The acquisition of Netflix went smoothly, and their partnership with PayPal was thriving. Word was, Reed Hastings and Elon Musk hit it off, chatting from noon until the early hours of the next morning. Both Stanford master's grads and Silicon Valley entrepreneurs, they had plenty in common.
Good news also came from Michael Ovitz. He and Sherry Hershler were making rounds among Wall Street's top private equity funds and had even earned the trust of Merrill Lynch. Negotiations were going so well that by the end of September, they expected to seal deals with three private equity funds and Merrill Lynch. The funds would invest $150 million in equity financing for Legendary Pictures.
Add Dunn Capital's $100 million, AMG's $20 million, and Ovitz's personal $80 million, and the newly formed Legendary Pictures would boast a staggering $350 million in capital!
That wasn't all. Merrill Lynch was set to provide a loan of $120–180 million, prioritized as debt.
Once these funds came through, Michael Ovitz, after years in the shadows, would reemerge as a Hollywood titan, commanding attention and respect. And Dunn, the force behind Legendary Pictures, would earn his due reverence.
But the failed truce with Michael Eisner was a problem. Naturally, Eisner had a backup plan. This was a matter of pride.
At the Spider-Man celebration party, with plenty of onlookers, Eisner and Dunn's heated exchange had drawn eyes. If Eisner did nothing afterward, his reputation in Hollywood would take a hit.
In the eyes of Universal Pictures' executives, Eisner's legendary aura had already dimmed under Dunn's onslaught.
What Dunn didn't expect was that Disney, despite its weaker film division, would strike from a new angle. Eisner had enlisted Mattel, the toy company, as his hired gun.
Back in June, Mattel and Disney had signed a deal granting Mattel the toy merchandising rights for the "Disney Princess" line for five years. At the same time, Disney had blocked Dunn Films' attempt to partner with Mattel on a "Barbie" project.
Mattel's conservative and shortsighted move cost them dearly. They ended up forming Mattel Animation Studios to develop Barbie animated films on their own.
Now, in September, Mattel was starting to see Disney's true intentions—and they were sinister.
Mattel had assumed their animation studio, backed by Disney's clout, would easily produce top-tier animated films. After all, Barbie's global brand was unmatched.
But Disney offered no help. Instead, they quietly sabotaged the Barbie movie's production. The reason was simple: Barbie's popularity could threaten the "Disney Princess" brand.
Mattel, a toy company with no filmmaking expertise, was left floundering without Disney's support. They had no choice but to partner with Mainframe Entertainment—a company with just seven employees!
Dunn, keenly interested in the Barbie project, had used his Universal connections to view some completed footage. He nearly burst out laughing.
This was a movie?
The quality was worse than a cheap, slapdash cartoon.
Even with the Barbie brand, this film had no chance of hitting theaters.
Mattel's refusal to work with Dunn Films was their own foolish mistake, and now they were paying for it.
On the bright side, the "Disney Princess" toys were selling like crazy!
Snow White, Aurora, Belle, Ariel—these toy lines were flying off shelves. In just over a month since launch, sales had topped $100 million.
For context, Barbie's annual sales were $1.6 billion.
With a five-year contract with Disney, and having burned bridges with Dunn Films while starting their Barbie movie, Mattel had to keep the Disney partnership alive, no matter Disney's ulterior motives.
The "Disney Princess" brand was pure gold.
So when Eisner came calling, Mattel didn't hesitate. They became Disney's attack dog, taking aim at Dunn.
…
"Mattel and Disney have built a strong partnership, collaborating on multiple brand properties. Disney is a major player with a wholesome image—exactly the kind of partner we seek."
"To be frank, back in May, Dunn Films approached us about collaborating on Barbie and other toy brands. After evaluating their strength and brand influence, we declined."
"True, Dunn Films makes high-quality movies, but when it comes to brand marketing, Disney is the gold standard. With nearly 80 years of history, Disney's legacy and influence far outshine Dunn Films."
"And let's be clear: Barbie is a toy. Even as a film, it's destined to be animated. Dunn Films has no experience in this area, while Disney's animation resources are unmatched in Hollywood."
"Yes, with Disney's help, we've officially greenlit Barbie's animated film, set for release next Christmas."
"As for Dunn Films' strategic partnership with Hasbro, we're not privy to the details, nor are we interested. But it seems Hasbro's male-oriented toys, like Transformers, just aren't on Disney's radar. If Disney wanted in on that market, I doubt Dunn Films would've had a chance, haha."
…
Back in Massachusetts, Dunn was filming A Beautiful Mind. During a break, assistant director Abel Smith handed him a few newspapers featuring Mattel's spokesperson's remarks from a press conference.
Dunn was both furious and amused.
Furious because Mattel had the gall to reject Dunn Films, then step on them to kiss up to Disney—utterly shameless.
Amused because Mattel's leadership was clearly clueless, throwing away their dignity for Disney's scraps. They didn't grasp how a film could skyrocket an IP's value.
Who said Barbie could only be an animated movie?
If Dunn had the brand, he'd have a live-action Barbie film out within a decade!
Mattel's decline in the new century wasn't for nothing. Their CEO's vision was too narrow, their strategy too cautious, their thinking too limited.
Abel Smith, a loyal member of Dunn's team who'd worked on two of his films, was indignant. "Mattel's acting like Disney's lapdog. They're way too cocky."
Dunn scoffed. "Mattel? Honestly, I wouldn't bother with a half-dead company like that. I didn't push back when they chose Disney. But now they're coming for me? Sorry, I'm done playing nice."
"Boss, you're gonna…" Abel's eyes lit up. He knew Dunn's style well.
Dunn sneered. "Mattel's begging to be humiliated. If they want to be cannon fodder, I'll oblige!"
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