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Changing of the Guard | #DisneyDecade Finale

The conclusion of our serial about Disney’s second renaissance.

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TRANSCRIPT

As the 20th century drew to a close, Disney was reflecting on a roller coaster of a decade. Throughout the 90s, every division had experienced both dizzying highs and discouraging lows. The theme parks started the 90s in a rut when Disneyland Paris flopped, but regained its footing when Walt Disney World’s Animal Kingdom proved a big hit. On the other hand, the animated feature division struck gold early in the decade when Beauty and the Beast, became the first ever animated feature nominated for an Academy Award for Best Picture, but hit a major rough patch in the mid 90s when controversial powerhouse Jeffrey Katzenberg was fired, and his new studio declared war on his former employer.

By the time Tarzan was released in the summer of 1999, Michael Eisner had been the public face of the company for more than ten years. That was true when he worked in partnership with Frank Wells, when he ran the company solo after Wells’ death in 1994, and it would continue to be the case moving into the new millenium, when former ABC President Bob Iger was appointed COO. For better or worse, the buck stopped with Eisner.

Tarzan was a big hit, and the parks division was on a hot streak. As the 21st century dawned, Disney was optimistic that Eisner and Iger could continue creating magic together, riding the success they’d had throughout…the Disney Decade.
Without question, Pixar animation studio was Disney’s most lucrative partnership of the 1990s. Toy Story had been a smash hit, and A Bug’s Life was a strong follow-up. Disney looked to cash in on that success with sequels; Toy Story 2 was originally slated as a direct-to-video feature, but Pixar head John Lasseter objected, certain that the sequel was ALSO destined for the big screen. He was able to get the entire cast from the first movie to return; Wayne Knight would return to the voiceover booth after a strong performance in Tarzan, and another sitcom powerhouse, Kelsey Grammer, would voice the movie’s villain, prospector Stinky Pete. Continuing with the winning formula from the previous Pixar features, Randy Newman was brought back for the soundtrack. Disney finally came around and acknowledged that their partners at Pixar were putting together a picture worthy of a theatrical release.

Toy Story 2 would debut in November of 1999. It would become Pixar’s biggest hit yet, grossing nearly half a billion dollars. In just four years, Pixar had amassed a very impressive resume. Disney couldn’t have been happier with the return on investment from this small Silicon Valley animation studio, with whom they only had a handshake agreement. The hits kept coming with Monster’s Inc in 2001, Finding Nemo in 2003, and The Incredibles in 2004.

 

Late in 2004, it was time for contract negotiations. As he always did, Eisner played hardball. He wanted to make more sequels, and he wanted a bigger cut of Pixar’s financial succe ss. If Pixar was unable to agree to Eisner’s terms, and decided instead to leave the partnership, Disney would retain the rights to all of Pixar’s films and characters. Not able to come to terms with their partner company, Pixar moved on to look for a new distributor, and Eisner, now free of the terms of his agreement with Lasseter, started a new computer animation division called Circle 7 Animation. Pre-production began promptly on Toy Story 3, Monsters Inc. 2: Lost in Scaradise, and Finding Nemo 2.
While Studio 7 got rolling, Disney Feature Animation was trying to build on the success of Tarzan. They hoped to accomplish this, not with an innovative new idea, but by reinvigorating a very old one. 60 years earlier, for his third animated feature, Walt Disney had taken a big gamble on a bold, innovative, grandiose picture called Fantasia, which paired abstract animation with classical music scores. It was so groundbreaking that, in 1940, movie theaters had to rent “Fantasound”, specialized sound equipment specifically designed for the feature. It was an ambitious project, but ultimately not a successful one.

Walt had originally envisioned Fantasia as a feature that would constantly be re-released with new segments, as well as some old favorites. The financial failure of the film, coupled with the onset of World War Two, ensured that his dream would gather dust on the shelves in Burbank for the next six decades. Finally, in the early 90s, Walt’s nephew Roy felt confident that the studio had the solid footing it needed to revisit his uncle’s vision. Eisner loved the idea. Jeffrey Katzenberg hated it. An anthology animated feature scored to classical music had been a flop in the 40s, and there was no reason for Katzenberg to think it wouldn’t flop in the 90s, too.

Once Katzenberg was out of the picture, Fantasia 2000 would finally go into production in 1997, with an eventual price tag of more than $80 million. Honoring Walt’s original vision, it would retain Mickey’s Sorcerer’s Apprentice from the original 1940 film, with all the other pieces being original creations, from George Gershwin’s jazzy “Rhapsody in Blue” to Igor Stravinsky’s dramatic “Firebird Suite”.

The film premiered in December of 1999 at Carnegie Hall in New York City, just five blocks from the Broadway Theater, where Fantasia premiered 59 years earlier. The movie went on a five city tour that included London, Paris, Tokyo, and then back to Los Angeles. An IMAX release would follow in April 2000, and a wide release in June.

Fantasia 2000 grossed a tremendously disappointing $90 million at the box office. Critics liked it, but it never really hit the mark with audiences. Tarzan had ended the 90s on a energetic high note, a note that Fantasia 2000 failed to successfully build on. Jeffrey Katzenberg, despite how antagonistic he may have been, was right. The Fantasia formula didn’t put mo ney in the bank for Michael Eisner, any more than it had for Walt Disney.

But Disney Feature Animation was still a profitable business. They would have another hit film with 2000’s Dinosaur, their first attempt at their own CGI movie. It grossed $349 million and proved that Disney could be successful in CGI animation in their own right, independent of Pixar. But, Disney weren’t the only ones having success in CGI animation in the early 2000s. Jeffrey Katzenberg, whose Dreamworks Studios had made their mark in the late 90s with Antz and The Prince of Egypt, would claim their first major victory of the animation war in 2001 with the release of Shrek. Veteran comedian Mike Meyers, taking over after the death of Saturday Night Live funnyman Chris Farley, would bring a Robin Williams-caliber performance to the title character in a fairy tale spoof that had both critics and audiences in stitches.

Shrek would go on to gross $484 million at the box office, spawn a wildly successful franchise of sequels, TV specials, and merchandise, and win the first ever Academy Award for Best Animated Feature. Dreamworks Animation would continue its strong box office performances throughout the 2000s with hits like Kung Fu Panda and Madagascar.

By contrast, the Disney animation studio would continue losing momentum. Movies like Atlantis: The Lost Empire, The Emperor’s New Groove, Treasure Planet, and Home on the Range came with the usual hefty price tags, but left audiences and critics feeling short changed, barely turning a profit. Even 2003’s Lilo and Stitch grossed only $273 million, just $20 million more than their most disappointing film of the 90s, Hercules. Compare that to the breakthrough success of Shrek, and it was clear that Disney was beginning to lose more and more ground, to Jeffrey Katzenberg and Dreamworks.

The faltering Disney Feature Animation division caused the board of directors to begin looking critically at some of the company’s other financial interests. During the Disney Decade, the Disney umbrella had grown to include a wide variety of entertainment projects, and even sports ventures. But in order to cut costs, Disney opted to abandon some of those interests throughout the 2000s. D espite leading the Anaheim Angels to their first ever world series championship in 2002, Disney opted to sell the team to billionaire advertising executive Arte Moreno in 2003 for $180 million. The Ducks were sold as well, as were several subsidiaries of ABC, Jumbo Pictures, and DiC Entertainment.

Probably the most noteworthy parting was with The Disney Store. These stores, which throughout the 90s and early 2000s could be found in malls around the world, had been a profitable venture, but they were logistically difficult to manage. They were downsized by 2004, with operations being licensed out to The Oriental Land Company in Japan, and The Children’s Place in North America. This made the stores easier to manage, but much less profitable for Disney.

Over in the theme park division, Imagineers had been brainstorming ideas for expansions to the Disneyland property since the early 1990s. Original concepts for Disneyland’s expansion called for a second gate where the parking lot stood, while a new shopping district would expand out to fill the void between the park and the Disneyland Hotel. Plans were drawn up for a west coast version of Epcot called “Westcot”. Westcot’s signature symbol was to be the 300 foot tall Spacestation Earth. A massive gold sphere surrounded by glass. The project would come with a hefty $3 billion price tag, but the failure of Disneyland Paris, along with interference from the city of Anaheim, would bring the project to a grinding halt.

Unlike Walt Disney World, which has the auth ority to make it’s own zoning and city planning decisions due to its size and jurisdiction, Disneyland is at the mercy of Anaheim city government, and has to cooperate with local residents and businesses. Sleeping Beauty Castle, topping out at a mere 77 feet, doesn’t interfere with the sightlines of locals. A 300 foot geodesic sphere would be another matter altogether. Spacestation Earth was labeled a reflective eyesore. In deference to their residents, the city of Anaheim wouldn’t help fund the new park, and with Disneyland Paris taking huge losses, the Disney Company couldn’t do it on their own. Westcot was dead.

Michael  Eisner held a three day retreat in 1995 to completely redesign Disneyland’s second theme park. Com pany executives left that retreat with a vision: Walt Disney had chosen to create his dream empire in the Golden State. The new park would be a celebration of all things Californian. But following the formula that had been successful at Epcot, Disney’s California Adventure would also be more adult-oriented, with experiences focused on shopping and dining, instead of rides and animatronics. The park would pay tribute to California’s signature regions: Hollywood, San Francisco, Napa Valley, and the Redwood Forest. Eisner’s idea was that, by re-creating the sights, sounds, and tastes of California, domestic and international tourists could get the entire California experience in one spot, keeping them on Disney property for longer.

Disney’s California Adventure would open in February of 2001. With an estimated capacity of 33,000 guests, Disney expected to have to turn guests away at the gate. After the runaway success of Disney’s Animal Kingdom, the company felt certain that this was a surefire hit.

But, the park’s budget was drastically cut during development, from $3 billion to $600 million, and it showed. Heavy on restaurants and shops, and light on shows and attractions, California Adventure was definitely more adult, but that meant it lacked much of Disneyland’s charm and energy. With the classic park just on the other side of the Esplanade, many guests to the Anaheim property chose to make a quick visit to California Adventure, or skip it altogether. By the end of 2001, more than 12 million guests visited Disneyland. California Adventure hosted only 5 million. Most weekdays saw crowds of only 5,000 people. High-end restaurateurs like Wolfgang Puck and Robert Mondavi, who had been thrilled to partner with Disney, soon got cold feet and pulled out of the park after months of seeing empty dining rooms.

 

Anxious to boost crowds, Disney’s Main Street Electrical Parade was moved to California Adventure, and new attractions like a kid’s area based around A Bug’s Life and an attraction based on the ABC smash hit “Who Wants to be a Millionaire” were built. Nothing worked. Disney had to act fast to avoid a “Disneyland Paris” sized catastrophe.

Michael Eisner had been under the microscope since his ill-fated employment of Michael Ovitz. He lost Pixar, a solid performer in the field of CGI animation, who would form distribution partnerships with other studios, including their main competitor, Dreamworks. Disney Feature Animation would still put out new movies every year, but most of them weren’t critical or commercial hits. Between the unimpressive box office performances and their underwhelming Disneyland expansion, Disney’s board of directors wasn’t happy with Michael Eisner.

 

Roy E. Disney, who had recommended Eisner for the job back in the early 1980s, was possibly now his most vocal critic. In 2003, Roy stepped down as chairman of Feature Animation and vice-chairman of the board. He felt that the Walt Disney company, which bore his uncle’s name, had lost its way, and he feared that micromanagement from board members and executives would lead to the company’s downfall, and more importantly, that Eisner was no longer fit to lead the Walt Disney Company into the future.

Bob Iger, who had quietly worked alongside Eisner as COO, was favored by the board to replace him. At a shareholders meeting in 2004, Eisner was not re-elected to the board of directors, and the group decided that Iger would succeed Eisner to the position of CEO. Eisner ultimately conceded and per the wishes of Disney’s board of directors and shareholders, would resign within a year, to be succeeded by Iger.

Despite stipulations in his contract that Eisner would maintain an office on the company lot and have use of Disney’s travel services, he elected to do neither. He made the choice, after 21 years of service as the public face of the Walt Disney Company, to completely sever ties with his former employer and disappear, at least for a time, from the public eye.

Bob Iger spent his first few years making bold decisions to redirect the Walt Disney Company. He would eventually purchase Pixar outright, and bring John Lasseter into the company as the new head of Disney Feature Animation, bringing Pixar’s magic to every branch of the company. He would refocus California Adventure with a $1.1 billion makeover, and would work to move the theme park division worldwide to even greater success, but at a slower, steadier, more conservative pace.

By the mid-2000s, Disney’s trajectory had changed from a decade earlier. It was evolving and f inding a new path. Bob Iger was making bold new decisions to turn Disney into the company that would soon release Frozen, the highest grossing animated film of all time at over $1.2 billion, fulfilling the studio’s 20 year goal of surpassing the Lion King.

They would also continue their business model of acquiring valuable Intellectual Properties to bring more diversity to their brand, and a wider slate of creative opportunities for new generations of filmmakers.

The architects of Disney’s Renaissance aspired to honor Walt Disney’s legacy through the stories they told, and the business they ran. When Walt released Snow White and the Seven Dwarfs in 1937, his goal was to tell an emotional story with stunning visuals and a great soundtrack. He wanted the world to know that animated pictures could be something more than just goofy cartoons.

His success made the Walt Disney Company a permanent fixture in the world of entertainment. Michael Eisner, Frank Wells, Bob Iger, Howard Ashman, Alan Menken, Stephen Schwartz, and even Jeffrey Katzenberg, along with countless others, entered the Disney Decade with the same goals as Walt.

But, it wasn’t an easy road. Tragic unexpected deaths, cutthroat competition, and the strain of creative passion turned the Disney Decade into a tumultuous era. Both the parks and the film division faced a steep learning curve, but Disney wouldn’t be the leading company in entertainment today if not for the visionaries who created, fought through, and left their mark on…The Disney Decade.

 

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