LOS ANGELES (CN) — Children’s TV star Bill Nye the Science Guy claims in court that the Walt Disney Co. cheated him out of more than $9 million of profits from his hit educational series over many years.
In a state court lawsuit filed Thursday, Nye accuses Disney and a half dozen of its subsidiaries of “an ongoing, deliberate conspiracy to deceive Mr. Nye and the [other owners of the series], and deprive them of their rightly owed share of the net profits from the BNSG series and derivative works.”
The defendants underreported royalties, mischaracterized revenues, used incorrect rates, overcharged expenses and “even, in some instances, [went] so far as to construct falsified invoices and accounting statements,” Nye says in the 27-page lawsuit.
The other defendants are ABC Television, Buena Vista Television, Touchstone Television Productions, Disney Educational Productions, Disney Movie Club and Buena Vista Home Entertainment.
In an email, a Buena Vista Television representative said Nye's lawsuit is "a publicity ploy and we look forward to vigorously defending it."
Nye, a Cornell University-trained mechanical engineer, performed on a Seattle TV station’s sketch comedy show in the late 1980s and early ’90s. In 1992, he and the producers of the comedy show developed the Science Guy show for Seattle’s PBS affiliate, garnering underwriting from the Department of Energy and the National Science Foundation.
In March 1993, Nye and the other owners of the show struck an agreement with Buena Vista Television — since renamed Disney–ABC Domestic Television — to promote and distribute the series. The owners were promised half of Disney’s net revenue, with one-third of that half going to Nye, according to the complaint.
“The show was an unquestionable success,” Nye says. Produced from 1992 through 1997, it won 19 Emmys and was “the first television program concurrently aired in national syndication while also broadcast on PBS.”
A DVD box set of all episodes sold for $1,500 in 2013. The series still plays in some markets today, Nye says.
The trouble began in April 2008 when Buena Vista sent Nye a $585,123 check for his profits from the year before and then in July demanded he return nearly all of it — $496,111 — because the company “had made a mistake in its prior calculation.”
That caused Nye to grow “suspicious of the veracity of the accounting statements he had been receiving … over the years.”
His questions led to “more than a year of futile discussions” between lawyers. Nye says the financial statements Disney did give him “appeared dubious” because they showed that the Science Guy series had grossed $26 million “but had somehow also accumulated deductions” of more than $20 million.
“The foregoing deductions were especially suspicious given that underwriting funds from the Department of Energy, the National Science Foundation, and other organizations covered the vast majority of BNSG’s costs of production,” the complaint states.
In January 2014, Nye demand an audit. Disney responded that it was backlogged with audits and could not accommodate Nye for three or four years.
After more back and forth, the audit began in May 2016. “However … the defendants failed to engage in the process in good faith” or to turn over many essential documents for review, Nye says.
Even so, he says his outside auditor discovered many discrepancies.
For instance, the series owners were to receive their share of 100 percent of net revenue from most “video device” sales, such as DVDs. But they would get only 20 percent of the revenue from video device sales made by a Disney affiliate.
Nye claims Disney paid him the reduced affiliate rate on sales from nonaffiliate Netflix, “thereby paying Mr. Nye one fifth … of what he was actually owed.”
“The defendants were well aware of their wrongdoing,” the lawsuit states.
Despite many difficulties, Nye says, the auditor determined that Disney underpaid him by at least $9,350,565.
“The foregoing estimate of underreported payments is merely the sum initially identified by the auditor based upon the limited documentation that [Disney] disclosed during the audit,” according to the complaint, prepared by Nye’s attorney, Charles C. Rainey with Hamrick & Evans.
“The plaintiff is informed and believes that the actual sum owed is substantially larger.”
Since Nye is due just one-third of the series owners’ share of the profits, he says Disney and its subsidiaries obtained “ill-gotten profits” of more than $28 million.
Nye seeks disgorgement of profits and punitive damages for fraudulent concealment, false promises, breach of contract, breach of fiduciary duty and other causes of action.
Such complaints are not new in the movie and TV industry. They are so frequent that practices such as those detailed in the lawsuit are known as Hollywood accounting.
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