Question: What company takes its name from Walt Disney and has mushroomed in size since Disney started it years ago?
If you said Walt Disney Co.--operator of Disneyland, creator of memorable children's movies--you're only half right.
Six miles from Disney's Burbank headquarters, in an unlabeled two-story office building in North Hollywood, is the late Disney's other, more obscure corporate offspring: Retlaw Enterprises Inc. (Retlaw is "Walter" spelled backward.)
Disney formed Retlaw in 1953 to give his family a slice of income from some of his other company's lucrative operations, including Disneyland. The slice turned out to be worth hundreds of millions of dollars.
Today Retlaw owns six television stations, about 1,150 acres of land in California and a jet leasing firm, and it still gets a share of the income from old Disney films released by the studio. Retlaw used to own the monorail and steam railroad at Disneyland before Walt Disney Co. bought them back in 1982.
Walt Disney died in 1966, and today Retlaw is owned by his widow, Lillian, 91, and their two publicity-shy daughters, Diane Disney Miller, 56, and Sharon Disney Lund, 53, who is the only one of the three on the Walt Disney Co. board of directors. Lillian and Sharon each own 30% of Retlaw; the remaining 40% is owned by Diane, her husband, former Walt Disney Co. chief executive Ronald W. Miller, and their children.
The Disneys all lead very private lives, and they are especially reticent when it comes to Retlaw. They declined to be interviewed or to provide photographs for this story. The one Retlaw officer they allowed to speak, Vice President and Treasurer Robert L. Wilson, read from a statement that he could not discuss Retlaw's finances or the Disneys individually.
"It's just a desire of theirs to keep their private lives separate," Wilson said.
Retlaw initially owned the merchandising rights to Walt Disney's name, the engineering division that designed Disneyland, and the two Disneyland trains. But the privately held Retlaw has since cut most of its ties to Walt Disney Co. and become a conservative broadcasting and real estate firm. It is probably worth in excess of $150 million.
Retlaw's TV stations, all CBS affiliates, are KJEO in Fresno; KMST in Monterey, Calif.; KEPR in Pasco, Wash.; KIMA in Yakima, Wash.; KIDK in Idaho Falls, Ida., and KLEW in Lewiston, Ida., the town where Walt and Lillian were married in 1925.
Retlaw's real estate includes 580 acres of farmland worth more than $8 million on the eastern edge of Palmdale in the Mojave Desert; 220 acres of vacant land in Riverside County, and 330 acres of avocado groves in Escondido and Riverside County.
Retlaw has other revenue sources as well. It draws annual payments--often $600,000 or more--from Walt Disney Co. for 26 Disney live-action movies, notably "Mary Poppins." The films were produced by Disney in the 1960s, and the payments reflect 10% equity stakes Walt Disney bought in the films as part of his management contract with Walt Disney Co.
Retlaw's small jet charter service is at Van Nuys Airport, where the company leases out its one corporate jet when its executives aren't using it. Retlaw also is planning to move its headquarters to a new $18-million three-story office complex and aircraft hangar it is scheduled to begin building early next year on the airport's west side.
Creating Retlaw reflected Walt Disney's vision for providing riches for his family. But it also strained relations between him and his brother, the late Roy O. Disney, and later between Walt Disney's heirs and Roy Disney's son, Roy E. Disney, who today oversees Shamrock Holdings Inc., a big investment firm in Burbank.
In the 1920s, Walt and Roy O. Disney co-founded the Disney studio, with Walt the creative partner and Roy the financial man. According to John Taylor's 1987 book "Storming the Magic Kingdom," an account of takeover threats against Walt Disney Co. in the mid-1980s, Roy vehemently objected to Retlaw's creation. He felt betrayed that Walt was diverting a portion of the company's income to Walt's side of the family.
Retlaw was first called Walt Disney Inc., then WED Enterprises. It was initially endowed with the merchandising rights to Walt Disney's name and likeness. WED licensed the rights back to the Disney company in exchange for 5% to 10% of the income from each of Disney's merchandising deals, and it could invest up to 15% in new Disney projects.
The rights were obviously valuable in light of Disney's phenomenal growth. Between 1953 and late 1981, Disney paid WED/Retlaw a total of $45.6 million in "name" royalties, with $25.6 million representing merchandise and $20 million covering the company's projects, namely Walt Disney World in Florida.
WED also held Walt's creative team, which designed Disneyland and many of its attractions, including the monorail. In 1965, however, Walt sold WED Enterprises' design and architectural group to what was then known as Walt Disney Productions.