Genting Malaysia Bhd.’s share value has plummeted sharply in recent days, and it squarely blames global entertainment giant Walt Disney Co. for that.
Genting is a preeminent Malaysian company that owns resorts and casinos around the world. It is seeking to augment its vast stable of businesses with a theme park just outside the major city of Kuala Lumpur, but company executives state that Disney has thrown a major wrench into those plans.
What Genting specifically alleges is that Disney and its huge subsidiary 21st Century Fox Inc. have breached a licensing agreement pursuant to which Fox agreed to sponsor Genting’s park, lending it a Fox-branded theme.
The details of Genting’s claim are set forth in a federal lawsuit it filed in a California court last week against Disney and Fox. Genting claims that, while Fox has consistently taken a hard negotiating stance aimed at improving its bottom line, Disney’s foray into the deal focuses on unlawfully killing the transaction rather than simply extracting greater profits.
A Bloomberg article on the matter notes Genting’s view that, “once Disney started calling the shots this year, the objective was no longer renegotiation but termination.”
Genting wants compensation for that. The company acknowledges that Disney’s anti-gambling stance accounts for its attempted disconnect with the theme park’s casino link, but says that severing the deal clearly breaches Genting’s deal with Fox.
Disney denies any unlawful intent, stating that Genting’s claims against it are “utterly without merit.” Fox stresses that it is Genting that is not contractually performing, stating that the developer has missed key project deadlines.
Genting’s lawsuit seeks $1 billion-plus in damages.