Walt Disney lost the rights to Oswald the Lucky Rabbit — and created Mickey Mouse instead

In 1927, Walt Disney created Oswald the Lucky Rabbit for Universal Pictures. The cartoon was a hit — Oswald was merchandised, featured in comics, and appeared in 26 shorts. But Disney's contract with producer Charles Mintz gave Universal the rights to the character. Disney owned nothing. In February 1928, Disney traveled to New York to negotiate a better deal. Mintz offered only 20% of the profits — and revealed that he had hired most of Disney's animators away from him. Disney refused, walked away, and lost both his hit character and his staff.

On the train back from New York, Disney created a new character. He sketched a mouse with round ears and named him Mortimer Mouse. His wife Lillian suggested the name Mickey instead. Disney partnered with Ub Iwerks, the one animator who had stayed loyal, to develop the character. The first Mickey Mouse cartoon, 'Plane Crazy,' was produced as a silent film in the summer of 1928. It was not a success.

Mickey Mouse did not find his audience until Disney added synchronized sound. 'Steamboat Willie' premiered on November 18, 1928, at the Colony Theater in New York. It was the first cartoon with fully synchronized sound and became a sensation. Audiences loved it. Mickey Mouse surpassed Oswald in popularity almost immediately. The character's success was so rapid that by 1930, Mickey Mouse merchandise was generating $1 million per year. The character appeared in over 130 cartoons during the 1930s.

Mickey Mouse became the foundation of the Walt Disney Company. The character appeared in films, television, comics, merchandise, and theme parks. The Walt Disney Company, built on the success of the character Disney created out of necessity, became one of the most powerful entertainment companies in the world. A bad contract that cost Disney his first hit character had forced him to create something far greater.