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Wed, Jul 23, 2003 - Page 12 News List

Blockbuster must pay, Disney says


Walt Disney Co, the second-largest US media company, can seek as much as US$65 for each of the hundreds of thousands of videos it claims Blockbuster Inc lost during a revenue-sharing agreement, a judge tentatively ruled.

Disney's Buena Vista Home Entertainment in January filed suit claiming that Blockbuster failed to account for "hundreds of thousands" of missing videos and sold videos prematurely under the agreement they signed in 1997.

Blockbuster argued that Disney should receive no more than US$32 per tape, which could have cut tens of millions from the US$120 million sought by Disney.

Under the contract, Blockbuster was to share rental revenue from Disney films with the studio in exchange for reduced prices on videos.

Blockbuster ended the revenue-sharing agreement with the Disney Co late last year.

The agreement covers only VHS tapes, which matter less to Blockbuster as DVD rentals surge.

"They owe us money. They should pay it," said Sandy Litvack, a lawyer for Disney, during a hearing before US District Judge Cormac Carney in Santa Ana, California.

Carney issued a tentative agreeing with Disney's argument that US$65 per video was a reasonable estimate of damages. He said he will issue a final ruling tomorrow.

Dallas-based Blockbuster is roughly 81 percent-owned by Viacom Inc, the third-largest US media company.

Blockbuster's lawyer Marshall Grossman said that Disney's US$65 per tape calculation was from before the 1997 agreement, and damages of US$25 to US$32 per video tape would be more accurate.

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