The hard truth of the mergers and acquisitions business is that, oftentimes, the private equity firms doing the deal know the profits lay in selling off and, at times, shutting down parts of a company. So when Disney paid $4 billion for Lucasfilm last year, a few wags sat in the back of the room and mouthed the words, “Wait for it.”
The wait is over. In April, Mickey and Co. shut down LucasArts. While the videogame division wasn’t on the cutting edge, the 200-person company had begun development of two new games last year, “Star Wars: 1313” and “Star Wars: First Assault.” But work on those games has been halted and the only way they’ll ever be published is if another company signs on to complete the games under a license from Disney.
About 10 LucasArts employees were spared the axe to manage any such undertakings.
The shuttering of LucasArts came after Disney decided that “minimizing the company’s risk while achieving a broader portfolio of quality Star Wars games,” was its goal.
That was clipped from a statement Disney released after word leaked the company had streeted 200 LucasArts employees. And a spokeswoman for the Happiest Place on Earth didn’t return a call seeking more insights into why Disney sent the crew out with sandwiches and roadmaps.
Belt tightening is nothing new in the Mouse House. In 2006, the company downsized 650 employees. In 2009, 1,900 were sent packing, most from the amusement park unit. In 2010, ImageMovers Digital in Marin was shut down with 450 employees told their services were no longer required. Over the next two years, about 300 Disney employees made the walk to the car with the box. And this year, it was LucasArts along with another 100 employees from various studio operations, including more than two dozen from Lucasfilm, connected to distribution, finance and licensing.
Those cuts, to a large degree, represented elimination of positions that were already duplicated with Disney.
Since Disney is a public company, it’s under an obligation to answer to shareholders and Wall Street regarding profits and share price, and the company was worth almost $110 billion in April, an all-time high.
But Lucasfilm and Disney make their money in entertainment, which begins with creativity. And the rumor floating from the Los Angeles basin is that the latest round of cuts by Disney have Hollywood dishing that perhaps CEO Bob Iger is having a difficult time finding the balance between maintaining a creative edge and a healthy enough bottom line.
The bottom line for Disney in the North Bay is that job security would seem to be something of an issue, now that LucasArts has joined ImageMovers on the Disney scrapheap.
With the specter of the botched Lucasfilm Grady Ranch project still fresh, Marin Economic Forum Interim CEO Robert Eyler requested a meeting with Disney regarding its vision for Marin following the Lucasfilm acquisition. He followed up with a phone call to Iger. Eyler offered to fly to Southern California at Iger’s convenience to talk about how Marin County might be a more effective partner for Disney.
When I wrote a story for the April issue about a six-month checkup on the Disney/Lucasfilm deal, Eyler was still waiting for that meeting.
Your Marin moment
The co-founder of Lagunitas Brewing Company, Tony Magee, has won his battle to put a farm, a house and a brandy distillery on 150 acres in West Marin.
And it only took him four years, a 214-page report from the California Coastal Commission and $500,000.
It seems Magee’s neighbor was less than enthused with Magee’s plans to raise sheep and chickens, grow grapes and hops and produce about 300 gallons of brandy per year. They argued the farm would create environmental issues, cause traffic problems and produce wastewater concerns. They also maintained the brandy operation should be eliminated.
Magee applied to the county in 2009 for the project, which was met with enthusiasm by both the planning commission and the board of supervisors. The Coastal Commission staff also seemed to think the agricultural project followed state regulations. But the commission elected to dig into the project a bit.
The staff then turned out a lengthy document that came to the same conclusions the county and commission staff had reached previously: The project conformed to state coastal regulations.
It’s worth noting that Marin Supervisor Steve Kinsey serves on the coastal commission as well and voted with the 7-2 majority of the commission to approve Magee’s project.
This detail wasn’t lost on the Sierra Club’s Marin unit, which said the vote was a travesty, accusing the commission of caving to the influence of Kinsey. The environmental watchdog said the commission turned a blind eye to industrial development, fire dangers as well as more traditional environmental issues, according to a splendid story by Nels Johnson in the Marin Independent Journal.
In the same story, Kinsey took a swing at the project’s opponents. “I regret that it faced such a relentless, expensive attack from a neighbor whose sole interest was protecting his own privacy."
Magee noted that, if he wasn’t selling plenty of suds, the $500,000 price tag for weathering the project opposition would have caused him to scrap it altogether.
Wonder if Magee will stop by the neighbors with a case or two of “A Little Sumpin Sumpin?”
