Acquired
02:53:52 · David Rosenthal, Ben Gilbert
[02:53:52] S1: Yep. What can we do? So in order to go get the bulk of the financing for the park, Walt comes back fully into the fold at the Disney studio and does something that no other movie executive is willing to do at this point in time. He embraces television. He goes to the TV networks for money. [02:54:18] S0: Yeah. And the fascinating thing is it's in part because they don't really want a pure financial partner for the park. Like, they don't wanna just go raise a bunch of debt that they'll then have to pay back. This has hamstrung them so many times. They're trying to think creatively of how can we do, like, a one plus one equals five thing here where we have this Disneyland Inc joint venture, and someone else is, you [02:54:44] S1: know, building this thing and funding it. So, yeah, at the time, the prevailing sentiment in Hollywood was that TV was a threat, that if Hollywood movie studios started putting their content on TV, it would steal audiences away from the theaters. It's just like in our NFL episode where baseball was deathly afraid of television. I think the quote was radio whets the appetite for attending baseball games live, and TV satiates it. [02:55:12] S0: Yes.
02:55:12 · Ben Gilbert, David Rosenthal
[02:55:12] S0: Yes. [02:55:12] S1: But Walt realizes just like the NFL did, that TV actually was a huge new opportunity. Walt says, when television first hit, I went back to New York, and I spent a week in New York just to study television. I had the feeling then that it was important and that we ought to get in it. The feeling of the motion picture business was that television was something we should fight or we should ignore it and maybe it would go away or some darn thing. I said, television is gonna be my way of going direct to the public, bypassing the middleman. I said, Roy, this television thing can be the greatest thing because we will be going direct to the public. And he also thinks it might be his ticket to financing the park. [02:55:56] S0: So ABC had been wanting to do something with Walt. I mean, lobbying over and over and over again, because Walt did this one special a few years before. I think it was on NBC, not ABC. And it it was great. Like, there is something very compelling about Walt Disney and Disney stuff in a television special. [02:56:17] S1: Yes. Yes. Avuncular Walt Disney beaming into living rooms around America. [02:56:25] S0: But ABC is the third place network. Yep. They don't have as many affiliates. They don't have as much reach. If you're gonna get a partner for something that you really wanna take advantage of the full reach of a television network, it's not ABC. [02:56:39] S1: You really want CBS or NBC?
02:56:39 · David Rosenthal, Ben Gilbert
[02:56:39] S1: You really want CBS or NBC? [02:56:42] S0: Yes. And so Walt actually goes to CBS at NBC with this pitch. I think it might be Roy, actually, flying to New York and doing this. But they're not interested, at least for the whole package that Walt is proposing. [02:56:55] S1: Yes. They both say, hey, Walt. We would gladly do a regular television series with you, but, I don't know about this park thing. [02:57:04] S0: You're asking for the better part of $5,000,000 so that we can build a theme park with you, and that's a bundled deal with a doing a TV show. This is really weird. [02:57:14] S1: Yep. ABC, though, Ben, as you were saying, they're the newest of the networks, and they're struggling to catch on. They need something like Disney and Disneyland to break out. So they say, yes. Walt's line on this was that ABC needed the show so badly that they bought the amusement park with it.
02:57:14 · David Rosenthal, Ben Gilbert
[02:57:14] S1: Yep. ABC, though, Ben, as you were saying, they're the newest of the networks, and they're struggling to catch on. They need something like Disney and Disneyland to break out. So they say, yes. Walt's line on this was that ABC needed the show so badly that they bought the amusement park with it. [02:57:37] S0: Do you know the structural thing with the television industry that was going on in 1952? No. So back in 1948, and I promise this is related. Back in 1948, the FCC paused the ability to get a new broadcast license while the FCC was sorting out some technical and policy problems. It was supposed to last, like, six to twelve months, but it ended up lasting four years until 1952, a freeze on the ability to get a new broadcast license. So the existing big four networks, are about to be three, NBC, CBS, and ABC, became pretty entrenched. Meanwhile, the number of households with TVs was absolutely exploding. It went from 9% of households in 1950 to 65% just five years later in 1955. [02:58:25] S1: Yeah. So all these networks now have a basically government protected oligopoly [02:58:30] S0: Accidentally. [02:58:31] S1: In this massive new market.
02:58:31 · David Rosenthal, Ben Gilbert
[02:58:31] S1: In this massive new market. [02:58:33] S0: Yes. So if ABC could put on a hit show, like, there's not that many choices of stuff to watch at any given time because of this supply demand mismatch on on content, suddenly a giant swath of Americans could pay attention instantly. So they're, like, really hungry for super compelling content. So Walt goes to ABC kinda knowing this and knowing they're in third place and says, okay. I I will make this show for you, but, a, you're doing the park with me, and, b, I have complete say on what happens during the program. And I can change my mind anytime, and there's no part of the contract about what I'm making for you. And ABC says, yes. Absolutely. That sounds fine, mister Disney. Yes. [02:59:19] S1: So ABC ends up investing $500,000 in equity in Disneyland Inc, same terms and amount as Disney productions. In addition, though, they also guarantee 4 and a half million dollars in bank loans. So boom. There's the rest of the financing that they think they need to get Disneyland off the ground in debt guaranteed by ABC. [02:59:44] S0: And they would televise the TV show, but Walt Disney Productions would have to produce it. But they're actually buying a pretty expensive TV show also. So in addition to this 500,000 and the 4,500,000, ABC is also gonna pay $5,000,000 per year to Walt Disney Productions to make the show that they're gonna put on the air. And it was ABC's to air for seven years, which made it the largest TV programming contract in history. [03:00:09] S1: Yes. This is an absolutely over the top deal.
03:00:09 · David Rosenthal, Ben Gilbert
[03:00:09] S1: Yes. This is an absolutely over the top deal. [03:00:13] S0: There is one other deal point, which is, ABC negotiated to have the right to all the profits from Disneyland's food and beverage for the first decade. [03:00:22] S1: They're like, hey. We need something else out of this. [03:00:24] S0: Yes. Yes. But a part of this contract that is completely set in stone is the opening date, 07/17/1955. [03:00:34] S1: Interesting. I didn't realize that the opening date was set in this contract with ABC. Either way, they do get the television show, and it works out to be a great deal for everybody involved because, Ben, to your point about supply and demand, it becomes a huge hit, like, instantaneously when it launches in the fall of nineteen fifty four. [03:00:56] S0: The content is basically a behind the scenes look at all the different lands and content for each. So Tomorrowland, Frontierland, Adventureland, etcetera. [03:01:05] S1: Yep. So pretty quickly, Disneyland, because, of course, they name the TV show the same as the park. [03:01:11] S0: Sure. I mean, if Walt gets to control all the programming, like, why not just make it the most perfectly aligned advertisement every week for a whole year to get ready? [03:01:19] S1: Yes. So it quickly becomes the second most popular show on television after I love Lucy, and it's the first ABC program to crack the top 25 shows ever. Like, it was all NBC and CBS until Disneyland. Unbelievable.