Winnie the Pooh and Cheetah Girls
Deborah Gregory, Stephen Slesinger's Disney Woes
It's long been a painful irony that the self-professed "happiest place on earth" has a massive legal department. And the Mouse House has battled everyone, from copyright owners to former executives, in a series of costly lawsuits.
“Is Disney notorious for having a legal department the size of Western Europe and being particularly ferocious?” literary agent Nicholas Ellison said to the L.A. Times. “Yes. But that doesn't mean they're . . . different from any other studio."
Cheetah Girls Creator Deborah Gregory: Screwed by the Mouse?
Disney's legal eagles write contracts that allow the studio to withhold profits from creatives like Cheetah Girls creator Deborah Gregory. Despite signing a 2001 deal that promised her 4% of any net profits (profit after taxes) from films, TV shows and merchandise, Gregory says she has received a paltry $125,000 from Disney for creating, and co-producing, the series.
“Hollywood deals are a trap for the unwary; they’re almost intended to deceive,” Paul Aiken, executive director of the Authors Guild, told the L.A. Times. “The best advice we give is that you should try to get as much of your money upfront. You can’t count on net profit deals for anything.”
According to her math, Gregory has received approximately $13,000 per year, less than the average Starbucks barista earns, for creating a 16-book series that has spawned movies, CDs, music tours, and massive merchandise sales from Cheetah Girls-emblazoned shoes, dolls, toothbrushes, video games, backpacks, note pads, pillows, posters and T-shirts.
“People think I must be living in a palace, when they think of the success of the Cheetah Girls,” Gregory told the L.A. Times from her cramped studio apartment in Manhattan. “But look at this place. It’s a . . . dump.”
“What happened to Deborah was unconscionable,” said an insider who asked not to be named, citing business considerations. “At the very least, they should have cut her in on the revenue from the DVDs and CDs.”
Winnie the Pooh and the Endless Lawsuit
But it's not only first-time authors who feel shafted by Disney. The family of Stephen Slesinger, owner of Winnie the Pooh, have engaged in a 17-year old legal war against the Mouse House, demanding over $2 billion in missing royalty payments.
In 1930, Winnie the Pooh creator A.A. Milne licensed his "bear of very little brain" to a New York film and television producer, Stephen Slesinger. Upon his death in 1956, Milne bequeathed partial rights to his bear to various friends and organizations, who formed the Pooh Properties Trust. Many of these organizations eventually sold their rights to Disney.
In 1961, the Slesingers also sold their portion to Disney in exchange for regular royalties. According to the 1983 renewal agreement, which both parties signed to freeze out Milne's heirs, Disney would receive 98% of worldwide gross revenue, while the Slesingers would get 2%.
This deal is incredibly lucrative: in 2005 alone, Disney earned $6 billion from worldwide sales of Winnie the Pooh merchandise.
However, things went sour in 1991, when the Slesingers filed suit, alleging that Disney wasn't paying them enough.
Los Angeles Superior Court Judge Charles McCoy tossed the original claim in 2004, after he learned that the Slesingers had illegally obtained 6,400 pages of Disney documents, and altered court documents to conceal the action.
"When a plaintiff's deliberate and egregious misconduct makes any sanction other than dismissal inadequate to ensure a fair trial, the trial court has inherent power to impose a terminating sanction," a three-judge appellate panel said in September of 2006, upholding McCoy's decision.
Disney then funded an attempt by Clare Milne (A.A. Milne's granddaughter) to have the Slesingers' ownership of the franchise terminated and the rights transfered to her, using the Sonny Bono Copyright Term Extension Act of 1998. Disney had helped her out, with the agreement that she would sign over the rights to Winnie the Pooh in the same way that the Slesingers had done previously.
However, the 9th U.S. Circuit Court of Appeals determined that Milne had no copyright termination right to exercise, thanks to the 1983 renewal, and threw out the suit. After reviewing the decision, the Supreme Court refused to hear the case as well.
In the spring of 2007, two separate decisions by Federal Court Judge Florence-Marie Cooper not only killed another attempt by Disney to strip the Slesingers of their rights, but also threw out 3 separate claims by the Slesingers against Disney. However, the Slesingers have 9 other claims still pending against the Mouse House.
(Next up: Accountants, Hollywood's most creative people?)
