UPDATE (11/27/2018 12:45pm PT):
- Deadline is reporting that both Disney and Fox have responded to the lawsuit allegations filed in federal court yesterday by Genting Malaysia Berhad.
- According to Deadline, Disney and Fox find the complaint “without merit.”
What they’re saying:
- 20th Century Fox Film spokesperson to Deadline: “This lawsuit is entirely without merit. As the Complaint itself makes clear, Genting has been failing to meet the agreed-on deadlines for several years, long before the 21CF-Disney agreement. The allegation that Disney, rather than Fox, finally decided to declare a default is simply made up. We look forward to presenting all the facts in the appropriate forum.”
- A Disney spokesperson commenting on the lawsuit: “The claims made against Disney in this matter are utterly without merit.”
Previously:
- The Hollywood Reporter recently wrote about a new lawsuit filed by Genting Malaysia Berhad (GENB) against 21st Century Fox for backing out of a licensing deal.
- The proposed deal would have Genting Malaysia Berhad building and managing a theme park branded to Fox properties such as Ice Age and Planet of the Apes and would be called Fox World.
- According to Genting Malaysia Berhad, they have spent $750 million to create the park and now Fox and Disney are backing away with “seller’s remorse.”
- Genting Malaysia Berhad filed a complaint in federal court on Monday saying they signed its licensing deal with Fox in 2013.
- According to plaintiff notes in the lawsuit, Fox (unlike Disney or Universal), had no experience in the theme park business until they were approached by Genting with an opportunity to create the world’s first Fox-branded theme park called “Fox World.”
- The deal would include annual licensing fees, a cut of retail sales, and approval rights over designs in the park.
- “Fox World” would be built outside of Kuala Lumpur, Malaysia, and would be the centerpiece to a resort complex that included a casino.
- The complaint also alleges that Disney didn’t want to be associated with gambling.
- Genting says they were planning a soft opening in the first half of 2019 but Fox was making that difficult by insisting on different vendors, not supplying style guides for digital assets, and not providing on the required on-site support needed.
- Genting Malaysia Berhad is represented by a Kasowitz Benson team led by John Berlinski.
- The Kasowitz Benson team says seller’s remorse “is not a valid ground for terminating an agreement.”
- Genting is seeking to recover the $750 million investment, plus more than $1 billion in consequential and punitive damages.
- They are also claiming breach of contract and breach of fair dealing against Fox, and are going after Disney for allegedly inducing the breaches.
- Genting Malaysia Berhad lawsuit: “Why would [Fox Entertainment Group] behave this way? Initially, because FEG wanted to use its leverage under the [Memorandum of Agreement] to threaten termination and force a renegotiation of the economic terms of what it viewed as a below-market deal, largely due to its failure to negotiate for a share of gate sales.”
- Genting Malaysia Berhad lawsuit: “On information and belief, Fox’s soon-to-be owner Disney was now calling the shots, and its objective was no longer renegotiation of the MOA, but termination. Unlike Fox, which was perfectly happy to have the Park situated a stone’s throw from the casinos of Resorts World Genting so long as it could continue to extract financial concessions from GENM, Disney wanted no association with a gaming company like GENM due to Disney’s ‘family-friendly’ brand strategy, as evidenced by its well-documented history of lobbying against the opening of gaming facilities near its parks. Accordingly, FEG issued a ‘notice of default’ purporting to start the process of terminating the parties’ Agreement.”
- The lawsuit also references some drama following the merger referencing James Murdoch to have, “disapproved of the business fundamentals of Fox World, with Mr. Murdoch commenting to others within Fox that he preferred to invest in and operate Fox-owned parks rather than license Fox IP to third-party theme park owners. Moreover, allowing an entity such as GENM, over which 21CF would have no control, to own and operate a theme park called ‘Fox World’ would have been inconsistent with 21CF’s business plans to rebrand the company using the name ‘FOX’ after the merger.”