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What Would Walt Do? - The 1984 Disney Hostile Takeover Attempt Part 1 - YouTube
Channel: Midway to Main Street
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In December of 1966 Walt Disney died.
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Just a month before he had been diagnosed
with lung cancer caused by decades of heavy smoking.
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The rapid decline between his diagnosis and
his subsequent death left much of the world stunned.
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This wasnât a slow gradual battle with cancer.
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Neither Walt Disney Productions nor the public
had time to cope with the idea of a future without Walt.
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One week he was around, and the next week
he wasnât.
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It was an abrupt and startling change that
left a looming question: What would become
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of Walt Disney Productions?
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After all, Walt was not some paper pushing
executive.
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As head of the company, he was always involved
in the creative direction that it would take,
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and it was an involvement that led Disney
down so many unique and new paths.
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Cartoon shorts with sound, then with color.
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Feature length animated films.
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A theme park.
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Animatronics.
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Even a proposed city of the future.
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Walt was never one to rest on his laurels
and it was hard to imagine what he was dreaming
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up next.
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While the world mourned the loss of Walt,
the company was forced to move forward without him.
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His older brother Roy, who had spent his career
managing the business side of Walt Disney
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Productions, postponed his retirement to take
over the company and finish the first phase
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of Waltâs final project: Disney World.
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Walt Disney: Everything in this room may change
time and time again as we move ahead, but
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the basic philosophy of what weâre planning
for Disney World is going to remain, very
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much, as it is right now.
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It was planned to ultimately feature a living
breathing city of the future called EPCOT,
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but phase one was all about an east coast
version of Disneyland and a number of hotels.
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Roy stuck to his word, and in October of 1971
Walt Disney World was opened to the public.
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The larger question of how Walt Disney Productions
would continue on without Walt still lingered,
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but at the very least his last dream was off
to a start.
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Just two months later Roy, at age 78, died
from a brain hemorrhage.
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That year would mark the last time that Walt
Disney Productions was run by a Disney.
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Regardless of how prepared they were, it was
time to answer the question of how to move
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on without Walt.
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The answer, as it turned out, would be provided
by these three men: Donn Tatum, Card Walker,
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and Ron Miller.
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With the death of Roy, Donn Tatum was given
the role of CEO.
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He had been with the company for 25 years
at that point and played a pretty crucial
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role in helping Roy build Disney World.
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Card Walker had served as COO of the company
while Roy was making Disney World a reality,
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and became president of the company when Tatum
became CEO.
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He was a real life version of the American
Dream concept.
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He started with the company by working in
the mail room over 30 years earlier and climbed
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the company ranks.
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Ron Miller was a film producer at Walt Disney
Productions who also happened to be the husband
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of Diane Disney, Waltâs daughter.
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These three, in a sense, were the keepers
of Waltâs legacy at the company.
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Tatum and Walker, especially, had decided
that the best way to take Walt Disney Productions
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into the 1970âs was by running every decision
past the question of âWhat would Walt do?â
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It was a filter that aimed to hold onto the
spirit and atmosphere of Waltâs era.
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Films produced in those years after his passing
carried the same tone as they did in the 1960âs.
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Resort prices rose as the parks grew, but
only as much as they needed to.
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Disney would never really capitalized on the resortâs
popularity.
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It seemed that the answer to âWhat would
Walt do?â was that he would keep doing the
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same exact thing he had been doing for the
last ten years.
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The problem was that such an approach wasnât
Waltâs style, poetically making the asking
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of that question one of the last things he
would actually do.
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Perhaps, on its own, that wouldnât be a
big issue.
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Sure, the company would stop evolving and
growing, but as long as the movie-going public
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and theme park guests still enjoyed it all,
theyâd remain in business.
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However, times were changing.
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The 1970âs saw an evolution in cinema.
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With the rise of auteur filmmakers like Stanley
Kubrick, Martin Scorsese, Francis Ford Coppola,
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and Stephen Speilberg, audiences grew less
interested in the studio-style films of the
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past, which is exactly what Disney specialized
in.
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Beyond that, the industry was changing.
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The birth of summer blockbusters with films
like Jaws and Star Wars brought upon a new
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era of increasingly expensive films and film marketing.
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Most studios at the time realized that Hollywood
was changing and changed along with it.
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Audiences wanted grittier and raunchier movies
and they wanted films directed by artists.
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Disney, holding true to the Walt era, refused
to dabble in R-rated films, ignored new radical
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story ideas for the safer concepts of the
past, and kept advertising budgets low, hoping
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that word of mouth would be enough to bring
in audiences.
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It wasnât.
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They still held down a corner of the market
for childrenâs films, but general audiences
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were growing less and less interested in the
safe Disney style.
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What started as a minor case of arrested development
grew more extreme with each passing year.
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Meanwhile, their theme parks were growing
while their prices werenât.
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This was great for guests, because letâs
be honest, who wants to pay more to go on vacation?
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But the result was a division of the company
that wasnât bringing in the type of revenue
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that it potentially could.
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It also wasnât helped by the two hits that
tourism took in the 1970âs due to oil issues
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overseas, and the rapidly bloating budget
of Walt Disney Worldâs second theme park,
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EPCOT Center, which would be the project born
out of Waltâs futuristic city concept.
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It was nice that Tatum and Walker were trying to stick to the ideas of Walt's era, but it was turning out
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to be bad for business.
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In 1977 Waltâs nephew, Roy E Disney, left
the company.
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He had written a letter justifying the decision,
in which he claimed that âThe creative atmosphere
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for which the Company has so long been famous
and on which it prides itself has, in my opinion,
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become stagnant.â
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While Royâs contributions to the company
werenât massive, it was seen as a blow to
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have the last remaining Disney working at
the company leave.
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As Disney moved into the 1980âs, things
didnât improve.
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Leadership had passed on from Donn Tatum to
Card Walker, but that mentality of making
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decisions based on what they thought Walt
would have wanted stuck around.
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Even when they did try something new, the
risks taken were minor.
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The 1979 film, âThe Black Holeâ, was a
clear attempt at trying to put a Disney twist
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on 1977âs Star Wars.
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Now-
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Gravity is at maximum Dan!
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My god I think itâs got us!
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-man is about to enter-
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Weâve got a break here too!
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-the black hole.
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A journey that begins where everything ends.
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They finally pushed their limits and stepped
outside of their Walt-era comfort zone by
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using the words âdamnâ and âhellâ,
bumping the film from a G rating to a PG rating.
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With a move so bold and daring, surely Disney
would finally pull out of itâs malaise.
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They were not.
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The Black Hole didnât bomb completely, but
considering it was one of their higher priced
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films of the era, it definitely didnât pay
off for them, grossing only around $10 million
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more than they spent on it.
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In 1981 NBC cancelled âWalt Disneyâs Wonderful
World of Colorâ, a series that existed in
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one form or another since the 1950âs, due
to low ratings, which forced it to move over
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to CBS.
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More experimental films like TRON were misses
for the studio, while their safer pictures
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such as the fourth Herbie the Love Bug film
were offering diminishing returns.
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Whatâs playing?
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Uh âNight of the Surferâ
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What was that we saw tonight?
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âSurfer Beach Partyâ
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And the night before last?
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Well that was âRick: Son of Surfâ and
âSinbad the Surferâ.
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Double feature!
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Canoe, do you ever get a spooky feeling that
we keep seeing the same movie over and over,
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and all they do is change the titles a little
bit?
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Yeah, itâs terrific stuff, isnât it?
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The studio had not only stopped innovating,
as Roy claimed, but their general output had
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also slowed to a crawl.
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By 1982 and â83, Walt Disney Productions
was releasing just three films a year.
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By comparison, the other major studios were
releasing upwards of ten films per year at
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the same time.
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Disney was taking fewer chances with fewer
films among more competition, so it wasnât
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so surprising that they were seeing fewer
payoffs.
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In 1983 Walker stepped down as CEO and passed
the torch to Ron Miller, who had been a producer
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for many of the films of the 1970âs.
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It was a move that actually looked like it
might bring about some change.
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Miller formed a new studio under the name
Touchstone Pictures, which would allow Disney
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to produce raunchier content that they wouldnât
dare put under the Disney name.
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Tom Hanks, National Treasure: Iâm looking
for a girl Timmy!
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Timmy: 200 bucks.
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Tom Hanks, Americaâs Dad: No no no!
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The one I came in with this afternoon. The blonde.
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Timmy: Oh. She left!
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The 1984 film, Splash, starring Daryl Hannah
and Tom Hanks grossed $69 million against
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an $8 million budget, making Touchstoneâs
first film a big hit.
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He also created The Disney Channel, a premium
pay channel that would broaden the companies
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reach to the rapidly growing world of cable
television.
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Unfortunately for Miller, it seemed to be
too little, too late.
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Disneyâs approach to facing the future without
Walt resulted in their revenues and stock
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prices stagnating while their cultural capital
held strong.
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Disney was, after all, still an American classic,
and characters like Mickey and Minnie were
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still beloved.
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They were just under the umbrella of a company
that wasnât taking full advantage of how
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much they were valued.
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That low stock price along with the perceived
high value of everything they owned made them
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the perfect targets of a hostile takeover.
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and that is when the infamous corporate raider,
Saul Steinberg, took aim at Disney.
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