Disney, founding member of the Society of Independent Motion Picture
Walt Disney: The SIMPP Years
Excerpt from Hollywood Renegades by J. A. Aberdeen
Not surprisingly, the most prominent surviving member of SIMPP, Walt Disney,
was also the creator of the most lasting corporate legacy. But Disney suffered
through many bitter and challenging years that coincided with the SIMPP years.
Walt Disney came into the Society of Independent Motion Picture Producers in
early 1942 in the wake of debilitating labor problems that interrupted his
studio operation. The animators strike in the summer of 1941 was widely regarded
as a major cause of the end of the Disney golden age that had been characterized
by lavish production value and ground-breaking achievements in animation. The
advent of World War II cut-off the studio's essential foreign revenue, and
brought lean years for Disney. After sustaining heavy losses on Pinocchio
and Fantasia (both 1940), Walt Disney announced in January 1942 that Bambi
would be the last of his full-length animated features, as several projects were
shelved to make way for the war effort.
In the 1940s, Walt Disney seemed to have lost his storytelling confidence.
His films relied heavily on voice narration, a film style that contrasted
starkly with the bold and innovative ideas that brought universal praise during
the previous decade from the public, his peers, and the film intelligentsia. As
his films lost their experimental edge, the Disney product moved to the
mainstream. More and more his projects were supported by big-name talent like Bing
Crosby, Edgar Bergen, and Dinah Shore, and his feature-length releases
consisted of an unambitious string of animated shorts packaged together. Walt
Disney had a difficult time finding saleable projects, while Roy Disney had
similar problems keeping the studio finances afloat. In 1949 the company
continued to show a fiscal loss. Walt Disney Productions stock, which had gone
public in 1941 at the price of $25, bottomed-out at its all-time low $3 per
Disney in the studio publicity portrait used to promote the release of
Lady and the Tramp in 1954.
Though Disney reentered feature animation production with Cinderella
(1950), studio insiders claimed that Walt Disney's fancy seemed to lie
elsewhere. After having achieved what he considered to be the pinnacle of
artistic and commercial success in animation in the late 1930s, he drifted
toward live-action projects, nature documentaries, and of course theme parks-in
a diversification effort that eventually saved his independent company.
With nearly $1 million in frozen funds accumulated in Great Britain, the
Disney brothers briefly considered opening a cartoon studio in England, but
instead formed Walt Disney British Films Ltd. to produce live-action films
overseas. Their first British film, Treasure Island (1950), was also the
first Disney feature without any animation, and established the Disney
live-action division as a prestige outfit for literary-based A-pictures with
Disney's constant drive for quality, which had resulted in exorbitant losses
on past animated films, proved to be a masterstroke that made his movies a
rerelease gold mine. The timeless nature of his movies, and Walt Disney's
insistence of keeping them out of the public view on a seven-year cycle, gave
Disney a fresh and profitable rerelease franchise and resulted in a Disney
stranglehold on animated features until the early 1990s when the home video
releases of Disney films destroyed their theatrical value.
Like several other prominent independent production companies, Walt Disney
Productions ventured into distribution. Dissatisfied with the RKO handling of
their documentary features, the Disneys formed the Buena Vista Film Distributing
Company in 1953 to handle domestic distribution of all of its films, beginning
with 20,000 Leagues Under the Sea and Lady and the Tramp (both
1954). Instead of operating a chain of expensive exchanges like the other
distributors, Buena Vista pioneered a far more flexible distribution system by
establishing sales offices in key territories, while a regional bureau called
National Film Service was hired to physically transport the film prints to
theaters. After decades of slow, constant growth, Buena Vista became one of the
industry's most profitable distribution outfits.
Disney Signs TV Contract," a new wire photo taken to announce the
landmark deal between Disney and ABC-Paramount.
Walt Disney's move into television also helped stabilize the company, not
only by adding additional revenue, but by allowing the producer to plant stakes
in the new and expanding medium. The 1954
deal between Walt Disney and ABC-Paramount went sour after a few years
although both sides benefitted greatly from the partnership. ABC received
several shows from the producer, while the deal enabled Disney to finance
Leonard Goldenson later said “the Disneys had turned out to be terrible
business partners.” Instead of splitting the Disneyland earnings amongst the
investors, “Disney kept plowing his profits back into park expansion.” The
television network was unaccustomed to the Disney philosophy of long-term growth
that had been practiced religiously by the brothers from the earliest days of
“They're just a dollar-minded bunch,” Roy Disney complained against ABC.
“They run the business for money first.”
Walt Disney also despised the arbitrary manner that ABC manipulated his
television shows. When ABC canceled The Mickey Mouse Club but denied
Disney the right to take it to another network, Roy Disney threatened an
antitrust lawsuit against the American Broadcasting Company in an effort to
force Disney's release from the contract.
The Disneys had demonstrated their business savvy in the original 1954 deal
by giving Walt Disney Productions the option to repurchase the ABC-Paramount
interest in Disneyland within seven years. In 1958, Walt Disney Productions
reported a nine-month net profit of $2.9 million, due largely to the 65.52
percent interest in Disneyland, Inc. that the company had acquired through
various stock purchases. One year before, Walt Disney Productions stock moved to
the New York Stock Exchange where it traded for around $60 a share. The Disney
brothers were determined to consolidate complete control of Disneyland in the
hands of Walt Disney Productions.
In a 1959 deal brokered by SIMPP's Loyd Wright,
Walt Disney sold part of his personal Disneyland holdings to Walt Disney
Productions as “recompense for his independent work in developing the concept
of Disneyland.” Also around the same time, as Walt Disney moved to NBC, Walt
Disney Productions began to exercise its option to buy the stock held by
ABC-Paramount, and eventually paid $7.5 million to reacquire the one-third
interest that had cost American Broadcasting only $500,000 originally. Though it
came at a tremendous cash outlay, the maneuver put Walt Disney Productions in
complete control of the theme park that became the bedrock of the company's
financial future. By the time Walt Disney died on December 15, 1965, the
Disneyland theme park represented a total investment of over $126 million.
Information on the transformation of Walt Disney Productions:
Miller, The Story of Walt Disney; Thomas, Building a Company;
Thomas, Walt Disney; Schickel, The Disney Version; Mosely, Disney's
World; Holliss and Sibley, The Disney Studio Story; Watts, The
End of the Disney animation Golden Age: “Disney Shelves Four
Pictures,” HR, January 5, 1942, pp. 1, 6.
Disney losses in 1949 at $93,899: Holliss and Sibley, p. 59.
Disney stock declines from $25 to $3: Diane Disney Miller, as
told to Pete Martin “Mickey Mouse Becomes a Secret Weapon,” The Saturday
Evening Post, December 29, 1956, p. 73.
For information on Buena Vista Film Distributing Co., Walt
Disney British Films, Ltd., and National Film Service: “Disney Moves Away From
RKO,” DV, September 21, 1954, pp. 1, 4.
“The Disneys had turned”: Goldenson, Beating the Odds,
“They're just a dollar-minded bunch”: Thomas, Building
a Company, p. 208.
The deal to repurchase ABC's Disneyland stock: Thomas M.
Prior, “Land of Fantasia Is Rising on Coast,” NYT, May 2, 1954, p.
Disney financial status in 1958: “9-Month Disney Net
$2,900,094,” HR, July 29, 1958, pp. 1, 14. The article also mentions
that Walt Disney Productions owned 65.52 percent of Disneyland since June 29,
“Recompense for his independent”: Schickel, pp. 313-314.
Walt Disney turns 1,555 shares of Disneyland over to Walt
Disney Productions: Walter E. Disney to Loyd Wright, “Re: Disneyland, Inc.
stock escrow,” October 1, 1959, Scott J. Winslow Associates, New Hampshire,
Historical Stocks, Bonds and Financial History, December 1999, p. 32. Loyd
Wright, who served as Disney's personal lawyer, acted as escrow holder in the
Value of Disneyland in 1966: Holliss and Sibley, p. 90.16,
1959, pp. 115-116.