MGM Knew of Studio Plan for Park, Eisner Testifies : Entertainment: The Disney chairman produced a 1985 videotape highlighting production plans at the Florida facility. MGM claims use of its name in Orlando is a breach of contract.

The Walt Disney Co. on Tuesday introduced a videotape that seemed to support its claim that the company did not mask its intention to use a Florida theme park as a production facility.

Despite allegations of a contract breach by rival studio MGM, the 1985 tape showed that company Chairman Michael D. Eisner and then-Florida Gov. Bob Graham highlighted the production plans at an announcement ceremony for the attraction.

After viewing the videotape in court, Los Angeles Superior Court Judge Curtis Rappe said, “What it might show is that Disney was not lurking around in the dark on this.”

The videotape was played during the second day of testimony by Eisner, who has denied misleading MGM in any way in the creation of the Disney-MGM Studios in Orlando.

“I made it very clear (in media interviews and public appearances in 1985) that this was a working studio,” Eisner said on the stand.

Eisner also said that, until MGM sued Disney in 1988, “I never heard a complaint” about the working studio. “Quite to the contrary, MGM was very enthusiastic about this, as I recall.”

MGM claims in its suit that Eisner and Disney breached the terms of a 1985 agreement that allowed Disney to use the MGM name at the Orlando theme park. MGM, which is seeking more than $100 million in damages, claims that the agreement does not authorize Disney to use its name for the working studio portion of the attraction, at which television programs and portions of films are produced.

Eisner made his points under questioning from Disney attorney Stanford M. Litvack, who was trying to establish that the company launched the working studio openly and that MGM did not object until three years later, in August, 1988.

“This was done in the most public way imaginable,” Litvack told Rappe.

Eisner, however, later on Tuesday renounced one aspect of his earlier deposition testimony in the case, in which he had said that he did not recall discussing the working-studio concept with a top MGM executive then involved in the deal.

Responding to MGM lawyer Terry Christensen, Eisner said: “The fact of the matter is, I do now recall the conversation, quite vividly. . . . I wish I had recalled it vividly in the deposition, but I didn’t.”

Christensen said afterward that MGM did not object to the working studio until 1988 because it was not until then that its name actually appeared on that facility.

Eisner also testified that “it would be devastating to our company” if former MGM studio owner Kirk Kerkorian is allowed to build a movie-related theme park in Las Vegas under the name MGM Grand. Disney is pressing that assertion in a countersuit against MGM Grand.

According to Christensen, Disney now pays $350,000 a year for exclusive use of the studio’s name at the movie-oriented park in Orlando. The licensing agreement reached in 1985 is for 15 years and the annual fee is to increase by $50,000 each year.

Eisner is scheduled to complete his testimony today after further questioning from Kerkorian’s attorney.