The Walt Disney Co. has lost a $270 million jury verdict over "Who Wants to Be a Millionaire," according to
reports from the courtroom.
That's a huge, huge number, basically everything Celador International was seeking in the six-year litigation over profits from the hit ABC game show. The Riverside jury deliberated for a week and awarded $269.4 million in damages.
Originally filed in 2004 but delayed by years of legal wrangling, Celador claimed that Disney-owned ABC and Buena Vista Television violated a complex deal to produce and distribute "Millionaire" in North America by brokering sweetheart deals among themselves that cheated Celador out of its share of millions of dollars.
The jury apparently agreed with Celador trial counsel Roman Silberfeld, who, during the three week federal court proceeding, hammered home the concept of "Hollywood accounting" to the jury. Silberfeld argued that ABC artificially deflated fees the network should have paid BVT and Disney-owned Valleycrest, which in turn decreased Celador's share of revenue. Loss of merchandising revenue was also claimed.
Disney attorneys, led by Marty Katz, argued that the conglom lived up to its side of the bargain and that Celador had already been paid millions from the show's U.S. run. In the end, the "Hollywood accounting" argument was more effective with the jury.
Disney said in a statement that it will appeal. "We believe this verdict is fundamentally wrong and will aggressively seek to have it reversed," the studio said in a statement.
The trial presented a rare peek at television accounting procedures, although the proceedings failed to produce any bombshell revelations. Former Walt Disney Co. CEO Michael Eisner never testified, although an email was read in which Eisner estimated the value of the show's rights at $1 billion and said it would reverse the network's fortunes. Current Disney CEO Robert Iger did take the stand, proving a smooth and well-prepared witness, though he contradicted Eisner's email by calling him a "great enthusiast" who might have been making "wild guesses" in describing the "Millionaire" franchise's worth.
In the 1999 deal, Disney's ABC received broadcast nights to the show, while BVT got other rights like production and distribution. In exchange, Celador received an executive producer fee for each network episode (weekly fees in syndication) plus backend participation based on BVT's gross receipts, subject to deductions.
