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It doesnt take a ticket for Disneylands Alice In Wonderland ride to know that Disney would be uncharacteristically crazy to allow new competition to its lucrative theme parks — as Genting Malaysia Berhad claims it learned the hard way earlier this year.
A $1.75 billion and counting lawsuit filed today in federal court in California accuses the Walt Disney Co. and 21st Century Fox of “improperly” pulling the plug on a long-planned “first-class, worldclass” and under construction “Fox World” theme park on the outskirts of Kuala Lumpur.
“Defendant Disney benefited from FEG, TCFFC, and/or FoxNexts improper termination of the Agreement by suppressing competition against Disneys existing theme parks,” says GENMs jury-seeking complaint for breach of contract and more (read it here) that details how Fox has killed the deal by demanding the park open in an impossible-to-meet deadline of 30 days.
Citing the recent multibillion-dollar purchase of most of the Fox assets by Disney, the paperwork filed by the Los Angeles office of Kasowitz Benson Torres LLP, President Donald Trumps longtime personal lawyers, declares Genting was kneecapped after doing everything asked of it by Fox since inking a licensing deal in 2013.
“On information and belief, Foxs soon-to-be owner Disney was now calling the shots, and its objective was no longer renegotiation of the MOA (Memorandum of Agreement), but termination,” the suit alleges. “Permitting the Fox brand to attach to a theme park over which FOX would have no control for what could amount to decades would have created business complications that Disney and 21CF preferred to avoid,” it adds of what would have been the first such Fox theme park, with Ice Age and Planet of the Apes rides and the like. “Thus, on information and belief, Disney and 21CF, with knowledge of the Agreement, improperly directed FEG to terminate the Agreement.”
And lets be clear, with Disneyland, Disney World in Florida, Tokyo Disneyland, Hong Kong Disneyland, Disneyland Paris and Shanghai Disney Resort, the media giants parks and resorts are a big part of the Burbank-based business. Last fiscal year, Disneys theme park business globally brought in $20.3 billion in revenue (the second-largest revenue generator for the company, behind television) and reported an operating income of $4.5 billion (about one-quarter of the companys total).
“Unlike Fox, which was perfectly happy to have the Park situated a stones 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 Disneys family-friendly brand strategy, as evidenced by its well-documented history of lobbying against the opening of gaming facilities near its parks,” the 29-page legal action states. “Accordingly, FEG issued a notice of default purporting to start the process of terminating the parties Agreement,” the suit motes. “If the plan were successful, not only would this termination give Fox—and therefore Disney—a windfall in accelerated payments, it would also protect Disneys existing parks from increased competition and protect its family-friendly brand.
Needless to say, at this point neither Disney nor Fox/New Fox has responded to requests for comment …though its not unlikely that Trump and Marc Kasowitz might soon be getting a very ticked-off call from the Murdochs.
Well update if or when Disney has something to say.
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