January 29, 2002 -- The Walt Disney Co. could lose as much as 25 percent of its annual gross revenues if it doesn't win the Winnie the Pooh lawsuit expected to go to trial as soon as the end of this year.
Freshly unsealed court documents show that new Hollywood attorneys for the heirs of New York agent Stephen Slesinger, who first sued Disney for back Pooh royalties in 1991, are now asking to terminate Disney's license to exploit the beloved bear cub.
The loss of Pooh plush toys or Tigger tee-shirts or Piglet lunch boxes, not to mention theme park attractions like the incredibly popular "Pooh's Honey Pot" ride in Tokyo and planned for Hong Kong, would be a devastating financial blow to the entertainment giant, which already is suffering from lower earnings, little growth and a lagging stock price.
The court documents claim that Pooh is the "most lucrative" of all Disney characters, even more than Mickey Mouse.
The attorneys for Slesinger's heirs used newspaper articles, stock analysts and company insiders in stating that Pooh generates as much as a quarter of Disney's total annual revenues, or $3.3 billion in 1998, $4.5 billion in 2002 and a projected $6 billion in 2001.
The attorneys quoted a sales and consumer data tracking company's figures showing that in licensed toy sales, Pooh characters have outsold Mickey, Minnie and friends $316 million to $114 million through November 1999.
Disney officials don't release detailed sales comparisons on their characters. However, just recently, in his Jan. 8 presentation to the Salomon Smith Barney Entertainment Media and Telecommunications Conference, Disney President Bob Iger said, "in merchandise licensing, two thirds of our revenues come from our Mickey and Pooh properties."
Bonnie Eskenazi, one of the attorneys from Greenberg Glusker Fields Claman Machtinger & Kinsella suing Disney, confirmed to The Post that the formal termination request regarding the 1983 Slesinger-Disney contract for commercializing Pooh was made last spring in the heirs' third amended a complaint that was among the newly unsealed court documents.
"It's a very common remedy for material breach of a license agreement to terminate the license," Eskenazi said. "Many licensing agreements with studios actually do contain a provision whereby the owner of the property expressly waives their right to terminate. And that is not in that contract."
But Daniel Petrocelli, the outside counsel for Disney in the case, told The Post that the Slesinger heirs do not have any right to pull Pooh from Disney. "That is a completely false and irresponsible accusation. This case is only about whether or not additional royalties are owed. Not for one second do the Slesingers have any chance under the law to get back any rights."
Replied Eskenazi: "Mr. Petrocelli's analysis is just not correct."
The last time Eskenazi and her litigator partner Bert Fields, who has never lost a case, went up against Disney in a big way was the Jeffrey Katzenberg trial, which proved devastating to Disney's Eisner both personally (that infamous "midget" slur) and profit-wise (a humongous settlement).
Yet Disney finds itself in an even more difficult spot this time around.
<b><i>Source:</i></b>
New York Post
