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Wall Street History
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09/22/2006
Walt Disney, Part II
We pick up our story with ‘Steamboat Willie,’ the first sound
cartoon. Initially, it was a silent short based on the comedy of
Buster Keaton. But Walt Disney was sitting in the theatre
watching Al Jolson singing in ‘The Jazz Singer,’ the first real
feature length ‘talkie,’ and he had an idea.
Film executives were divided over sound then, if you can believe
it, and as Walt wrote brother Roy, “None of them are positive
how it is all going to turn out, but I have come to this definite
conclusion: Sound effects and talking pictures are more than a
mere novelty. They are here to stay and in time will develop into
a wonderful thing.”
Harold Evans writes of critic Richard Schickel who, in Evans’s
words argued that “Walt’s distinction was to see sound as not
just an addition to the movies but also a force that would
fundamentally transform them. ‘He was the first moviemaker to
resolve the aesthetically disruptive fight between sight and sound
through the simple method of fusion, making them absolutely
‘co-expressible,’ with neither one dominant nor carrying more
than a fair share of the film’s weight.’”
But in the case of ‘Steamboat Willie,’ when Walt and Ub Iwerks
showed it before the animators’ wives and girlfriends for a dry
run, the viewers were far from impressed. Walt’s wife Lillian
said “it sounded terrible.” And according to Mildred Iwerks in
her book ‘The Hand Behind the Mouse,’ she was gossiping with
the other wives afterwards in the hall when Walt ran out and
exclaimed, “You’re here talking about babies and we’re in there
making history.”
Back in New York, though, where Walt was trying to get movers
and shakers in the film and recording business interested, there
were no takers. Walt needed a sound expert and finally he found
Pat Powers, the founder of Cinephone. Powers put together an
orchestra, which proceeded to botch the first recording (they
couldn’t keep up with the action), and Walt had to sell his car to
get a second session.
Then Disney had to find a distributor. Only one, Harry
Reichenbach of the Colony Theater in New York, allowed Walt
to do a public screening.
On November 18, 1928, the public told Walt Disney that he was
on the right track. They loved ‘Steamboat Willie’ and Mickey
Mouse was on his way to stardom.
So why did everyone love Mickey? Michael Eisner told Harold
Evans that the revelation for him came in listening to an
audiotape of an unedited ‘Edgar Bergen/Charlie McCarthy
Show.’
“Normally Walt did Mickey’s voice in a studio and did it over
and over until he got it right. But this particular show was live
and it became startlingly obvious that Walt and Mickey were one
and the same. He kept falling back into Walt when he was trying
to be Mickey and back to Mickey when he was Walt, just as I
later discovered that Kermit the Frog was part of Jim Henson and
Charlie Brown was Charles Schultz. These great characters are
not created by committee, nor are they fiction. They are real and
alive and the alter egos of their creators.”
Evans writes Mickey was a sunnier character than Walt. I would
add that in the case of Charlie Brown, he definitely reflected the
disposition of Schultz.
Walt also believed in the family values he promoted at Disney.
“All right, I’m corny,” he said, “but I think there’s just about a
hundred and forty million people in this country that are just as
corny as I am.”
Oh, he enjoyed cussing and a stiff drink now and then, but he
was really just a regular guy who hated to see people get
screwed, as he had been in his search for a career.
He also had this dark side, shaped by his early years no doubt.
He brooded a lot and was described as somber. It was said you
could put your arm around brother Roy, but not Walt.
Harold Evans notes, though, that the way to his heart was to talk
about trains. He built a half-mile railway in the yard of his home
“and delighted in putting on this engineer’s cap to take visitors
for a ride.”
Meanwhile, Pat Powers was going around Walt’s back to steal
Ub Iwerks. Iwerks’s loyalty to Walt was tested in the making of
‘The Skeleton Dance’ and Iwerks bolted for Powers’s studio.
But get this. When Iwerks left Disney he cashed out his 20
percent interest for $2,920. By the time Iwerks went bankrupt
after six years and returned to Walt, the original stake would
have been worth over $1 million. If Iwerks’s heirs had inherited
his original 20 percent, it would be worth around $5 billion
today.
During the Depression, however, Walt Disney Company was
struggling. Roy Disney ran the financial end and he had to meet
a payroll of 187, including gag men, animators, inkers and
musicians. In 1931, Walt Disney had snapped under the pressure
and under doctor’s orders was told to take his wife on a long
cruise to Panama to get away from it all.
Then in 1934, Walt came up with the idea for ‘Snow White and
the Seven Dwarfs,’ the first full-length feature. But Disney told
Roy he needed an initial $500,000. Yikes.
Disney had a friend, though, Joe Rosenberg, a loan officer at the
Giannini family’s Bank of America [a story for another day] and
Rosenberg gave Disney a $1 million line of credit for the project.
Walt ended up being way over budget, with the final cost around
$1.5 million, but on Dec. 21, 1937, ‘Snow White’ opened to rave
reviews and drew sellout crowds at New York’s Radio City
Music Hall. In its first year the picture grossed $8.5 million, at a
time when the cost of a children’s ticket was just ten cents. So,
rounding off, since some theatres these days are beginning to
charge as much as $10, that would be $850 million in today’s
dollars.
Walt Disney was feted all over and earned a special Academy
Award in 1939, while Roy Disney was so comfortable about the
future of the studio he built a new one on 50 acres adjacent to
Griffith Park in Burbank. Walt in turn kept coming up with great
ideas. Roy E. Disney recalls hearing about the story of a wooden
puppet who wanted to be a real boy.
Roy E. was nine at the time, home sick in bed, when Uncle Walt
stopped by on a Saturday evening to say hello.
“He obviously decided to see how ‘Pinocchio’ played with me,
and for the next 40 minutes he acted out the whole story. It was
completely mesmerizing. When I finally went to see the finished
movie, I was actually disappointed. It was nowhere near as good
as it was in Walt’s telling.’
Walt was even more manic about ‘Fantasia,’ the classical music
project where he employed conductor Leopold Stokowski. Both
‘Fantasia’ and ‘Pinocchio’ were completed in 1940 for in excess
of $2 million, and especially in the case of ‘Fantasia’ the initial
box office was tepid. [By the way, the audio oscillator Disney
used for ‘Fantasia’ was the first product made by Bill Hewlett
and David Packard in their Palo Alto garage.]
Under pressure from the bankers, Roy convinced Walt that the
best way to raise funds would be to make an initial public
offering of stock. In April 1940 Disney raised $3.5 million in
this manner. But by 1945, the initial disappointment in the
release of ‘Bambi,’ coupled with a strike by the Cartoonists’
Guild and then the war, hiked his debt to the Bank of America to
several $million.
Disney cut staff by a third, even as Walt planned his next three
projects: ‘Alice in Wonderland,’ ‘Peter Pan,’ and ‘Cinderella.’
For the time being he settled on ‘Cinderella’ and then he began
working on live action and nature documentaries, including a 69-
minute one featuring poisonous scorpions and snakes titled ‘The
Living Desert,’ which earned ten times its production costs.
Next up, “an amusement park.” Walt needed $10 million.
From Harold Evans:
“Disgusted by the experiences of taking his daughters to fairs
where the rides were tawdry, the employees hostile, and the
grounds dirty, he envisaged something utterly different, but Roy
was aghast at the idea of adding to their debt.”
Walt ended up using his own money for a feasibility study as he
dreamt of a miniature town, “a showplace of nostalgia and
romance.” There would be a Main Street, a Frontierland,
Tomorrowland, Fantasyland and Adventureland; all telling
different stories. And it was to be called Disneyland.
But Roy and Walt couldn’t find a bank that would lend them
what was now clearly going to be more than $10 million, so they
began going to the television networks. All three had been
badgering Disney for a series, but Walt had insisted on
controlling rights.
So the pitch was, whoever would invest in Disneyland got to be
the preferred network for the series. David Sarnoff at NBC and
William Paley at CBS eventually backed off, but Leonard
Goldenson of ABC was supremely interested. ABC needed
programming and agreed to invest $500,000 in Disneyland as
well as guarantee a loan of $4.5 million. In return ABC picked
up a 35 percent stake in the amusement park and all of the profits
from the concessions for ten years. For his part Walt agreed to
provide a weekly one-hour Sunday night Disney show. The
initial budget for the series was $5 million and Disney received
one minute of commercial air time.
On October 27, 1954, Walt Disney (who had been convinced to
host the program) opened the first show with a preview of
Disneyland. The rest is history. Early on, 50 million tuned in for
a documentary about the filming of his ‘20,000 Leagues Under
the Sea,’ one-half of all television households.
Then Walt ran three hour-long features on Davy Crockett, thus
rescuing the career of Fess Parker at the same time. One of
Disney’s studio producers, George Bruns, composed ‘The Ballad
of Davy Crockett’ and it spent 13 weeks at #1.
Disneyland opened in July 1955, coinciding with a special hosted
by Ronald Reagan. It was 160 acres, transformed from an
orange grove, but the first few days were nearly a disaster.
Traffic jammed the Santa Ana Freeway, food ran out, a gas leak
shut down Fantasyland, and the day’s heat caused women’s high
heels to sink into the freshly laid asphalt on Main Street. [“The
Century”]
Yet in the first seven weeks, one million visitors went through
the turnstile. Four million the first year. Walt Disney
Productions grew in five years from a gross income of $6 million
to $27 million.
Disneyland was a monument to optimism during America’s most
optimistic times. And when it came to branding, there were none
better than Walt Disney. Whether it was the television show,
feature films or Disneyland, merchandise was being sold.
Like Davy Crockett’s coonskin caps, guns, record, and lunch
boxes. Historian William Manchester once told the story of a
retailer who had an oversupply of pup tents, so he stenciled
“Davy Crockett” on them and sold the stock out in two days.
And those coonskin caps? 10 million were sold in a few weeks.
Disney quickly realized a fact of life. As he told a young
employee, Marty Sklar, “I’m not Walt Disney anymore. I do a
lot of things the public doesn’t want to know about. I smoke and
drink and lose my temper. But Walt Disney is a thing, an image
in the public mind. Disney is something they think of as a kind
of entertainment, a family thing, and it’s all wrapped up in the
name Disney.” [Harold Evans]
One project after another followed, including the critically-
acclaimed ‘Mary Poppins,’ which earned a tidy $44 million its
first year. Picture Walt, backstage at ‘Camelot’ in New York,
trying to convince Julie Andrews that her first film role should be
as a flying nanny, accompanied by animated characters.
Alas, Walt Disney died in 1966, a victim of his life-long vice,
smoking.
Brother Roy fulfilled his dreams, though, such as the opening of
Disney World in Orlando, Fla., Oct. 1, 1971. Roy himself died
just three months later. Sadly, the Walt Disney Company almost
collapsed over the succeeding years, only to be resurrected in
1984 by Michael Eisner and his inseparable partner, the late
Frank Wells.
Sources:
“The Oxford Companion to United States History,” edited by
Paul S. Boyer
“They Made America,” Harold Evans, with Gail Buckland and
David Lefer
“The Century,” Peter Jennings and Todd Brewster
Brian Trumbore
I’m traveling in Europe for a spell. Next Wall Street History,
Oct. 6
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