Now it was up to Steve to negotiate a deal with Jeffrey Katzenberg, Disney’s powerful head of animation. Dickering with Disney would offer a real acid test of both his negotiating skills and his self-discipline. Both Katzenberg and Jobs knew that Disney was the power player at the bargaining table. The storied studio was in the midst of a glorious run. Starting in 1989, Katzenberg’s team would deliver one hit after another for five years running: The Little Mermaid, Beauty and the Beast, Aladdin, The Nightmare Before Christmas (based on a story by another animator who had gotten away, Tim Burton), and The Lion King. So as much as Katzenberg admired Lasseter’s chops and regretted that he would not return to Disney, he knew that his company could survive perfectly well without a Pixar movie.

Lasseter, Catmull, and everyone else at Pixar, on the other hand, fully realized that making a movie for Disney was probably their only chance to survive as a company. The negotiations were their last stand, and their fate was in the hands of Steve. Catmull and Lasseter were very comfortable with this. For years, Steve had been the point man on Pixar’s negotiations. “He was tough,” remembers Lasseter. “He’d walk into the room and say, ‘Which one of you has the authority to buy our computers?’ If they said no one, he would just dismiss them. ‘I only want to negotiate with someone who can make the deal,’ he’d say, and leave. We always said that Steve would take a hand grenade, toss it into the room, and then walk in. He’d get everyone’s attention right away.’ ”

But putting Katzenberg and Jobs in the same room held potential for catastrophe. Both men had powerful egos, and both were accustomed to getting their way. Katzenberg believed he’d be the next president of Disney, and took full responsibility for the successes of his animators. Smart, overbearing, difficult to work for, and yet somehow likable, Katzenberg also shared Steve’s certainty and faith in his own opinions. When he walked into the first negotiating session with Pixar, in a conference room near his office, he plopped a basket full of Disney baby toys in front of Steve, who’d recently been at Laurene’s side for the birth of Reed. It was a gift, but it was also a clear sign of who held the keys to the vault.

Susan Barnes has observed that Steve entered every negotiation knowing exactly what he had to get, and what his position was versus the other side. In negotiating with Lucas, he had been able to exploit Lucas’s need for cash. This time Steve went in knowing that Katzenberg had the power, and that Pixar needed a deal to survive. He kicked off the negotiations with a certain brashness, saying that he wanted Pixar to be a partner on all aspects of the revenue from the film, something no neophyte studio filmmaker would ever get. Katzenberg promptly nixed that.

The two had fundamental disagreements about the true value of Pixar. Jobs was convinced that Pixar’s technology could revolutionize the business model for animation, believing that computerizing the process would dramatically lower the cost of animating movies. He was offended by what he perceived as Disney’s old-school thinking. “They make the mistake of not appreciating technology,” he told me. “They don’t have a clue.” Katzenberg, who of course knew far more than Steve about the animation business, disagreed. “I was not interested in Pixar’s technology,” Katzenberg told me a few years later. “I was interested in Lasseter’s storytelling. Luxo the lamp had more emotion and humor in a five-minute short than most two-hour movies.” He was sanguine at best about the potential cost savings. “The idea that this technology is a new business model for animation is bullshit. Good luck with that! The artists and storytellers will want to continue to grow the technology, so this year’s technology will be obsolete in ten years.” Katzenberg was right, of course. No matter how much technology you throw at the art of making an animated movie, a good one will always be expensive. Pixar made Toy Story for around $20 million (a number that doesn’t include what Disney spent on it for promotion and distribution). Pixar’s 2013 movie, Monsters University, is rumored to have cost around $200 million, marketing included.

These kinds of personal and philosophical differences with the brass at Disney were something Steve had been unable to manage at NeXT, where his anger and resentment helped sabotage the IBM deal. “The people at the top of IBM knew nothing about computers. Nothing. Nothing,” he raged in later years, still furious. In those negotiations he had let the IBMers know his true feelings about them, one of his many blunders as he overplayed his hand. But with Katzenberg he acted more deliberately. He made his points, and held out when necessary: Katzenberg asked for the rights to all Pixar’s 3-D computing technology, and Steve refused. But he mostly acquiesced, instead of raging against the more powerful man across the table. Pixar did not get ownership of the films or their characters. And Pixar didn’t get a cut of the video revenues, because Steve didn’t yet understand the huge market for family-oriented videos. But he did get a deal—Disney would fund the production of Toy Story and have the option to fund two more movies as well. Pixar would get 12.5 percent of the box office—and a new life. At long last, the Pixar gang was going to get its chance to make a movie.

STEVE LOVED PIXAR, and he especially loved watching the team start to develop the movie that would turn into Toy Story. But he didn’t love losing money. In fact, he later admitted that he would never have purchased Pixar if he had known how much money he would spend keeping the company afloat. So in the early 1990s, both before and after getting the Disney deal, he shopped the company around, even though the few potential buyers were interested only in Pixar’s technology—not its movie-making promise. Catmull looked on as Steve negotiated with companies as varied as Hallmark, Silicon Graphics, and Microsoft, each with different ideas of how Pixar’s software could augment their own offerings. But none of the deals crystallized. In each case, Steve would not budge from an outrageous price tag that he’d put on the company. The repeated failures made Catmull wonder if he’d ever really wanted to sell. “I could see why it would happen. Some of the deals made sense. It wasn’t the dream we’d wanted, but you’re trying to keep things going,” he remembers. But nothing worked out. “Afterward, I’m thinking, What was that all about? Was he just looking for confirmation that he’d done something right?” Catmull came to think that Steve might have been subconsciously sinking each deal out of loyalty to Pixar. “He had this sense of what it means to be loyal and to give your word. As I was getting to know Steve more, I could see how this interplayed in complex ways. Not that Steve ever psychoanalyzed himself.”

Catmull never discussed the deals with Steve in such a psychological way: “We didn’t get philosophical all that often. When we started to edge into personality and so forth, he’d just say, ‘I am who I am.’ ” So Catmull’s theory about loyalty must remain just that. But his conjecture reflects the complexity of what Steve was feeling then. He was losing way more money than he’d ever imagined, especially with things at NeXT going in the wrong direction. Yet he was far from poor: he had all the money he needed to raise a family and do the things that mattered to him. And as he watched Toy Story develop, he was starting to fall truly in love with Pixar. It was such a welcome respite from NeXT, far less intense and far less demanding.

Steve started coming up to Pixar’s offices once a week, even though he often had little to do there. Catmull managed the process of staffing up after the movie deal was done, a process that could have been disruptive, given that Pixar had just downsized dramatically when Steve sold the hardware division. But under Catmull there was no “bozo period” at Pixar.