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Mickey merchandise hit $70 million
A $300 license
The deal was for children's writing tablets, which sold in huge numbers, though Disney had no idea how many because it had only a handshake and $300. In 1933, Walt and Roy hired Kay Kamen, a Kansas City adman who had owned an advertising firm, as the exclusive agent for Disney merchandise licensing. Disney would get 60 percent of the first $100,000 in royalties he generated and half of every dollar after that.
Within six months, Kamen had turned a hodgepodge of random licenses into $6 million in gross merchandise sales. Two years later it was $70 million a year, from more than 40 consumer product partners around the world.
What it paid
Most of his deals paid a 5 percent royalty on the wholesale price, and the $70 million was retail. If wholesale ran about half of retail, that is roughly $1.75 million split between Disney and Kamen. Disney's film distributor was advancing $15,000 per cartoon, while Walt spent $30,000 or more making each one.
The watch deal
The most famous deal was with the Ingersoll Watch Company, which was close to bankruptcy during the Depression. The Mickey Mouse watch sold 2.5 million units over two years and saved the company.
How does a licensing royalty work?
A licensee pays the owner of a character a percentage of the wholesale price of each product sold. The owner usually controls how the character is drawn and used. A 5 percent royalty on wholesale means the owner earns a small share of each sale. Volume across dozens of product makers is what made the arrangement valuable.
Why did the Mickey Mouse watch sell?
Ingersoll was known for inexpensive watches, including its famous dollar watch. The Mickey Mouse wristwatch debuted in 1933 and sold for $3.75, with Mickey's arms serving as the hands. Mickey was a familiar face to children, and the watch put him on their wrists. The watch became one of the best-known pieces of character merchandise ever made.
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