Acquired
02:43:11 · Ben Gilbert, David Rosenthal
[02:43:11] S0: I was about to make the, comment. Oh, this sounds a lot like Elon Musk, but none of Elon's companies have a board that would vote against him. And so that's really the only difference here. It's kind of the, like, Elon before Elon. Yes. So there ends up being two problems with this plan. One is Walt and the architecture company that he hired kinda come to the conclusion that this plot of land, it's just too small. Even with all the clever ideas to be space efficient, there's just too much that he wants to do with this Disneyland concept. It keeps growing in scope to accomplish all of it in that little strip of land. The second problem is after provisional approval, the Burbank City Council starts to learn more, and they decline the proposal since they do not want a, quote, carnival like atmosphere right there on the side of the river. [02:43:58] S1: You could describe Disneyland as lots of things, but carnival like atmosphere, clearly, did not get the vision. [02:44:05] S0: Right. The the magic is that it isn't. Exactly. Easily could have been. So they need to find a bigger plot of land, and they need to, work with a team that is really good at odd research based tasks. And you're never gonna guess, listeners, where he goes for this. It is like a a crazy nugget of history. He goes to SRI, the Stanford Research Institute. If you've heard SRI before, it is one letter off from Siri, which was a spinout of SRI. Yes. That SRI. [02:44:44] S1: That it was. I was just gonna say that you you just triggered, like, you know, probably 2,000,000 phones.
02:44:44 · David Rosenthal, Ben Gilbert
[02:44:44] S1: That it was. I was just gonna say that you you just triggered, like, you know, probably 2,000,000 phones. [02:44:51] S0: Some of which are running, the betas, so they'll have the new Siri AI. [02:44:55] S1: Yeah. Yeah. Yeah. [02:44:57] S0: Yes. Yeah. SRI. [02:44:58] S1: SRI is the research firm that Walt hires to go identify what ultimately becomes Anaheim. [02:45:09] S0: The perfect spot. They absolutely knock it out of the park. But when you describe it, the site sounds completely nuts. 10 times bigger than the original site, a full a 160 acres. [02:45:20] S1: Yep. [02:45:20] S0: 25 miles away from Los Angeles. It is currently just some orange groves. Anaheim itself was a small farming town. There wasn't even a highway connecting it to Los Angeles. [02:45:34] S1: There was a planned highway. [02:45:37] S0: Yes. So there's a quote from the animated man by Michael Barrier. The SRI analysis from August 1953 took into account a large number of factors, including likely population growth, freeway construction, and the effect of terrain on television transmission since the idea was that TV will play an important part in the promotion and development of Disneyland. The study pointed toward a location Southeast Of Los Angeles in Anaheim in Orange County just off the Santa Ana Freeway. That freeway was then under construction, but most of it between Downtown Los Angeles and Orange County was scheduled for completion. The foresight of all the factors that they considered there. [02:46:16] S1: Just incredible.
02:46:16 · David Rosenthal, Ben Gilbert
[02:46:16] S1: Just incredible. [02:46:17] S0: So, there is one problem though, which is great. We found the perfect site. It's a 160 acres, and we're gonna do this much bigger and better than we were before. We're gonna need some money. [02:46:27] S1: We're gonna need a lot of money. So Walt goes back to the company. [02:46:33] S0: Yes. And remember, they had no interest in pursuing this, which is why he had to set up wed in the first place. It's becoming clear that this is happening. I mean, Walt Disney is a force of nature, and Roy becomes supportive or at least as supportive as [02:46:47] S1: strong armed into supporting this.
02:46:47 · David Rosenthal, Ben Gilbert
[02:46:47] S1: strong armed into supporting this. [02:46:49] S0: Right. While still trying to protect the company. And so in 1953 in April, Walt Disney Productions board of directors, this is a public company, agreed to a personal services contract with Walt and contracts with WED to design and build the Disneyland Park attractions. This is done as a cost plus contract. So WED and Walt personally don't have to take any risk, at least in in this part of it. It is just like, we will pay you whatever it is plus your profit margin to go build stuff, and, you know, it's kind of a blank check. There are some pretty wild other terms in this personal services contract according to a 1990 article decades later in the LA Times. Walt is allowed to pursue outside projects, which effectively gives him all the benefits of being a free agent while still drawing his $153,000 salary from Walt Disney Productions. K. Another point. Walt argues that he should be compensated for the use of his name. He ends up getting it. Again, worked into this deal, and the contract awards him 10% of all merchandise sold. [02:47:58] S1: Wow. I actually didn't find this. [02:48:00] S0: This is wild. So here's the next bullet point. He will now get the right to invest alongside Walt Disney Productions in each live action film project, which he would later do on Mary Poppins and other films.
02:48:00 · Ben Gilbert, David Rosenthal
[02:48:00] S0: This is wild. So here's the next bullet point. He will now get the right to invest alongside Walt Disney Productions in each live action film project, which he would later do on Mary Poppins and other films. [02:48:12] S1: So why did he negotiate for this? I mean, my feeling about Wald after doing all this research is that he didn't actually really care that much personally about money. Was he trying to accumulate cash so that he could fund Disneyland? [02:48:28] S0: Exactly. Exactly. There's also some, like, personal stuff tied up in here, his relationship with the company where he's like, it's not really mine anymore, so I kinda want more out of it. That's sort of the less generous take on it. But he and Roy definitely kinda came to this understanding of, well, if Walt is gonna have to fund a lot of this, then we need to figure out a way for Walt to get more cash so that he can [02:48:51] S1: do that. This is happening no matter what. So we can do it the easy way, or we can do it the hard way.
02:48:51 · David Rosenthal, Ben Gilbert
[02:48:51] S1: do that. This is happening no matter what. So we can do it the easy way, or we can do it the hard way. [02:48:57] S0: It is interesting on his relationship with money. He was interested in money, but for the sake of deploying it. I mean, hoarding money was never his thing. Like, he did live extravagantly compared to most people. He had that train and, you know, a vacation house in Palm Springs and all that. But it's not what the other big Hollywood moguls were doing. Lillian Disney has a comment in 1956. She said, I've always been worried. I have never felt secure. Never. He's always telling us how wealthy we are, how much we've got, and we haven't got anything. And she's kinda right. [02:49:30] S1: Because he's always putting it back in. [02:49:32] S0: Yes. And it's all tied up in the enterprise value of Disney, which he keeps sort of remortgaging and rebetting the farm. Yes. So there's that angle. He also always believed in the park just like he always believed that animation feature animation had a a long runway ahead of it. And I I was trying to think of the best way to contextualize this. So to validate him there, this is a crazy stat on just how right he was about all of this. Walt built this company over his entire lifetime from age 21 until he died in 1966. And if you look at the company's market cap today compared to where it was in 1966, ninety nine point nine five percent of the value was created after Walt Disney died. [02:50:15] S1: Yep.