The Deja-Vu of Disney’s Labor Issues
How labor actions today parallel those Disney faced in 1941.
Two Labor Unions, the Writers Guild of America (WGA) and the Screen Actors Guild — American Federation of Television and Radio Artists (SAG-AFTRA), are currently on strike, grinding production for almost all major Hollywood studios to a dead stop. The Walt Disney Company, for better or for worse, finds itself on the front lines of this conflict with CEO Bob Iger emerging as a sort of figurehead for the opposing Alliance of Motion Picture and Television Producers (AMPTP).
The Disney Company, being as large as it is, is not unfamiliar with labor actions — or the threat of labor actions — against them and has historically been able to work with the Unions for an equitable deal, but this particular strike is proving to be more consequential than most with the AMPTP giving very little ground and the two labor Unions seemingly willing to dig in their heels for a protracted fight.
This conflict has the potential to do lasting damage to The Mouse in a way that no strike since the first, which the company had faced in 1941, has. The positioning of the Walt Disney Company, its ambitions and financial status as well as the moves of its key players, have several parallels with where it stood just prior to and in the early days of that earlier action, the 1941 Screen Cartoonists Guild (SCG) strike, which reshaped Walt and Roy Disney’s Studio forever.
Expansion and Expenditures
Between 1937 and 1941 — riding high on the success of Snow White and the Seven Dwarfs (1937) — Walt and Roy quadrupled the size of their staff, from about 300 employees to over 1200. In order to tackle what are now considered two of the finest animated features ever made, Pinocchio (1940) and Fantasia (1940), as well as maintaining the prodigious number of animated shorts that the company was producing per year; the staff increases as well as the move from the Disney Brothers’ Hyperion Avenue studios to the much larger facility in Burbank seemed a prudent reinvestment of their Snow White windfall.
It is worth noting that, for the most part, Walt and Roy were making this all up as they went along. Walt was hardly a film industry insider and Roy was learning large-scale finance on the fly, but the push and pull between the two brothers — Walt’s creative drive and Roy’s fiscal practicality — was a winning combination throughout the 1930s. Walt never could have gotten the financing for his shorts and, ultimately, his feature without Roy finding a way to fiscally assure it. Then again, the kind of inspirational magic Walt could wield (This was a man who convinced almost his entire studio of animators, to whom he owed significant back wages, to pack up their families and move from Kansas City to Los Angeles on a promise) was a kind of inspirational skill that was not a part of Roy’s nature.
Roy understood finance, but perhaps not business and this staff expansion and the move to the Burbank studio came with a business cost that he could never have wrapped his head around; it isolated the company’s Golden Goose, Walt Disney, from the majority of his staff. Physically distanced in his third-floor office from the production facilities and his artists, and no longer able to identify the majority of his employees on a first-name basis, newer staff never got to know the Walt that kept the Hyperion folks inspired and willing to make sacrifices.
Walt Disney sensed his losing touch with his staff, at one point even telling animator Joe Grant that he had remembered a dream about wandering empty hallways in the new Burbank facilities. While there may have been no way to take advantage of the opportunities that his blockbuster feature had given him other than this large-scale expansion of the business, it was the first of a series of large investments and expenditures that were turning the studio’s fortunes from celebration to desperation.
Walt dreamed big and this was the first time in history that he could go for those dreams with some unrestrained gusto. Pinocchio and then Fantasia were considerably more expensive than Snow White had been, and they were both flops. Pinocchio just didn’t seem to land with audiences for whom the novelty of the first animated feature may have begun to wane. And Fantasia, with all its ambition and built-in classical music respectability, all but buried itself with its heavy dependence on the new technology of Fantasound.
Fantasound was an expensive installation of sound equipment and speakers in a theater that allowed not only for multi-directional sound sources around the listener but also, more importantly, for the extreme sound separation that would be required to keep the recordings of a large symphony orchestra from registering as dull and muddy to a movie theater audience. Installing a single Fantasound system in a movie house would cost somewhere north of $80,000 in 1940s money and, for a screening of Fantasia, was considered critical.
By all accounts, the effect of the new sound system was electric, but, due to the expense, wartime shortages of electronic equipment and a lack of confidence in Walt’s idea of Fantasia being in permanent release with musical sequences occasionally swapped out to keep the experience fresh; only 12 theaters opted in for the upgrade. By 1941 Walt and Roy had thrown in the towel on Fantasound and allowed RKO to distribute it more widely with severe editing and with a muddy, monophonic, version of the soundtrack.
The picture was destined to sink quickly after that.
Walt and Roy and the rest of the Hyperion artists had triumphed with Snow White and suddenly, a few years later, they were a bloated organization with cash flow problems which had over-invested in new technology and had lost the ability to rally their own troops. Troops who needed rallying desperately.
In 2017 — a little more than five years before the 2023 SAG-AFTRA strikes — the Disney Company, under the purview of CEO Bob Iger, began the process of acquiring one of the most legendary of Hollywood studios, 20th Century Fox. The $71 billion deal for the company had much of the industry wondering if Iger had lost his mind.
The newly acquired studio did have the rights to a number of properties likely to be useful to the future of other franchises that Disney had also picked up under Iger: most notably the X-Men, Deadpool, and Fantastic Four characters that would eventually play into the Marvel IP that Disney now owned. They also gained distribution rights to the first Star Wars film, Star Wars: A New Hope (1977), the lack of which had been something of an irritant to the company which now, also due to Iger, was Star Wars. These, plus the Avatar franchise — already represented in Disney’s Florida theme parks — and film series like the Alien movies which Disney had flirted with along the way (For more on the Alien flirtation) definitely added synergy to the deal, but was it worth a price tag that Disney was going to struggle to pay down for decades?
But Bob Iger had a plan, and it was to hop on the streaming bandwagon.
“What could it mean having access to [Fox’s] library, not to monetize it through traditional means, but to do it through this [streaming]? Bam! I mean, the light bulb went off.” — Bob Iger
Streaming was certainly not a new technology in 2017 in the way that Fantasound had been in 1940 — Netflix had been at it for a considerable amount of time — but what Disney was doing was unique in the field: never before had a company this large with such a specific identity tried to make a streaming network pay off. They had a tremendous amount of valuable content — much of it previously licensed to Netflix — that was distinctly part of the Disney brand, or the Star Wars brand, or the Marvel brand. On top of that, they now had their $71 billion worth of 21st Century Fox media assets to sort of flesh the content out.
As of this writing, Disney+ has still not made a profit. Far from being able to start to defray some of the costs of the Fox acquisition, the streaming service itself has been hemorrhaging money.
The Disney Company had, as previously in 1941, expanded explosively and then placed the surety of the debt from that expansion into the hands of an unfamiliar technological landscape dependent on an unrealistic level of widespread adoption. As in 1941, the company had gone out on a limb and failed.
Extreme External Factors
The United States had not officially entered World War II by 1941, though President Roosevelt had been quietly funneling arms and equipment to the United Kingdom as best he could while trying to make a case to the American public for why they should join much of the rest of the world in trying to stop Hitler. A number of U.S. industries were already beginning to feel the effects of Europe being locked down in conflict, however, as export markets began to close off.
The motion picture industry was particularly vulnerable to this sort of distribution isolation: pictures unable to bolster their domestic box office with releases across the globe. Animation, by its nature, is a particularly translatable kind of movie to foreign markets. Linguistic and cultural barriers tend to be less pronounced when the medium has been designed from the starting point of a comedic pantomime. This is to say that the European markets had been incredibly lucrative for the Disneys (much in the same way that Asian markets are to the company today) and, without them, the studio struggled to bolster the sales of its new features, not to mention maintain the previously consistent income generated by their Mickey Mouse and Silly Symphony shorts from overseas.
After the two most expensive animated films ever produced, not to mention the continuous stream of animated shorts, had been released without most foreign markets being available, Disney was hurting. The War was choking the studio, financially.
By the 21st Century, The Walt Disney Company had a wildly disparate set of revenue streams. They made money off of movies, television networks, games, clothing, etc… but their most consistent and profitable enterprises were their mammoth theme parks in California, Florida, Hong Kong, Shanghai, Tokyo, and Paris. So consistent and dependable was that revenue that it could cover over — perhaps “hide” is a good word here — divisions that were not quite pulling their own weight, like a streaming television service that was stubbornly refusing to stop losing money.
Then, in 2019, the COVID-19 pandemic pulled the plug on those profit-making machines. Out of concern for public safety and due to governmental mandates, Disney theme parks around the world began to shut their doors.
Lest we forget, amongst all this diversification, the Disney Company started as a producer of movies and has remained remarkably successful at that for a hundred years; but during the trials of COVID, that part of the business was closed off as well. Movie theaters across the world closed their doors and film producers had to figure out where to put their wares on display for sale. In Disney’s case, this was largely the obvious choice, their new streaming network, but this was never going to pull in the direct cash numbers that a hit movie at the box office would and there were price point issues that would keep Disney+ from being able to defray the loss of that income. It is worth pointing out that Disney+ did grow considerably during this time — not making enough to stave off their losses, it still added quite a number of new subscribers — which led to another unintended consequence of the pandemic.
After a few years of limited theatrical releases and the expectation that Disney’s tent-pole films would end up on Disney+ with minimal or no wait, the audience, even after the movie houses began to open up, seemed to decide to stay home.
Historically, the concerns of a company that makes cartoons and theme parks are not all that significant compared to the suffering and loss of life surrounding World War II and the COVID-19 pandemic, but both events did cause a severe financial impact on the Disney Company that left it vulnerable to the impact of the strikes that it was about to be involved in.
Executive Missteps
Much in the way that the Disney Company today is a very different beast than it was in the 1930s, Walt Disney was a very different leader than Bob Iger; though you could argue that, for better or for worse, they were the men appropriate to their time.
Walt Disney not only refined and defined one industry, animation, for generations to come, but he also created, out of the ether, several others: the American theme park, animatronics, several flavors of television, a few new modes of transportation and he was inches away from almost completely redefining the idea of the modern city. He was a quintessential American success story, a much beloved favorite son who achieved the exceedingly rare feat of actually moving from rags to riches. He was, and is, an icon.
Bob Iger is a businessman, probably a very canny one. If Walt invented his industry, Iger coaxed it to more power and profitability than anyone had ever foreseen possible; which is impressive if one is into that sort of thing. It’s hard to ascribe the creative work that flourished during Iger’s time at the Disney Company directly to him — let’s be honest, the Disney company has had exactly one artist in the leader position, ever, and it’s the other guy we’re talking about — but Iger’s acquisitions, Star Wars, Marvel, etc. have been very much at the heart of the company’s more recent innovations.
If Walt is the historic figurehead of the company, Iger has, almost undeniably, been its most successful fiscal steward. And when, after the COVID threat began to become more manageable, the company seemed in such disarray, it was Iger who was called back into service, replacing CEO Bob Chapek, to set things right.
The return elicited literal cheers from staff at the theme parks. The Hollywood Reporter ran a headline, “Bob Iger Returns as Hero in Waiting to Save a Battered Disney.”
It was clear that this was someone who inspired a lot of faith, goodwill, and trust; much like his predecessor in 1941 had.
And, for many, the strikes that the two men faced were the first time the audience saw them flinch.
In the case of Walt Disney, the writing had been on the wall for some time: MGM, the Fleischers, and Warner Brothers had all been unionized and it was clear that the SCG was coming for Mickey. (Leon Schlessinger at Warner Brothers put up surprisingly little fight, potentially as he saw that the unionization of Disney animators might put his company and theirs on a more level playing field.) Walt, on the advice of the studio’s attorney Gunther Lessing, tried to head this off at the pass by quickly forming a, probably illegal, union hosted by the company itself. This stirred the pot and Roy Disney’s refusal to negotiate even with the union in his own pocket caused a major defection of some formerly loyal artists.
Then Walt decided to employ his greatest skill, the ability to inspire and motivate his staff by the sheer force of his own will and drive.
It fell miserably flat.
Walt gave, over two consecutive days, two three-hour speeches to his staff, pleading the fragility of the company’s financial state, assuring them that there was no internal caste system of favored employees, and trying to reinvigorate the company’s faith in the power of animation.
Ward Kimball referred to it as “a sob story” and others described it as their being treated as “wayward sons” by a “benevolent and understanding father.” (Walt Disney: The Triumph of the American Imagination, Neal Gabler)
Reporting on it later, The Nation said, “This speech recruited more members for the Screen Cartoonists Guild than a year of campaigning.”
Then Walt finally pulled the trigger of the gun pointed at his own company; he fired Art Babbitt.
Babbitt was an extraordinary animator best known for his work with the character Goofy. He had been willing to work with Walt’s company union, the Cartoonists’ Federation, until Roy nixed it and then he moved over to a place of prominence within the SCG. The day he was walked off the lot by Disney security, hundreds of animators met him with the promise to see him on the picket line.
Within two days that’s where they were. A few days after that Disney had to be restrained from physically attacking Babbitt who was speaking on a megaphone outside the studio gates.
The formerly unassailable wonder boy of animation was breaking apart.
The collapse continued as Walt tried alternately to ignore that the Strike was happening; to tell reporters that the Strike had somehow increased production because the strikers were dead weight; to bring in Willie Bioff, the powerful and feared leader of the International Alliance of Theatrical Stage Employees Union (IATSE) to try and swallow up the smaller SGA and broker a settlement; to accuse the SGA of being run by communists; and on and on. Walt seemed to be flailing and it was ugly to watch.
The Federal Government, recognizing that at the brink of America’s entry into World War II, it was not serving the country well to have the deeply American symbol of Mickey Mouse dug deeper and deeper into a progressively worsening labor conflict, sent Walt away to South America as a sort of ambassador while it cleared up the mess at the Disney Studios.
Walt Disney returned from that trip a very different person.
Bob Iger must’ve thought he had this labor relations thing down pat. He’d just headed off a large-scale strike of Walt Disney World employees and negotiated one of the highest pay rates for theme park employees in the country.
Negotiations had been productive and the compromises made seemed reasonable to all sides. He’d even managed to avoid being demonized for the 7,000-plus layoffs he’d just initiated company-wide; mostly due to the job cuts being a measure to fend off a takeover of the Disney Board which would’ve led to potentially higher numbers of lost jobs. So it must’ve been a shock when, a month after the beginning of the WGA strike and a few days before SAG-AFTRA was to hit the picket lines, he found himself as the poster boy for the seemingly out-of-touch studio heads of the AMPTP.
During an appearance on CNBC’s Squawk Box program, he really put his foot in it:
“It’s very disturbing to me. We’ve talked about disruptive forces on this business and all the challenges we’re facing, the recovery from COVID which is ongoing, it’s not completely back. This is the worst time in the world to add to that disruption. I understand any labor organization’s desire to work on behalf of its members to get the most compensation and be compensated fairly based on the value that they deliver. We managed, as an industry, to negotiate a very good deal with the directors guild that reflects the value that the directors contribute to this great business. We wanted to do the same thing with the writers, and we’d like to do the same thing with the actors. There’s a level of expectation that they have, that is just not realistic. And they are adding to the set of the challenges that this business is already facing that is, quite frankly, very disruptive.”
This response from a CEO who makes in a single day more than most writers or actors will pull in over a year, combined with pictures of him relaxing on his own personal yacht, gave the two Unions quite a bit of ammo with which to arm the press who, in turn, began to whittle away at the idea of “Bob, the Returning Hero.”
Then came Iger’s stance on AI: while moderate compared to several other studios, he has described it as “bullish” which is not a word that denotes caution. His comments seemed less focused on the issues of labor, but more so on the legal hurdles obstructing the use of the new technology:
“I can tell you that our legal team is working overtime already to try to come to grips with what could be some of the challenges here… I think there is a lot we are going to have to contend with that will be quite disruptive and quite challenging.” — Bob Iger
To be fair, he seemed to be referencing endpoint and point-of-sales, customer-facing, technical stuff here, but these statements, on top of the ill-timed use of AI to create the opening credits on Disney+’s Marvel series Secret Invasion, were warning signs to the Unions deeply concerned about both the use of the technology to replace jobs and, at worst, to use the writers’ and actors’ work to generate new content for free.
The idea that these missteps would’ve caused Iger to adjust his tone would’ve seemed reasonable, but, after 113 days of the Strike, the AMPTP represented by Iger, Donna Langley, Ted Sarandos, and David Zaslav called the WGA into a meeting room where they were, as the WGA’s subsequent press release put it, “met with a lecture about how good their single and only counteroffer was.” Then, to add to the insult, Iger and crew attempted to pull an end-run around Union leaders by making their offer public minutes after the unsuccessful negotiation. This sort of “attempting to sow discontent between the Union’s members and its leaders” tactic speaks to a confidence that the AMPTP had no reasonable excuse to have assumed.
Negotiations were again at a standstill.
It seemed to no longer matter if Iger was speaking as part of a group of studio heads or on his own; he had become representative of what the Unions and, increasingly, the public, saw as the anti-labor Hollywood institution. As if to prove the point, stories — most of which seem to have no primary source and are likely untrue — began to circle around him, specifically.
“Bob Iger outraged by WGA’s rejection of AMPTP latest offer.”
“Disney CEO Further Angers Fans After Reports of Getting Offended at WGA Deal That Would Fairly Pay Writers.”
“DISNEY LISTS $330,000 CRISIS PR JOB AFTER CEO INSULTS STRIKING ACTORS AND WRITERS.”
Well, that last one may have a grain of truth:
Perhaps due to his earlier somewhat tone-deaf moves, or simply due to the fact that he represented the largest studio in the negotiations, Iger got the bulk of the blame. It had become clear that Bob Iger, much like Walt Disney in the 1940s, was showing his cracks.
Like Walt Disney, Iger had tried his “sob story” (“This is the worst time in the world to add to that disruption.”) and his group’s parental lecture about the generosity of AMPTP’s sole counteroffer smelled a lot like Walt’s “wayward sons” speech. In both situations, the moves further enraged the union members. The AMPTP’s attempt to bypass union leaders, much as Walt had tried twice — once with his studio-run company union and later by inviting Willie Bioff’s IATSE into the mix — had similar and predictable results.
The 1941 strike, during a period of severe financial distress for the Disney Studios, is often referred to as a time that left Walt, as Ward Kimball described him, “a broken man.” The mythology of Walt Disney as we view him now had not yet solidified and, as Fantasia (1940) struggled and the strike erupted, Walt began his shift from being a jaunty, fashionable, pop-artist to “Uncle Walt,” the folksy spokesman who had begun to lose his taste for animation. It would take the Disneyland project in the late-’40s to re-engage his enthusiasm.
Whether the 2023 WGA/SAG-AFTRA strike may have as profound an effect remains to be seen. One thing that seems likely is that the longer it extends, the more severe the effect on the Walt Disney Company and on Bob Iger’s reputation. Walt Disney, for the most part, recovered from his difficult period leading up to and during the strike, but has Iger inherited any of that Disney magic, or is his business sense of the purely mundane variety?
Time will tell.
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Kelly McCubbin is a columnist for Boardwalk Times
