This article was originally published on November 21st, 2018.
Cool Runnings, Invincible, Remember the Titans, The Walt Disney Company loves a good sports story.
In 1993, the entertainment giant decided to take it one step further and partake in a radical experiment.
After the success of the movie, 'The Mighty Ducks,' Disney Chairman Michael Eisner (@Michael_Eisner) announced the creation of a National Hockey League (NHL) franchise in the city of Anaheim. An unparalleled business move that would combine the movie industry, brand marketing, and professional sports.
Disney Decade
In the early 1990s, Eisner was developing an ambitious growth plan for The Walt Disney Company.
In what would become known as the "Disney Decade," Eisner would open two new Disney theme parks. Disneyland Paris and Hollywood Studios at Walt Disney World, becoming the two new expansions on each side of the Atlantic.
Furthermore, Disney would also go on to purchase media companies such as ABC, ESPN, and Miramax.
So far the growth was consistent with Disney's previous business ventures.
However, an out of left field move came when the family-friendly media giant decided to enter professional sports. Especially with a sport such as hockey, which is famous for its brutal fights and a fan base predominantly in Canada.
Hockey had only started to see a boom in the U.S. after Wayne Gretzky’s (@WayneGretzky) 1988 move to the Los Angeles Kings. Thanks to what has become known in the hockey world as “The Trade”. The NHL had only recently expanded into new U.S. markets, such as San Jose and Tampa Bay.
Good Neighbor
In 1990, Anaheim City Council had started the construction of a new $121-million multi-purpose sporting arena, with the hopes of persuading a sporting franchise to move to the city.
However, the new Anaheim Arena had turned into an embarrassment for the city, due to the multimillion-dollar financial obligations. The financially strapped city council was facing hiring freezes and budget cutbacks, to be able to cover the costs associated with their new arena.
Disney and Eisner at the same time we're looking to expand their Disneyland theme park in the city. Simultaneously, "The Happiest Place On Earth" was seeking city and public approval of an environmental impact report, which would support their expansion project, which became 'Disney California Adventure Park'.
With this in mind Eisner made the decision to start a good neighbor policy, with Anaheim City Council. Disney would establish an NHL franchise and house them in the new Anaheim Arena. Saving the city up to $20 million, in the first eight years.
In return Disney set out to gain as much as $1 billion in public money to pay for part of the Disneyland Resort expansion, especially public works and infrastructure improvements.
"We couldn't be more pleased," said Anaheim Mayor Tom Daly. "Everything Disney does is first-class. Let's hope they bring some of their magic into the new team as well as the NHL. This is an early Christmas present. It's wonderful."
Disney paid $50 million to acquire the NHL franchise rights. $25 million going to the NHL for the rights to operate the new franchise. Another $25 million being paid to LA Kings' owner Bruce McNall, for shared territorial rights in Southern California.
Eisner identified an array of possibilities for cross-promotion, with the creation of the NHL team. While also creating the opportunity to create an entirely new line of revenue for Disney and its partners.
The NHL and the city of Anaheim, meanwhile, also had plenty to gain from Disney’s leap into professional sports. Fueling the push to create the team was the kind of marketing synergy most brands only dream of, a synergy in which every partner earned exposure and revenue as long as the overall Mighty Ducks machine was successful.
For the NHL, the benefits were obvious. Bringing in an American media giant to create a team with a built-in fan base was an absolute coup for the continent’s smallest major sports league, and many within the hockey world were ecstatic to have Disney’s proven marketing chops on their side.
"I think it's fabulous," Fred Comrie, managing general partner of the San Diego Gulls said. "Everything Disney has touched lately has been phenomenal. They are outstanding marketers, and if they can start drawing and start getting people interested in hockey, it's a major plus for us. All of a sudden hockey is the 'in' thing."
Be Our Guest
As would be expected there was much noise made about the name that Disney would choose for their new NHL franchise.
Anaheim was already home to two other professional teams, the MLB's California Angels and the NFL's Los Angeles Rams. Both teams had refused to brand themselves with thier hometown name. Stating that the city of Anaheim was too small and not well-known nationally. This suggested as Disney was playing the good neighbor card with the city of Anaheim that they would utilize Anaheim in their branding in some way.
A number of suggestions for a nickname were offered throughout the media, most referencing some form of Disney connection. Disneyland President Jack Lindquist suggesting the "Goofys" and William Bedsworth, an Orange County Superior Court judge suggesting "Beasts" from the Disney film "Beauty and the Beast." John Wolf, assistant to the general manager at the LA Kings even suggested calling them the "Aces," stating "As in 'aces over kings' in poker."
However, the final say came down to Eisner, who decided to reference the 1992 movie 'The Mighty Ducks.'
"Ducks are what we are going to call it unless I hear otherwise," said Eisner, at an NHL board meeting.
The Mighty Ducks of Anaheim, would take to the ice for the first time, on October 8th, 1993, as they faced off against the Detroit Red Wings.
However, the first game of the 1993 NHL season, was proceeded by a fifteen-minute Disney themed opening ceremony. Reportedly costing $450,000 and featured a rendition of “Be Our Guest,” on electric guitar, and shouts for fans to blow into their plastic “duck calls.”
Despite the elaborate opening ceremony the Ducks would lose 7 – 2, on their NHL debut. However, the Ducks would improve throughout the season and go on to set a league record 33 wins. No expansion team had ever finished with 33 wins in their first season.
The Ducks would finish 4th in the Pacific Division and failed to make the playoffs in their first season.
The Ducks would appear to be a success with local fans in their first season. As the team sold out 27 out of 41 home games, with a total of 98.9% of all tickets sold throughout the season, Furthermore, the Mighty Ducks became a merchandising behemoth, as they outsold all other NHL teams that season.
ESPN West
As Disney saw the success of the Mighty Ducks, they decided to take another major step into the world of professional sports.
In 1995, Disney announced that it had agreed to buy a 25% interest in the MLB franchise, the California Angels.
A year later they would reach an agreement to buy the rest of the Angels and fund a renovation of Anaheim Stadium. Under the deal, Disney would pay $70 million toward a $100-million stadium renovations, with the city paying the rest.
City Councilman Bob Zemel identified that the deal would give Disney control of virtually all stadium revenue. With Disney receiving all the stadium revenue from tickets, parking, concessions, ballpark advertising, and the stadium's name. Furthermore, Disney Sports Enterprises would be exempt from any future sports taxes the city might want to impose.
The deal, transformed the Big A into a more intimate, baseball-only facility, after the Rams left Anaheim for St. Louis.
The deal between Disney and the city of Anaheim, meant if there was a name change that “Anaheim” had to be contained within the team’s name.
The ownership deals for the Ducks and the Angels gave Disney a seat at the table in two professional sports leagues. An especially useful way to complement its television businesses ABC and ESPN.
During the 90's the regional sports cable television evolved from a lot of local networks to become one major regional player Fox Sports.
The emergence of Fox and its national "Fox Sports News" programming was seen by Disney as a potential competitor to the ESPN franchise program "Sports Center". While ESPN was and still programs live sporting events nationally, MLB, NBA, NFL, College Sports, Fox Sports Net was primarily programming "Hometown Teams" Lakers, Dodgers, Kings, Ducks, Angels, Clippers, UCLA, USC, Big West, and West Coast Conference games.
With this as a backdrop, Disney developed an Organizational Strategy to use its media resources ABC/ESPN and its sports businesses Ducks and Angels to create an entity to compete in the regional sports market. In Southern California this regional would be known as ESPN West to compete with Fox Sports Net West.
The strategy was for the Ducks and the Angels to be the professional sports team anchors for this new regional sports cable channel. The programming mix would also include college sports not under contract to FOX along with existing ESPN and ESPN2 programming. However, the strategy failed and ESPN West never made it to air.
The Ducks and Angels were the only real drawing cards for cable operators to carry the channel, therefore the per-subscriber fees Disney needed to produce the programming were not going to be paid at a high enough rate by the cable operators. Something that can be seen with the Pac-12 Network today.
Without sufficient cable systems clearing the proposed new channel, advertising revenue could not be projected to cover operating costs.
The Angels and the Ducks had little interest in the development of ESPN West because based on the insufficient cable system clearances and advertising revenue for the venture, the teams stood to lose needed television rights fees from Fox and also the added value from television eyeballs for their in-stadium/arena advertising.
In 2005, Disney would go on to sell the Ducks to Henry Samueli. He would then go on to lead the Ducks to a Stanley Cup victory in 2007, becoming the first winner from California.
"If you run a sports franchise for the shareholders, you’re probably going to have a pretty poor team and you’re going to be very unpopular in the community", said Eisner. “If you run it for the community, you’re going to lose a lot of money and be very unpopular with the shareholders. And even though the Ducks and the Angels were maybe a tenth of a percent of the whole company, it was like 40 percent of the publicity.”
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