The Walt Disney Company

Ben Gilbert and David Rosenthal open the Spring 2026 season with Part 1 of The Walt Disney Company, covering "Walt's Era." Ben calls it a "glaring omission" that in 11 years of Acquired they had never told Walt's story. He describes Disney as an entertainment company unlike the rest: more than 100 years old and part of most listeners' childhoods, and for parents, often part of their parenting too. David points out that Disney already runs through the show's history. The very first episode was Pixar, and they have since covered Lucasfilm, Marvel and ESPN. Ben jokes that those older episodes might need to be "decanonized" and redone.

Since plenty of biographies and documentaries already analyze Walt's psyche, the hosts say they will focus on the business. Their question is what Walt's "merry band" did from the 1920s onward that let them succeed so unusually well in Hollywood. Ben argues that Disney's profits today put it in a different league from Paramount, Universal, Warner Brothers and the other classic studios.

The business of feature film production is a mediocre one, especially by the standards of what we study on this show here with Acquired, except for Disney.

Ben says he is a huge Disney fan. He grew up on Aladdin and The Lion King, saw Beauty and the Beast as his first movie in theaters, and had Toy Story posters on his wall. Even so, he knew almost nothing about the company's early history, and David says the same. Ben lists things that surprised him. The company started in Kansas City. A character meant to come before Mickey Mouse was lost in a contract dispute. And films like Snow White, Pinocchio and Bambi date from the 1930s and '40s, with Snow White produced before World War II and before most people had televisions at home.

Ben also frames the story as a technology story, which fits Acquired's roots. He points to innovations that often bet the whole company: synchronized sound, the idea of a feature-length animated movie, the multiplane camera, and a giant theme park in Anaheim when nothing like it existed. He adds that Disney invented the flywheel business model that so many entrepreneurs try to copy. The episode comes with a companion PDF that includes Acquired's own version of the Disney flywheel. The hosts joke that the PDF is their own flywheel, built from IP they keep finding new uses for.

David names his main source for facts and Walt quotes: Neal Gabler's biography Walt Disney: The Triumph of the American Imagination. He adds, with an "I think," that Gabler was the only author with full access to the Disney archives. Ben includes the standard disclaimer: the show is not investment advice, the hosts may hold investments in companies they discuss, and the show is for informational and entertainment purposes only.

Walter Elias Disney was born in Chicago in December 1901. Family lore says the Disneys descend from the D'Isignys of Normandy, who came to England with William the Conqueror in 1066. David notes the claim is "unverifiable," and Ben agrees it is lost to history.

David describes Walt's father, Elias, as a frustrated entrepreneur. At various points he was a carpenter, landlord, farmer, newspaper route owner, and eventually a failed investor in a jelly factory. The family's success story was Elias's younger brother Robert, a real estate speculator among other things. Robert's investments in Chicago and the Midwest are what drew Elias to Chicago to seek his fortune.

When Walt was 4, Elias moved the family to Marceline, Missouri, where Robert had just bought another tract of land. Ben says the move was partly about leaving a dangerous city to raise the kids in a small town. He believes Marceline itself was created as a division point for the Santa Fe Railroad, possibly on the route between Chicago and Kansas City, and David agrees. Robert was again betting that the town would grow.

David describes Marceline as "basically a Disney movie": orchards, ponds, animals, farmhouses, and a railroad-built town with a Main Street. He says that is a nod to the later Main Street USA. Lillian Disney, Walt's future wife, would say Marceline was the most important part of Walt's life, even though he lived much longer in Chicago and Kansas City.

On visits to check on the family's real estate, Uncle Robert's wife, Aunt Maggie, brought Walt gifts. One year, when he was probably 6 or 7, she gave him a Big Chief drawing tablet and pencil set, and he started sketching everything he could see. As the legend goes, a retired neighbor asked him to draw his favorite horse. The neighbor liked the drawing so much that he paid Walt a nickel and hung it in a frame in his house.

David is careful about whether the story is literally true. He says that whatever the exact facts, there is no doubt that in Marceline a link formed in young Walt's mind between "art and commerce." David argues that this pairing would drive Walt's life, the studio and its movies, and would "change America."

Ben pushes back on the idyllic picture. Farm life in Marceline was very hard, all the kids had to work, and there was no "magical economic prosperity." He suggests that remembering a hard childhood as idyllic foreshadows the later "Disney-ification of things." David connects this to Walt's age. The family lived there only from when he was about 4 until 8 or 9, before he was really put to work, so he mostly got to enjoy it. In reality, the family could not make a living there, and David says Elias "adds farming to his list of entrepreneurial failures."

When Walt was 9, the family moved to Kansas City. Elias bought a delivery route for the Kansas City Star and put the family to work delivering papers. Ben notes how many Acquired protagonists started as newspaper boys. David compares Walt to Jack Bogle of Vanguard, who also delivered papers as a boy, got up at 4 a.m., and fell asleep at school. David calls this a big reversal from Marceline.

Walt kept drawing and kept earning from it. In Kansas City he drew frames for a local barber shop, which paid him a nickel or a free haircut for each one. That was his spending money growing up.

When Walt reached high school, Elias moved the family back to Chicago for the jelly factory, which also failed. Walt became the cartoonist for his high school newspaper. He soon left school to join the Red Cross and was sent to France as an ambulance driver during World War I. David notes that Walt picked up a chain-smoking habit there that he kept for the rest of his life and that eventually killed him "way too young."

The war ended soon after Walt reached France. In fall 1919 he came back to Kansas City, where his older brother Roy lived. The hosts disagree slightly on the age gap, with David at first saying 8 years and Ben suggesting 9. Walt planned to become a professional cartoonist. Through Roy, he joined an advertising art shop that needed apprentices to draw flyers for the holiday rush. He worked there for 6 weeks over Christmas and was then laid off.

David says Walt got two things out of the job. The first was a credential: he could now call himself a professional artist. Ben jokes that all it takes is getting paid once. The second was a co-founder, a fellow apprentice named Ub Iwerks. Ben calls Ub "the Steve Wozniak of Disney," and David agrees that Walt is "like the original Steve Jobs." Ben adds a caveat to the comparison. Walt was more hands-on than Jobs: he was also an animator (Ub was just a better one), a camera operator and a builder, working directly in the core technology and craft of his business.

After both were laid off, Walt suggested they start their own studio instead of looking for new jobs. They formed Iwerks Disney Commercial Artists Incorporated. According to David, the names were supposedly ordered that way so it would not sound like an optometrist, "Disney Eyeworks." Ben notes that in Walt Disney's first business, his name was not first on the door. David says Walt was still the driving force and went out pitching clients around Kansas City.

One client they pitched was the Kansas City Slide Company. David describes it as having become the country's largest producer of advertising slides and short commercials shown in movie theaters before feature films. It had so much work, as films and theaters spread across the country, that it hired Walt and Ub full-time, ending their first venture quickly. The company wanted them for a relatively new business line: animated commercials shown before films. Both fell in love with animation. David calls it more than art. It was technology, requiring cameras, film and other new inventions.

Ben notes that animation then was used mainly in advertising, with no thriving entertainment industry of its own yet. David adds that the entertainment shorts and cartoons that did exist were all based in New York, not Kansas City. He explains that the whole industry was barely 20 years old, because animation could not be produced at any scale until film cameras and projectors were widely available commercially.

David argues that cartoons worked in advertising mainly because they were a novelty, "almost a gimmick." They grabbed attention even with "no color, no sound, no story," just "a series of visual novelties." Ben agrees that audiences had never seen anything like them before.

For Walt, who was always thinking about how to make a career of it, that newness was the attraction. David says Walt figured he could quickly become as good as or better than anyone in the world in such a young field. Becoming the world's best commercial artist was a much longer shot. Ben puts it more bluntly: oil painting is thousands of years old, while animation was a "small pool."

Working nights and weekends on the Slide Company's equipment and cameras, Walt made a few short cartoons entirely by himself and branded them "Laugh-o-grams." He sold them on the side to a local theater chain to run before features, and they became a hit in Kansas City. Ben compares the name to Rolex's "Turn-O-Graph." David calls it hokey and clarifies that Laugh-o-grams did not become Disney, though its spirit did.

The hosts stress how primitive the medium was: no sound, no voices, no color, and barely any backgrounds. David argues that without those things, a cartoon could not tell a story or build a real sense of character. Audiences could not form a relationship with characters the way they later would with Mickey, Donald, Goofy or Minnie. Ben adds that the only emotion available was humor, and the only real way to deliver it was slapstick. Cartoons were built from exaggerated "gags" that did not have to fit anything else a character had done, each starting and ending within a few minutes or even seconds.

David notes that this was not so different from film in general at the time. Charlie Chaplin, the biggest star of the silent era, mostly made movies of exactly that kind. Ben sums it up: you could recap most scenes with "Oh, he fell down!"

In May 1922, at 20, Walt decided the Laugh-o-grams were successful enough to go out on his own. He founded Laugh-o-gram Films, Inc. and persuaded Ub Iwerks and a few other Slide Company animators to join him. David calls it "another failure." Despite local popularity, by 1922–1923 cartoons across the country were losing their appeal as "the novelty is wearing off."

David explains the context. With no television and not much radio yet, the movie theater was where people went for both news and entertainment. Ben gives a statistic: in the 1920s the average American went to the theater more than 40 times a year, compared with about twice a year today. David says the only alternatives were live shows like ballet or opera, or sporting events like baseball. Ben describes a theater visit as a "bundle": the feature, plus newsreels, cartoons with gags and other filler.

David cites a survey of theater managers from around 1922 or 1923. It asked which filler options audiences liked around the feature, such as newsreels, live comedies, short serials and cartoons. Only 23% said they showed cartoons and that audiences liked them, by far the lowest of any filler option. Laugh-o-grams could not find a market outside Kansas City, and in 1923 the company went bankrupt and shut down.

David calls Walt a "1.5 times disgraced entrepreneur," and Ben says he was following in his father's footsteps. Ben adds that Walt had raised money from local friends and family and lost the loan capital they had given him. Uncle Robert's advice was to skip town. David calls this sound advice for the era, because reputations did not travel. Ben explains that your credit was only the credit you had with the people in your own town.

Robert and Roy had both moved to Los Angeles. In summer 1923, at 21, Walt took the Santa Fe train to L.A. with almost nothing and stayed with Robert. David is struck that Walt first planned to get a directing job at a Hollywood studio. Ben explains that Walt had given up on animation, thinking he was too late after seeing work from the New York cartooning scene. David calls this "silly and wrong," and says the hubris of expecting to become the next D.W. Griffith with no directing experience "is Walt for you."

Ben tells a story David had not heard. With no job and no money, Walt had fake business cards printed saying he was Universal's Kansas City representative and used them to get past the receptionist onto the Universal lot. From what Ben could tell, he spent at least a day there learning what he could about film production. He later tried to come back and ask for a job, but ran out of money without getting hired.

After being rejected by all the major studios, Walt went back to animation. David quotes him:

When things began to look hopeless, I got my cartoon things out again.

By then, David says, nearly the only popular cartoon left in the industry was Felix the Cat. Felix was created by Pat Sullivan in New York and distributed by Margaret Winkler, also in New York, whom David calls a pioneer.

Walt's one remaining asset from Laugh-o-gram was a reel he and Ub had made just before leaving Kansas City: Alice's Wonderland. It was a hybrid short in which a real girl interacts on screen with cartoons drawn over the film. Ben calls the technique pioneering, since other animators were making only cartoons. David notes a business advantage too: it was cheaper than full animation because only the characters had to be animated, not the backgrounds.

Ben explains why, which he finds counterintuitive. Live-action is much faster and cheaper than animation, because when you point a camera at the world you get everything in the frame "for free." Animation requires drawing everything from scratch, like the trees and the grass, frame by frame.

Walt sent the reel to Winkler. She liked it and commissioned 12 more Alice Comedies at roughly $1,500 to $1,800 each. The hosts say they saw this contract during a few days in the Disney corporate archives in Burbank. Ben reads from his photo: an agreement dated the 16th day of October 1923, with Walt Disney of 4406 Kingswell Avenue, Hollywood, California, for 12 negatives of a series, with "Alice Comedies" in all caps. Ben calls it "effectively the contract that puts Disney in business." He notes that Walt's signature on it is much less flowery than the one in today's logo, which Walt developed over time.

Ben recounts that when the deal came through, Walt ran to Roy, who was in a hospital ward with tuberculosis. Ben says the $1,500 to $1,800 per film was a lot of money at the time. In his telling, Roy talked it through, said "okay, let's get right to work," and left the hospital. In October 1923 the brothers founded the Disney Brothers Cartoon Studio as a true partnership: Roy ran the business and finances, and Walt ran the creative side.

Walt wrote to Ub Iwerks and other animators in Kansas City, saying they finally had a deal and would build "a real company and a real animation studio." They came. Ben notes that the company we know as Disney today began as the Disney Brothers Cartoon Studio and "a whole bunch of Kansas City guys" who moved west to join Walt.

David calls the Alice Comedies a moderate success. He attributes this, with an "I think," to the novelty of combining cartoons with live action, which kept audiences entertained for a few years. The studio made 57 Alice Comedies from 1923 to 1927.

In 1927, Charles Mintz, Winkler's relatively new husband, had taken over as head of her business and was no longer getting along with Felix creator Pat Sullivan. Ben calls this a big opportunity. David describes how Mintz quietly arranged with Universal Pictures, which David calls a big New York film distributor, to create a new character to rival Felix. All the while, Mintz and Winkler were still distributing Felix. Ben compares it to building your own chips while still buying Nvidia.

Mintz then asked Walt for a new series and character. In David's paraphrase, he wanted something "like Felix, but not Felix. Like maybe not a cat." Ben explains the brief: plausibly different from Felix, but with everything that made Felix successful. This excerpt ends there. It connects to Ben's earlier teaser about a pre-Mickey character lost in a contract dispute, but the dispute itself is not covered here.

David describes how Walt Disney and Ub Iwerks went looking for a character that echoed the recognizable traits of a cat (white fur, a tail, big ears, easy to draw in black and white) and arrived not at Mickey Mouse but at Oswald the Lucky Rabbit. Backed by Universal's distribution, Oswald became a hit for Universal, for Winkler and Mintz, and for The Disney Brothers Cartoon Studio.

Ben argues the success was predictable: the brief was to take something already working and apply Walt and Ub's style, and they were "emotional animators." He cites Bob Thomas's book Walt Disney: An American Original to describe what that style changed.

before Disney, cartoons were slapdash, two-dimensional characters in bizarre movement before elemental backgrounds. Disney insisted on rounded, humanized figures. He wanted the humor to come out of the character, not the outrageous action.

David credits the partnership rather than either man alone: in his view Iwerks had "immense artistic talent as an animator," while Walt had taste, recognizing that talent and knowing when and where to apply it.

On the strength of Oswald, the studio grew from a ragtag Kansas City group into what David calls an operation "bordering on major animation studio," hiring about 25 employees and churning out Oswald cartoons. It moved into a studio building on Hyperion Avenue in Los Angeles's Silver Lake neighborhood.

With the move, the company was renamed the Walt Disney Studio, and the hosts note it is unclear which brother instigated the change. One story holds that it was Roy's idea, reasoning that the studio needed to build a brand and that Walt, as the frontman, salesman and creative visionary, should be the name on it. The other says Walt had long dreamed of seeing his name on a neon sign; David thinks the sign was in fact built, and Ben says the Hyperion studio carried it for a long time before the building was knocked down, adding that he thinks the site is now a strip mall or something similar.

As the studio scaled, Walt shifted from doing much of the animation and camera work himself to overseeing the operation, which David argues was necessary with 25 artists, creatives and camera staff who needed someone with overall vision and taste. Ben adds an ownership detail: at this point the company that would become Walt Disney Productions and later the Walt Disney Company was 60% owned by Walt and his wife and 40% by Roy and his wife.

Charles Mintz, Winkler's husband in New York, who had already shown his methods in dealings involving Felix the Cat and Pat Sullivan, concluded that Walt had become superfluous and that only the animators mattered. Crucially, the studio did not own the Oswald IP; Universal did, even though the Disney studio behaved as if Oswald were its own creation. David says he does not think Walt or Roy "really read the fine print on the contracts."

In early 1928, Walt and his wife Lillian, herself an early employee in the Ink and Paint Department, travelled to New York, where Walt asked Mintz for a higher fee per Oswald short. In David's retelling, Mintz instead questioned what Walt was even doing anymore and offered to keep the studio involved only at about $500 less per cartoon. Ben's understanding is that this effectively wiped out the margin, leaving Disney paid at cost. David believes Mintz had calculated that he was indifferent to Walt's answer, because if Walt refused he would simply take the animators and make the cartoons himself.

Mintz had in fact already secured the animators before the meeting. Ben thinks Mintz had signed nearly all of them except Ub Iwerks, approaching each individually through "an act of subterfuge." David says only Ub and perhaps 2 or 3 others stayed loyal. With no employment contracts and no rights to the character, Walt had no leverage.

He's got nothing. He's got no customer contract. He's got no employees. He's got no intellectual properties.

Ben concludes the enterprise value of the studio was effectively zero. David calls it an "extremely bitter lesson" that Walt and Roy never forgot, and argues that everything in Disney's history and all the enterprise value it later built traces back to this moment; Ben frames it as "a hard reaction to this lesson."

The humiliation went further. According to David, Mintz forced the studio to finish the remaining cartoons on the Oswald contract and keep paying the animators who were about to defect. Ben's verdict: "Just brutal."

Both hosts arrive with the same trivia. Disney recovered the Oswald rights in 2006, in what Ben describes as one of Bob Iger's first acts as CEO. By then Disney owned ABC, which owned ESPN, while Oswald sat with Universal, which Ben describes as then owned by NBC and now by Comcast.

The deal, as Ben recounts it, effectively traded an ABC/ESPN Monday Night Football asset, commentator Al Michaels, to NBC in exchange for the IP rights to Oswald. David compares it to "a sports team trade."

David says that, as legend has it, Walt sketched a new character on the long train ride back from New York, one that would reverse the company's fortunes and arguably become one of, if not the most, recognized figures in history. After this setup the episode breaks for a sponsor segment from J.P. Morgan about BILL, then returns to the story.