Why Toy Story almost bankrupted Pixar?
How is it possible to release the most-profitable movie of the year and still face bankruptcy?
1995. Pixar and The Walt Disney Company had signed a contract—twelve pages, describing an agreement to produce three movies together. The first would be the computer-animated film… Toy Story.
But there was a problem. A huge problem hidden inside that financial agreement.
When the math was done, even in the best-case scenario—even if Toy Story became a massive, global blockbuster—Pixar couldn't cover salaries or keep the lights on. The company was going bankrupt.
Lawrence Levy was the man forced to confront that math. In 1995, he agreed to become Pixar's Chief Financial Officer—but only six weeks into the job, he discovered the fatal flaw.
That afternoon, he left the office and drove home. When he arrived, he sat down on the sofa next to his wife, who was eight months pregnant with their third child. This family had too much to lose.
Lawrence leaned closer and said to her:
Hillary. I made a mistake. The biggest mistake of my career