June 16 (Bloomberg) -- Former Walt Disney Co. Chief Executive Officer Michael Eisner said in a 1999 e-mail that “Who Wants to Be a Millionaire” was as important to Disney’s ABC network as its National Football League deal.
Eisner, in a second 1999 e-mail also presented today at a trial, estimated the value of the rights to the game show at $1 billion and said it would turn ABC around. The e-mails were introduced as evidence by lawyers for the show’s creator, which accuses Disney, the world’s largest media company, of cheating it out of its share of the profit.
“Of course we own it and it costs almost nothing,” Eisner said in an Aug. 24, 1999, message, shown to the federal court jury in Riverside, California, by Roman Silberfeld, a lawyer for Celador International Ltd. “Sometimes the entertainment business is just wonderful.”
Closely held Celador sued Disney six years ago, alleging Disney’s Buena Vista Television unit broke an implied promise by failing to negotiate a higher license fee with Disney’s ABC television network after the show became a hit. That prevented Buena Vista from making a bigger profit that it would have had to share with the creators, according to London-based Celador.
Eisner’s e-mails were allowed as evidence because the former CEO, who left Burbank, California-based Disney in 2005, is out of the country and can’t testify at the trial. The creators seek more than $200 million in damages for the network run of “Millionaire” as well as $16 million for merchandising.
Robert Iger, Eisner’s successor, told jurors today that he didn’t necessarily believe the quiz show would turn ABC around.
“Mr. Eisner was a great enthusiast and he often got excited about things even to the point of making wild guesses in describing the billion-dollar estimate,” Iger testified under questioning by Silberfeld. “I’m less excitable. I was far from describing it using his terms.”
Iger, who headed ABC before becoming Disney president in 2000, said “Millionaire” was “a factor” in a $1.1 billion increase in broadcasting revenue in 2000. There were “other factors,” he said.
Responding to questions from Disney’s lawyer, Martin Katz, Iger said the company honors its contracts and doesn’t pay people more than they are owed. ABC takes the risk with shows because it has to go out and sell advertising, Iger said.
Celador claims it entered into an agreement in 1998 with ABC and Buena Vista, a Disney production and distribution unit, that entitled the creators to a share of the show’s profit in North America. Buena Vista made an “implied promise” in the agreement to “act in good faith” to obtain the highest possible price for the show, according to Celador.
ABC paid below-market value for “Millionaire” because Buena Vista, at Disney’s behest, didn’t seek a higher fee after the show became a success, according to Celador. Disney, using an affiliated company, also inflated production costs, the creators said.
The case is Celador International Ltd. v. Walt Disney Co. 04-03541, U.S. District Court, Central District of California (Riverside.)
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