Here is a brief excerpt from an article by Neil Gabler for The New York Times. To read the complete article, check out others, and obtain subscription information, please click here.

Photo: Walt Disney working on a sketch for Laugh-o-Gram, an early venture that made comic shorts based on fairy tales. Photo Credit: The Baron Missakian Collection, via University of Missouri-Kansas City

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Here is something that might surprise you: Walt Disney, that icon of American ingenuity, was in financial straits through most of his career. You probably thought he would have been a business genius — a model for others to study. But Disney was an atrocious businessman, constantly running his company into the ground. At the same time, though, he was a corporate visionary whose aversion to typical business practices led to the colossus that the Walt Disney Company became.

Before he was even old enough to legally sign the incorporation papers, Disney wrangled a few friends together, raised some cash, and started Laugh-o-Gram, a studio in Kansas City, Mo., that made comic cartoon shorts based on fairy tales. But he seemed less interested in making money than in having fun, and the company promptly went bankrupt, sending Disney, by then 21, to Los Angeles to look for work in the film industry.

He was saved when a New York distributor picked up a short he had made, featuring a real-life girl named Alice who lived in a cartoon world. Things went swimmingly for a while, even when the Alice films ran their course and Disney had to invent a new hit character, Oswald the Lucky Rabbit. But Disney was both financially reckless and egotistic. His distributor doubled-crossed him, surreptitiously poaching his animators, who bristled at his highhandedness. Since the distributor owned the rights to Oswald, Disney, then 27, had to start from scratch again.

He replaced Oswald with a new invention: Mickey Mouse, an instant success. But as his creativity continued to flourish, his business acumen flagged. Even Disney’s older brother Roy O. Disney, who oversaw the infant studio’s finances, said his brother would have been constantly fleeced were it not for him. In the case of Mickey Mouse, he was. A New York businessman named Pat Powers finagled Disney into contracting for his sound services — with onerous terms. Even though the Mickey Mouse cartoons did well, by the time Disney paid Powers his enormous cut and the studio’s expenses, there was very little left. Only when Disney persuaded Columbia Pictures to buy the distribution rights for a second series of cartoons called “Silly Symphonies” did he get a steady cash flow. In time, Columbia also secured from Powers the rights to the Mickey cartoons.

Disney could have expanded the company steadily, building on the success of Mickey Mouse. Instead, he placed a huge and highly risky bet on feature animation. Snow White was four years in production and cost over $2 million ($33.5 million in today’s dollars), most of it borrowed from Bank of America against the receipts of the cartoon shorts. The gamble paid off. Snow White earned nearly $7 million ($117 million today), most of which he immediately sank into a new studio headquarters in Burbank, Calif., and a slate of features.

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Here is a direct link to the complete article.

Neal Gabler is the author of Walt Disney: The Triumph of the American Imagination and an adviser on Walt Disney for “American Experience,” which is on PBS on Monday and Tuesday nights.