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Celador vs. Disney: Is William Morris Agency on Trial Here?

WMA’s role in the deal to import “Millionaire” is becoming a pivotal point of testimony

Celador’s $270 million claim against Disney alleging underpayment for “Who Wants to Be a Millionaire” entered a second week of trial Tuesday, though judging from the testimony so far, you’d think the William Morris Agency was on the hot seat.

In the firing line of lawyers from both sides, former WMA agent and current ICM vice president Greg Lipstone retreated behind a fog of “I don’t know” and “I don’t recall” when asked repeatedly to recall details of WMA’s role in bringing the show to the U.S. in 1999.

His memory refreshed by his own emails and other documents, Lipstone agreed that WMA made more than $5.8 million in commissions from “Millionaire” – but only after dramatically renegotiating the show’s license fee with ABC.

And the agency pulled off the negotiation without ever telling its client: Celador Productions, creator of the hugely successful game show.

That revelation might not have been the smoking gun. But coming off the June 3 testimony of former WMA agent Ben Silverman, Lipstone’s testimony certainly seemed to have put some bullets in Celador’s chamber.

Questioned by Celador lawyer Roman Silberfeld, Lipstone reveled, almost despite himself, just how stealthy and surgical Hollywood dealmaking can be: He acknowledged that soon after “Millionaire” first aired in 1999 to huge ratings, WMA bosses felt the agency’s commission from the package deal they orchestrated to import the U.K. hit wasn’t enough.

To deal with the concerns of WMA brass Sam Haskall and others, a meeting was held between WMA and ABC representatives to renegotiate the license fees. WMA did well in that meeting, walking in with $187,500 for half-hour episodes and $210,000 for one-hour episodes; and walking out with $200,000 and $400,000, respectively.

Celador’s suit, first filed in 2004, contends that WMA, with Lipstone and Silverman at the core, is an integral piece of the puzzle of Hollywood sweetheart deals and accounting shell games that the London-based company say cost it hundreds of millions.

Disney aims to prove to the jury that Celador got exactly its entitlement under the contract, and that the package with WMA actually saved Celador millions in agency commissions.

Lipstone was unable to recall whether the agency’s “Millionaire” package with ABC promised that it would “act as ABC’s sole and exclusive agent” while it was also working for Celador; nor could he remember whether Celador – pursued by Silverman when the U.K. “Millionaire” took off in 1998 – was ever told of the package deal.

Reading from compensation statements, Celador’s lawyer renegotiation saw WMA make $2.8 million from the first 1999-2000 season of “Millionaire,” with $3.2 million in the second season, and $880,000 in the 2001-02 season three of the show.

WMA wasn’t the only one to renegotiate once “Millionaire” caught fire. Host Regis Philbin, BVT and others got a new deal. Celador, which received approximately $13 million in executive producer fees for the show’s network run, did not.

Finally, asked if he thought the renegotiations and actions detailed in court were fair to Celador, Lipstone took a dramatic moment and then dispassionately said, "I think it is two different things."

The evidence portion of the trial, which will see former Disney CEO Michael Eisner and current Disney boss Bob Iger also take the stand, is expected to last until June 29.

Previous Celador vs. Disney coverage by TheWrap:

June 3: Ben Silverman Testifies: WMA Made $4M

June 2: Disney to 'Millionaire' Maker: Tough Luck

June 1: Disney vs. Celador: All About the Contract

May 31: It's Disney vs. Celador in Witness-Rich Copyright Trial