MGM Sues Disney Over New Hotels in Florida

MGM/UA Communications filed suit Tuesday against Walt Disney Co., charging that the Burbank company breached a contract with MGM by building hotels as part of a Florida studio tour that bears both companies’ names.

Disney spokesman Erwin Okun said, “We’re not going to comment at this time.”

The suit, filed in Los Angeles Superior Court, states that a 1985 agreement between the two companies gives Disney the right to use the MGM name for a studio tour attraction and merchandise connected with such an attraction.

Disney is building a movie production facility and studio tour called the “Disney-MGM Studio Tour” in which MGM has no financial participation. The attraction, which is south of Disney’s Epcot Center, is scheduled to open next year.

However, the suit contends, Disney also is planning several hotels in the area, some of which will be connected to the studio facility.

“The placement and use by Disney of major hotels in this fashion integrated with the Disney-MGM Studio Tour is a violation of the contract, which prohibits Disney from using the ‘MGM’ name ‘in or in connection with hotels,’ ” the suit said.

In addition, the suit charged, Disney has been selling merchandise using the MGM name “in an improper and unapproved manner” at Walt Disney World in Florida.

MGM is asking the court to forbid Disney from using the MGM name “in its studio tour in Florida or anywhere else.” The suit also seeks damages of more than $10 million. MGM Grand Inc., which has owned the right to use the MGM name on hotels since 1980, was also a party to the suit.