Why the Disney family are feuding over a US$400 million trust fund
The Walt Disney Company has come a long way since it was founded by brothers Walt and Roy O. Disney nearly a century ago. What began as a cartoon studio is now a media powerhouse, complete with amusement parks and properties.
But for all its success, the family behind “The Happiest Place on Earth” has largely stayed out of the limelight and the business. While it's not known just how much the family is worth, GOBankingRates estimated the company's net worth to be US$130 billion. Roy O.'s grandson, Roy P., previously said the family owns less than 3 per cent of the company, but assuming it is about that amount would put their fortune around US$3.9 billion (not counting any investments in addition to Disney holdings).
From a family trust-fund feud to generous philanthropic endeavours, here's a look at the three generations of the Disney family. (The family didn't respond to a request for comment from Business Insider.)
Disney co-founder Walt Disney wanted to be a cartoonist since high school, taking extracurricular art classes at the Chicago Academy of Fine Arts
He later worked at a film ad company in Missouri, where he learned animation and went on to form his first animation studio, Laugh-O-Grams, according to the Walt Disney website. But a bad business deal led to the downfall of the studio: a small theatrical company called Pictorial Clubs reportedly offered Laugh-O-Gram US$11,000 for six small films, but it only gave Disney a US$100 down payment before Pictoral went bankrupt.
Walt then left for Hollywood. In 1923, he co-founded the Disney Brothers Cartoon Studio, which became Walt Disney Studio, with his older brother, Roy O. Disney. The two had a close relationship: Walt controlled the creative aspects of the company, while Roy ran the business side.
Five years later, Steamboat Willy was the first media production to debut Mickey Mouse. In 1937, Disney's first feature-length film, Snow White and the Seven Dwarfs, debuted and became a box office hit, taking the company from being in debt to being worth millions of dollars.
By the late 1950s, Walt had created a family entertainment world complete with movies, television shows and an amusement park
In 1953, Walt self-funded a private company, WED Enterprises – now known as Walt Disney Imagineering – and opened Disneyland two years later. Roughly a decade later, in 1964, Walt and Roy kicked off the development of Walt Disney World in Florida.
That same year, Walt launched one of the most important projects of his career, according to the Walt Disney website: Mary Poppins, which received 12 Academy Award nominations.
Today, Disney is one of the biggest media companies in the world, with an estimated net worth of nearly US$130 billion. It was named the No. 1 best-regarded company in 2018 by Forbes
GOBankingRates' Sean Dennison evaluated the company's net worth to be US$130 billion based on its revenue and profits from the past three years. In 2019 alone, Disney was on the upswing. It announced a new streaming service, Disney+, which caused Disney shares to hit a record high, Arjun Reddy of Business Insider reported.
In March 2019, Disney acquired Fox's entertainment business for US$71 billion as part of its plan to compete with technology companies such as Amazon and Netflix. It got a controlling stake in streaming service Hulu in the process. It was Disney's 23rd acquisition. Overall, Disney has four key business segments, according to Forbes: media networks, parks and resorts, studio entertainment, and consumer products and interactive media.
It's unknown how much the Disney family is worth today, but Walt has been described as a ‘family man’ who tried to provide a normal life for his family
In 1925, Walt married Lillian Bounds, a studio inker. Eight years later, Lillian gave birth to Diane, and the couple later adopted their daughter Sharon as an infant. Walt drove the girls to school every day and barely brought his work home. “We weren't raised with the idea that this is a great man who is doing things that no one else had ever done,” Sharon had said. “He was Daddy. He was a man who went to work every morning and came home every night.”
Walt reportedly adored his 10 grandchildren. Walt died in 1966 of lung cancer, leaving a network of trusts and family foundations for his family.
Walt and Lillian had two main residences, both in California
Their main residence was an estate in Los Angeles' Holmby Hills, worth US$8.5 million before being sold in 1998. A subsequent owner made renovations that put its value at US$90 million. They also owned a 2,433-sq-ft weekend retreat in Palm Springs, up for sale at nearly US$900,000 in 2016.
Walt's older daughter, Diane, married Ronald Miller in 1954 and had seven children, who were reportedly relatively quiet with their side of the family fortune
Diane raised her children – Chris, Joanna, Tamara, Jennifer, Walt, Ron Jnr and Patrick – the same way she was raised, trying to give them a typical life. Tamara previously told People their mother took a “hands-on approach to raising children,” forgoing a nanny and taking them to tutors and soccer practice.
“We … lived a very simple, traditional family life,” Chris previously said in an interview. “So when people would confront us with 'your grandpa is Walt Disney,' it seemed like an odd affront to us,” even though, he added, “we knew grandpa was world-renowned”.
“Our parents and grandparents did a beautiful job of protecting us,” Jennifer said in the same interview. “We really had such a normal life. They all made sure of it.”
Diane died in 2013 at age 79. She was Walt's last surviving child.
Walt's youngest daughter, Sharon, adopted one child, Victoria, with her first husband, Robert Brown. She then had twins, Brad and Michelle, with her second husband, Bill Lund
Like her sister, Sharon stayed out of the limelight and tried to protect her kids from Disney fame, reported Eriq Gardner of The Hollywood Reporter. Brad told Gardner he led a “very normal life”. Sharon died from breast cancer in 1993 at age 56. Michelle has never had a job and owns three homes, spending a lot of time in Newport Beach, California, according to Gardner.
Victoria was said to live quite lavishly, splurging on US$5,000-a-night suites at the Royal Palms apartment homes in Las Vegas. Gardner wrote: “She once went on a Disney cruise ship and destroyed her suite in such spectacular fashion that Eisner, then-CEO of the company, had to call the trustees and make them pay for the damages. The family staged numerous interventions, to no avail.”
Victoria's share of the family fortune was added to Brad's and Michelle's after she died in 2002 from health complications, Michael Lyons of National Post reported.
Sharon's twins later became embroiled in a multiple-year feud over their US$400 million trust fund
The inheritance was supposed to be distributed in annual payments and lump sums at five-year intervals at ages 35, 40 and 45, reported Gardner. However, the trustees dispersed the payments to Michelle, but withheld Brad's. Michelle and the trustees argued that Brad wasn't capable of managing his share because of a “chronic cognitive disability” and that Bill, their father, was taking advantage of this to gain money, according to NBC News.
Bill argued that the trustees were manipulating his daughter, Michelle. According to Gardner, he was previously a trustee but resigned after an allegation that he used trust money to gain more than US$3 million in kickbacks from a real-estate deal. He reportedly agreed to an annual settlement of US$500,000.
While Michelle reportedly suffered from drug addiction and had a brain aneurysm that “left her with uncertain mental abilities”, the trustees agreed with her about her brother, Gardner wrote. And the court ended up ruling in favour of the trustees, continuing to withhold Brad's payments while paying out Michelle's.
On the other side of the family, Roy O. and wife, Edna Francis, gave birth to Roy E. Disney in 1930, who later became a senior executive for The Walt Disney Company
Roy E. had four children of his own: Susan, Roy P., Tim, and Abigail. About the time Michael Eisner became CEO of Disney, in the 1980s and revived the company, Disney stocks increased and the family's net worth skyrocketed to 50 times what it was when Roy E.'s children were growing up, Abigail told Sarah McVeigh of The Cut. In 2003, Roy E. announced plans to sell 7.5 million Disney shares – about 43 per cent of his stake in the company, reported Randall Smith and Bruce Orwall of The Wall Street Journal. He died in 2009 of stomach cancer.
Roy E.'s daughter Abigail started feeling uneasy about her family's wealth by the time she reached her 20s
Abigail told The Cut said she was embarrassed by her family's wealth, adding that it bred deep self-doubt and an “inferiority complex around people who have actually earned their money”. “We went from being comfortable, upper-middle-class people to suddenly my dad had a private jet,” she said, referring to the family's private 737. “That's when I feel that my dad really lost his way in life. And that's why I feel hyperconscious about what wealth does to people. I lived in one family as a child, and then I didn't even recognise the family as I got older.”
She's taught her four children that “money is morally neutral”, she said. “It does not, in and of itself, make you a bad person. It also does not, in and of itself, makes you a good person. You are who you are and the least important thing about you is what you have.” Abigail is a documentary filmmaker and founded Fork Films, which focuses on international social issues. She added that the fortune she inherited would have made her a billionaire if she wanted to be one, and that she would outlaw private jets if she could.
She was one of 18 ultra-wealthy Americans to sign a letter asking presidential candidates to support a wealth tax in June 2019. In a 25-tweet thread, Abigail slammed Disney's decision to furlough its 43,000 employees without first cancelling plans to pay shareholder bonuses and executive bonuses, reported Business Insider's Taylor Nicole Rogers. Top executives have taken pay cuts to conserve the company's cash during the crisis, but their potential to still earn bonuses is “the REAL outrage”, Disney tweeted.
Abigail's brother, Roy P., said in an interview that by 1960, Walt and Roy O. owned about 20 per cent of the company. Today, the family owns less than 3 per cent of the company
Roy P. is an investor, according to the interview. His brother, Tim, is a screenwriter with a hefty real-estate portfolio. Tim reportedly bought Kristen Wiig's Los Angeles house for US$5.2 million, according to Yolanda's Little Black Book. He also has a renovated Spanish estate in Los Feliz, which he bought for US$6.4 million, and a weekend retreat in Joshua Tree. He previously sold a Hancock Park property for US$4.45 million.
Their sister, Susan, also makes real estate moves: She previously owned a 4,883-sq-ft beachfront house in Malibu, which she sold for US$18 million after several price cuts, reported Mark David for Variety. She also runs the restaurant The Bel-Air, where grilled lamb chops go for US$38.
While Walt and Roy O. kept their families in harmony, the two families were reportedly never close and drew even further apart after Roy O.'s death in 1971
Diane's husband and Walt's son-in-law, Ron, became CEO of Disney in the early 1980s. In 1984, Roy E. replaced him with Eisner, according to People. The move reportedly deepened the family divide, but the two families later patched things up. Roy E. was the only heir to get involved in the family business, which Walt tried to steer his children and grandchildren away from, according to Gardner. While Diane didn't get involved in corporate matters, she reportedly worked the hardest to preserve Walt's legacy, creating the Walt Disney Family Museum.
Most of the Disney family has shied away from corporate affairs, instead displaying their wealth and power philanthropically, according to Gardner
Disney family members – and the company itself – have donated millions to charity.
Lillian donated US$274 million for a new concert hall in Los Angeles, according to The New York Times. Sharon was a trustee for CalArts, and got involved with the Marianne Frostig Center of Educational Therapy and the Curtis School Foundation, according to The Los Angeles Times. Her family has reportedly contributed nearly US$100 million toward building Disney Hall on Bunker Hill.
According to Gardner, the Lund family is committed to the Sharon Disney Lund Foundation, donating money to cancer research and visiting the scientists. The Foundation has also donated US$1 million to a non-profit arts organisation for teens. So far, Abigail has donated about US$70 million and plans to keep “giving a lot of money away” until her death, she told The Cut. She and her husband, Pierre Hauser, co-founded the Daphne Foundation, which supports programmes to end poverty in New York City.
There's also the Roy and Patricia Disney Family Foundation, which focuses on three areas: equality, sustainability and vibrant communities. And in 2018, The Disney Company announced a five-year global commitment of US$100 million to children's hospitals. It previously donated US$1 million to Unicef and most recently pledged US$5 million to support the rebuilding of the Notre-Dame Cathedral.
This article originally appeared on Business Insider.
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While the company enjoys tremendous success, Walt Disney’s grandchildren, Brad and Michelle, remain embroiled in a multiple-year dispute over their US$400 million trust fund