Walt Disney, founding member of the Society of Independent Motion Picture Producers.

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 share.

Walt 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 broad appeal.

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.

"Walt 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 Disneyland.

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 their company.

“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.

SOURCES:

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 Magic Kingdom.
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, p. 124.
“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. 86.
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, 1957.
“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 deal.
Value of Disneyland in 1966: Holliss and Sibley, p. 90.16, 1959, pp. 115-116.

See Bibliography.