‘Millionaire’ Trial Final Answer: Celador Wins $269M; Disney Vows Appeal

After three days of deliberation, verdict is in: Celador wins. Iger tells TheWrap: “The jury made the wrong decision.”

A federal jury on Wednesday awarded "Who Wants to Be a Millionaire" creator Celador International more than $269 million in damages, ruling that Disney and its family of TV companies failed to "perform the obligations of the rights agreement" of their contract that brought the game show to the U.S.

The jury awarded the British producer $260,238,024.00 for revenues from the network license fee, and $9,193,774.00 in revenues from merchandising. Jurors leaving the courtroom declined to speak with TheWrap.

Within minutes, Disney indicated its intention to appeal.

"We believe this verdict is fundamentally wrong and will aggressively seek to have it reversed," read the Disney statement.

"The jury made the wrong decision," Disney CEO Robert Iger told TheWrap on Thursday when asked about the verdict at the moguls' retreat going on in Sun Valley, Idaho. He wouldn't comment further.

The U.K. company won both its claims – breach of contract and breach of implied covenant of good faith and fair dealing in what has been a six-year legal pursuit of Disney and their TV family of ABC, Buena Vista Television and Valleycrest Productions.

"It's sound sensible verdict when you consider what was at stake," lead Celador lawyer Roman Silberfeld told TheWrap after the verdict. Of the damages, he added, "while a big number, it is within the low range of what we were asking." 

There's a lot more paperwork to come. Almost immediately, Disney lawyers will likely file and argue verdict motions before the court. They could ask the court to put aside the verdict or find significant error in it and demand a new trial. If the judge denies those motions, the company will move to appeal the verdict.

A senior Disney official, speaking on condition of anonymity, told TheWrap that the case was too complex legally and financially for a jury to sort through — jurors somehow believed that Celador was deserving of ad revenue, which the original contract was clear on.

"It'll be another two to three years before the appeal is done," noted Silberfeld.

The case, which Judge Virginia Phillips called a “dispute about a contract” when the trial started almost a month ago, became an investigation into the slippery world of Hollywood dealmaking and the black hole of Hollywood accounting.

Celador, which first filed suit in 2004, contended that Disney and its TV parnters conducted a series of slippery deals and secret arrangements that left the “Millionaire” creators short hundreds of millions in expected revenues and profits from the hit game show when it came to America and ABC in 1999 In his closing argument on June Celador lead lawyer Roman Silberfeld poignantly called the maneuverings on the part of the Disney family “a shell game.” 

Disney was never really able to shake that hustler’s image in testimony from Celador boss Paul Smith and others about its shifty hands with “Millionaire’s” profits.

Celador sought damages of around $279 million to  $395 million in fees and revenues, based on two separate sets of accounting methodologies the company had commissioned and the number of episodes of the show, and around $11 million in lost merchandising revenues.

During the almost five-week trial, the nine-person jury heard testimony from some of Hollywood’s heavy hitters, including stellar corporate star power in Disney CEO Iger.

"The jury made the wrong decision," Iger told TheWrap on Thursday when asked about the verdict at the moguls' retreat going on in Sun Valley. He wouldn't comment further.

 

The jury did not get to see his  predecessor, Michael Eisner — though his hyperbolic emails describing his dream of making a billion dollars off the show were read aloud in court.

Despite being on the witness list for several weeks, Eisner was suddenly unavailable to take the stand because he was away on business in Italy.

In an odd way," Silberfeld told TheWrap, "his absence helped us because then his emails were allowed in by the judge and they pretty much told the whole story." 

The jury did hear from Celador boss Paul Smith, who laid out how the show was created in Britain, how he was approached by the William Morris Agency to pitch the show in America, and how it ended up at ABC.

They also heard what might have been the only smoking gun of the trial in the 2006 videotaped deposition from Michael Davies – the ABC VP of Alternative Programming, who is universally cited as the primary enthusiast behind bringing “Millionaire” to America. Davies testified about how he contacted Ben Silverman, then an agent at William Morris’ London office, and said that if he could get the show for ABC, Davies would make sure WMA “would get a package” for an American version.

Both Silverman and fellow former William Morris agent Greg Lipstone were called to shed light on that deal. As it happened, William Morris’ involvement became a side case all to it’s own with WMA seemingly playing both sides of the deal for both parties simultaneously.

In his closing argument, Disney lawyer Marty Katz even made a point of laying the blame at WMA’s doorstep: “If Celador Productions is unhappy with the deal that got,” Katz said, “they have the wrong defendant here.”

In the end, there was only one defendant – the Walt Disney Co. – and having beaten them in court, Celador are now undoubtly very happy with the result they got on Thursday.

Sharon Waxman contributed reporting this story from Sun Valley.

Editor's note: An earlier version of this story incorrectly stated that damages amounted to $272 million; it was assumed that $3 million in "adjustments" were added to the total, when in fact they were inclusive.