Disney opens Pandora to unleash avatars

The 5ha <i>Avatar</i> attraction has a huge mountain that appears to float in the air.
The 5ha Avatar attraction has a huge mountain that appears to float in the air.
A Na’vi in a science lab while in the queue for the Avatar Flight of Passage ride at Pandora-World of Avatar.
A Na’vi in a science lab while in the queue for the Avatar Flight of Passage ride at Pandora-World of Avatar.
Walt Disney is betting that the most successful movie of all time will help its theme-park business continue a hot streak eight years after the film came out.

The media giant this week opens Pandora — World of Avatar, a $US500 million ($667m) attraction at Walt Disney World’s Animal Kingdom near Orlando, Florida, the biggest expansion of one of its American theme parks in more than a decade. Based on James Cameron’s 2009 movie Avatar, which grossed nearly $US2.8 billion, Pandora is part of a multibillion-dollar effort by Disney to expand its theme parks worldwide.

The spending is a sign of Disney’s confidence that it can keep its parks and resorts business growing even after the division posted record profits recently. Operating income grew 73 per cent between fiscal 2012 and ­fiscal 2016 to $US3.3bn. Revenue in the same period rose 31 per cent to just shy of $US17bn.

Disney executives say the quality of the park’s attractions will draw people to Pandora.

Five years ago, Disney executives indicated they had reached a peak in annual capital spending. After a brief lull, though, such expenditures have again accelerated, with parks investment doubling to $US4.2bn a year between fiscal 2013 and 2016. Much of that is due to the opening last year of the $US5.5bn Shanghai park, in which Disney holds 43 per cent interest.

Disney has new Star Wars lands in the works at Disney World near Orlando and Disneyland in Anaheim, California, as well as a Toy Story-themed land at Shanghai Disneyland, Marvel and Frozen lands at Hong Kong ­Disneyland, and rides based on Finding Nemo, Beauty and the Beast and Big Hero Six in Tokyo. The company also is planning “long-term investment” in Disney Paris.

Attendance at its domestic parks has grown substantially, with a rising number of days when Walt Disney World and Disneyland parks have had to turn away guests. To address that issue, the company last year introduced seasonal pricing at its domestic parks and launched Shanghai Disneyland in June with a similar policy.

As a result, attendance at its domestic parks fell 1 per cent in ­fiscal 2016, the first drop since ­fiscal 2010, but per-capita guest spending increased 7 per cent. The 5ha Avatar attraction marks an ­effort to increase both capacity and guest spending. Disney hopes it will turn Animal Kingdom, one of four parks at Walt Disney World, from a place where guests typically spend a few hours to one where they can spend a full day. It features a flight simulator, a river journey and a huge mountain that appears to float in the air. “It was not a park that had a lot of demand in the evening,” Robert Chapek, chairman of the parks and resorts business, said.

Disney made a deal with Cameron’s Lightstorm Entertainment and studio Twentieth Century Fox, owned by 21st Century Fox, in 2011, before it bought Star Wars and before Frozen had made its debut. Disney chief executive Robert Iger and then-parks chief Tom Staggs had pitched their ideas to collaborate on a series of Avatar attractions in Animal Kingdom to Cameron and his ­producing partner, Jon Landau.

“They said they wanted to ­create a totally immersive experience and that it would have an ethos behind it,” recalled Landau. The film’s message of conservation was important to Cameron, and Disney convinced him that it would be a good fit with the similarly themed Animal Kingdom.

Disney agreed to pay Fox and Lightstorm tens of millions of ­dollars a year, in addition to a cut of Avatar merchandise sales. It also has rights to open Avatar rides at its other parks.

At the time of the deal, the parties expected a sequel to ­Avatar would be released by the time the theme park opened. But due to delays, the first of a ­planned four sequels won’t come out until 2020.

That has raised concerns about whether tourists will be as drawn to the theme-park area the way they are to rides based on newer hits such as Guardians of the Galaxy.

In addition, the success of Avatar was due as much to its 3D technology as to the characters and world that have informed the new attractions. Avatar ­merchandise didn’t sell well around the movie’s release. A Fox spokesman declined to comment on merchandise sales.

Mr Chapek said that thanks to a marketing campaign by ­Disney, interest in Avatar theme-park attractions doesn’t appear to be diminished by the delayed sequels, according to ­internal research. Merchandise sales, he added, have been robust during trial operations.

Landau said he was pleased that Pandora was designed so that it did not require prior knowledge of the movie on which it is based.


Live From Disney Fantasy: Post Dry Dock Additions and More

Just when you thought Disney couldn’t get any more magical, Disney Fantasy emerged from dry dock with some new additions — revamped kids spaces and a sweets shop — as well as some old favorites. We’re onboard to try them out. Check our list of the best activities below to see what not to miss on your next sailing.

1. Oceaneers Club

Disney Cruise Line’s Oceaneers Club, for kids aged 3 to 12, varies from ship to ship, but Disney Fantasy is now home to two new spaces, including the Star Wars Command Post, which features flight training simulators, a hollow table for the computerized design of well-known aircrafts, visits from BB8 and an escape room activity that allows kids to join The Resistance. Meanwhile, the Marvel Super Hero Academy, modeled after Dr. Strange’s Sanctum Sanctorum, offers super hero courses led by the likes of Dr. Strange, Thor and others. Participants get their very own ID badges and can collect stickers for the courses they’ve completed.

2. Sweet on You

Sweet on You, Disney Fantasy’s new sweets shop, sells for-fee candy by the pound, prepackaged sweets, chocolates, bonbons and macarons. The shop, themed after vintage Disney shorts featuring Mickey and Minnie Mouse, is also the place to snag 20 flavors of gelato and 16 flavors of ice cream that can be mixed and matched to create a variety of sundaes and a “milkshake of the day.” Flavors range from tried and true (vanilla, chocolate, cookies ‘n’ cream, pistachio) to more adventurous (red velvet, caramel popcorn, oatmeal cookie, and candy explosion featuring Nerds). This venue has taken up residence in the ship’s former video arcade, located just outside of the Cabanas buffet on Deck 11.

Aerial shot of the Pirate Night crowd dancing on Disney Fantasy

3. Pirates in the Caribbean

Disney cruise ships host Pirate Night on nearly all sailings;, where passengers are encouraged to dress up like swashbucklers and take part in pirate-themed dance parties and games. The part you definitely won’t want to miss is the nighttime Pirates in the Caribbean show on the pool deck. Starring Captain Jack Sparrow, who rescues the ship from a band of no-good buccaneers by rappelling down the funnel (weather permitting), the show concludes with an at-sea fireworks display. (Note: For the best views, head to Deck 12, starboard, just beside the Funnel Vision movie screen.)

4. AquaDuck Watercoaster

Water slide-loving cruisers can get their fix on the AquaDuck, a clear, inner tube-required water slide that circles high above the ship’s pool deck. You’ll find the entrance on Deck 12; be prepared to look down, as part of the run juts out over the side of the vessel, offering views of the ocean below.

5. Character Appearances

One of many great things about Disney cruises is that it’s much easier to meet characters onboard than it is in the Disney parks. Surprise appearances are mixed in with rendezvous at scheduled times and places. (Check your Personal Navigator daily newsletter for details.) On our sailing, we encountered Mickey, Minnie, Donald, Daisy, Goofy, Pluto, Chip and Dale, Stitch, Peter Pan, Aladdin, Jack Sparrow and a squad of princesses, including Ariel, Tiana, Cinderella, Belle, Anna and Elsa. (These experiences are free, but due to demand, some princess meet-and-greets require passengers to obtain complimentary time-slotted tickets at the shore excursions desk.)

Buena Vista Theater, this is the movie theater.

6. Movies, Movies, Movies

Because Disney owns the rights, many first-run Disney films that are still in theaters are also shown onboard — for free. (We caught Guardians of the Galaxy II, Beauty and the Beast and Moana.) Movies like Tarzan, Lilo and Stitch, Tangled, Monsters Inc., The Lion King and others are also shown throughout the day on the pool deck’s Funnel Vision movie screen. If you’d rather catch up on classic Disney films in your cabin, choose from a huge, complimentary library available on-demand on all stateroom TVs. (We refreshed our childhood memories of The Little Mermaid one evening before heading to the atrium to meet Ariel, and it was just the thing to put us in a princess-y mood.)


Disney will reportedly overhaul Hall of Presidents so Trump doesn’t speak

It would appear that Disney will completely retool the entire Hall of Presidents attraction at Magic Kingdom, which will keep the robot version of Donald Trump from opening his robotic word-hole.

Since the early ’90s, every sitting president has said at least a few lines at the Hall of Presidents. But now Disney is reportedly rolling back the attraction to a pre-1993 format, in which only Abraham Lincoln and George Washington speak.

Earlier this week, an anonymous Disney cast member spoke to Motherboard’s Kevin Wong about the possible rollback in a piece titled “Here’s the Secret Backstage Trump Drama at Walt Disney World’s Hall of Presidents” (which you should most definitely read in its entirety).

However, here are a few of the highlights:

“The Imagineers will likely revert the attraction to its pre-1993 format, where only George Washington and Abraham Lincoln recited lines, while keeping the more realistic, grounded tone of the current show.”

“Given how polarizing the president is right now, Disney Parks & Resorts is currently trying to find [a solution] that approaches middle ground,” said the source in an interview with Motherboard. “They want to include our 45th commander-in-chief in this 45-year-old theme park attraction, while at the same time, not seem to endorse or support some of Trump’s more controversial policies.”

“Given President Trump’s current problems,” continued the source, “Walt Disney World might elect to push the attraction’s opening date back to the fall and then make further tweaks to the show.”

… “Another contributing factor to Trump’s auditory exclusion is his own lack of participation and obstinance. Disney reportedly reached out to Trump starting in January, but there has been no compromising effort to get things moving.”

“That’s a part of this—just getting time with him [to record],” said the source. “I guess there’s also been some back-and-forth on his proposed script, which is something they’re hoping to use as a ‘Get Out of Jail Free’ card. If he’s not available to record, they can use that as a legitimate excuse… that’s kind of what Disney’s hoping for.”

… “They were convinced that Hillary was going to win,” said the source. “They were having conversations in late October and early November on how to dress her. ‘Should it be the pantsuit she wore at the [Democratic] National Convention? Or should it be a darker color?’ They were thinking along those lines. No one was giving any serious thought to it being Trump.”

As we previously reported, the pushback from fans over the possibility of a Trumpbot at Hall of Presidents has been fierce.

In January a petition circulated calling for the silence of the 45th President. Also, back in April, rumors were circulating that Disney would just quietly update the attraction with a new muzzled Trumpbot amidst the fever of the opening of Pandora: The World of Avatar.

So far, there hasn’t been a single official peep from Disney on what they plan to do with the new orange animatronic addition.


Disney’s ‘Pirates’ rolls out red carpet for rare China premiere

Walt Disney Co’s latest outing of “Pirates of the Caribbean” rolled out the red carpet in Shanghai on Thursday in a rare world premiere in China for a Hollywood blockbuster as U.S. producers look to woo moviegoers in the Middle Kingdom.

In the shadow of Disney’s newest theme park that opened last year, hundreds of “Pirates” fans lined up to catch a glimpse of stars Johnny Depp, Orlando Bloom and Javier Bardem ahead of an afternoon viewing.

Despite a slowdown in box office sales in the Chinese market, U.S. studios are increasingly looking to it to boost global revenues, though they face issues from a local quota system for imported films to questions over censorship.

China’s box office slowed markedly last year, but grew at its fastest pace in more than a year in April, driven by Universal’s high-octane action movie “The Fate of the Furious”.

Actor Johnny Depp arrives on the red carpet for the global premiere of the film ‘Pirates of the Caribbean: Dead Men Tell No Tales’, in Shanghai, China May 11, 2017. REUTERS/Aly Song

The China premiere of “Pirates of the Caribbean: Dead Men Tell No Tales” puts it among a small number of U.S. films to screen for the first time in China. Films like “Point Break” and “Iron Man 3” have premiered or opened earlier in China.

The trend reflects the growing influence of China’s 1.4 billion potential cinema goers, who are increasingly driving global box office sales.

In the Shanghai sunshine, student Zhao Yushen said she had skipped her studies for exams to come from nearby Nanjing to see Depp.

“I’ve still got one final-term exam to take tomorrow morning, but I haven’t prepared for it at all,” she said.

Hollywood is eager to tap more consumers like Zhao, and hopes it can lobby Beijing to raise a cap of 34 imported films a year under a revenue-sharing deal. The deal is scheduled to be reviewed this year.

The market grew around 4 percent last year, down sharply from nearly 50 percent in 2015, according to box office tracker EntGroup.

The four previous “Pirates of the Caribbean” films, the most recent in 2011, have generated over $3.7 billion in worldwide ticket sales, according to the website Box Office Mojo.


Disney cruise to head to Bermuda

Disney Cruise Line will make its maiden trip to Bermuda in October 2018, the Bermuda Tourism Authority announced yesterday.

The Disney Magic is to sail to Bermuda five times next year on October 6, 15, 21, 28 and 31, from New York City.

The BTA was “thrilled” to partner with an iconic brand and bring a new segment of cruise travellers to Bermuda, chief product and experiences officer Pat Phillip-Fairn said.

“It’s the first time Disney Cruise Line has come to Bermuda, so naturally we’re excited about these inaugural calls.

“Disney cruise vacationers and the new experiential travellers now discovering Bermuda are very similar, in that they want to see, taste and experience everything Bermuda has to offer.

“Our team will now drill down on the kinds of desirable Bermuda experiences the island can offer to inspire Disney passengers with the company’s Port Adventures team and our local stakeholders.”

Each of the Disney Magic sailings will include two full days in Bermuda, while the October 15 sailing will include three days.

Ms Phillip-Fairn said Disney had been “intrigued by Bermuda” during talks — and that up to 20 per cent of passengers would be travelling without children.

Diversifying the island’s cruise offerings is another key objective of the BTA, and Disney is “very keen on creating great experiences for guests, and encouraging guests to get off the ship and explore”.

Senator Michael Fahy, the Minister for Tourism and Transport, said the calls were significant because they helped lengthen the visitor season.

“When we successfully attract visitors in the fall and winter, we keep Bermudians in hospitality working year-round and that’s critically important to the growth of our tourism industry.”

The Disney Magic cruise liner carries up to 2,713 passengers and 950 crew, and will berth in Dockyard.

The island offers “a wonderful setting for memory making”, according to Tom Wolber, senior vice-president of Disney Cruise Line operations.


Walt Disney’s original Disneyland map could sell for $1M

The first-ever map of Disneyland could fetch up to $1 million when it hits the auction block next month.

The 3 ½ foot by 5 ½ foot tri-fold, hand drawn poster created by Walt Disney in a weekend in 1953, features the first iterations of attractions at the now-famous amusement park – some of which had their names changed, and others scrapped entirely.

For example, Frontierland and Tomorrowland, two of Disney’s “themed lands,” were originally marked as Frontier Country and World of Tomorrow, respectively.

Meanwhile, something called Lilliputian Land never came to fruition.

Other attractions were seen through from concept to reality.

Disney wanted his park to include a train station, old-fashioned Main Street square, princess castle, pirate ship and perhaps even a rocket – attractions that exist in the Anaheim, Ca., park today.

He and his brother/business partner Roy Disney used the drawing to obtain financing from investors to build the park.

It fell into the hands of collector Ron Clark some 40 years ago through a former Disney worker who’d been pals with Walt himself.

“It had this aura,” Clark said. “It just kind of puts you in awe that this is the piece that came out of Walt Disney’s mind and this is what came about: this park, these parks worldwide, the passion people have for it today and the happiness of hundreds of millions who have graced these lands.”

But now the avid Disney fan, who visits the California park at least three times a year, wants to pass on his prized possession to another diehard.

“It was always my desire to somehow return it to Disney,” he said. “I wanted it to go home. For 40 years, that has been my wish.”

The map — as well as nearly 1,000 other Disney artifacts such original props, wardrobe pieces, ride vehicles and souvenirs — goes up for auction June 25 through Van Eaton Galleries in Los Angeles.

Disney spokesman John McClintock wouldn’t say whether park officials will be among the bidders.

He said it’s tough to compare concepts in the map to what exists in the park today, including the Sleeping Beauty Castle, which sits in its center, as opposed to much further back in the original sketch.

“It predates any work on Disneyland and it doesn’t really resemble Disneyland, so you can’t really use that as a template for how the park developed,” McClintock said.

But he added, “The story behind the art is that it was all done in a weekend. It’s amazing that they got as much right as they did.

Disney’s Bob Iger Shuns Early Home Movie Releases

Bob Iger



Unlike its rival movie studios, Disney is not looking at an early premium video-on-demand window for theatricals, according to Chairman-CEO Bob Iger.

The executive made that point emphatically on Tuesday during a conference call with Wall Street analysts following the release of its earnings for the second quarter that ended on March 31. He said Disney’s upcoming slate is so strong with big tentpoles — with the “Star Wars,” Marvel, and Pixar franchises — that he does not see the need for an early window.

“We’re not in advanced conversations for a premium VOD window,” Iger said. “We don’t really believe there is a need for us to move that product off of the big screen any faster than we already are. The movies we make are perfect for consumption on the big screen. We’ve also created global phenomenon with our films. People seem to want to go seem them en masse.”

Other studios have been holding closed-door talks about offering high-profile films on-demand as $30 to $50 rentals within a month or so of their debuts, as a chance to capture audiences between the ages of 25 and 39. But no one went public with the notion during the CinemaCon gathering in late March in Las Vegas.

Iger said Tuesday said that he would be “open-minded” about a shorter premium VOD window. “What we’ve got going is working. We have no reason to disrupt that right now. We are making movies that people want to see in the large screen venues that are being built worldwide,” he added.

Disney has been dominating the movie business since last year, when it took in 57% of worldwide profits from the business, according to estimates by Cowen and Co. The studio racked up nearly $3 billion in domestic receipts from blockbusters such as “Finding Dory,” “Rogue One: A Star Wars Story,” and “Captain America: Civil War.”

Disney’s two 2017 releases have performed impressively. “Beauty and the Beast” has surpassed $1 billion worldwide, and “Guardians of the Galaxy Vol. 2” opened to a massive $145 million at the domestic box office last weekend.


Disney earnings: $1.50 a share, vs expected EPS of $1.41

The Walt Disney Company reported fiscal-second quarter earnings that beat estimates on Tuesday, but revenue disappointed.

Here’s what the company reported compared with what Wall Street expected, according to Thomson Reuters consensus estimates:

  • EPS: $1.50 vs. $1.41 expected
  • Revenue: $13.34 billion vs. $13.45 billion expected

The stock fell nearly 2 percent in after-hours trading.

ESPN weighs on cable segment

Disney’s cable business, which falls under its media and networks segment, reported operating income of $1.79 billion. That figure comes in below Street expectations for about $1.85 billion, according to a StreetAccount consensus estimate.

The company said the 3 percent year-over-year decrease in operating income was primarily driven by ESPN’s higher programming costs. Disney said, however, that the decline was “partially offset by affiliate and advertising revenue growth.”

Disney Chairman and CEO Bob Iger again defended the sports network, saying the company is “confident in ESPN’s future.”

“Live sports is still a huge driver of consumption,” Iger said on CNBC’s “Closing Bell.”

Bob Iger, chairman and CEO of the Walt Disney Company

Iger: Confident in ESPN’s future  

Disney is seeing “significant growth” in the number of subscribers to streaming services and other platforms that provide alternatives to traditional paid TV, the longtime CEO said. However, “so far, it’s not enough to make up for some of the losses on traditional [TV platforms],” he said.

In a call with analysts on Tuesday, Iger reiterated Disney’s bullish outlook on streaming services.

“Right now, they are a small part of the pay TV universe, but we believe they’ll be a much bigger part of the business going forward. And from a per sub pricing standpoint, these new services are just as valuable to us as traditional platforms,” he said.

Iger remained optimistic, saying that these alternative services are still relatively brand new. The Disney CEO said he believes subscribers to these platforms will eventually balance out the cord-cutting behavior.

The cable segment has typically brought in about 30 percent of Disney’s total revenue. In late April, ESPN said it would lay off 100 people as the sports network cuts costs and adapts itself to digital distribution.

‘Beauty and the Beast’ drives studio

Disney’s studio segment bested Wall Street’s optimistic expectations, reporting operating income that grew 21 percent year over year. The company credited a strong performance by “Beauty in the Beast,” which has crossed $1 billion in the global box office.

Here’s what Disney reported as operating income for each segment, compared with analysts’ expectations, according to StreetAccount consensus estimates:

  • Media and networks: $2.22 billion vs. $2.20 billion expected
  • Parks and resorts: $750 million vs. $726.4 million expected
  • Studio: $656 million vs. $528 million expected
  • Consumer and interactive: $367 million vs. $365.7 million expected

In March, Disney’s board announced it was extending Iger’s contract to July 2, 2019. The company has not yet named a successor for Iger.

When CNBC asked the Disney CEO if he’d run for office, Iger said he hasn’t thought much about what he will do when he leaves the company.

Not spending time on what to do next: Disney CEO

Iger on potential POTUS run: Not spending much time on what I’m going to do next  

Here’s how much revenue each segment brought in compared with what analysts projected, according to StreetAccount consensus estimates:

  • Media and networks: $5.95 billion vs. $5.99 billion expected
  • Parks and resorts: $4.30 billion vs. $4.27 billion expected
  • Studio: $2.03 billion vs. $1.99 billion expected
  • Consumer and interactive: $1.06 billion vs. $1.17 billion

Disney World May Reinvent Transportation

Getting around Disney‘s (NYSE:DIS) massive theme-park resort is a challenge for guests, but Disney World is reportedly shaking up the way that folks will be able to travel within its realm in the future. Disney confirmed to the Orlando Sentinel last month that it’s exploring a gondola-based system, verifying the rumors that surfaced earlier this year after permit requests showed the theme-park giant proposing a cable-car system to connect some of its resorts with two of its theme parks.

The gondola system that may connect six points within the resort may seem ambitious, but it’s child’s play compared to what the Los Angeles Times is now reporting. Sources are telling the paper that Disney is in late-stage negotiations with at least two makers of autonomous shuttles, over a project that could replace its clunky bus and tram resort-transportation options with self-driving vehicles. Los Angels Times is calling it “the highest-profile commercial deployment of driverless passenger vehicles to date.”

Disney monorail at EPCOT.


Shuttle run

Disney World spans more than 43 square miles of turf, and while a good chunk of that acreage is protected wetlands, it’s no easy feat to get around from most hotels to the attractions. Disney’s fleet of monorails, ferryboats, shuttle buses, and parking lot trams may seem efficient, but most guests who spend enough time at the resort will probably argue otherwise.

Boats can be slow. Buses can take as long as half an hour to arrive, and fill up quickly in peak periods. Resort monorails are limited to the priciest on-site hotels, and even then waits and downtime can take their toll.

Perpetually loading gondolas and self-driving shuttles could be the ticket to getting guests moving with minimal waits. More importantly, Disney would be providing unique experiences that set it apart from both the competition and daily life.

Theme parks are a pretty big deal for Disney, accounting for 31% of the media behemoth’s revenue and 21% of its segment operating profit in fiscal 2016. Disney World is its largest resort, by far. Ticket prices inch higher every year without fail, and while that nudges Disney to invest in compelling attractions every year, there’s also the mandate to make experiences magical. The ability to step out of a hotel room and into a driverless shuttle that will take resort guests to the front gate of a desired theme park is worthy of a premium over the growing number of lodging options.

We also can’t ignore the competition. Disney World’s rivals are spending a lot of money on new experiences, and Disney would prefer to keep visitors captive. In an era in which car rentals are cheap and Uber hails even cheaper, Disney needs to do everything that it can to keep its resort guests from straying. Self-driving shuttles and slick gondolas could be the trick to making families spend their entire vacations on Disney property, but the company had better act quick before before the opportunity to be the first mover here is gone.


Disney Survives an Appeals Court Scare in ‘Pirates of the Caribbean’ Case

In a 2-1 vote, the 9th Circuit rules that an author waited too long to rescind a release of copyright claims.
Disney Enterprises, Inc.
‘Pirates of the Caribbean: On Stranger Tides’ (2011)
Few took seriously a billion-dollar lawsuit against Disney over its Pirates of the Caribbean franchise, but on Tuesday, the studio only narrowly preserved a victory against Florida author Royce Mathew at the 9th Circuit Court of Appeals.

For more than a decade, Mathew has been in and out of court alleging that the Johnny Depp films used his work. He first sued in 2005, but then withdrew the complaint after Disney presented old “theme park art” that predated his own and represented that it had independently created “the unique supernatural elements in [Pirates of the Caribbean] that involves pirates transforming and turning into living skeletons under the moonlight due to a hideous curse affecting them.”

When Mathew withdrew his lawsuit, he signed a release form.

But he would later sue a second time, and then a third time, and in his last complaint, he claimed that Disney had “altered and tampered” with the artwork and procured his release by fraudulent means.

A district judge then dismissed the complaint, ruling that Mathew had to properly rescind the release he signed, and the fact that he waited until the complaint was filed to do so was an unexcusable delay that prejudiced Disney.

Today, two circuit judges at the 9th Circuit affirm that holding. (See here.)

“While a finding of substantial prejudice is generally premature at the 12(b)(6) stage,” they write, referring to the stage of litigation where judges look at the plausibility of pleadings, “here the Second Amended Complaint alleges that since May 28, 2010, Disney has continuously exploited the Pirates of the Caribbean Franchise ‘in movies, television, on-line streaming, DVD’s, video games, merchandising and otherwise in connection with… public showings, distribution, licensing, and merchandising,’ released a fourth movie in the series, and worked on developing a fifth movie. These allegations are sufficient to hold that Disney suffered economic prejudice from Mathew’s delay in seeking rescission because, relying on its presumed rights, including the comprehensive Release obtained from Mathew, Disney expended significant resources in developing its Pirates of the Caribbean Franchise. Accordingly, Mathew cannot rescind the Release.”

The decision would be unremarkable but for the dissenting opinion from 9th Circuit judge Richard Clifton, who is a tad bit skeptical about the prejudice Disney suffered.

“That Disney would not have pursued the Pirates of the Caribbean franchise if it had known of Mathew’s subsequent intent to try to rescind the Release is more than a little implausible,” he writes. “More to the point, that is a factual determination that cannot properly be made on a motion to dismiss based on the allegations contained in Mathew’s complaint. Substantial prejudice is a fact-intensive question that Disney had the burden to prove.”

Clifton then moves on to attack his colleagues at the 9th Circuit for misunderstanding the circuit’s holding in Petrella v. Metro-Goldwyn-Mayer (a copyright case concerning Martin Scorsese’s Raging Bull, which later went to the Supreme Court).

“[T]he majority cites Petrella for the proposition that substantial prejudice exists whenever a defendant shows that it ‘invested money to expand its business or entered into business transactions based on its presumed rights’ during the delay,'” he writes. “Petrella made clear that the proposition quoted above only applied in instances of extraordinary delay, in that case of 18 to 19 years, where less proof of prejudice was required. The delay in our case was less than four years. That does not mean that Mathew’s delay should be disregarded, but it does mean that it cannot be presumed that Disney must have suffered prejudice so substantial that Mathew’s claim should be dismissed on a motion to dismiss.”

Fortunately for Disney, as it gets ready to release its latest installment of Pirates of the Caribbean, Clifton was outvoted.


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