Do you ever find yourself looking fondly back at the Disney animated classics of the early 2000s? Monsters Inc. 2: Lost in Scaradise? Finding Nemo 2? Toy Story 3, sans the incinerator? Don't feel too bad if those aren't ringing a bell - they were never made. These are the films that were being worked on by a division of Walt Disney Feature Animation: Circle 7 Animation. Its mandate was to create CGI animated sequels to the Disney-owned Pixar properties, from Toy Story up to, and including, Cars. The ill-advised project was put to rest after just over two years, but in those two years is a fascinating story about ego, corporate negotiations, and artistic integrity. Here is the tale of Circle 7 Animation, derisively nicknamed "Pixaren't" by Disney's rivals.

The successful November 1999 release of Toy Story 2, bringing in $57.4 million on its opening weekend, should have been a time of celebration for the two companies involved in its creation, Disney and Pixar. Instead, it sparked a heated debate between the two leaders at the top: Pixar CEO Steve Jobs and Disney Chief Michael Eisner. The two had begun negotiations on a new contract, but each had differing ideas on how Pixar should be run and on the interpretation of their current agreement. On a creative level, Disney wanted Pixar to focus on making sequels. Pixar, on the other hand, did not, opting to continue telling original stories and pushing the boundaries of computer animation. Eisner bided his time, assuring the Disney shareholders that Pixar's latest project, Finding Nemo, would not only fail but would give Pixar a much-needed reality check, humbling them to such a degree that Disney would have the upper hand. Finding Nemo would end up the second top-grossing film of 2003. The success of that film bolstered Pixar's confidence that they didn't need Disney to succeed.

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Circle 7 Animation Is Born

Finding Nemo
Image via Walt Disney Studios

One would think that this would be a humbling moment for Eisner and Disney. One would think incorrectly. Instead, Eisner started debating the terms of their current agreement, specifically the number of films that fell under their deal. The original deal was for Pixar to deliver seven feature films, which seems pretty straightforward, but not in this battle of wills. Jobs and Pixar held to the belief that the 2006 film Cars would satisfy that agreement. Eisner and Disney, however, argued that because Toy Story 2 was a sequel, it didn't count towards the seven, which would mean that 2007's Ratatouille would be the final film. Negotiations were going nowhere, neither Jobs nor Eisner was going to back down, and it was becoming evident that separation was imminent. So Eisner moved forward with a plan, one that was either a bargaining chip, a big "screw you" to Jobs, or a little of both. He set up Circle 7 Animation, so named for the Glendale street the unit was on (thank goodness it wasn't on Elm Street - that would be a nightmare). Circle 7 Animation was going to specialize in computer-generated animation, and focus exclusively on creating sequels to the seven Pixar films they had the rights to.

Circle 7 Animation initiated production on three films. Toy Story 3 was the feature that developed the furthest. The storyline, scripted by Jim Herzfeld, would have seen a defective Buzz sent to the Taiwanese factory he came from, thanks to a product recall. The remaining toys shipped themselves by FedEx to China, on a mission to save Buzz. Monsters Inc. 2: Lost In Scaradise had Mike Wazowski and James P. Sullivan trapped in the human world after entering it to find Boo. A script by Laurie Craig for Finding Nemo 2 is an interesting read, with the story introducing Nemo's long-lost brother Remy, who survived the barracuda attack that killed their mother and remaining siblings.

Circle 7 Animation Is Shuttered After Disney and Pixar Reconcile

Woody and Andy's other toys sit on a wooden porch watching on as Andy leaves.
Image via Pixar

The early production work on those three films is all that Circle 7 Animation accomplished before the studio was shut down. The first blow was CEO Eisner being pushed to step down from the position, eliminating the piece that prevented a reconciliation of the two companies. Without Eisner to champion the division, the end was nigh. The killing blow was the 2005 appointment of Bob Iger to the role of CEO of The Walt Disney Company in 2005. One of his first acts was to approach Jobs with a proposition: let Disney buy Pixar. Iger confessed that Walt Disney Animation Studios had been faltering, and needed improvement. Said Iger, "I thought the fastest way to accomplish that, albeit at the riskiest and the most expensive, was to buy Pixar." Iger contacted Jobs, and they agreed to meet in person to talk about the prospect. At Apple's headquarters, the pair worked together on a list of pros and cons, leading to Disney's purchase of Pixar for $7.4 billion in 2006, a move that made Jobs the largest shareholder of Disney.

With that, Circle 7 Animation was no more. Of the 168 employees on board, nearly 20% were let go, effective May 26th, 2006. Disney Animation absorbed the remaining staff, now under the leadership of John Lasseter. Disney did commit, however, to help the laid-off staff find new work. As for their work, Pixar did not use any of it, preferring to start from scratch with the proposed projects, so all that exists are bits and pieces of concept art, brief descriptions of storylines, and little else. Had the project worked out, and Pixar and Disney never reconciled, it would be an interesting exercise to think of what the animation landscape would look like. Would Pixar have made any sequels to their films after Cars, or do the sequels exist because of Disney's influence? Would Circle 7 Animation move past its original purpose and work on original material? And if so, would it have been met with the success of Pixar's catalog? It's hard to say, but thankfully, thanks to some level-headed thinking and cooler temperaments, we never need to find out.