Disney: MGM ‘piggybacking’

When MGM-Grand decided to go ahead with plans to build a $1 billion hotel, casino and theme park in Las Vegas, it was in part an attempt to “piggyback” the enterprise on Disney’s costly promotions for the Disney-MGM studio tour theme park in Orlando, Fla., an attorney for Disney said yesterday.

Disney attorney Sanford Litvack made his remarks as the second day of closing arguments got under way in the legal battles between Disney and MGM/UA. Closing arguments will continue for a third day, now postponed until Oct. 13.

MGM/UA filed a $ 100 million breach of contract suit four years ago, charging that Disney violated a 1985 licensing contract when it began producing films at the Disney-MGM studio tour park. MGM/UA attorneys say the company would never have agreed to license the use of its name for competitive product.

Disney attorneys and witnesses say it was always the studio’s intention to have a fully operational studio in Orlando accompanying the theme park.

In addition, Disney filed a cross complaint charging that MGM-Grand’s plans to build a theme park adjacent to a new hotel/casino in Las Vegas was a conspiracy to hurt Disney’s name and constituted unfair business practices.

“It was Disney who obtained the worldwide rights to the MGM name in connection with theme parks in the 1985 contract,” Litvack said yesterday. “And when it was decided that MGM-Grand would get back into the hotel and gaming business in Vegas, it was Disney that was the roadblock to building a theme park adjacent to the hotel.

“So emissaries from MGM/UA were sent to Disney to try and limit Disney’s rights or to get those rights back,” he said. “And when Disney refused, MGM-Grand decided to go forward with their plans anyway.”

And while MGM/UA and MGM-Grand are two separate businesses–they were separated in 1980–Litvack told Superior Court Judge Curtis B. Rappe to think of the companies as one entity.

“There is a total and complete overlap of officers of both companies, and they both share one major shareholder (billionaire Kirk Kerkorian),” Litvack said. “The operation of both companies is pretty well intertwined, in fact the lines are so blurred as to be non-existent.”

The plans for the MGM-Grand Hotel and Theme Park, which is currently being built, include two showrooms, a 170,000-square-foot casino, more than 5,000 rooms, a midway, a sports arena and a 12-ride theme park, which would only be accessible from the hotel.

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