Disney settles in $40M 'Home Improvement' suit

Disney and the creators of "Home Improvement" settled in a 6-year-long lawsuit Wednesday, just weeks before going to trial in September. They claimed $40 million in damages, but settled privately.

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The Creators of "Home Improvement", which starred Tim Allen, Wind Dancer Production Group and writer-producers Matt Williams, Carmen Finestra, Tam O'Shanter and David McFadzean alleged they lost syndication money from the popular ABC-Disney show generating upwards of $1.5 billion. Additionally the creators claimed they were hit with massive distribution fees, which undercut overall net profits and Disney asserted a 75 percent stake.

The show ran from 1991 to 1999, starred 90s heartthrob Jonathan Taylor Thomas and Pamela Anderson. Tim Allen as Tim "The Toolman" Taylor, voyeuristically hosted the home-improvement show "Tool Time," while raising his 3 sons with wife Jill. 

When the case was first introduced in 2013, it was dismissed on an “incontestability” clause, cited in the original profits contracts. The case was later revived when a California court ruled that Disney should be prevented from asserting the incontestability clause due to its alleged conduct frustrating a challenge. At the time, the creators asserted that Disney delayed audits obstructing a timely object. As the claim traveled through appellate courts and the parties then went through a discovery process.

When the Los Angeles Superior Court denied Disney’s motion in April, the plaintiffs were particularly troubled by Disney’s 35 and 40 percent distribution fees and licensing domestic basic cable rights of the series. Disney asserted that it was authorized to do so under the contracts, but the judge objected. The royalties from subscription-based VOD services like Hulu also came under question.

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This is the second major lawsuit taken involving the show. The first in the 1990s involved “vertical integration” challenging Disney’s licensing with the affiliates. Since then, vertical integration suits have continued to pop-up in media and entertainment with the rise of streaming services and their reliance on acquisitions, such as with AMC’s "Walking Dead" and Fox’s "Bones".