Malaysian developer sues Fox, Disney over Fox World project

November 26, 2018, 7:17 PM · The parent company of Resorts World Genting in Malaysia is suing Fox and Disney, alleging that Disney ordered Fox to terminate its licensing deal for the upcoming Fox World theme park. Genting is seeking more than US$1 billion in damages.

Earlier this month at the IAAPA Attractions Expo in Orlando, Dynamic Attractions wowed fans with plans for a "Duel Power Coaster" that it said would debt next year at a theme park in Malaysia.

Sources later confirmed that the ride — a next generation mashup of Radiator Springs Racers and Spider-Man ride tech — would power a motorcycle ride at the planned Fox World theme park under construction at Resorts World Genting. But the future of that park was thrown into doubt today when Resorts World's parent company filed a lawsuit against Fox and its soon-to-be-new owner Disney in a California court.

The filing reveals that Genting has spend more than $750 million developing the theme park, which it intended to be on par with the Universal Studios Singapore theme park at its sister Resorts World Sentosa development in neighboring Singapore. Genting is seeking damages in excess of $1 billion in an attempt to recoup its investment, as well as "consequential and punative" damages.

Genting said that Fox Entertainment Group, under direction from Disney, has issued a "notice of default" in an attempt to break its licensing deal with the Malaysian development. Genting further alleges that Fox has been stringing along the project in attempt to coerce Genting to renegotiate to give Fox a percentage of gate revenue, in addition to the agreed-upon licensing fee and food and souvenir commissions. But Genting also said that Disney had pushed Fox more recently to get out of the deal entirely, since Disney does not want to be associated with the casino that is the heart of the Resorts World Genting project.

Having made such a significant investment in Fox World, GENM [Genting Malaysia] has worked feverishly since 2013 to bring it to life as soon as possible and to recoup its investment. FEG, however, has fought GENM at nearly every turn, causing delay after delay. Examples include FEG’s early insistence that GENM replace one of its preferred vendors with FEG’s less qualified choice—a vendor whose inexperience and unethical business practices led to its termination from the project and months of delays; FEG’s untimely, repeated and continued unreasonable exercise of its approval rights under the parties’ agreement; FEG’s failure to provide industry standard style guides and digital assets for many of its licensed properties, including its very own 20th Century Fox logo; and FEG’s failure to provide the level of on-site support that is required under the parties’ Agreement and that is typically provided by the licensor of a branded theme park development of this size and scale.

One example that Genting cited was the "Century City Lake Spectacular" show that the park was to feature as its nighttime entertainment. Like similar shows at Disney, Universal, and Warner Bros. theme parks, it was to feature clips from famous Fox movies. But Genting said that Fox failed to provide clearances for the clips, and that the developer incurred costs in "hundreds of thousands of dollars and... many months of delays" as it had to ask its show design vendor to redo the production using only the clips for which Genting could obtain legal clearance.

"Clear from the timing of these events was that Disney—regardless of whether it was legally permissible under applicable antitrust laws—was intervening in the GENM/FEG negotiations and calling the shots for FEG. Having long adopted anti-gambling policies based on its 'family-friendly' brand image, Disney has a history of eliminating any ties to gambling held by its acquired companies," the filing states. "With Fox World located just outside the casinos in the Genting Highlands integrated resort, it comes as no surprise that Disney would, on information and belief, try to kill the Fox World deal in a transparent attempt to 'protect' the Disney brand."

Update: Here's the statement from Disney, courtesy a spokesperson: "The claims made against Disney in this matter are utterly without merit."

That's it.

Replies (11)

November 27, 2018 at 8:43 AM

Nightmare.

November 27, 2018 at 2:36 PM

A contract is a contract, and this park is nearing completion. As much as I love Disney this is complete and total BS and I look forward to seeing them lose this one. Just ridiculous. It's already built and the contracts were done years ago. Move on!

November 27, 2018 at 5:42 PM

FWIW, Disney's denial says nothing about the claims against Fox. And those claims are why people in the themed entertainment business just ordered the state of Indiana's entire annual production of popcorn to watch this one play out.

November 27, 2018 at 5:54 PM

Of course Disney is going to push back on this, but I don't think it's for the reasons stated in the lawsuit. I'm pretty sure Disney just doesn't want to get caught in the same spot they are with Marvel, where the rights to characters they own are tied to contracts with different companies. Even if they aren't planning on building a park that uses Fox characters in that region of the world, that doesn't mean they wouldn't eventually like the option.

November 27, 2018 at 9:55 PM

IF you read the suit, Genting openly admits they have BREACHED the contract, MULTIPLE TIMES.

They say FOX is the reason for their BREACH.

But, then they say, FOX has repeatedly shown a willingness to renegotiate due to Genting’s BREACH.

FOX’s past willingness to renegotiate is NOT a guarantee of future willingness.

This was a wise move for FOX. And, subsequently for Disney.

It’s a loss for the Disney Haters that didn’t bother to read Genting’s complaint rather read biased coverage and buy it hook line and sinker!

November 27, 2018 at 11:34 PM

is this company publicly traded? Disney loves to buy other companies. The legal way for disney to handle this is to buy a substancial amount of shares in this company. Then they have legal influence. Even, if they are not publicly traded and a large shareholder is not willing to sell at a fair price. Perhaps, an ownership interest would be acceptable to Disney? I highly doubt Disney is morally against gambling on principle. They only opposed it in florida, because it is competition. Disney did not contribute anything to oppose any gambling in california that is more than 75 miles from Disneyland.

They now have the dead pool franchise which they are not going to kill until it stops making big profits. Disney will be modifying their public image going forward (somewhat) in the search for growth. I guarantee it.

November 28, 2018 at 1:02 AM

I had expected Disney to treat Fox as a more mature brand that is willing to work with casino resorts in the same way that Universal does. If Disney does not want Fox to work with casinos then that is very worrying as that means films like Deadpool 3 etc will not get made.

November 28, 2018 at 1:55 AM

Asian countries will happily develop their own global IP within the next 30 years...then won't need Disney after that.

November 28, 2018 at 4:21 AM

This reminds me of the Burger King case from Australia. The local master franchisee (trading as Hungry Jacks) has a contract with BK that required he open a certain number of outlets per year... after a few years BK wanted to make some changes to the contract (including adopting the Burger King name, which until that point they were blocked from doing); when Hungry Jacks refused to give way, BK stopped approving new outlets... as a new outlet needed their approval before opening, and Jacks needed a certain number of outlets open in the contract, it engineered a breach of contract that BK used to try to revoke the master franchise.

The court wasn’t impressed by BL acting in bad faith and backed Hungry Jacks in the ensuing legal battle.

November 28, 2018 at 4:23 AM

Dave, if Disney don’t want to have their other brand attached to a casino company, then they just as sure don’t want to be a major investor in a casino company.

November 29, 2018 at 9:50 AM

Disney Co. is a financial moloch. We all know that the actual company with it's massive flood of shareholders, is acting as if no anti-trust regulation on earth can affect them. The long list of media business aquisitions over the past 20 years actually lead to a de facto unhealthy situation. Conflicts will arise every then and now, everywhere. It's ONLY Disney co. which is responsible for the situation. Because everywhere IP based contracts exist, running between media production and media use partners, before Disney co. happen to take over some media production company again, they jeopardise "media peace" worldwide. Apart from anti trust matters, Disney co. could be held responsible for hostile business moves. I believe, in many a country's legislations, that's not just a matter of trade law, but a matter of criminal law; on the line with related crime types as fraud, coercision and blackmail...
There is a serious need to stop molochs in their arrogant warfare.

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