I saw three possible paths forward. The first was to stick with current management. The second was to identify new talent, but I’d scoured the animation and movie--making world looking for people who could do the job at the level we needed, and I’d come up empty. Or, we could buy Pixar, which would bring John Lasseter and Ed Catmull—Pixar’s visionary leaders, along with Steve Jobs—into Disney. The board was somewhat incredulous when I raised this idea at the very beginning of my tenure as CEO, but they were intrigued enough to allow me to explore it, perhaps because it seemed so far-fetched.

About a week and a half before our announcement about the video iPod, I summoned the courage to call Steve and say, “I have another crazy idea. Can I come see you in a day or two to discuss it?” I didn’t yet fully appreciate just how much Steve liked radical ideas. “Tell me now,” he said. I thought Steve would likely say no immediately. He might also be offended at what he perceived as the arrogance of the idea. Even if he told me where I could shove it, though, I’d be left exactly where I already was. I had nothing to lose.

“I’ve been thinking about our respective futures,” I said. “What do you think about the idea of Disney buying Pixar?” I waited for him to hang up or to erupt in laughter. The quiet before his response seemed endless. Instead, he said, “You know, that’s not the craziest idea in the world.”

A couple of weeks later, Steve and I met in Apple’s boardroom in Cupertino, California. It was a long room, with a table nearly as long down the middle. One wall was glass, looking out over the entrance to Apple’s campus, and the other featured a whiteboard, probably 25 feet long. Steve said he loved whiteboard exercises, where an entire vision—all the thoughts and designs and calculations—could be drawn out, at the whim of whoever held the felt pen.

Not unexpectedly, Steve was the holder of the pen, and I sensed he was quite used to assuming that role. He stood with marker in hand and scrawled pros on one side and cons on the other. I was too nervous to launch in, so I ceded the first serve to him. “Okay,” he said. “Well, I’ve got some cons.” He wrote the first with gusto: “Disney’s culture will destroy Pixar!” I couldn’t blame him for that. His experience with Disney so far hadn’t provided any evidence to the contrary. He went on, writing his cons in full sentences across the board. “Fixing Disney Animation will take too long and will burn John and Ed out in the process.” “There’s too much ill will and the healing will take years.” “Wall Street will hate it.” “Your board will never let you do it.” There were many more, but one in all cap letters, “DISTRACTION WILL KILL PIXAR’S CREATIVITY.” I assumed he meant that the whole process of a deal and the assimilation would be too much of a shock to the system they’d created.

It seemed pointless for me to add to his list, so we moved to the pros. I went first and said, “Disney will be saved by Pixar and we’ll all live happily ever after.” Steve smiled but didn’t write it down. “What do you mean?” I said, “Turning Animation around will totally change the perception of Disney and shift our fortunes. Plus, John and Ed will have a much larger canvas to paint on.”

Two hours later, the pros were meager and the cons were abundant, even if a few of them, in my estimation, were quite petty. I felt dispirited, but I should have expected this. “Well,” I said. “It was a nice idea. But I don’t see how we do this.” “A few solid pros are more powerful than dozens of cons,” Steve said. “So what should we do next?” We agreed I needed to learn more about Pixar and to see it firsthand.

If I had to name the 10 best days I’ve ever had on the job, that first visit would be high on the list. What I saw that day left me breathless—the level of talent and creative ambition, the commitment to quality, the storytelling ingenuity, the technology, the leadership structure, and the air of enthusiastic collaboration—even the building, the architecture itself. It was a culture that anyone in a creative business, in any business, would aspire to. And it was so far beyond where Disney Animation was and beyond anything we might be able to achieve on our own that I felt we had to do all we could to make this happen.

When I got back to my office in Burbank, I met immediately with my team. It’s an understatement to say they didn’t share my enthusiasm. There were too many risks, they said. The cost would be too great. Many people thought Steve would be impossible to deal with and would try to run the company. They worried that I was barely into my tenure as CEO and I was already putting my future—not to mention the company’s future—on the line by pursuing this.

But my instinct about Pixar was powerful. I believed this acquisition could transform us. It could fix Disney Animation; it could add Steve Jobs, arguably the strongest possible voice on issues of technology, to the Disney board; it could bring a culture of excellence and ambition into ours that would reverberate in much-needed ways throughout the company.

Not long after, I flew to San Jose and met with Steve at Apple’s headquarters. I knew going in that I didn’t want the process to be drawn out. Steve was constitutionally incapable of a long, complicated back-and-forth, and I feared that if we got bogged down on any one point, he would sour on the whole thing and walk away. So as soon as we sat down, I said, “I’ll be straight with you. This is something I feel we have to do.” Steve agreed, but unlike in the past, he didn’t use his leverage to demand a wildly impossible number. Wherever we landed was going to be very good for them, but he knew it needed to be in the realm of possibility for us, too, and I think he appreciated my frankness. Over the course of the next month, we went over the possible financial structure in great detail and arrived at a price:

$7.4 billion. Even if Steve stopped just short of being greedy, it was still a huge price, and it was going to be a tough sell to our board and to investors.

I realized my best shot was for the board to hear from Steve, John, and Ed directly. So, on a weekend in January 2006, we all convened in a Goldman Sachs conference room in L.A. Several members of the board were still opposed, but the moment the Pixar team started talking, everyone in the room was transfixed. They had no notes, no decks, no visual aids. They just talked—about Pixar’s philosophy and how they worked, about what we were already dreaming of doing together, and about who they were as people.

As for Steve, it’s hard to imagine a better salesman for something this ambitious. He talked about the need for big companies to take big risks. He talked about where Disney had been and what it needed to do to radically change course. He talked about me and the bond that we’d formed already—with the iTunes deal, but also in our ongoing discussions about preserving Pixar’s culture—and his desire to work together to make this crazy idea a success. For the first time, watching him speak, I felt optimistic that it might happen.

The board was scheduled to meet for a final vote on January 24, but word of a possible deal soon leaked. Suddenly I was receiving calls from people urging me not to do it. But my confidence never wavered. I was on a mission as I addressed the board and spoke with as much fire as I could muster. “The future of the company is right here, right now,” I said. “It’s in your hands.” I repeated something I’d said back in October, in my first board meeting as CEO. “As Disney Animation goes, so goes the company. It was true in 1937 with Snow White and the Seven Dwarfs and in 1994 with The Lion King, and it’s no less true right now. When Animation soars, Disney soars. We have to do this. Our path to the future starts right here, tonight.”

When I was done, the room went very quiet and a vote was taken. After all the board had been through over the past few years, it seemed likely that risk aversion could rule the day. The first four members voted yes, and the fifth also voted yes but added that he was doing so only out of support for me. Of the remaining five, two voted against, bringing the final tally to nine for and two against. The deal was approved, and the fortunes of the company began to improve, almost right before our eyes.

Man of Characters
Iger at Toy Story 3’s world premiere in Hollywood, 2010.


By Lee Roth/Capital Pictures.

Steve became a Disney board member and our largest shareholder, and whenever I wanted to do something big, I talked it over with him. In 2009, after our very successful acquisition of Pixar, we were interested in acquiring Marvel, so I met with Steve and walked him through the business. He claimed to have never read a comic book in his life (“I hate them more than I hate video games,” he told me), so I brought an encyclopedia of Marvel characters with me to explain the universe to him and show him what we would be buying. He spent about 10 seconds looking at it, then pushed it aside and said, “Is this one important to you? Do you really want it? Is it another Pixar?”

Steve and I had become good friends since we’d made the Pixar deal. We socialized on occasion and talked a few times a week. We vacationed at adjacent Hawaiian hotels a few times and would meet and take long walks on the beach, talking about our wives and kids, about music, about Apple and Disney and the things we might still do together. Our connection was much more than a business relationship. We enjoyed each other’s company immensely, and we felt we could say anything to each other, that our friendship was strong enough that it was never threatened by candor. You don’t expect to develop such close friendships late in life, but when I think back on my time as CEO—at the things I’m most grateful for and surprised by—my relationship with Steve is one of them. He could criticize me, and I could disagree, and neither of us took it too personally.

Plenty of people warned me that the worst thing I could do was let Steve into the company, that he would bully me and everyone else. I always said the same thing: “How can Steve Jobs coming into our company not be a good thing? Even if it comes at my expense? Who wouldn’t want Steve Jobs to have influence over how a company is run?” I wasn’t worried about how he would act, and I was confident that if he did do something that was out of line, I could call him out on it. He was quick to judge people, and when he criticized, it was often quite harsh. That said, he came to all the board meetings and actively participated, giving the kind of objective criticism you’d expect from any board member. He rarely created trouble for me. Not never but rarely.

When it came to the Marvel question, I told him that I wasn’t sure if it was another Pixar, but they had great talent at the company, and the content was so rich that if we held the IP, it would put some real distance between us and everyone else. I asked him if he’d be willing to reach out to Ike Perlmutter, Marvel’s CEO and controlling shareholder, and vouch for me.

Later, after we’d closed the deal, Ike told me that he’d still had his doubts and the call from Steve made a big difference. “He said you were true to your word,” Ike said. I was grateful that Steve was willing to do it as a friend, really, more than as the most influential member of our board. Every once in a while, I would say to him, “I have to ask you this, you’re our largest shareholder,” and he would always respond, “You can’t think of me as that. That’s insulting. I’m just a good friend.”

With every success the company has had since Steve’s death, there’s always a moment in the midst of my excitement when I think, I wish Steve could be here for this. It’s impossible not to have the conversation with him in my head that I wish I could be having in real life. More than that, I believe that if Steve were still alive, we would have combined our companies, or at least discussed the possibility very seriously.

In the summer of 2011, Steve and Laurene came to our house in L.A. to have dinner with Willow and me. He was in the late stages of cancer by then, terribly thin and in obvious pain. He had very little energy, and his voice was a low rasp. But he wanted to spend an evening with us, in part to toast what we’d done years ago. We sat in our dining room and raised glasses of wine before dinner. “Look what we did,” he said. “We saved two companies.”

All four of us teared up. This was Steve at his warmest and most sincere. He was convinced that Pixar had flourished in ways that it never would have had it not become part of Disney, and that Disney had been reenergized by bringing on Pixar. I couldn’t help but think of those early conversations and how nervous I was to reach out to him. It was only six years before, but it seemed like another lifetime. He’d become so important to me, professionally and personally. As we toasted, I could barely look at Willow. She had known Steve much longer than I had, going way back to 1982, when he was one of the young, brash, brilliant founders of Apple. Now he was gaunt and frail and in the last months of his life, and I knew how much it pained her to see him that way.

He died on October 5, 2011. There were about 25 people at his burial in Palo Alto. We gathered in a tight square around his coffin, and Laurene asked if anyone wanted to say anything. I hadn’t prepared to speak, but the memory of that walk we took on Pixar’s campus years earlier came to mind.

I’d never told anyone other than Alan Braverman, our general counsel, and Willow, because I needed to share the emotional intensity of that day. I thought the moment captured Steve’s character, though, so I recalled it there at the cemetery: Steve pulling me aside; the walk across campus; the way he put his arm around me and delivered the news; his concern that I should have this intimate, terrible knowledge, because it might affect me and Disney and he wanted to be fully transparent; the emotion with which he talked about his son and his need to live long enough to see him graduate from high school and begin his life as an adult.

After the funeral, Laurene came up to me and said, “I’ve never told my side of that story.” She described Steve coming home that night. “We had dinner, and then the kids left the dinner table, and I said to Steve, ‘So, did you tell him?’ ‘I told him.’ And I said, ‘Can we trust him?’ ” We were standing there with Steve’s grave behind us, and Laurene, who’d just buried her husband, gave me a gift that I’ve thought about nearly every day since. I’ve certainly thought of Steve every day. “I asked him if we could trust you,” Laurene said. “And Steve said, ‘I love that guy.’ ” The feeling was mutual.

Adapted from The Ride of A Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company by Robert Iger, published September 23, 2019 by Random House, a division of Penguin Random House LLC. Copyright © 2019 by Robert Iger.