No more Pooh?

[nisiemouse]

Dh just told me that disney has warned investors of a potential loss of revenue from the Pooh case. I will be so sad if there is no more Pooh.

 

[Peter Pirate]

Because if Disney has done something unethical or underhanded I will have a hard time understanding it. We've had a few of these issues...There was the Sports Complex (of which they lost)...There's also the IRS allegations.

I've always known Disney to play hardball but are they cutthroat & unethical as well?

I'm not passing judgement here only venting the fears of a Car #1 Disney supporter...

Other thoughts will certainly be appreciated...

 

[JeffJewell]

Since Peter asked, and all, here are a couple thoughts.

First, to nisiemouse: there will _always_ be Pooh. The only difference could possibly be who cashes the checks with which you buy your Pooh-raphernalia.

Second, to Peter: at this point, this is a "we'll never know" issue. What we _do_ know is that Disney and at least one subsidiary of Disney have destroyed hundreds of boxes of records pertaining to Pooh's licensing fees and revenues, even after a court order to produce the documents.

Those who distrust management and their intentions will point out this is a crime in and of itself, and it also raises suspicions that there must be a gun smoking really badly underneath there, to make the illegal shredding attractive to decision-makers.

Those who believe in management and their intentions will point out that businesses destroy documents all the time, and assert that this was a badly timed clean up, not a perfectly timed cover up. This is known as the Arthur Anderson defense, and I suspect, cynically yet sadly, that it will be reasonably effective.

are they cutthroat & unethical as well?

Cutthroat, no doubt. Unethical, well, that gets a little hairy, because "ethical" is a moving target. More importantly, perhaps, "ethical" is a meaningless concept in business. If your lawyers can beat back anyone who says it's illegal, and it makes you money, business is for it. Ethics don't enter into it; it's difficult to quantify such quaint notions in a spreadsheet cell.

The disagreement is over exactly which Pooh products Disney owes licensing fees and royalties on. Perhaps 'Scoop can interpret more of the legalese (I always suspected he might come in handy, for something, someday...), but it looks to me as though Disney is playing a semantics game (and perhaps a supply chain game, as well) to avoid legitimate payouts they owe; dismissing proven underpayments as "clerical errors," and destroying the documents that would prove (or disprove, but I doubt they'd be shredding stuff that could help their case) other underpayments.

Jeff

 

[Bstanley]

I'm not a lawyer (nor do I play on on TV , but my understanding of the situation is that the creator of Pooh (A.A. Milne) sold the "commercial rights' in 1929 to a US agent and in a 1932 letter updated the definition "to include live television, radio and puppet shows, as well as phonograph records and devices that would be analagous to television in the future".

Disney signed a contract with the wife of the (then deceased) agent to use the characters in 1961 for their movie and began selling all kinds of Pooh related merchandise based on those characterizations. They also began paying royalties to her based on that agreement. But the two sides have been argueing over just how much Pooh stuff Disney actually sells, as well as whether the original 1932 argreement covers things like videotapes, DVDs, Computer Software, etc.

It is REALLY ugly, it does look like Disney has been underhanded about it, and it will end up costing them several hundred million when it finally gets settled - and worst of all - the Judge in the case has already stated that "if breach of contract or fraud was proven at trial, the Slesingers would be free to terminate the contract and seek a home elsewhere for Winnie the Pooh. "....

 

[JeffJewell]

the Judge in the case has already stated that "if breach of contract or fraud was proven at trial, the Slesingers would be free to terminate the contract and seek a home elsewhere for Winnie the Pooh. "

I personally believe this is the key to understanding the shredding. Paying fines can be a pain, but if you have to pay a fine to ensure that breach of contract or fraud cannot be proven, allowing you to keep your lucrative license, spreadsheet ethics would say that's the way to proceed.

Jeff

 

[Bstanley]

No matter what happens I imagine that the 'worst case' would end up being nothing more than Disney paying more for using the Pooh characters.

I say this because I can't think of anyone else who might 'use' the characters more than Disney does... Vivendi/Universal? Sony/Paramount? etc.

Basically the license holder isn't going to be able to find anyone else who can make as much money for them as Disney can so it'll just boil down to how big the payment pile is... This past year Disney paid them $17M or so and the claim is that it should have been $40M or so.

 

[Another Voice]

Disney has already lost a series of cases involving the same contract interpretation they applied to the Pooh contract (singer Peggy Lee and several of the Mousekteers among them). Most of the other studios gave up the “there’s no mention of DVD’s in the contract” defense a long time ago, only Disney remains trying to litigate these things.

It should also be noted that most of the document shredding occurred after the court ordered Disney to stop the document destruction. These documents included those in boxes labeled ‘Pooh Legal Troubles’. The Company has already been fined several times by the court for failing to produce information; even stiffer fines are now expected over the continuing shredding.

Disney expected to force a settlement in the case all along, but now they seem very, very frightened. Not only is the court extremely upset with The Company’s behavior, but the right holders say they have every intention to strip the contract from Disney (a very likely outcome under California law). They are encouraged, no doubt, by the lengthy line of other media companies more than willing to sign very lucrative deals with the Slesingers.

In a related matter, the business reporter who wrote extensively about this case has been fired by her newspaper. She is now suing, claiming that Disney applied unethical pressure on the paper to silence her. At first the issue was pretty much ignored, but now an awful lot of very interesting evidence is coming to light. This is another story that could blow up very quickly.

 

[Bob O]

I would also agree with AV in that its one thing for a company to destroy documents, its a totally different situation for a company to destroy subpoended documents. if anybody believes it was accidential i would be happy to sell them a bridge. And they may have a tough time with a jury/judge as the public spotlight is on big business and right now they arent in a good light and escpecially juries like to side with the"little guy" if they can and stick it too the big corp.. I have no idea how it will end up but disney does itself a major dis-service by destroying evidence(unless of course they destroyed the smoking gun).

 

[Conure]

Due to infaltion, it's actually 10 bucks.

Disney will do something, because their is TONS of revenue behind that yellow bear. I dare say he brings in more then Mickey. If I were at the head of Disney,(and I really wish I was sometimes,) I would lessen my dependence on Pooh. Market Mickey enough, their's your safety net. Sure, sell Pooh, but don't ENTIRELY DEPEND ON HIM. Ya never know what could happen.


I never let schooling interfere with my education.

-Mark Twain

 

[cmbelle]

Yes, I would miss Pooh and his friends, but Disney has so many other avenues for marketing that they do not take; i.e. - Lion King, Goofy, Donald Duck, Pocohantos. So much of their marketing is tied in to Pooh, no one seems to try to present an original idea.

 

[Lesley]

All the legal issues aside...I think I'd actually be relieved if Disney lost Pooh. I love Pooh, but I'm a bit of a purist. The crap that Disney is passing off as "Winnie the Pooh" these days just does not do justice to the original writing...which was brilliant.

Disney has done nothing but exploit my favorite "silly old bear". (Ooops...actually my favorite bear is Paddington...but he's not a "silly old bear"...he's just silly)

Heck, I think the contract should be voided under grounds of abuse of artistic license