Article: Disney suing Blockbuster

[Luv2Roam]

Boy, the Disney attorneys have a lot on their plate.

Disney sues Blockbuster over revenue pact--report
Reuters, 01.03.03, 2:24 AM ET

NEW YORK, Jan 3 (Reuters) - Blockbuster Inc (nyse: BBI - news - people), the largest U.S. movie-rental chain, cheated Walt Disney Co's (nyse: BBI - news - people) video unit out of about $120 million under a four-year revenue-sharing agreement, according to a lawsuit filed by the studio, Bloomberg News reported late Thursday.

Disney's Buena Vista Home Entertainment unit claims Blockbuster improperly deducted "promotional" credits, failed to account for "hundreds of thousands" of missing videos and sold videos prematurely under the agreement they signed in 1997, the report said.

Under the contract, Blockbuster was to share rental revenue from Disney films with the studio in exchange for reduced prices on videos.

Blockbuster ended the revenue-sharing agreement with the second-largest U.S. media company last year after Disney complained of the discrepancies, the suit says. The agreement covers only VHS tapes, which matter less to Blockbuster as digital video disc rentals surge, the article said.

Officials at both companies were unavailable to comment early on Friday.

Copyright 2003, Reuters News Service

 

[Another Voice]

In the ultimate of ironies, a lot of the movies that Disney is whining about are all the ‘Winnie the Pooh’ tapes….

 

[Another Voice]

Well, considering that the courts in California have already ruled that "The Old Lady" is speaking the truth I'm fairly sure my word choice is correct.

 

[KNWVIKING]

I think i'd "whine" too for 120 mil.

 

[d-r]

Originally posted by KNWVIKING
I think i'd "whine" too for 120 mil.

Hey, it would make up for treasure planet...

DR


PS actually I liked TP

 

[Another Voice]

Mr. Scoop – Disney has already admitted it short-paid royalties on Pooh merchandise. That part of the case is simply been about how much they owe.

I’d say a confession is better than a finding by the preponderance of the evidence.

 

[Luv2Roam]

Disney sues Blockbuster for breaching revenue pact
Reuters, 01.03.03, 1:31 PM ET

By Derek Caney

NEW YORK, Jan 3 (Reuters) - Walt Disney Co. (nyse: DIS - news - people) accused Blockbuster Inc. (nyse: DIS - news - people), the largest U.S. film-rental chain, of shortchanging the film and television conglomerate by $120 million under a revenue-sharing agreement, it said in a lawsuit filed earlier this week.

Disney's home video unit, Buena Vista Home Entertainment unit, claimed that Blockbuster breached a 1997 revenue-sharing agreement improperly deducted credits for promotions like "rent one, get one free" and failed to account for missing videos under the agreement they signed in 1997, according to the suit filed in a U.S. District Court in Los Angeles on Tuesday.

The suit also alleges that Blockbuster sold Disney tapes before it was contractually allowed to do so under the contract.

Blockbuster, which is 81 percent owned by Viacom Inc., terminated the agreement in June 2001.

Although he has not yet seen the complaint, Blockbuster General Counsel Ed Stead said he believed that the claims are without merit.

"In conversations between senior Disney executives and several Blockbuster executives, Disney has acknowledged that heart of these claims are bogus," he told Reuters. "That leads me to believe to they are trying to gain some leverage against Blockbuster in contract negotiations or deflect attention away from their own corporate difficulties."

Disney spokesman John Spelich retorted, "That sounds like the desperate comment of a person worried about the merits of his case. They have breached their contract. Being unable to reach a settlement, this was the only option they left us with."

In the mid-1990s, Blockbuster inked deals that gave major film studios a percentage of rental revenue in exchange for lower wholesale prices for video tapes.

Blockbuster is seeking similar deals for DVDs with all of the studios. Stead said it has some agreements in place, but declined to be more specific.

Such revenue agreements helped Blockbuster turn around its business in the 1990s. But these days, retailers like Wal-Mart Stores Inc. (nyse: WMT - news - people) and Best Buy Co. Inc. (nyse: WMT - news - people) have been undercutting Blockbuster's DVD rentals by offering DVDs for sale at rock-bottom prices.

Copyright 2003, Reuters News Service

 

[raidermatt]

I don't suppose Blockbuster has done Disney a favor by destroying some boxes labeled "Disney - Legal Troubles" have they?