Acquired
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.
03:01:19 · David Rosenthal, Ben Gilbert
[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. [03:01:38] S0: Also, ABC lets Disney run trailers inside each episode for their current theatrical release. Yes. So it both promotes Disneyland and the current movie slate. [03:01:48] S1: It it becomes a whole another no to the flywheel. [03:01:51] S0: Yes. And for the first time, they get repeat exposure. I mean, Disney only gets a touch point once every few years with a consumer with a movie, and maybe you watch their shorts. But with TV, it's this way to build a repeated relationship. [03:02:05] S1: They had this in a certain way with the comic strip before, but this is like that on steroids. Yes. So in that same fall and winter of nineteen fifty four into 1955, the show has its first big, like, viral moment even before the park opens. So in December 1954, Disney begins a three part live action miniseries on the show about the story of Davy Crockett. Davy Crockett. Oh, that's right. And America goes nuts for Davy Crockett. For listeners who don't know, Davy Crockett is like a historical American figure that fought and died in the battle of the Alamo in Texas over a century before this. [03:02:58] S0: Which Disney highly fictionalizes the character.
03:02:58 · Ben Gilbert, David Rosenthal
[03:02:58] S0: Which Disney highly fictionalizes the character. [03:03:00] S1: Yes. Totally. But this miniseries becomes a massive flywheel moment for Disney, totally unintentionally. Davy Crockett coonskin caps become the must have kids product of 1955. They sell 10,000,000 caps in 1955. Unreal. Even better, the theme song, the ballad of Davy Crockett, you know, king of the wild frontier, reaches number one on the billboard charts in America and sells 7,000,000 records. In total, Disney would go on to do around 300,000,000 of gross sales of Davy Crockett merchandise, which at this point, they fully in housed commercial products. Kate Kamen had tragically passed away in a airplane crash in 1949, after which they in house all of this within Disney. So if all that happened with the same splits we mentioned before at 5% royalties on that $300,000,000, assuming, again, a 100% retail markup from wholesale, That's 7 and a half million dollars to Disney, which, you know, I think is more in actual revenue to Disney than they had earned from any film at that point in history. [03:04:23] S0: And, David, this is really gonna blow your mind. That is actually more than the amount of income they had received ever cumulatively from first run animated features. If you add up all the pluses and all the minuses Yeah. By 1957, the money they had made ever in profit dollars from their first release films was a hair over $7,000,000. And they made, by your estimates, 7 and a half million.
03:04:23 · Ben Gilbert, David Rosenthal
[03:04:23] S0: And, David, this is really gonna blow your mind. That is actually more than the amount of income they had received ever cumulatively from first run animated features. If you add up all the pluses and all the minuses Yeah. By 1957, the money they had made ever in profit dollars from their first release films was a hair over $7,000,000. And they made, by your estimates, 7 and a half million. [03:04:53] S1: They made more from Coonskin caps and record sales than incredible. And what timing right before Disneyland opens? [03:05:01] S0: Insane. Amazing. Disney absolutely crushed the timing on switching their horse to TV or sort of embracing TV and embracing it in this huge way. And not just with programming, but directing all this attention at Disneyland. We gave that stat earlier all the way in the the twenties that the average American went to theaters over 40 times. By 1947, that number was down to about 32 times. And by 1956, the year after Disneyland opened, it was down to 14 times per year. [03:05:31] S1: Wow. [03:05:32] S0: Thanks to our friend Arvind at Worldly Partners for gathering all this data. [03:05:35] S1: So movie executives really had good cause to be concerned about TV.
03:05:35 · David Rosenthal, Ben Gilbert
[03:05:35] S1: So movie executives really had good cause to be concerned about TV. [03:05:40] S0: Absolutely. Attention was shifting to television, and right as it was shifting in droves, boom. That is right where Disney showed up in this, like, multiplicative way. You know? Yeah. Man, incredible timing. And Walt as ever had a quote on this. This is from the special that he did back in 1950 as an experiment. He said, I regard television as one of our most important channels for the development of a new motion picture audience. Millions of televiewers never go to a picture theater and countless others infrequently. In these highly competitive days, we must use the television screen along with every other promotional medium to increase our potential audience. [03:06:20] S1: Man, was he right. [03:06:21] S0: Man, was he right. [03:06:23] S1: And it's just so incredible that because he started playing with trains, Disney became a major force in television and, of course, opened the park. [03:06:33] S0: Yes. Okay. So how does this all come together? We've got this, like, joint venture called Disneyland Inc. It's got $500,000 from Walt Disney Productions. It's got $500,000 from ABC. It's got $200,000 from Western Publishing who distributed their books. Yep. And then Walt himself put in $250,000. [03:06:53] S1: That's right. I did see that. Yes. And then they've got the 4 and a half million of debt guaranteed by ABC.