To widow, Pooh suit is no silly old fight
July 8, 2002
Beverly Hills, CA (LA Times) - Once upon a time -- well, actually 78 years ago -- a British playwright named Alan Alexander Milne scribbled some lighthearted verses about a boy and his constant companion, a dimwitted bear who couldn't get enough honey.
Winnie the Pooh was an immediate sensation. Even today, people can't get enough of that silly old bear -- or his honey.
Pooh has become a $1 billion-a-year industry for Walt Disney Co., which acquired rights to the Milne characters in 1961.
Last year, Disney paid $352 million to buy the remaining Pooh rights from various Milne heirs in England. Yet there remains one threat to the entertainment giant's Pooh empire. Her name is Shirley Slesinger Lasswell.
Lasswell is an 81-year-old widow who lives in Beverly Hills and gets around in a chauffeured silver Mercedes with a 3-foot Pooh doll buckled in beside her. Lasswell and her daughter inherited merchandising rights to Milne's characters half a century ago from Lasswell's first husband, a literary agent.
In 1961, Lasswell turned those rights over to Disney for a share of the merchandising revenue. Since then, she and her daughter, Patricia Slesinger, have collected $66 million in Pooh riches. But they are unhappy. They contend that Disney has cheated them out of at least $200 million in royalties and are asking a court to terminate their Disney contract so they can shop their Pooh rights to other companies.
Their 11-year-old lawsuit is set for trial in March. For Disney, the stakes are enormous. The company recently warned shareholders that "damages could total as much as several hundred million dollars and adversely impact . . . any future exploitation" of Pooh, Piglet, Tigger and Eeyore.
Both sides agree that Lasswell and her daughter are entitled to Disney royalties on a range of Pooh products. The dispute centers on whether their rights extend to videotapes, DVDs and computer software featuring the Milne menagerie.
Disney's lead attorney, Daniel Petrocelli, dismisses the case as "overreaching" and "rooted in greed."
Back in the '50s, Lasswell marketed upscale Pooh toys and children's clothing to department stores, helping to revive the franchise years before Disney became involved. Lasswell believes that she has been key to developing the Pooh brand.
"We just want what we're entitled to: no more, no less," she says.
Agent grabs rights
After Winnie-the-Pooh was published in 1926, one of the first to see Pooh's financial potential was Stephen Slesinger, a young New York literary agent. Slesinger established one of the first successful character-licensing firms, acquiring rights to Tarzan and Charlie Chan.
In 1930, Slesinger sailed to England to secure from Milne the rights to sell Pooh merchandise in the United States and Canada. He agreed to pay Milne a $1,000 advance, plus royalties equal to 3 percent of the merchandising revenue.
Two years later, Slesinger acquired the radio and television rights at a time when TV was still just a budding idea among a few engineers. During the Depression, Slesinger licensed Pooh toys and dishes, an RCA record narrated by Jimmy Stewart and a board game by Parker Bros.
By the mid-1930s, Milne was enjoying steady royalties from his Pooh books as well as Slesinger's merchandise.
Disney shows interest
By the 1940s, Disney was scouting for other children's stories to animate and took a keen interest in Pooh.
But Roy O. Disney, Walt's brother and the financial brains of the company, uncovered a problem.
"A.A. Milne has certainly completely balled up his rights in Winnie the Pooh," he wrote in a 1947 memo. "Milne has given to Slesinger not only rights to merchandising, but also rights for radio and television. . . . If we were to attempt to do anything with Winnie the Pooh, Slesinger is in a beautiful spot to either hold us up for an outrageous price or sit back and reap the rewards of our investment."
Disney took a pass on Pooh.
In 1953 Slesinger died -- bequeathing his merchandising and licensing business to Shirley and their 1-year-old daughter, Patricia.
Within a few years, the stream of royalties began to dwindle.
"I thought, 'Now what do I do?' But it was right there for me," she said. "I decided to promote Pooh."
She reread Milne's books and wrote down verses to use in a new line of products.
In 1960, Shirley got a call from Disney asking if she was interested in selling her Pooh rights. She was excited by the idea.
"I really went as far as I could go [with Pooh]. It was just me, not some huge company," she said.
She reached a royalty agreement in 1961 with Disney that gave her 4 percent of the revenue on worldwide Pooh sales. Soon after, Shirley said, she met Walt Disney at the Waldorf-Astoria hotel in New York.
"He said, 'Shirley, you won't be sorry,' " she recalled.
Shirley remarried in 1964, to cartoonist Fred Lasswell, and moved with her husband and daughter to Tampa, where she drove a Cadillac with a "POOH 1" license plate.
The family's Pooh royalties rose from $13,000 in 1967 to $89,000 by 1981, their attorneys said. Pooh money helped pay for Patricia Slesinger's college education and her art-history studies abroad.
Shirley's doubts about Disney surfaced in 1981 while she was on a trip to Disney World. A self-described Pooh "shopaholic," she went on a buying spree. Later, she compared her haul with Disney's royalty statements and saw that many of the Pooh products were not listed. She hired a lawyer.
In 1983, Shirley Lasswell, Christopher Milne and representatives of the Milne estate signed a new Disney contract. The deal trimmed the Slesinger family's Pooh royalties from 4 percent to about 2 percent of what they expected to be a much larger revenue pie.
It called for more detailed accounting of what was sold. Disney also paid Lasswell and her daughter $750,000 to resolve the dispute over past royalties.
The peace didn't last long. By the late 1980s, videotapes were the rage, and Disney was busy putting Pooh movies and TV programs on video. In 1987, a lawyer for the Milne estate and Lasswell compared notes about Disney's royalty payments.
In one 12-month period, Disney paid the family more than $1 million in royalties on Pooh records and videotapes, plus $17,000 for computer software. Then royalties for those products suddenly dropped. For one six-month period in 1989, according to court records, Disney paid Lasswell and her daughter just $22.37 on software sales.
In 1990, Lasswell hired an auditor to review Disney's books and concluded that the company had failed to keep complete sales records for Pooh merchandise for eight years. She and her daughter sued Disney in 1991. The next year, they received a $2.2-million "catch-up" payment to clear up discrepancies uncovered in the audit.
The current court case centers on whether videotapes, DVDs and software are covered by the 1983 royalty agreement. The family contends that Disney executives promised that videos and other emerging technologies would be included, even if they were not spelled out in the contract.
Disney says the Slesingers tried in 1983 to include videos in the deal and signed even after the company rejected the demand.
"The case boils down to whether they are entitled to be paid for all sorts of uses that are not covered by the contract," said Petrocelli, the Disney attorney.
"They say that when Winnie the Pooh is dancing down Main Street and hugs a kid, they ought to get a royalty from that. But the contract never gave them those rights."
Milne estate sells rights
Last year, seeking to tie up legal loose ends in its Pooh royalty agreements, Disney bought all future rights from the Milne estate for $352 million. A Milne family trust distributed the money to four principal beneficiaries.
Now, the Pooh holdouts are down to Shirley Lasswell and her daughter.
Patricia Slesinger, 49, says the legal battle with Disney has been emotionally draining but also educational. She has learned about the role her parents played in building the Pooh merchandise empire.
Two years ago, Disney published a 176-page coffee-table book about the history of Pooh. Slesinger was offended to find no mention of her family.
"Everybody has done a great job" developing the Pooh brand, she said. "But don't try to erase us out of history."
July 8, 2002
Beverly Hills, CA (LA Times) - Once upon a time -- well, actually 78 years ago -- a British playwright named Alan Alexander Milne scribbled some lighthearted verses about a boy and his constant companion, a dimwitted bear who couldn't get enough honey.
Winnie the Pooh was an immediate sensation. Even today, people can't get enough of that silly old bear -- or his honey.
Pooh has become a $1 billion-a-year industry for Walt Disney Co., which acquired rights to the Milne characters in 1961.
Last year, Disney paid $352 million to buy the remaining Pooh rights from various Milne heirs in England. Yet there remains one threat to the entertainment giant's Pooh empire. Her name is Shirley Slesinger Lasswell.
Lasswell is an 81-year-old widow who lives in Beverly Hills and gets around in a chauffeured silver Mercedes with a 3-foot Pooh doll buckled in beside her. Lasswell and her daughter inherited merchandising rights to Milne's characters half a century ago from Lasswell's first husband, a literary agent.
In 1961, Lasswell turned those rights over to Disney for a share of the merchandising revenue. Since then, she and her daughter, Patricia Slesinger, have collected $66 million in Pooh riches. But they are unhappy. They contend that Disney has cheated them out of at least $200 million in royalties and are asking a court to terminate their Disney contract so they can shop their Pooh rights to other companies.
Their 11-year-old lawsuit is set for trial in March. For Disney, the stakes are enormous. The company recently warned shareholders that "damages could total as much as several hundred million dollars and adversely impact . . . any future exploitation" of Pooh, Piglet, Tigger and Eeyore.
Both sides agree that Lasswell and her daughter are entitled to Disney royalties on a range of Pooh products. The dispute centers on whether their rights extend to videotapes, DVDs and computer software featuring the Milne menagerie.
Disney's lead attorney, Daniel Petrocelli, dismisses the case as "overreaching" and "rooted in greed."
Back in the '50s, Lasswell marketed upscale Pooh toys and children's clothing to department stores, helping to revive the franchise years before Disney became involved. Lasswell believes that she has been key to developing the Pooh brand.
"We just want what we're entitled to: no more, no less," she says.
Agent grabs rights
After Winnie-the-Pooh was published in 1926, one of the first to see Pooh's financial potential was Stephen Slesinger, a young New York literary agent. Slesinger established one of the first successful character-licensing firms, acquiring rights to Tarzan and Charlie Chan.
In 1930, Slesinger sailed to England to secure from Milne the rights to sell Pooh merchandise in the United States and Canada. He agreed to pay Milne a $1,000 advance, plus royalties equal to 3 percent of the merchandising revenue.
Two years later, Slesinger acquired the radio and television rights at a time when TV was still just a budding idea among a few engineers. During the Depression, Slesinger licensed Pooh toys and dishes, an RCA record narrated by Jimmy Stewart and a board game by Parker Bros.
By the mid-1930s, Milne was enjoying steady royalties from his Pooh books as well as Slesinger's merchandise.
Disney shows interest
By the 1940s, Disney was scouting for other children's stories to animate and took a keen interest in Pooh.
But Roy O. Disney, Walt's brother and the financial brains of the company, uncovered a problem.
"A.A. Milne has certainly completely balled up his rights in Winnie the Pooh," he wrote in a 1947 memo. "Milne has given to Slesinger not only rights to merchandising, but also rights for radio and television. . . . If we were to attempt to do anything with Winnie the Pooh, Slesinger is in a beautiful spot to either hold us up for an outrageous price or sit back and reap the rewards of our investment."
Disney took a pass on Pooh.
In 1953 Slesinger died -- bequeathing his merchandising and licensing business to Shirley and their 1-year-old daughter, Patricia.
Within a few years, the stream of royalties began to dwindle.
"I thought, 'Now what do I do?' But it was right there for me," she said. "I decided to promote Pooh."
She reread Milne's books and wrote down verses to use in a new line of products.
In 1960, Shirley got a call from Disney asking if she was interested in selling her Pooh rights. She was excited by the idea.
"I really went as far as I could go [with Pooh]. It was just me, not some huge company," she said.
She reached a royalty agreement in 1961 with Disney that gave her 4 percent of the revenue on worldwide Pooh sales. Soon after, Shirley said, she met Walt Disney at the Waldorf-Astoria hotel in New York.
"He said, 'Shirley, you won't be sorry,' " she recalled.
Shirley remarried in 1964, to cartoonist Fred Lasswell, and moved with her husband and daughter to Tampa, where she drove a Cadillac with a "POOH 1" license plate.
The family's Pooh royalties rose from $13,000 in 1967 to $89,000 by 1981, their attorneys said. Pooh money helped pay for Patricia Slesinger's college education and her art-history studies abroad.
Shirley's doubts about Disney surfaced in 1981 while she was on a trip to Disney World. A self-described Pooh "shopaholic," she went on a buying spree. Later, she compared her haul with Disney's royalty statements and saw that many of the Pooh products were not listed. She hired a lawyer.
In 1983, Shirley Lasswell, Christopher Milne and representatives of the Milne estate signed a new Disney contract. The deal trimmed the Slesinger family's Pooh royalties from 4 percent to about 2 percent of what they expected to be a much larger revenue pie.
It called for more detailed accounting of what was sold. Disney also paid Lasswell and her daughter $750,000 to resolve the dispute over past royalties.
The peace didn't last long. By the late 1980s, videotapes were the rage, and Disney was busy putting Pooh movies and TV programs on video. In 1987, a lawyer for the Milne estate and Lasswell compared notes about Disney's royalty payments.
In one 12-month period, Disney paid the family more than $1 million in royalties on Pooh records and videotapes, plus $17,000 for computer software. Then royalties for those products suddenly dropped. For one six-month period in 1989, according to court records, Disney paid Lasswell and her daughter just $22.37 on software sales.
In 1990, Lasswell hired an auditor to review Disney's books and concluded that the company had failed to keep complete sales records for Pooh merchandise for eight years. She and her daughter sued Disney in 1991. The next year, they received a $2.2-million "catch-up" payment to clear up discrepancies uncovered in the audit.
The current court case centers on whether videotapes, DVDs and software are covered by the 1983 royalty agreement. The family contends that Disney executives promised that videos and other emerging technologies would be included, even if they were not spelled out in the contract.
Disney says the Slesingers tried in 1983 to include videos in the deal and signed even after the company rejected the demand.
"The case boils down to whether they are entitled to be paid for all sorts of uses that are not covered by the contract," said Petrocelli, the Disney attorney.
"They say that when Winnie the Pooh is dancing down Main Street and hugs a kid, they ought to get a royalty from that. But the contract never gave them those rights."
Milne estate sells rights
Last year, seeking to tie up legal loose ends in its Pooh royalty agreements, Disney bought all future rights from the Milne estate for $352 million. A Milne family trust distributed the money to four principal beneficiaries.
Now, the Pooh holdouts are down to Shirley Lasswell and her daughter.
Patricia Slesinger, 49, says the legal battle with Disney has been emotionally draining but also educational. She has learned about the role her parents played in building the Pooh merchandise empire.
Two years ago, Disney published a 176-page coffee-table book about the history of Pooh. Slesinger was offended to find no mention of her family.
"Everybody has done a great job" developing the Pooh brand, she said. "But don't try to erase us out of history."
