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Filed in 2004 but delayed by years of legal wrangling, the “Millionaire” case presents a rare open-court Hollywood showdown with hundreds of millions of dollars on the line. The witness list includes top execs like Disney president and CEO Bob Iger, former ABC exec Mark Pedowitz and former ABC exec-turned-“Millionaire” producer Michael Davies. Also scheduled to testify are dealmakers such as Ben Silverman and Greg Lipstone, who, as WMA agents, helped put together the 1999 deal to bring “Millionaire” to the U.S.
Celador claims in the litigation that Disney-owned ABC and BVT violated a complex deal to produce and distribute “Millionaire” in North America by brokering sweetheart deals among themselves that cheated Celador out of millions of dollars in profits.
“Who Wants to Be a Millionaire” (we’re still not sure why there’s no question mark) aired on ABC from 1999-2002 with Regis Philbin hosting. The network employed an unorthodox strategy with the show, airing it as many as 13 nights in a row. At its peak in 2000, it was drawing about 30 million viewers a night but ratings soon crashed, and after about 360 episodes, the series switched to syndication with Meredith Vieira hosting (more than 1000 of those episodes have aired).
In the 1999 deal, Disney’s ABC received network broadcast rights to the show, while BVT got other rights like production and distribution. In exchange, Celador received an executive producer fee for each network episode (a weekly fee when the show went into syndication) plus a backend participation based on BVT’s gross receipts, subject to deductions for production expenses and other costs.
Celador argues that ABC artificially deflated what the network should have paid BVT and fellow Disney-owned production company Valleycrest to air the show, significantly decreasing Celador’s piece of the pie. The alleged self-dealing also impacted merchandising revenue because BVT was not entitled to deduct certain expenses, Celador claims. The company also is asking for punitive damages, bringing the total potential hit to Disney to as much as $270 million with interest.
Disney’s lead attorney, well-known showbiz litigator Marty Katz, declined to comment on the case, as did Celador trial lawyer Roman Silberfeld. But Disney argues in the litigation that Celador, which has licensed the “Millionaire” format in more than 100 countries around the world, has made millions from the U.S. version and that ABC’s decision to air the show so often resulted in astronomical per-episode fees for the company. The downside was that BVT/Valleycrest’s production costs, all of which were subject to an agreed-upon 10% “overhead charge,” skyrocketed, putting Celador’s backend in a negative position.
Celador is also accusing the Walt Disney Co., parent of both ABC and BVT, of failing to intervene when ABC kept the Philbin-hosted “Millionaire” on the air when BVT could have maximized profits by moving the show to syndication. Disney disputes whether that claim is even a part of the lawsuit.
The case has navigated a winding path to trial. Originally filed in May 2004, it survived years of complex legal maneuvering, the breakup of Celador’s original law firm and the death in January of Judge Florence-Marie Cooper, who had overseen the case from the outset. Celador principal Paul Smith sold the company in 2006 to Dutch TV outfit 2waytraffic, which was acquired in 2008 by Sony Pictures Entertainment.
Several previous trial dates have been set and reset. But barring a last-minute settlement, lawyers for both sides say they expect the jury trial to begin as scheduled on May 26. Judge Phillips said today that the trial would begin on or around that day, the expected end date of a criminal trial in Phillips’ courtroom.
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