Disney-MGM Studios
The End of the MGM Name
Yesterland

On January 7, 2008, Disney-MGM Studios became Disney’s Hollywood Studios.

Despite the “MGM” in the park’s name, Metro-Goldwyn-Mayer had no part in designing, owning, or operating Disney-MGM Studios. Metro-Goldwyn-Mayer simply collected a licensing fee from The Walt Disney Company. But the owner of MGM, billionaire financier Kirk Kerkorian, wasn’t happy about it.

Disney-MGM Studios entrance
Disney-MGM Studios entrance in 2007.
 
Disney’s Hollywood Studios entrance
Disney’s Hollywood Studios entrance in February 2008.

When Kerkorian learned of the deal in 1985, he couldn’t believe that his executives had traded one of the most valuable assets of MGM/UA (as the company was called at the time)—its legendary name—to a competitor for a relatively small fee.

In his 1998 book Work in Progress, former Disney CEO Michael Eisner explains, “In June 1985, we signed an agreement that gave us most of everything we sought, including perpetual rights to use much of MGM’s library and its logo for a very modest fee. For reasons that remain a mystery Kerkorian was told about the deal only as it was being signed.”

Notice that Eisner used the term perpetual rights.

But why did Disney seek the MGM name for its new theme park and studio in Florida? It was because the new park would not just be about Disney movies, it would be about the movies, and no movie studio had a more glorious past than MGM. Not only that, but MGM had a library of many of the greatest movies of all time. The MGM of 1985 was only a shadow of the great MGM of earlier decades. Then again, the Disney of 1985 was also a company whose greatest movie achievements had been in the past.

Putting the two most recognized names in entertainment together would be just the marketing angle that the new park needed!

Disney-MGM Studios guard booth
Guard booth (but not a real one) at Disney-MGM Studios in 2007.
 
Disney’s Hollywood Studios guard booth
Guard booth (but not a real one) at Disney’s Hollywood Studios in February 2008.

The relationship with MGM/UA was a rocky one. Around the time the park opened, MGM/UA sued Disney over the licensing agreement. In October 1992, a Los Angeles Superior Court judge ruled that Disney could continue to use the Disney-MGM name and logo on productions made at the Florida park. And MGM/UA could license the MGM name to other companies, such as Kerkorian’s hotel-casino company MGM Grand, even for theme parks. An October 26, 1992, article in Variety summed up the issues:

Problems occurred when Disney began to use the studios, located within the movie backlot theme park, to create film product, using the Disney-MGM name (several minutes of “Beauty and the Beast” as well as parts of “Honey, I Blew Up the Kid” were shot on the Florida lot).
In his ruling, [Judge] Rappe said the language in the 1985 contract was “reasonably susceptible” to the interpretation that Disney could create film product within its working studio theme park.
Disney subsequently filed a cross complaint against MGM/UA and MGM Grand over the latter’s plans to build a theme park adjacent to a new $1 billion hotel project in Las Vegas. Disney claimed it held exclusive worldwide rights to the MGM name in connection with theme parks.

MGM Grand went ahead with MGM Grand Adventures Theme Park in Las Vegas. The unsuccessful park opened in 1993 and closed in 2000. So, for a number of years there were two MGM-branded theme parks—Disney’s and MGM Grand’s—but they were unrelated.

Disney-MGM Studios Animation Courtyard gate
Animation Courtyard Gate at Disney-MGM Studios in 2007.
 
Disney’s Hollywood Studios Animation Courtyard gate
Incomplete Animation Courtyard Gate at Disney’s Hollywood Studios in February 2008.

If Disney had perpetual rights, as Eisner indicated, why did Disney finally change the name of the park?

For at least a decade, rumors on the Internet had claimed that the contract between Disney and MGM was about to end, and that Disney had no choice but to rename the park and remove all MGM content. As evidence, people pointed out that Disney’s promotional VHS tapes for Walt Disney World were calling the park Disney Studios instead of Disney-MGM Studios. The name in the tapes was due to a licensing limitation dealing with content distribution, not with an imminent name change at the park. It remained Disney-MGM Studios.

But the rights weren’t perpetual after all. The 1991 book The Disney Touch by Ron Grover identified the length of the agreement as 20 years in the following paragraph:

The negotiations took about a month. In the end, Disney all but walked away with Leo the Lion’s mane. Disney received almost free rein in use of the famous roaring lion and the treasure trove of old MGM movies. Most important, it got those rights for virtually nothing. Under the 20-year agreement, Disney was to pay only $100,000 a year for the first three years and $250,000 for the fourth year. The annual fee would increase by $50,000 in every year thereafter, with an eventual cap of $1 million for the yearly fee. Disney also got nearly unfettered ability to build other studio tours, for each of which it would pay half the fee agreed upon for the Orlando park.

A 20-year contract signed in June 1985 would have ended in June 2005. (It seems odd that Disney would base a permanent theme park’s name, image, and long-term marketing on a relatively short-term licensing agreement.) Of course, the agreement could have gone on perpetually if Disney and MGM had found it mutually beneficial to keep renewing their agreement whenever the end of the term neared. Disney was able to use the MGM name through the end of 2007 and into a transition period in early 2008.

Disney-MGM Studios bus stop 6
Bus stop 6 outside Disney-MGM Studios in 2007.
 
Disney’s Hollywood Studios bus stop 6
Bus stop 6 outside Disney’s Hollywood Studios in February 2008.

In August 2007, a Disney press release announced that Disney-MGM Studios would have a new name in January 2008. There was even an official reason:

“The new name reflects how the park has grown from representing the golden age of movies to a celebration of the new entertainment that today’s Hollywood has to offer—in music, television, movies and theater,” said Meg Crofton, president of Walt Disney World Resort.

Actually, the park had never been just about the golden age of movies. Even in its first year, the park’s idealized Hollywood, which was summed up as “the Hollywood that never was and always will be,” included television, the latest animation, relatively recent George Lucas movies, and actual film production.

It doesn’t matter if MGM refused to renew or if Disney simply decided that using the MGM name was no longer good marketing. The Walt Disney Company in 2008 is a very different company than it was in 1985. Back then, the MGM name might have given a studio theme park more credibility than Disney alone possessed. But today, Disney is an entertainment giant in film, broadcasting, cable, and home video. Why publicize Metro-Goldwyn-Mayer, which is now even more of a shadow of its legendary past than it was in 1985?

The new name of the park surprised Disney fans on the Internet. The online community had expected Disney-PIXAR Studios or Disney-ABC Studios or maybe even Disney-PIXAR-ABC-ESPN-Muppets-go.com Studios—but not Disney’s Hollywood Studios. But it makes a lot of sense. If the name MGM was synonymous with the movies, there’s one other name that has an even a greater connection to the movies—and that’s Hollywood.

Disney-MGM Studios destination on a WDW bus
The destination of this WDW bus in 2007 is Disney-MGM Studios.
 
Disney’s Hollywood Studios destination on a WDW bus
The destination of this WDW bus in February 2008 is Disney’s Hollywood Studios.

But what about all the MGM content in The Great Movie Ride? Well, let’s see who made the films depicted in that ride and who holds the copyrights... Footlight Parade (1933) was a Warner Bros. film. And so was The Public Enemy (1931), starring James Cagney. Raiders of the Lost Ark (1981) was Lucasfilm production, released in the U.S. by Paramount Pictures. Casablanca (1942) was a Warner Bros.-First National Pictures film. Alien (1979) was made by Brandywine Productions Ltd. and released in the U.S. through Twentieth Century-Fox Film Corporation. Mary Poppins and Fantasia are, of course, from Walt Disney Productions.

The Great Movie Ride entrance
The Great Movie Ride still has clips from classic MGM movies.

How about the famous MGM musical, Gene Kelly’s Singin’ in the Rain (1952)? And the great MGM favorite The Wizard of Oz (1939)? After all, it’s the biggest, most complex scene in the entire ride. And how about the MGM films Tarzan the Ape Man (1932) and Tarzan and His Mate (1934), both starring Johnny Weissmuller? All of these MGM classics are now owned by Warner Bros., along with the entire pre-1986 library of MGM movies. That’s because Ted Turner bought MGM/UA Entertainment Co. from Kirk Kerkorian in 1986. Turner quickly sold most of MGM/UA’s assets—including the MGM and United Artists trademarks, which he sold back to Kerkorian. Turner kept the pre-1986 movies and television programs for his Turner Broadcasting System television empire. Turner merged with Time Warner (parent of Warner Bros.) in 1996.

With some exceptions, The Great Movie Ride is really The Great Movies-That-Are-Owned-By-Warner-Bros. Ride

Actually, some of MGM’s most valuable properties, including The Wizard of Oz and Singin’ in the Rain, were never part of the overall contract between MGM and Disney. They were excluded from the contract and licensed separately.

Disney doesn’t disclose the terms of their licensing agreements with Warner Bros. and the other copyright holders of The Great Movie Ride content. Presumably, Warner Bros. and the others are happy to take Disney’s money to allow Disney to publicize their older movies (which might even translate to additional DVD sales for those companies). But if, for some reason, one of the contracts can’t be renewed at some point, it would be easy for Disney to change out a scene in the ride.

In any case, there’s no reason to worry that the end of the licensing agreement with MGM also means closure of The Great Movie Ride.

Scene from The Wizard of Oz in The Great Movie Ride
The Wizard of Oz is the most elaborate scene in The Great Movie Ride.
 

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© 2008-2009 Werner Weiss — Disclaimers, Copyright, and Trademarks

Updated May 1, 2009.

Photograph of Disney-MGM Studios entrance: 2007 by Werner Weiss.
Photograph of Disney’s Hollywood Studios entrance: 2008 by Werner Weiss.
Photograph of Disney-MGM Studios guard booth: 2007 by Werner Weiss.
Photograph of Disney’s Hollywood Studios guard booth: 2008 by Werner Weiss.
Photograph of Disney-MGM Studios Animation Courtyard Gate: 2007 by Werner Weiss.
Photograph of Disney’s Hollywood Studios Animation Courtyard Gate: 2008 by Werner Weiss.
Photograph of Disney-MGM Studios bus stop 6: 2007 by Werner Weiss.
Photograph of Disney’s Hollywood Studios bus stop 6: 2008 by Werner Weiss.
Photograph of Disney-MGM Studios destination on a WDW bus: 2007 by Werner Weiss.
Photograph of Disney’s Hollywood Studios destination on a WDW bus: 2008 by Werner Weiss.
Photograph of The Great Movie Ride entrance: 2007 by Werner Weiss.
Photograph of scene from The Wizard of Oz in The Great Movie Ride: 2007 by Werner Weiss.