Pooh License Trouble!

#1

http://www.nypost.com/business/40121.htm

DEEP POOH-POOH
By NIKKI FINKE

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.

…What will a poor Tigger do!

#2

I have been reading these articles for a while, and they all are very similar to this one. What I have been able to surmise from them all is that Disney needs new attorneys. It seems as though every time something like this comes up, they lose. I don’t expect Disney to lose Pooh though, maybe they might have to pay additional royalties, but they won’t lose him.

My only question about the numbers they float is how in the world do they figure out what percentage Pooh and Friends brings to Disney? Do they assume that everyone that enters MK is going there only for the Pooh ride? I mean, look at the Disney company: Theme Parks, hotels, ABC, the Disney Channel, the old Fox Family Channel, cable systems, internet properties, ESPN, Live and animated films. I am sure that I forgot something. But out of all the income those entities bring in, they say that one quarter is directly from Pooh et al? I would guess that I am an average Disney consumer. We spend probably $5,000 per year on Disney stuff, between the trips, movies, watching TV, etc. I would bet that we spent maybe $100 on Pooh stuff. Two nightgowns for my girls, a pooh DVD and a portion of our annual passes to WDW. Then again, I would still go to WDW without Pooh, but some others might not.

Am I missing something?

#3

What I have been able to surmise from them all is that Disney needs new attorneys. It seems as though every time something like this comes up, they lose. I don’t expect Disney to lose Pooh though, maybe they might have to pay additional royalties, but they won’t lose him.

Mickey, I agree with you on the attorneys. And I hope your right about Pooh staying at Disney.

#4

Originally posted by tigger
Mickey, I agree with you on the attorneys. And I hope your right about Pooh staying at Disney.

I would’t be surprised to see this resolved with an out of court settlement. What would these people do with Pooh themselves? They don’t have Disney’s marketing or film making history behind them. They don’t own a theme park in which to place Pooh rides. They wouldn’t own the rights to any of the Disney clothing, rides or movies with Pooh in them. They just want the court to look at the licensing agreement and decide if Disney is paying them enough money.

Oh, and I forgot the Disney Store in the list of Disney properties.

#5

I’m not sure that I understand what exactly the family is sueing over?

Additional Royalties should be just about the only thing they can sue for.

I guess I just don’t understand.

I would hate to see all the Pooh stuff in the parks go bye bye.
If that does happen it would seem that Disney could sue the family back for 19 years of advertising expenses from the TV show and every Pooh stuffed animal ever made.