Circle 7 Animation

Circle 7 Animation (or Disney Circle 7 Animation) was a short lived division of Walt Disney Feature Animation specializing in computer generated imagery (CGI) animation and was originally intended to create sequels to the Disney owned Pixar properties, leading rivals and animators to derisively nickname the division "Pixaren't". The studio did not release any films during its existence, and none of its scripts were used by Pixar.

The division was named after the street where its studio was located. Circle Seven Drive in Glendale, California is also home to KABC-TV.

Background
Pixar and Disney originally had a seven film distribution agreement that gave Disney full ownership of Pixar's feature films and characters, as well as sequel rights. With the success of Toy Story 2 in the end of 1999, then Disney CEO Michael Eisner and then Pixar owner Steve Jobs began to disagree on how Pixar should be run and the terms of a continued relationship.

Eisner claimed that Toy Story 2, as it was a sequel, did not count towards the "original" film count of the agreement, though Jobs disagreed.

Jobs announced in January 2004 — after ten months of negotiations — that Pixar would not renew their agreement with Disney, and would seek out other distributors for releases starting in 2006. Jobs wanted Pixar to receive most of the profits that their films made (giving Disney the standard 10% distribution fee) as well as full ownership of any future films and characters that the studio would create post Cars (2006).

Eisner found these terms unacceptable. Then executive producer of Pixar John Lasseter, who had personally directed Toy Story (1995), A Bug's Life (1998), and Toy Story 2 (1999), was distraught at the breakdown of the Disney Pixar relationship, as he was worried about what Disney might do with the characters Pixar had created.

When he had to announce what had happened at a meeting of Pixar's 800 employees, Lasseter reportedly said, through tears, "It's like you have these dear children and you have to give them up to be adopted by convicted child molesters."

History
In 2004, Disney Circle 7 Animation was formed as a CGI animation studio to create sequels to the Disney owned Pixar properties, and the studio began to hire staff shortly after. It was seen as a bargaining chip by people within Pixar and Disney, but also as a backup plan by Eisner in the event that negotiations fell through.

The first (and only) projects that the studio worked on were early drafts of Toy Story 3, Monsters, Inc. 2: Lost in Scaradise, and Finding Nemo 2. In the end of January 2006, new Disney CEO Bob Iger and Jobs agreed to a deal in which Disney would purchase Pixar for $7.4 billion, with Pixar's leadership (Edwin Catmull and Lasseter) taking control of Disney's animation group, and Pixar would be making Toy Story 3 – director Andrew Stanton stated that Pixar purposely avoided looking at Circle 7's script.

On May 26, 2006, Disney officially closed this division and transferred about 80% of the studio's employees to Walt Disney Feature Animation, which was soon renamed Walt Disney Animation Studios.

Catmull later disclosed in his book of 2014 Creativity, Inc. that although Pixar had been frustrated with Disney's decision to create Circle 7 Animation to create sequels to Pixar's own films, they did not hold that against Circle 7's employees, who had had no part in that decision. This was why Catmull and Lasseter were willing to absorb most of the Circle 7 workforce directly into Walt Disney Animation Studios.

Indeed, they eventually appointed Andrew Millstein, the former head of Circle 7, as the general manager of Walt Disney Animation Studios to handle day to day business affairs on their behalf.