Here's the breakdown:
* Contractual Dispute: In 1927, Disney had a contract with Universal Studios for the creation and distribution of Oswald cartoons. However, Universal owned the rights to Oswald, not Disney.
* The Dispute: Disney and his brother Roy went to negotiate a better contract with Universal, but the studio offered them a worse deal. In addition, Universal also offered higher salaries to Disney's animators, which led to several of them defecting.
* Losing the Rights: Faced with the loss of his animators and a bad deal, Disney had no choice but to concede to Universal. He effectively lost control over Oswald.
* The Birth of Mickey Mouse: This situation prompted Disney and his team to create a new character, Mickey Mouse, who became a worldwide sensation and eventually surpassed Oswald in popularity.
So, while Disney didn't "lose" Oswald physically, he lost the rights to the character due to a contractual dispute with Universal Studios. This event, however, ironically led to the creation of a much more beloved and iconic character.