Entertainment Industry

« Previous | Company Town Home | Next »

Federal jury awards $269.2 million in damages in "Who Wants to Be a Millionaire" suit

STCANJSWWOCAFTIU5RCA1K0QAACAO8P9XICAQ02VNQCA49M5VHCA6T51GVCA6TJJCZCACH94TACAH3P5LICAHMNGV9CAF4FUMZCAN1OULVCA4LR2ZTCA5Y5O9DCAOFRVL3CAFT10I4CAIKEBNWCA7XGKYB
In a legal setback for the the Walt Disney Co., a federal jury in Riverside awarded the creator of "Who Wants to Be a Millionaire" nearly $269.2 million in damages from the once-popular prime-time game show.

The decision strikes at the heart of the "vertical integration" argument that has buttressed the wave of consolidation that has swept Hollywood over the last 20 years, in which media giants contend that it is economically advantageous to control both the production and distribution of TV programming.

Creator Celador International sued The Walt Disney Co. in 2004, claiming that it had been denied its fair share of profits from the show, which aired on the entertainment giant's ABC network for three years beginning in the summer of 1999 and continues to appear on local TV stations. Celador argued that a series of "sweetheart deals" struck between a clutch of Disney-owned companies kept the show in the red, even as it became ABC's first No. 1 show in more than a decade.

Celador asked the jury to award damages of up to $395 million in broadcast licensing fees, based on what one expert said would be the fair market value of the show. The U.K.-based company also claimed that it was owed $10 million in revenue from the sale of "Millionaire"-inspired games and other merchandise.

The jury arrived at a figure that was slightly less -- $260 million in licensing fees and $9.2 million in money owed from the sale of merchandise. Disney issued a statement, saying it plans to challenge the award.

"We believe this verdict is fundamentally wrong and will aggressively seek to have it reversed," Disney said in the statement.

The case has been described as an illustration of "Hollywood accounting," in which TV shows that become major hits never turn a profit. Over the course of the four-week trial, Celador's attorneys introduced evidence that the show generated $515 million in revenue from license fees over the course of its three-year prime-time run through 2002, not including $70 million in merchandising revenue. 

"Millionaire" also attracted nearly $1.8 billion in advertising for ABC, according to research firm Kantar Media. 

But according to Disney's accounting, Millionaire has run a $73-million deficit.

[Update, 11:22 p.m.: For more, see the story on the ruling against Disney in the "Who Wants to Be a Millionnaire?" lawsuit in tomorrow's Times.]

-- Dawn C. Chmielewski

Photo of "Who Wants to be Millionaire?" by Virginia Sherwood / ABC

 
Comments () | Archives (30)

More slime-bucket production companies. Greedy, selfish and third rate pigs. May they all be sued.

More slime-bucket production companies. Greedy, selfish and third rate pigs. May they all be sued.

I once worked for Lawrence Murphy and Peter Murphy at Disney, and this is TYPICAL of this corporation.

They laugh and hide behind Harvard MBAs. They spit on the genuine creators of marketable product.

Today, the laugh is on them.

Shouldn't the IRS challenge the accounting that says it lost money on the show?

Hey Mickey, stop cheating and play fairly.

Good Luck in collecting... Hollywood people, you know their kind, never lets go of any money.
Never trust them with any money or share with them any product of your talent.

Yo Dawn, can you ask Celador if I can borrow a few bucks.

I don't think a reduction of ~30% of the requested amount is "slightly less."

Disney got served- Hell yeah!

Rarely does the US enforce the Sherman Antitrust Act. Companies like Disney, Sony, Fox, Kruger, Bank of America, Safeway, etc. have control of the production and market. The little guy has almost no chance of standing up to the big guys due to high costs of court battles. As a result innovation is stifled or the little guy gets taken advantage of.

In this case, Disney has evaded taxes and their financial obligations by claiming that Millionaire has run a $73-million deficit. Shame on them and Congress for allowing these corporations to get away with this.

One wonders why this isn't treated as criminal fraud?
They set up fake transactions in order to avoid paying what they owed.
If that was some guy on the street instead of a Disney suit, he would be under indictment.

Disney is fiscal in nature. OK, very cheap. They have had a fifty year history of not paying the vaste majority of their employees even an industry median average when the same exact job and responsibilities is compared to every other house in town. Yes, they and the majority of studios do have a creative imagination as do their Accounting Firms, in house and out, but the IRS seems to be lacking in man power and intellect to keep up with their ever evolving creative ways of downplaying profits. Disney will spend four years with their in house lawyers because they will be spending pennies on the dollar and then righting off seventy percent of the legal fees. At the end of the day it is just Disney being stubborn, cheap, unethical and downright slimy. Funny, they sell themselves as a family themed house, yet they neglect the very families at Disney.

Tragically Mickey fell in with the fast crowd and became a Krakow gutter rat.

"The creator of 'Who Wants to Be a Millionaire' sued The Walt Disney Co. claiming that it had been denied its fair share of profits from the popular show."

Even though the lawsuit was filed on behalf of a corporate entity, the creator of the show could not be an "it" - unless robots work in development for Celador. LAT, please be consistent with your pronoun clarity - i.e., "creator/(s)he" or "creators/they" or "company claiming credit for the creation of/it" - any one of these will do, thanks.

If you don't come in on Saturday don't bother coming in on sunday

"Slime-bucket production companies", what is that based on? Unless they are referring to Disney it's gibberish. I have not read the case but a jury found that Disney deliberately cooked its books to cheat the creators (producers) out of the fruits of their work. 'Pragmatist' is right, this behavior in the entertainment industry is criminal even if it is the industry standard; it's fraudulent and those who engineered it should be prosecuted for fraud --as in jail time-- to put an end to it.

Such fundamental, grubby dishonesty. If they could steal the money out of your pocket and get away with it, they would. Weren't they brought up properly?

The R.I.A.A., OVER $100 million. ANY questions?

Please, give us some more information and context. How comes that booth parts can defend so hughly different amounts?

There's a reason that some refer to Disney as "Mouseschwitz" and "Duckhau".

Typical Hollywood business.

' We make money together...I don't pay you....then you are forced to sue me to get it. '

Chutzpah

Pay up you "Rat".

typical studio greed, if they weren't making any money they wouldn't produce show after show season after season, it's that simple. it's the same failed argument Warners made with the Batman franchise. why would you make a sequel if the first movie "lost" money.

juries see right past this subterfuge.

typical studio greed, if they weren't making any money they wouldn't produce show after show season after season, it's that simple. it's the same failed argument Warners made with the Batman franchise. why would you make a sequel if the first movie "lost" money.

juries see right past this subterfuge.

I hated this show, this award should ensure that Disney never airs this garbage again.

 
1 2 | »

Advertisement
Connect

Recommended on Facebook


In Case You Missed It...


Photos: L.A.’s busiest filming sites

Video





Categories

Companies


Archives