Roy Disney Considered Buying Disney & Selling the Parks
Did you know that at one point in 1984, Roy E. Disney was considering a takeover of the Disney company that included selling off some of the theme parks? In early 1984 Disney was facing a potential hostile takeover by by a corporate raider, and of the many options considered by both Disney and Roy, one of them included Roy buying the company himself and selling parts of it off.
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This is Saul P. Steinberg. He was a corporate raider. What he and many other raiders in the 1980s did was sell junk bonds from their companies. They were essentially loans that had a high risk of defaulting, but a high interest rate. They’d use these junk bonds to raise money in the short term, and then use that money to buyout other companies. Then they would use the profits of the newly owned company to pay off those loans.
Disney at that time made for a really appealing target. It was a company with a lot of value in its properties and assets, including three theme parks and a beloved film library that spanned nearly 50 years.
When Disney learned that Steinberg’s company, Reliance Insurance, was buying up their stock, they had to act fast and figure out what to do. While they didn’t know what would work and what would backfire, the options Disney had were numerous. One option included offering to buy back the Disney stock from Steinberg at a higher price. This practice was called greenmail, and it was less than ideal because paying greenmail usually meant another raider would come right around the corner to do the same thing.
Another option would be to, as odd as it sounds, buy another company. Spending a considerable amount of money on an acquisition of their own would not only saddle them with debt, but it would dilute the value of Disney’s stock as well. In general, it would make Disney a less appealing target. The problem there was… well, it’d saddle them with debt and dilute their stock.
There was a third option, and that was to take the public company private again by buying it. Disney management consider this as well, but as they did, someone else was considering it.
Roy E Disney at this point was no longer a part of the Disney Company. He had resigned from his position years prior. Roy felt that the company wasn’t evolving creatively anymore, and instead opted to just sit on the Disney board. Later, in March of 1984 Roy would resign from that position as well.
Shamrock hired an independent company to conduct a study on Disney to find out how much it was worth, and how much it would cost to buy. What they found was that it would cost Roy over $2 billion to buy Walt Disney Productions. He would essentially have to borrow the money from outside investors, use it to buy the company, and then turn around and sell parts of the company to pay back that loan.
To him it was a simple choice. If he had to sell off a part of the company it would be the theme parks. Growing up with his Uncle Walt’s movies and working in animation and film himself, he saw Disney as a film studio first and foremost. It wasn’t ideal that he would have to sell part of the company, but he felt all things considered, he’d rather save part of the company than none of it. So he went ahead and started to have investors lined up for the massive loan he would need to take over Disney.
With all of the planning coming together, Roy would later learn that he would need to put $200 million of his own money up to buy Walt Disney Productions and he would have to sell one of the two resorts to pay back the loan of over $2 billion. In theory he was ready to carve out a piece of the company to save the rest, but when the time came he couldn’t bring himself to do it. He couldn’t cannibalize what his family worked so hard to build. Ultimately Shamrock Holdings would pass on the decision.
So what did happen? Well long story short, Disney’s board ultimately decided to pay greenmail to Steinberg in return for the 4.2 million shares he owned. The greenmail would cost Disney over $325 million and it was approved under the condition that Disney would make moves to improve their overall value to prevent other raiders from trying to extort greenmail from them later down the line.
Roy was asked back onto the board of directors and helped kick off a drastic shift in leadership. They would also back his fight to have CEO Ron Miller ousted and replaced with new management. Under his suggestion and their support, the board approved the hiring of Frank Wells as President of the company and Michael Eisner as Chairman and CEO.
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Also just wanted to add two more points that I'm now realizing I left out of the video: Disney would eventually sell off Arvida in 1987, so that extra land is no longer Disney's. Also I couldn't find any details on which parks Roy would have to sell in the deal. It's possible they never got that far into planning. My best guess would be Walt Disney World though since that'd be the resort most likely to get him the $2 billion he would need to pay back the loans, due to all of the (then) undeveloped land that could be sold off.
@thefriendlygamer2221
6 жыл бұрын
Rob Plays this is not true that's enough
@chainsawbarbarian
6 жыл бұрын
Do a vid on Walt and Freemasonry please. Club 33, indeed! No conspiracy nonsense... just truth
@sonicman1282
6 жыл бұрын
Could be worst, the parks could be brought by either six flags or cedar fair
Roy, Wells, and Eisner were the dreamteam when all 3 were working together
@partyharry7585
6 жыл бұрын
You can say there were the The Three Musketeers
@RachelDeRosier010894
5 жыл бұрын
@@partyharry7585 The Three Mouseketeers
Roy Disney world 😂😂
@MrUABama
6 жыл бұрын
Roy Wally World
@MattMcIrvin
6 жыл бұрын
Six Flags Disney World!
@tskingdom5298
6 жыл бұрын
It is considered Roy's park lol it would make sense
@kellyweingart3692
5 жыл бұрын
Michael Eisner World 😂
@kellyweingart3692
5 жыл бұрын
Bob Iger World
I was 17 years old when this was happening. I remember it very well. The Arvida "deal" is also where the "urban legend" of a Disney Park in Texas came from. To this day people STILL think they'll be a DL in the Lone Star State. Also Angus Wynne Jr. approached Walt himself as to building a 2nd themed park in Texas around 1958-59. Walt said "No" In 1961 Six Flags Over Texas opened.
@justimagine2403
6 жыл бұрын
No the new rumor I am just starting right now is: Disney Heartland Built on the outskirts of Des Moines Iowa.
@TitoTimTravels
6 жыл бұрын
North TX would actually be a good location. Land is fair priced, and weather is mostly moderate (summer is a bit hot). Being centrally located it would be easy for people in any part of the country to get to. I doubt they really need a 3rd US location... but Texas would make good sense.
@suckmyass7368
5 жыл бұрын
@@TitoTimTravels Disneyland and Disney World are enough. We don't a third resort in the US.
Great video, but the information just made me sick and disgusted. Greed destroys creativity.
Roy Disney: A true, honorable gentleman indeed!
@markjackson6431
9 ай бұрын
“honorable”? yeah okay…..sure
As an ex-Imagineer, I worked on some projects that Roy had involvement with in the 90's. He was called in as a management supporter, but it was clear he did not have a gift for theme park project development, and was more a political animal, even if just on the periphery. The idea of his acquisition of WDC would have been scary, as most of the investors he could attract would have added so many strings to the loan. The Florida park would have been safe, but agree that WDL would have been vulnerable if hived off. My feeling that Bush Gardens or Six Flags would have been the types to snap up the offer. On a side note Rob, have you considered a piece on the possibilities of utilising the land in Texas WDC acquired? Not so much on the deal, as I think that has been touched on, but on how it could be brought into the operation. Also hearing your speculation on the new resort project at EuroDisney would be fun. Thanks for the great videos.
I love learning about Disney Company and the sacrifices made to get to where it is, thank you Rob.
What a horrifying thought, Rob!
Great video Rob. I can't tell how many times I've heard about this story without knowing anything, well, about this story.
Very interesting video Rob. I enjoyed it. I love learning about the history of Disney.
The timing of this video, when Disney has just confirmed to buy a huge portion of Fox, is just so perfect.
What a fabulous look at history, Rob. Thanks for this.
Wow! Excellent video Rob! Learning something new each day!!
R.I.P Roy Disney 1930-2009
Another fascinating topic today Rob! Who knew learning about theme park history could offer an enlightening discussion on 80's business tactics. This could be a movie.. instead of "WallStreet" let's call it "Main Street USA" starring Chris Pratt as Roy E Disney? LOL
@MidwaytoMainStreet
6 жыл бұрын
If Disney War has taught me one thing, it's that the running of the company could definitely make a movie!
The historical information you provide is most interesting. I remember when Walt Disney was attempting to create a Disney-style ski resort at a place called Mineral King in the mountains of California. Though I wish he had suceeded, l'd like to hear your explanation of why the project failed. If I recall correctly, I believe it was due to the protestations of the Sierra Club and environmentalists who thought Disney would introduce traffic and congestion into a remote mountain wilderness area. Let's hear your well-researched version of the story.
Really interesting video rob. It would be very strange to have Disney only owning one of their resorts in the US I read somewhere that Walt and Roy considered selling Disney to General Electric in the sixties but I can't find anything about it maybe a optic,for a future video if you know more
So happy to get that notification at school
Excellent explanation of a complicated corporate fight.
Everyday you post one of these videos is a better day.
Great vid!!
When you work hard to get where you are.once your gone, since it didn't cost you you don't value what you relative's done.
MICHEAL EISNER DISNEY'S SAVOR!!!
I did but it's always nice to hear more about it
Good video, very informative.
In the end, the Texas Bass brother's saved Disney. They also saved Blue Bell which is another American icon.
Really interesting video!
Love your videos Rob!!!
@MidwaytoMainStreet
6 жыл бұрын
Thanks!
Great video
Could you do a video on what was happening in the early 2000s when the Disney company almost got bought out again?
Yo man....love your vids and appreciate the amount of research you put into all of them. I have a couple ideas for you for future vids. Hopefully you never done any on these topics. Biography type vid of Michael Eisner and history of Disney vacation club. Thanks in advance and keep up the good work!
Yes, Roy E. Disney hired Michael Eisner and years later, fired him, interesting Disney history..
gotta love Roy!
Another great video! Do you still do your Q&A series ? Was wondering what you think of the new “gondola” transportation system that is being constructed in Walt Disney World. Do you think it will increase the rates at the connecting resorts it will pass through ?
@MidwaytoMainStreet
6 жыл бұрын
Good question! I don't do the Q&A as a video series anymore (though I have considered bringing back a form of it in 2018), but Christine and I do Q&A every week on our Disney podcast, The Tomorrowland Transit Authorities. To your question, I really like the idea of more and different forms of transportation around the parks. It'll definitely bump up resort rates in the short term. My biggest hope is that they sit within security areas, so that someone would be able to hop from HWS to Epcot to MK all day and only have to go through security/bag check once.
@nickcutrone8743
6 жыл бұрын
Thanks for the reply !!! I really enjoy your videos !!!
Hey i have a question. What do you feel about the Fox-Disney deal and how do you reckon it would effect the parks and/ or films? What attractions Would you like too appear?
Perhaps Disney wouldn't have lost its way so badly if Roy had taken over.
And today, Roy would only need to use KickStarter. :D
WOW... Could You Imagine Where We'd Be Today ??? WHEW
What if they did this today but it actully happens what theme park companies would try to buy disneyparks : Sixflags , cedar fair , universal , seaworld and what parks in what places would they try to obtain who want the european disneyland paris or the asian disneyland hong kong , tokyo and shanghai
@sonicman1282
6 жыл бұрын
Darn I was going to say that about six flags
@justimagine2403
6 жыл бұрын
I would take Paris over Disneyworld. It is crushingly hot in Disney World and not as pretty. France is the largest tourist area in the world.
@coledoucette5116
6 жыл бұрын
Just Imagine and Paris has Disneyland’s version of TOT
Right when I saw that guy, I thought he looked like some kind of loan shark or mobster
Have you ever done any videos on the Disneyland pan Pacific and Disneyland hotel? Been searching video or history of how they were built or changed over the years. Thanks
@MidwaytoMainStreet
6 жыл бұрын
Not yet but maybe in the future! Closest I have right now is a video I did on how Disney came about owning The Disneyland Hotel - kzread.info/dash/bejne/iXqqz6dqmdurhaw.html
@ninjamaster3453
6 жыл бұрын
Rob Plays Thank you for the reply. I recall staying at both hotels as a kid like 20 years ago before the grounds renovations
Scary
I can’t
It always comes back to Eisner
Would selling the IP of Disney Parks be so bad? Companies split up owning the land under the buildings separate from owning the buildings separate from owning the operations. We might have gotten an Oriental Land Company situation with the parks where the owners of the IP... would actually CARE and invest in this awesome idea with best in class rides and attractions. And all the park goers would be happy. And the shareholders would be happy. Just write a contract that says, you can't let it DUMP out for 30 years with zero improvement. Like you know... EPCOT.
It's all right Roy for you had everyone against you .just like your great uncle.
Look in Description "...by by..." o o f
lego did just that
Roy E Disney is a mensch, had some pretty good ideas.
Rob, I’ve got a question. Why did Disney sell Miramax?
@Bigreid92
6 жыл бұрын
CR Reviews Disney wanted to focus more on its Marvel, Pixar and Disney Motion picture brands.
@crreviews1726
6 жыл бұрын
Bigreid92 Thanks for answering my question!
Why were they rude to him by calling him the idiot nephew?
@markjackson6431
9 ай бұрын
Walt may have meant that as a joke. although Walt was a warm uncle to Roy, he was a hard boss to him. they didn’t always see eye to eye. Roy’s mom may have begged the executives to give Roy a job. in contrast, Ron Miller was being courted and groomed to one day take over the company. back when Roy O. and Walt were running the company, there were two types of “boys”. Roy’s boys were more business type people while Walt’s boys were more creative type people. i think there was a growing sentiment that Roy was one of Roy’s boys when actually he was more of Walt’s boys. that probably explains why Roy never really wanted to be the main guy in charge. leave that to someone else and bitch when they don’t do what you want. it happened twice with Roy. but although he got his way both times, probably lost some respect from people. considering he agreed with a lot of things that went wrong with the company in the back half of Eisner’s tenure.
Are you and Christine still together? Sorry it’s just I’ve only seen a few recent vids
@MidwaytoMainStreet
6 жыл бұрын
We're still best friends if that's what you mean! We still co-host The Tomorrowland Transit Authorities, a weekly Disney podcast.
@coledoucette5116
6 жыл бұрын
Rob Plays awesome thanks for answering
When he said Walt was his uncle I got triggered
@MidwaytoMainStreet
6 жыл бұрын
Why's that? Walt was Roy E Disney's Uncle
if the parks did get bought up disney would have eventually got them back after a successful movie made enough profit to do so
Roy Disney made some bad descisions
Unpopular opinion: Micheal Eisner was the best thing to happen to the walt disney company since Walt himself and Roy Disney was up his own @$$. I have spoken.
Ron to buy he was Walt’s brother
@MidwaytoMainStreet
6 жыл бұрын
Two Roys. Roy O was Walt's brother. Roy O's son, Roy E Disney is the Roy in this video. Being Roy O's son, that also made him Walt's nephew.
Roy Disney died in 1971 soo
@MidwaytoMainStreet
5 жыл бұрын
Wrong Roy. The Roy that died in 1971 was Roy O Disney, Walt's brother. This is Roy E. Disney, who was Roy O's son and Walt's nephew.
Shamrock!shamrock ! where did i heard this name OMG! of course they came to rescue of me my children when in park la brea some kutti was harassing us in fake eviction, is it same group i wonder i need to find out
He looks a lot like you tbh
You wonder if that is what Disney is doing now to ward of Apple or Google or someone by tossing a ton of debt and reinvesting in their parks. I was hoping Dollywood would purchase Disney. Truly I thought Disney was dead with the crushing lines until Fast Pass came along. That is workable but now they run out of Fast Passes? Yuck! I have 1 day in the magic kingdom and they tell me I can't ride XYZ ride (probably Splash Mountain) and I would be... ok... look, I spent $10,000 to get my family of 5 down here and we can't get to ride one of the top 5 rides... Nope, I am not going back. Disneyland is better.
@kellyweingart3692
5 жыл бұрын
Dolly World 😂😂😂😂
Rdw😹😹😹😹😹😹😹😹😹