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Disney loses appeal in $269-million 'Millionaire' case

December 04, 2012|By Ben Fritz
  • Walt Disney Co. was ordered to pay producer Celador International $320 million related to profits from "Who Wants to be a Millionaire?"
Walt Disney Co. was ordered to pay producer Celador International $320… (Maria Melin )

Walt Disney Co. has lost its appeal of a high-profile case concerning profits from the game show "Who Wants to be a Millionaire."

The Burbank media giant was ordered by a federal jury in 2010 to pay Celador International, the British company that created the game show, $269.4 million in damages over its accounting practices, along with $50 million in prejudgment interest.

The dispute arose over allegations that Disney did not properly account for the value of the show, a major hit on its ABC network for three years beginning in 1999, as it struck deals between different divisions of the conglomerate.

According to evidence presented in the case, Disney's accounting showed that "Millionaire" ran a $73-million deficit for the company, despite its high ratings.

A jury in July 2010 ruled in Celador's favor, though it did not award the company all $395 million in damages it requested.

Disney appealed, arguing that it was entitled to a new trial because of errors made by the U.S. district court.

However, a panel of three U.S. Court of Appeal judges for the 9th Circuit disagreed Monday. They found that the district court did not err and upheld the jury's award because it was not "grossly excessive or monstrous, clearly not supported by the evidence, or based only on speculation or guesswork."

The decision appears to put an end to Disney's legal options in the case.

"We are extremely disappointed with the decision, as ABC and Buena Vista Television continue to believe that they fully adhered to the 'Millionaire' agreement," said an ABC spokeswoman.

Said Paul Smith, chairman of Celador: "Our litigation objectives − to receive what we were fairly entitled to under our contract and to be made substantially whole − were realized by the jury's verdict and today by the Court of Appeals' decision. I am pleased that justice has been done."

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