“It’ll always be MGM Studios to me!” It’s a common phrase we often hear from
longtime Disney World fans who remember the days when Disney World’s third park, Disney’s
Hollywood Studios, was called Disney-MGM Studios. But why was that it’s name to begin with,
and why did it change?
Disney MGM Studios was born from EPCOT in more ways than one. As the origin story goes,
Disney was initially planning to create two new pavilions in Future World. One was going
to be about the human body, and would eventually become The Wonders of Live pavilion. The other
was going to be a Great Movie Ride pavilion, which would look like a film soundstage, have
a movie-theater facade, and focus on, as expected, the film industry.
When he saw the idea CEO Michael Eisner felt that there was enough potential in the film
pavilion concept that he thought it could act as a centerpiece for a whole third park,
which would be themed around the movies.
On top of that Eisner was just eager to build and open a third theme park. Disney had seen
with the opening of EPCOT in 1982 that average stay length for guests doubled. That meant
guests spent more money not just on park entry, but on food and hotels as well. Lastly, Disney
wanted to be prepared to take on MCA, who were looking to build a Universal Studios
in Orlando to compete with Disney. To that end, a theme park centered around Hollywood
would be the perfect foil to MCA’s plans.
There was just one problem: Disney’s film library wasn’t as nearly a well rounded
as Universal’s was. Sure, Disney was synonymous with classic animation and wholesome family
entertainment, but Universal was a Hollywood staple that had films that ranged from classics
like Frankenstein, to masterpieces like Hitchcock’s Psycho, to modern action blockbusters like
Jaws. Believe it or not, Disney was outmatched.
So they decided to turn to another studio to partner with. It would have to be a studio
with as much of a celebrated history in Hollywood as Universal. Enter MGM.
Disney worked out a contract with MGM in 1985 and it was pretty amazing for Disney. According
to “The Disney Touch” by Ron Grover, Disney essentially had free reign of MGM’s film
and name rights for the park, and all for almost nothing. The deal had Disney paying
MGM $100k a year for first three years and $250k for the fourth year. For every year
after that the fee would go up an additional $50k, capping out at a million dollars. So
what’s that mean? It means over the full 20 years of the deal, Disney would pay a total
of 11.3 million dollars to MGM. Now, to us that’s a lot of money, but to put it in
perspective, in 1989 Disney Parks and Resorts made that much money in less than two days.
Apparently MGM owner and billionaire Kirk Kerkorian was unaware of the deal with Disney
until after it was finalized, and he was not too happy to hear how much Disney was getting
for such a low price. So while the deal went through, it started on rocky ground.
In fact, before the park even opened, MGM sued Disney, claiming that Disney violated
their contract by operating a functional studio at the park donning their name. In turn Disney
filed a countersuit, stating that MGM was violating the contract by planning to open
an MGM park in Las Vegas. In 1992 a judge ruled that Disney could continue to produce
content at the theme park and use the Disney-MGM name in it. He also ruled that MGM had the
right to build a theme park in Las Vegas and use the MGM name and logo, as long as it wasn’t
themed after a movie studio like Disney’s park.
Side note: MGM Grand Adventures Theme Park went on to open in 1993, and would eventually
flop and close in 2002.
So, with bad blood between them, a couple of lawsuits, and a licensing deal that Disney
was surely not going to get lucky with again, it came as no surprise when Disney decided
not to try and renew their agreement towards the end of the 20-year deal. In August of
2007 it was announced that the park would be renamed to Disney’s Hollywood Studios
the following year in 2008, 19 years after the park opened.
Beyond that, there’s an argument to be made that Disney didn’t really need MGM anymore.
In the time since Michael Eisner had stepped in as CEO, Disney’s approach to the film
industry had been renewed and rounded out. Disney experienced a renaissance in animation,
and new subsidiary studios were producing films that Disney wouldn’t have even considered
making in the past. Sure they weren’t Hollywood classics yet, but with the park generally
leaning away from the backlot approach anyway, it didn’t seem to matter.
Today the park is undergoing even more change, and is expected to see its name replaced once
again. Luckily though, as Disney fans, we don’t need eleven million dollars to keep
calling it MGM Studios.