Acquired
02:13:12 · Ben Gilbert, David Rosenthal
[02:13:12] S0: on this company, and we spent, I don't know, the better part of the year so far researching this, and I found zero evidence of that. [02:13:19] S1: Yeah. Same. Definitely anti communist, for sure. Yep. But, anyway, so speaking of the war By [02:13:28] S0: the way, this is like four giant blows to the company in a row. You've got Europe dropping even before The US enters the war. You've got the the European distribution falling off. There's a thing we didn't talk about, which was Fantasia tried to make this giant bet in a new type of sound for movies called Fantasound. Alone almost killed the company. The budget for Fantasia was 50% bigger than Snow White. And in the first run at the box office, they tried to use Fanta sound, this new sound technology they had invented, and distributors didn't pick it [02:14:03] S1: up Yes. [02:14:03] S0: To do, like, a real first run. And so out of the $2,300,000 budget in that first year it came out in 1941, they recouped 325,000. Wow. That is a giant loss on Fantasia. I think Disney was also funding the development and and distribution of Fantasound. So you've got those two, then the strike. Now The US enters the war. [02:14:27] S1: Yeah. One more note on Fantasia, though, before we talk about the impact of The US entering the war. Do you know what ultimately ended up happening with Fantasia? [02:14:37] S0: They made Fantasia two thousand sixty years later? No?
02:14:37 · Ben Gilbert, David Rosenthal
[02:14:37] S0: They made Fantasia two thousand sixty years later? No? [02:14:41] S1: Yes. The, that is true, but that is not what I was getting at. So, yeah, the initial release of Fantasia, as you said, was a total flop. They couldn't exhibit it anywhere, lost tons and tons of money. Later, it has this huge resurgence. I mean, I remember when I was growing up as a kid, my parents loved Fantasia. [02:15:01] S0: Yeah. I actually thought Fantasia was a modern movie. It's crazy to me that it was Disney's second. [02:15:04] S1: Right. Right. Right. I think it was, like, the sixties and the hippies that thought, like, oh, this is, like, the coolest thing. So Fantasia, if you look today at the list of inflation adjusted top films in history, by box office gross inflation adjusted, Fantasia is the twenty fourth highest grossing film in Hollywood history. Unbelievable. So it has [02:15:30] S0: And our whole second kinda timeless. [02:15:33] S1: Totally. It's an amazing, amazing production. I mean, the music, the symphonies, the sound. It's watch Fantasia if you've never seen it. It is well worth your time. [02:15:43] S0: And now a hard cut over to World War two.
02:15:43 · Ben Gilbert, David Rosenthal
[02:15:43] S0: And now a hard cut over to World War two. [02:15:45] S1: Right. Yeah. Yeah. Yeah. So back to 1941, no sooner does Roy settle the strike than Pearl Harbor happens, and The US now enters World War two. And unlike many of the other great American companies of that era that we've covered on this show before where World War two was great for their business like Coca Cola or Mars or Lockheed, World War two is a disaster for Disney. Nothing of value gets built for Disney during the war. It basically breaks every single node in the flywheel. And on top of the strike, it just completely grinds to a halt all new core IP production for the studio. [02:16:36] S0: Yeah. So the first thing that happens is within hours and then days of Pearl Harbor getting bombed, the US military moves into the studio. Yes. They look at Burbank, and they think this is a great asset. And so Do you know why? Hundreds of troops, there are two reasons, that set up shop using the sound stages to work on all the optical systems for antiaircraft. Sound systems are awesome. There's no windows. It's a giant room. The I mean, like, it's it's the the thing you would want for stuff like this. The second reason that I suspect you're hinting at, David, is it is real close to Lockheed.
02:16:36 · Ben Gilbert, David Rosenthal
[02:16:36] S0: Yeah. So the first thing that happens is within hours and then days of Pearl Harbor getting bombed, the US military moves into the studio. Yes. They look at Burbank, and they think this is a great asset. And so Do you know why? Hundreds of troops, there are two reasons, that set up shop using the sound stages to work on all the optical systems for antiaircraft. Sound systems are awesome. There's no windows. It's a giant room. The I mean, like, it's it's the the thing you would want for stuff like this. The second reason that I suspect you're hinting at, David, is it is real close to Lockheed. [02:17:12] S1: Yes. Real close specifically to Lockheed Skunk Works department, which is in Burbank. The secret Lockheed Skunk Works airplane hangars and and department was in Burbank because Burbank was the sticks back then, and Disney is right next door. So that's probably the bigger reason why the military requisitions the Disney lot is to protect skunkworks. Fascinating. [02:17:40] S0: Yeah. So you've got that happening. You've got a whole bunch of the animators getting drafted. Yep. I mean, so you're you're you're down manpower. You're just coming out of the strike. You have these huge failures in Pinocchio, Fantasia, and also Bambi. Again, you've lost European distribution. [02:17:55] S1: Yep.
02:17:55 · David Rosenthal, Ben Gilbert
[02:17:55] S1: Yep. [02:17:55] S0: And so the appetite for making more things like those three movies drops to, like, zero. Yeah. I mean, at this point, there's a financial reality that Disney owes a dividend to these shareholders, which interestingly enough, it actually suspended. In 1942, they actually didn't pay out the dividend, but they do have to pay Bank of America. The films aren't gonna be the thing doing it. And, conveniently, they've got the US government saying, can you help us with some propaganda films? [02:18:22] S1: Yep. [02:18:22] S0: Can you help us encourage people to pay their taxes and buy war bonds and support the troops? And so Disney kinda looks at everything, how it's all playing out and says, yeah, that's what we're gonna be doing for the war. [02:18:35] S1: So all of the studio production work during The US's time as an active participant in World War two, yeah, basically, just gets repurposed to propaganda and training materials for the government. [02:18:49] S0: And insanely, they do use Disney IP. Like, you see all these crazy old posters with, like, you know, Donald Duck holding a gun. And, I mean, the the stuff you sort of would never see with these characters today. But not only did Disney say, we're work for hire, they said, we we can use the Disney IP. But interestingly, David, do you know about Mickey Mouse's role? [02:19:12] S1: Oh, no. [02:19:13] S0: They really did not employ Mickey Mouse. They protected Mickey Mouse from the war image, and Donald Duck sort of led the [02:19:23] S1: charge Interesting.
02:19:23 · David Rosenthal, Ben Gilbert
[02:19:23] S1: charge Interesting. [02:19:24] S0: On all the the the war films. [02:19:26] S1: Well, part of this is because, canonically, Donald Duck is a sailor. [02:19:29] S0: Right? Okay. That makes sense. [02:19:31] S1: Yeah. Yeah. But then it makes sense to protect Mickey too. [02:19:34] S0: And Donald's also the more, like, fighter out of character. Yeah. Mickey started off as this troublemaker, but then kinda became the, like, nice protagonist. [02:19:43] S1: Yeah. The goody two shoes, and then Donald was the foil. Yeah. Yeah. So all of this, though, to our point earlier, does nothing either for the flywheel model or for generating new IP to feed it. [02:19:55] S0: Or pushing the envelope of technology or pushing the bounds of creativity, like all the things that contribute to Disney's core. Yep. They they are financially floated, though, by the war. I mean, the way that they make it through this period is they they actually are generating net income reliably. Not a lot. [02:20:12] S1: But From the government work? Exactly. And there's one other big innovation, an actual bright spot that comes out of this back against the wall moment during the war that the company's in financially. Do you know what that is? Oh. [02:20:29] S0: Oh, the Disney Vault. [02:20:30] S1: The Vault. Yes. Yes. So in 1944, the company is so cash strapped that they come up with the, again, at at the time, crazy seeming idea to rerelease Snow White in theaters because, hey. We can't make new stuff, but people sure like that old movie. Let's just put it in theaters and see what happens.