Where this was said
Hollywood, The Alice Comedies & Oswald's Loss (1923-1928)
At 38:02 · chapter starts 23:05
Walt rolls up to Hollywood in summer 1923 with nothing, even faking Universal Pictures business cards to sneak onto the lot and study filmmaking. After striking out at every major studio, he returns to animation — his one real skill. He sends a test reel of a hybrid live-action/cartoon short called Alice's Wonderland to New York distributor Margaret Winkler, who commissions 12 more 'Alice Comedies' for $1,500–$1,800 each. Ben and David describe seeing this actual contract in the Disney Archives: signed October 16, 1923, it is the founding document of the Walt Disney Company. Roy literally walks out of his tuberculosis ward to go into business. The Disney Brothers Cartoon Studio quickly hires 25 staff and moves to Hyperion Avenue, renaming itself the Walt Disney Studio. When Oswald the Lucky Rabbit — their second series — becomes a hit, distributor Charles Mintz (who had taken over Winkler's business) senses an opportunity: he secretly signs away almost all of Walt's animators and then in early 1928 offers Walt a pay cut down to cost, knowing Walt has no leverage without animators or IP rights. Walt is left with nothing — no employees, no IP, no contracts. The enterprise value of Walt Disney Studios is effectively zero. [1] — David Rosenthal "When distributor Charles Mintz stole Oswald the Lucky Rabbit from Walt Disney in 1928 — poaching nearly all his animators and leaving the s…" 35:40 It is, as Ben and David note, the catastrophe from which everything else about Disney's business philosophy flows.
When distributor Charles Mintz stole Oswald the Lucky Rabbit from Walt Disney in 1928 — poaching nearly all his animators and leaving the studio worth nothing — Walt learned the single most important lesson of his career: you must own your IP. Every piece of Disney's extraordinary enterprise value traces back to this one catastrophic moment.
