Consulting for Entertainment Weekly - Case Study Example

October, 2009 Consulting for Entertainment Weekly Question: If Disney prevails in this lawsuit, how much is Lee entitled to?Walt DisneyWalt Disney has been globally famous for its animated films and other related features. It’s lawsuit against Ms. Peggy Lee was not a first for the company. Several artists have pursued a court cases against the company due to profit participation deals. Considering all the facts and details mentioned in the article, Disney’s contract with Ms. Lee specifically mentioned that she was able to retain rights to residual payments at 12.

5% for such items such as phonographic recordings sold to the public. On the other hand, the contract also specified that Disney has the rights to “any other technology yet to be invented,” this includes the distribution of videocassettes of the Lady and the Tramp film in 1987. The company has also made clear that it was their practice not to allow profit participation deals for voice performers, as manifested by the testimonies of Jodi Bension (the voice of Ariel in The Little Mermaid) and Cheech Marin (voice performer in Oliver and Co.). Peggy Lee As for the case of Ms.

Peggy Lee, she is pressing the advantage that despite the contract’s specification on residual payments she is also pressing the right that the company violated her right to privacy, especially on the use of her name and likeness without her consent. The distribution of the 1987 videocassettes, with her voice used, is in her case a violation to her right to privacy. However, it must also be pointed out that she misinterpreted her claim that she is entitled to $9 million as of March 1988 videocassette sales of Lady and the Tramp.

Lee misinterpreted the Income Statement and multiplied the $77 million sales to 12.5% residual paymentsAnalysisBased from the evidences presented, it is clear that Disney has an edge in winning the case against Ms. Lee. The unauthorized commercial use of name, voice, signature, photograph or likeness is defined as the unknowing use of a person’s name, voice, etc. without such person’s permission. In this case, Ms. Lee permitted Disney to use her voice and talent when she agreed on working with the film back in 1955.

The later release of the film in 1987 is not a violation of her right to privacy since her contract specified that Disney has rights to “any other technology yet to be invented” and that phonographic recordings later sold entitles her to residual rights. If this is the case, then Ms. Lee is only entitled to 12.5% of the profit generated by the videocassette release, which was capped (under union rules) to $381,000. If the future value of money is calculated, Disney would calculate her money based on the following equation:Present Value= Future Value/ (1+i)^n Where:i= interest rate n= number of periodsIf Lee won the case, she should have received (using the same equation):Lee’s profits calculated from 12.

5%Profits before Tax= 32,239,74412.5% * 32,239,744= 4,029,9684,029,968= Future value/(1+.08)^34,029,968= Future value/(1.08)^34,029,968 x (1.08)^3= Future value4,029,968 x 1.26= Future value5,076,599= Future ValueHence, if Disney won the case and assuming that interest rate and number of periods are the same:Amount Lee owns: $381,000 (under union rules)381,000= Future value/(1+.08)^3381,000= Future value/(1.08)^3Future value = 381,000 x 1.26Future value = 480,060In this regard, Disney should have owed her only $480,060 if the company have won.

Works CitedAll of my information is from:Power Point slides, Bus 302L, Financial Accounting Review Materials.All of Hanks information is from:Power Point slides, Bus 302L, Managerial Accounting Review Materials