Wall Street Analyst Apologizes For Predicting UP Would Fail

Here’s something you don’t hear often: an analyst on Wall Street admitting they’re wrong. Richard Greenfield of Pali Research told the New York Times that he was “dead wrong” when he suggested that investors sell their Disney shares, in part because UP would flop. Prior to the opening of the film, Greenfield had said, “We doubt younger boys will be that excited by the main character,” and he also claimed the film lacked commercial appeal because there was no female lead. Now that UP has become Pixar’s second-highest grossing film domestically, Greenfield is backtracking. It’s worth noting that Greenfield has a history of being wrong about Pixar and Disney. In 2008, he’d been hesitant about the potential of Wall-E, and in March of this year, he predicted that Disney’s stock would crash to $12.50 a share whereas it has jumped to over $22 in the past couple months. There is no animation business plan more foolproof than creating work from a foundation of creative integrity. Pixar gets that; it’s too bad the analysts on Wall Street don’t.

(via Michael Sporn)


  • http://www.vujade-ent.blogspot.com Steve Schnier

    And yet despite being consistently wrong, Richard Greenfield continuues to be a respected source of financial wisdom.

    The truth is – nobody knows anything.

    Frank Zappa said that back in the good old days (the 50′s, 60′s and early 70′s), record companies were run by old men wearing fedoras and smoking big black stogies. When confronted with a new act or sound they’d shrug and say, “I dunno. Let’s put it out there and see how it does.” They’d press a few thousand copies and let the market dictate. Of course the 60′s and 70′s became the heyday of popular music.

    Today the record industry is populated by hip young A&R (artist and repetoire) experts who say “no” to nearly everything – because they “know” what’s going to be a hit – or not. That’s why contemporary radio is a wasteland.

    Same thing in the movie biz. Hip young development execs and Wall Street bean counters like Richard Greenfield have their finger on the pulse of the American public… Yeah. Right…

    Hats off to the gang at Pixar – with their fedoras and big black stogies.

  • Alex Curtis

    Greenfield’s mindset is similar to many of the business executives that have infiltrated the creative process in animation. Because of their background, they tend to look at individual story elements, rather than analyzing the narrative as a whole. They see a film for the pieces: female lead, comic sidekick, sci-fi setting, a scary scene, etc. They then compare the pieces against a list of successful pieces and do “market research”.

    People like Greenfield have zero creative experience / training, and are simply incapable of understanding how each story element contributes to the whole. All they can do is compare balance sheets.

    “The Lion King was a hit in all age groups. Lions must be good. “

  • http://highlyrecommended.blogspot.com Satorical

    This is the type of entertainment industry analyst who thinks “Uh-oh, this isn’t a sequel.” In other words, he’s Part of the Problem.

  • http://www.sitasingstheblues.com/ Nina Paley

    Today the record industry is populated by hip young A&R (artist and repetoire) experts who say “no” to nearly everything – because they “know” what’s going to be a hit – or not. That’s why contemporary radio is a wasteland.

    It’s the same in the film business. This is why we see so many highly-funded disappointing, cookie-cutter films. There’s tons of creativity in the industry, but it’s seldom encouraged (or even allowed) to innovate. Fortunately there are ways to make films outside this system, but they are inevitably very low budget.

  • http://MrFunsBlog Floyd Norman

    Wall Street wrong?

    Tell me something I don’t know.

  • http://microscopicpictures.weebly.com/index.html John Richardson

    Well, it’s pretty exhilarating to see what you can do with that kind of budget, Ms. Paley.

  • Scott

    “Greenfield’s mindset is similar to many of the business executives that have infiltrated the creative process in animation.”

    Greenfield’s mindset is similar to many of the business executives that have infiltrated film making–of all kinds.

  • Matt

    I absolutely LOVE seeing Pixar prove these pencil-necks wrong, time and time again. They still won’t learn… but at least they get to taste their own foot in their mouth.

  • http://drgrantz.deviantart.com/ revned

    So the next time Greenfield predicts the failure of an upcoming Pixar film, we should all go out and buy Disney stock.

  • http://www.vujade-ent.blogspot.com Steve Schnier

    From their website:

    “Pali is a mid-sized, independent global financial services firm focused on delivering high-value services and products to growth-oriented issuers and institutional money managers. Pali maintains primary offices in New York and London, and has additional offices in San Francisco, Chicago, Boston, Minneapolis, Summit, NJ and Boca Raton. Our global product lines include:

    * Equity Trading
    * Equity Research
    * Global Derivatives
    * Fixed Income
    * Investment Banking

    Pali’s experienced professionals have extensive backgounds in equity trading and execution, equity research, derivatives, fixed income and investment banking. Entrepreneurial thinking, innovation, and integrity are core values of our firm. ”

    Yeah. Read that last line again. Snort.

  • http://thelinknewspaper.com Christopher Olson

    And yet Greenfield STILL says stockholders should sell their shares in Disney:

    “But Mr. Greenfield stuck with his sell recommendation for the company’s stock, saying he believed the next 12 to 18 months would be “substantially more difficult for Disney than investors are currently anticipating.” He listed industrywide troubles with broadcast television and difficulty cutting more costs in the theme park unit.”"

  • http://brianromero.com Brian Romero

    Trusting the Wall St Journal’s opinion on what makes an appealing animated feature is like asking an animator for killer stock tips. It makes no effing sense!

  • http://dailygrail.com/blog/8389 red pill junkie

    To me, an Economist is an expert that can precisely pinpoint why you were an idiot for following his advise of 3 months ago.

  • jordan reichek

    >>There is no animation business plan more foolproof than creating work from a foundation of creative integrity. Pixar gets that; it’s too bad the analysts on Wall Street don’t.<<

    …and most of the other film studios and networks in animation.

  • Dave G

    If this dude were an animator, he would have been canned for not doing his job. Idiots like him have had their knives sharpened predicting the fall of Pixar for years now.

  • Charles

    “There is no animation business plan more foolproof than creating work from a foundation of creative integrity. ”

    well said.

  • Mike Caracappa

    Well judging by the trailers for UP I don’t nessicerily blame him for following his instincts. I don’t think this film looked that great from its trailers, and if it wasn’t for the fact that it was labeled a Pixar movie, regardless of the crew that worked on it, Im more than willing to bet this film wouldn’t have done well. If this guy isn’t a blind Pixar loyalist, maybe like some of us he believes that Pixar hasn’t made a good film since The Incredibles.

  • chrisheadrick

    I really like Steve and Alex’s analysis, but I’d like to lightly disagree with Steve’s first post…

    I absolutely believe Zappa’s comment, but a damning message about the current popular music creativity and sales crisis was burned into my brain by two documentaries…one on FRONTLINE, and the other I saw while traveling in Britain.

    FRONTLINE traced the history of the formation of the famous “Big Six” US record labels, and found that each was formed by a young man who loved music. Each company started out as the vision of a person who chased after bands to sign them, attending show after show. In each interview, these guys waxed rhapsodic about shows they’d seen and proudly displayed records they’d purchased as teenagers that changed their lives.
    Up until the present day, I still believe A&R scrubs hit the sidewalks in search of new talent, and are often music and “scene” lovers honestly in search of innovation. The blame rests higher up.

    A few years after seeing the FRONTLINE show, I saw a British documentary track down and interview the present heads of all the major labels. They found that absolutely none of them had any music background at all. They all came from executive jobs at other large conglomerates, like Seagram’s or Sony Electronics. In one unforgettable scene, the documentarians asked to see the “record collections” of these men in their homes, and when the camera zoomed in on the stack of CDs next to these guys’ expensive stereos, the artists were Celine Dion, Kenny G, John Tesh, Dean Martin…..unimaginative, “safe” music for unimaginative guys. Often, the men blamed the pale CD collections in their homes on their (younger trophy) wives, but when pressed by the interviewer to name their own music purchases, they were as caught in the headlights as Sarah Palin asked to name what publications she read regularly. None of them—none—were convincing “music lovers”.

  • Brad Bird

    It’s also worth noting that these same analysts are always bullish about any studios whose production slates are loaded with sequels, remakes, and “re-boots”.

    This particular poverty of imagination is absolutely mainstream thinking when it comes to businessmen, who are all about recognizing patterns of success that they assume are repeatable… no matter how often that very approach fails.

    They always try to copy the original THING rather than the CONDITIONS that allowed the original thing to come into being.

  • http://robcatview.blogspot.com robcat2075

    The other funny thing about that article is the quote from another analyst :

    “Continued affirmation of the Pixar acquisition as financially and strategically sound,” said Anthony J. DiClemente of Barclays Capital in a research note.

    That’s a “research note” from a financial company that has lost 2/3 of its stock value in two years and would have gone under if the US had not bailed out its debtors such as AIG. Research experts, all of them.

    I’m looking forward to Michael Moore’s documentary on Wall Street coming out later this year. I’m sure it won’t touch on this event directly but I’m hoping he gets into how little competence and expertise these “analyst” people really have.

  • Jon Reeves

    Greenfield’s mindset is similar to many business executives, period. It’s just much more noticeably off-kilter when it comes to an industry that depends on creativity — rather than one where creativity causes a revolution (case in point: Google).

  • http://deleted OtherDan

    Unfortunately, it’s the business types that make the shots. Just think how much more successful we’d be if it were artists making the calls in their area of expertise.

  • Terrence M

    Not exactly related to the topic, but…

    I just saw Up for the first time on Thursday, and I must say that I didn’t think it was that great of a film. The beginning of the movie was good and a really nice setup, but I feel that everything after the house initially left the ground was a huge waste of potential. Typical Pixar movie tricks. Silly bad guy, obligatory sad part, etc.

    I just had to get that off my chest, since it seems almost everyone who watches a Pixar film love it.

  • http://none Zack Mays

    Its great to see big shots eat their own words !!!

  • http://www.vujade-ent.blogspot.com Steve Schnier

    Valid opinion. You don’t have to love UP.

    That’s what makes Greenfield’s analysis so intereting in the first place. He allows his own personal tastes to dictate how he thinks a movie will perform and provides financial advice to investors on that basis.

  • $ame Old $tory

    Well, Brad said it best as usual-but he also knows it’s understandable.

    How can these businessmen parse and quantify the potential for creative successes? The answer is that they can’t and they wouldn’t even hazard a try along the lines Brad notes (which might be a good thing as they’re not creative artists). Really it’s simply hopeless for them to evaluate film production business in any other way than the one they always go to, the “proven model”.

    What that tells any savvy investor is that you just can’t go to these guys for your buy & sell orders for entertainment stocks. But the WSJ is never going to cop to that.

  • http://www.sportingnews.com/blog/mjf7583 Michael F.

    Maybe he forgot that kids are not the only people who watch animated films.

  • Steve Gattuso

    “Greenfield’s mindset is similar to many of the business executives that have infiltrated film making–of all kinds.”

    Forget film-making. It’s the the mindset of business executives in all fields. They think they’re Billy Mays, and can make a fortune repackaging the same old stuff with a new label and aggressive sales pitches.

  • Paul N

    Hey, at least the guy owned up to being wrong. Credit where credit is due…

  • Keith Paynter

    “What in the Hell does all of this laughter have to do with the making of animated cartoons?” – Eddie Selzer (Super Genius)

    Congrats to Pixar.

  • calartskid

    “This particular poverty of imagination is absolutely mainstream thinking when it comes to businessmen, who are all about recognizing patterns of success that they assume are repeatable… no matter how often that very approach fails.”

    but Brad, explain to me why John is doing the same thing with the Tinkerbell movies!

  • Walty

    Well, he’s consistent….

    …and I’ll use that to my advantage! Next time he says “Sell!!”" , I’ll “BUYYYYYYY”!!!

  • Gobo

    It’s undeniable that UP is a crowd-pleaser. It’s fun, funny, tear-jerking, warmhearted, and full of beauty and adventure. That’s why it’s the second-most-popular Pixar movie to date.

    That doesn’t make it predictable or rehashed, as some people (including friends of mine) have said. I can’t see how anyone can watch UP and say “gee, that’s just a bunch of Pixar’s old recycled tricks. Ho hum!”

  • Chris J.

    In all of this “the suits don’t get it!” clap-trap, I hate to go back to the well YET AGAIN, but:

    http://www.youtube.com/watch?v=WApcUBcVMos

    If (a)The great majority of animation studios are churning out sub-par content (copying the THING rather than the CONDITIONS, as said above), and

    (b)There are so many talented and creative animators and story types out there who recognize this, and

    (c)Animation, Sound, and Editing software is (relatively) inexpensive, and

    (d)Modern animators have access to the greatest independent promotion and distribution system ever created (the internet)

    then why doesn’t a + b + c + d = an explosion of independently animated and distributed films?

  • John C

    First, it’s the new york times. The same publication in which David Carr claimed the Annies last year was an “inside job” based on “things you don’t want to know about”. Why anyone still read this crap is beyond me.

    However, analysts are wrong very often, when they are right, it is often for the WRONG reasons. An so are all of us !! If Iron Giant hasn’t been a miserable failure at the box office, we would have been hating all the naysayers, shouting about their incompetence.

    Nice publicity stunt trying to display Pixar as the underdog “taking risks” and “beating the odds”… if anyone thought that with UP, they were taking risks in uncharted waters, you haven’t seen the same 2nd and 3rd act as I have.

  • Oluseyi

    @Chris J:
    > then why doesn’t a + b + c + d = an explosion of independently animated and distributed films?

    Because, pardon my french, “Shit is hard, yo!”

    More eloquently stated, the missing ingredient is hard work. Lots of people are passionate and talented, and tools and infrastructure are readily available, but using that passion to fuel productive work with the available tools is HARD, especially when bills have to be paid and soul-crushing jobs have to be worked.

    I lost my job about six weeks ago (software developer). I thought maybe this was the time to turn to my illustration and animation aspirations, and see if I can’t fashion a living out of them. I’ve been working at my craft, but I haven’t been working as hard as I could or should – nor as hard as I would if I was being (comfortably) compensated for my time. I’m getting better, but I completely understand why we’re far short of an explosion of independently animated films.

    (Personally, I also feel drained and bereft of ideas right now. Maybe others feel the same, too?)

    Anyway, enough about me. There’s a critical “e” missing in the formula, and that is good old fashioned hard work and elbow grease. I hope I find the diligence to put all five elements together and help turn the tide, but I understand why things are the way they are.

  • Barbara in BC

    The superficial comments from Mr. WallStreet just go to show that there’s no formula for artistic success. I went to see UP with my 86 year old father who lost my mother two years ago. He not only WANTED to go see the movie, he cried at several points. It’s a nice story and the part where a whole marriage is silently summarized within the space of 10 minutes is brilliant.

  • http://MrFunsBlog Floyd Norman

    First of all, filmmaking is hard work.

    You have to bust your butt to even make a crappy film. Those who have done it know what I mean.

  • http://deleted OtherDan

    Paul N., If an eathquake occurs and some guy has advised people to buy in the affected area because “there will not be an earthquake”, then it’s not admirable if he recounts after the fact and damage has occured. It’s just a feeble attempt at damage control.

    Watch this: http://uk.video.yahoo.com/watch/4668112/12478589

    You may empathize with Cramer because of his doe in the headlights appearance. But, who’s right?

  • http://thisisadan.tumblr.com Dan

    Did anyone see John K’s recent blog post on his pitch to Dreamworks?
    http://johnkstuff.blogspot.com/2009/07/ideas-arenas-modern-way-to-write.html

    I feel like that painfully sums it up. Painfully.

    It’s really a shame that animation is such an expensive medium that requires super-skilled labor. That really prevents, say, a couple of dudes who have a really good idea from executing it, the same way they could if they had a good live action idea or (as happens A LOT) a documentary idea.

    The line between business and art is one that I find incredibly interesting. It’s crazy how essential each side is to the other. It’s a shame they’ll probably never speak the same language (or even a similar dialect).

    Also, I guess this is poor form, but I’m willing to say that seeing Nina Paley, Floyd Norman, AND Brad Bird posting in one thread made my morning.

  • Chris J.

    @Oluseyi & Floyd Norman

    Alas, you’ve found the truth of it.

    It’s easy to dream about planting your flag at the top of the mountain – quite another thing to actually climb the damn thing :)

  • Sylvain

    If artistic integrity means not making sequels, nor releasing a 3d rehash remastered version of films that were not framed and directed to be in 3d, nor making a film based on ancilary revenues, I have to say all the current major studios have very limited artistic integrity.

    Even with Pixar, Cars 2 and Toy Story 3 are sequels and will have major ancilary revenues (supposedly the reason for making them). The remastering of Beauty and the Beast, Toy Story 1, and Toy Story 2 in 3d are failures of artistic integrity. The decision to put an “I want” song in Princess Frog is also one. Please let’s remove our colored glasses, and I’m not talking about the tint of the polarisers.

    One element hindering artistic integrity is being part of a giant corporation, and having predatorial budgets of nearly 200 millions. I’m talking about almost any studio here.

  • http://highlyrecommended.blogspot.com Satorical

    For the record, Disney stock is up more than 50% in the six months since Greenfield made this prediction.

    Thing is, you need money to capitalize on this sort of thing. If only I had had capital when Apple stock was $12 ten or so years ago…