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When The Walt Disney Company breached its contract with an international partner, the result was a massive $1 billion lawsuit. But it wasn’t all Disney’s fault.
Credit: Shanghai Disney Resort/Prateekb, Flickr/Canva
In November 2022, The New Strait Times proudly announced Disney’s formal plans for a brand-new theme park resort to be constructed in the Southeast Asian city of Melaka, Malaysia. The resort would encompass nearly 81 acres of land and include a theme park similar to Disneyland Park in Anaheim, California, as well as another expansion called Disney City. It would open to Guests in 2027 and be the largest theme park resort of its kind in Southeast Asia–the fourth Disney Park resort in Asia, joining Tokyo Disney Resort, Shanghai Disneyland Resort, and Hong Kong Disneyland.
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Media outlets around the globe picked up the breaking news story and published it as fact, using CNN as the source of their information. But less than 24 hours after the announcement, CNN Southeast Asia reporter Heather Chen retracted her landmark news story, as allegedly demanded by The Walt Disney Company, because it was found to be untrue.
Credit: Mohd Fazlin Mohd/Flickr
According to Melaka state exco Datuk Muhammad Jailani Khamis, the whole ordeal was a misunderstanding between Disney and city government officials. For Disney Parks fans around the world, the announcement gave birth to the shortest-lived Parks fan reaction in the history of The Walt Disney Company. But it wasn’t the first time plans for the construction of a Disney Park in Malaysia were on the books. The first time it happened, however, Disney was ultimately named the defendant in a massive $1 billion lawsuit filed by an Asian resort development company.
In the complaint, the plaintiff, Genting Malaysia–an Asian resort development company–alleged that The Walt Disney Company and its soon-to-be subsidiary, FOX Entertainment, breached a contract related to the Malaysian theme park plans. The complaint, filed in Central California District Court in November 2018, alleged that Disney and FOX ended an agreement related to theme park plans in Malaysia with no cause and sought restitution of “at least $1 billion.”
The allegations were related to FOX’s withdrawal from an agreement made with Genting Malaysia years earlier. The agreement would have granted the license for a FOX World theme park as part of a massive new project called Resort World Genting.
Resort World Genting/Credit: Flickr/Prateekb
It would have been the very first such project for FOX Entertainment, but according to Genting’s complaint, FOX submitted a “notice of default” with the intent of ending the previously created agreement. Over time, there were disagreements between the two entities related to the specific terms of the agreement. But in the end, Genting Resorts claimed that FOX simply pulled out of the project altogether–and had no grounds on which to do so.
Credit: Disney/FOX
In an email sent to Bloomberg, FOX stated it pulled out of the deal with Genting after the Asian resort developer “failed to meet agreed-upon deadlines.” The complaint filed by Genting alleged that both The Walt Disney Company and 21st Century FOX interfered in the agreement between FOX and Genting, which led to FOX Entertainment Licensing and Merchandising quitting the deal with Genting.
On December 14, 2017, Disney announced its acquisition of 21st Century FOX–a move that would create nightmares for now-CEO Bob Iger, beginning in 2022. The acquisition led to problems in the planning of the new FOX-Genting Resort, as the new project included a casino, and at that time, the idea of Disney participating in a resort that allowed Guests to gamble was inconceivable, as The Walt Disney Company had a strong stance against gambling at that time.
Genting’s complaint included claims that the development company had already invested almost $180 million in the FOX World project. A quarterly earnings report released by Genting just before the suit was filed detailed plans to roll out the “highly anticipated 20th Century FOX World Theme Park” alongside another tourist attraction, called The Skytropolis, a smaller indoor theme park.
Credit: Cecil Lee/Flickr
Malaysia’s new FOX World–had it been developed–would have been owned by The Walt Disney Company, as Disney’s acquisition of FOX was finalized in March 2019.
When the dust finally settled, so was the suit. According to Bloomberg, the settlement between Genting Malaysia, FOX, and The Walt Disney Company demanded that FOX World Park be renamed. The settlement also allowed for Genting’s use of both FOX and non-FOX intellectual property, and each of the interested parties agreed to dismiss any and all suits and claims that were awaiting legal process in the United States.
Credit: Disney Parks
Despite issues in the past with another Asian Disney theme park in Malaysia, The Walt Disney Company remains interested in South Asia as a viable location for another revenue stream. In September 2022, Disney Cruise Line announced the addition of a brand-new port in Singapore, and earlier this month, in a Q&A session during the JPMorgan shareholders’ event, Disney Parks President Josh D’Amaro even alluded to the possibility of a brand-new Disney theme park resort in Singapore as well. Only time will tell what actually comes to fruition.
