Twentieth Century Fox executives looked around in 2013 and decided it was finally time for the historic studio to get into the theme park business.
Fox had seen Disney and Universal expand into Japan and China, slowly conquering the globe with their resort businesses. So they came up with a bold idea to grab a piece of the international tourism market by licensing Fox IP — including “Ice Age” and “Planet of the Apes” — to local resort developers in Dubai and Malaysia.
The Dubai project had the good fortune never to get off the ground. But the Malaysian development — situated in a mountain resort complex an hour outside the country’s capital Kuala Lumpur — has become a world-class fiasco.
In a countersuit filed on Wednesday, Fox alleges that the project was doomed by Lim Kok Thay, the mercurial chairman of casino conglomerate Genting Malaysia Berhad. The suit, filed in U.S. District Court in Los Angeles, alleges that Lim routinely demanded changes to the park’s design, failed to properly manage the project, and ignored critical deadlines.
The result, Fox alleges, is a park that is years behind schedule and shoddily built. The suit claims that cars on some rides have bubbling paint, that one ride was built without an emergency exit, and that the parade floats were so wide that spectators would not fit on the sidewalk. A ride called “Scrat’s Nutty Adventure” was built with “visible patchwork on the mountain façade.” Fox officials were especially alarmed that Genting disregarded the “integrity of Fox’s IP,” for example by designing a cruise-ship style dance show feature the creatures from “Alien” and “Predator.”
Fox also worried that Genting built a new floor on its adjacent mall, from which customers could see into the park without buying a ticket. Some park buildings were built too big or too small, requiring reconfiguration of rides to fit the space, the lawsuit states.
“Rather than ‘measure twice, cut once,’ Genting’s approach was essentially to cut without measuring at all, wait for someone to point out its errors, and then cut again and again until Genting either got it right or shrugged it off as close enough,” the lawsuit alleges. “Genting responded to Fox’s complaints by reassuring Fox that the build-and-then-wait-to-see-if-anyone-complains approach was standard local Genting construction practice.”
Fox officials felt that many of their objections were simply ignored. A creative manager for Genting confided to a Fox representative that the chairman “does not care about what Fox think(s); he will just slap it up and fight you later.”
Genting filed its own suit in November, alleging that Fox was trying to back out of the deal due to its merger with Disney. Genting claims that Disney does not want competition for its Shanghai theme park, and does not want to be in business with a gambling company. Genting also contends that it has already sunk $750 million into the park, and that the park was delayed due to Fox’s refusal to cooperate. Genting’s claim seeks more than $1 billion in damages.
In its countersuit, Fox denies those allegations. Fox says it has tried to find a graceful exit to avoid a disaster. One proposal would have involved Genting paying a gate royalty to Fox beginning this month, to compensate the studio for “the growing risk to its brand.” The second option would have allowed Genting to bring in other IP, and to remove the Fox name from the theme park.
Genting rejected both ideas, leading Fox to declare a default. The complaint seeks $46 million in royalties, fees, and travel reimbursements.
John Berlinski, an attorney representing Genting in the dispute, blasted Fox’s “incompetence.”
“Fox’s attempt to blame Genting is only to be expected and is designed to divert attention away from its own incompetence and inexperience,” Berlinski said. “Just two months before termination, Fox was more than willing to open Fox World, but only if Genting paid them well in excess of the amounts the parties originally agreed upon. Genting has a proven track record in delivering high quality world-class theme parks and will prove that Fox’s termination was both unfounded and improperly directed by Disney and Fox’s parent company, Twenty First Century Fox.”
In a quarterly report in December, Genting disclosed that it had filed suit, and said the litigation “is not expected to impact the Group’s current business operations.” Lim seemed unfazed by the whole thing, telling local media that the theme park is “very much part of our plans” and would be ready in early 2019.