Bill Nye files suit against Disney, Buena Vista for millions in underreported licensing payments

“Bill Nye” by paul antico. Licensed under CC BY 2.0.

William Sanford Nye, better known as Bill Nye the Science Guy, introduced many young children to science topics during the show’s five-year run during the mid-1990s and for years afterward during syndication. The children’s science education show received 36 Emmy Award nominations through the year 2000, of which it won a total of 19 Emmys. On Wednesday, August 25th, Bill Nye filed a complaint including charges of fraudulent concealment and breach of contract against a series of media companies, including the Walt Disney Company (NYSE:DIS). The suit has been filed in Los Angeles County Superior Court.

In the suit, Nye alleges that Buena Vista Television entered into an agreement in March 1993 to promote, market and distribute the Bill Nye the Science Guy television series. That agreement entitled the owners of the show to 50 percent of the net profits divided four ways, leaving Nye entitled to 16.5 percent of the total net profits earned by the show. The agreement with Buena Vista also included certain carve-outs allowing Buena Vista to grant video device distribution rights and exploit subsidiary rights with affiliates. The agreement allegedly required Buena Vista to provide quarterly accounting statements as long as Buena Vista was receiving income for distributing the television series.

“[Bill Nye the Science Guy] was an unquestionable success,” Nye’s complaint notes, adding that the show was the first television program to be concurrently air on national syndication while also being broadcast on PBS. In 2013, more than a decade after the production of the original Bill Nye the Science Guy show concluded, Disney marketed DVD box sets of the series at a retail price of $1,500 per box set.

Nye first became suspicious as to whether Buena Vista was upholding its end of the agreement in July 2008 after Buena Vista informed Nye they had made a mistake in calculating a participation payment sent to Nye that April; instead of earning $585,000 in net profits, Nye then owed Buena Vista nearly $500,000. Since that July 2008 statement recalculation, Nye alleges that Buena Vista ceased making participation or royalty payments, claiming that Nye first had to repay the $500,000 before receiving future payments. Nye’s suit specifically notes that Disney failed to act in good faith to resolve the dispute when counsel contacted them about the issue.

Further suspicion was raised when a review of financial statements provided by Buena Vista claimed that the Bill Nye the Science Guy television series grossed $26 million in revenue while also accumulating deductions of $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 [Bill Nye the Science Guy]’s costs of production,” the complaint reads.

Nye exercised his contractual right to conduct an audit of Buena Vista’s records in December 2013. The auditor contacted both Buena Vista and Disney and Disney allegedly responded that it would take three to four years for them to be able to comply because of a backlog of audits. The auditor working for Nye was refused access to licensing agreements between Buena Vista, Disney and a series of media companies including Netflix and Apple. The auditor’s analysis of limited documentation led the auditor to conclude that Nye was owed $9.35 million in payments which were underreported. The auditor allegedly discovered that Buena Vista was engaging in improperly deducting certain expenses such as foreign withholding tax. Further, Buena Vista was allegedly miscalculating gross revenues on licensing agreements with Netflix and the Disney Movie Club. Both Buena Vista and Disney refused to provide information on sales of Bill Nye the Science Guy recordings to Disney Movie Club.

Nye’s suit includes seven causes for action including fraudulent concealment, fraudulent inducement, breach of contract and breach of fiduciary duty. Nye’s prayer for relief requests an order compelling defendants to account for money owed to the plaintiff, compensatory and/or special damages, punitive damages under California Civil Code § 3294, disgorgement of all profits which can be traced to the causes for action and the imposition of a constructive trust upon all profits and proceeds related to the Bill Nye the Science Guy series which are currently in the possession of the defendants.


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2 comments so far.

  • [Avatar for Valuationguy]
    August 30, 2017 09:31 am

    Disney is a multi-billion dollar enterprise with the heft to crush Bill Nye unless Nye gets enough publicity to embarrass the corporation as a whole. Bravo Steve in getting this out.

    Disney is marketed as family-friendly because of its origins….but that is JUST marketing. They are a global shark….and would just as soon EAT Nye as pay him what is owed….if they can get away with it.

    Very few large corporations these days have management with any sort of conscience…..because those without conscience tend to be much more ruthless and effective in business. (Witness the money center banks….where management is hopelessly morally compromised.)

  • [Avatar for Anon2]
    August 29, 2017 09:33 am

    Disney as a family brand cannot condone fraudulent behavior… it should clean house quick, make reparations and apologize, do all that or prepare to lose the trust and patronage of its honest, clean and good, law abiding family base.