The Walt Disney Company was formed almost 100 years ago and in that time since it has
become an entertainment behemoth that has undoubtedly changed the face of American media
and culture.
With an impact like that you could say that the Walt Disney name is priceless.
Except there was a price, and Disney paid it.
As much as we all love Disneyland today, the idea wasn’t always widely accepted.
When Walt tried to originally purchase land for a Disney themed amusement park in the
early 1950s, Disney stockholders sued to stop the purchase and won.
They felt that Walt Disney Productions was in the film and animation industry, not the
amusement park industry.
To buy land for an amusement park would be a misuse of company money.
Walt argued that they were in the entertainment industry, and that Disneyland would be a “totally
new concept in entertainment.”
So to avoid letting shareholders block his plans again and seeking the funding he would
need for this Disneyland, Walt formed a new separate company to be named
Walt Disney Incorporated.
However fearing that it would be too confusing what with Walt Disney Productions existing,
Roy Disney and Disney’s lawyers urged him to change the name.
Instead he would use his initials and so on December 16th, 1952 he formed WED Enterprises.
Now today we largely remember WED for their work on some of the most memorable theme park
attractions in the world.
However there was also a “personal services” branch of the company, and it would be not
only the key to WED working, but a source of tension between Walt and Roy for years.
You see, Walt granted WED his own naming rights, and in turn WED licensed the Walt Disney name
to Walt Disney Productions for a 10% royalty of all merch, and up to a 15% share of every
Disney project that he chose to invest in, which happened pretty often.
Walt argued that this move would ultimately be a good one for everyone involved.
Walt would get the funding for his Disneyland project, without having to worry about Disney
Production shareholders.
He would also secure a financial future for his family after he was gone.
In return, with WED licensing Walt’s name, it would ensure that Walt Disney Productions
would be able to continue to use the name long after he died, without the mess of estate
rights and stuff like that.
Roy however was not pleased.
With the ownership of WED being split between Walt and his two daughters, Walt and his immediate
family were now about to financially benefit from the Disney name in a way Roy and his
family couldn’t.
Beyond that there was a question as to whether the move was ethical.
The formation of the company was only approved by the Walt Disney Productions board of directors,
and so none of the company’s shareholders had any say in the costly fees Disney would
now have to start paying Walt.
As most of us know, WED would go on to develop Disneyland, and despite a rocky opening day
the theme park would go on to be massive success and change the amusement park industry forever.
That success is why, in 1963, Walt Disney Productions felt it was time to revisit the
Disney/WED deal.
With the company growing there was more risk than ever that a shareholder would sue the
company over the questionable formation of WED Enterprises.
The negotiations lasted over a year and oftentimes got heated.
On February 5th, 1965 however, Walt Disney Productions would buy the design and architecture
portion of WED Enterprises.
Walt would get a ten year extension on ownership of the Disneyland Railroad and Monorail, and
he would also get to keep his naming royalty contract.
Since Walt Disney Productions now owned WED Enterprises, the remaining business dealings
would operate under a new name: Retlaw Enterprises, which was Walter spelled backwards.
WED would continue to operate at Walt Disney Productions until 1986 when it was renamed
to its current name: Walt Disney Imagineering.
The deal would remain for the following seventeen years, and in early 1982 Retlaw Enterprises,
at that point owned by Walt’s wife, Lillian, and their two daughters Diane and Sharon, would
sell Walt’s naming rights and rights to the Disneyland Railroad and Monorail to The
Walt Disney Company.
The price?
818,461 shares of Disney stock, which at the time were worth $42.6 million.
Today those shares, after three splits, would be worth over $1.1 billion.
Retlaw would actually continue to operate through the 80s, 90s and early 00’s.
While their ties to the Disney company were severed, the company had purchased numerous
television stations and pieces of real estate over the years.
In 1999 Retlaw sold it’s television stations, and in 2005 what was left of Retlaw Enterprises
was folded into the Walt Disney Family Foundation.
Retlaw is an often overlooked piece of Disney’s history, but it’s an important one.
It was the foundation upon which Disneyland was built, it both caused a rift within his
family and secured it’s financial future at the same time, and it even put a price
on the Walt Disney name.
If you liked this video and want to know more about WED and Retlaw and the feud between
Walt and Roy during those years, I highly suggest checking out Roy Disney’s biography,
“Building a Company”, by Bob Thomas.
You can find a link to it in the description below.
Thanks for watching, and I’ll see you next time.