Disney film deal examined
By Katherine Nichols
Advertiser Staff Writer
Top tourism officials yesterday questioned a Hawai'i marketing deal with Walt Disney Studio's animated film "Lilo & Stitch," but allowed the multimillion-dollar campaign to move forward.
The Hawai'i Tourism Authority had said the deal announced last week by the Hawai'i Visitors and Convention Bureau was not final without the authority's approval.
The authority's board gave no formal approval yesterday at a special meeting to evaluate the one-year, $1.7 million deal, which was endorsed by staff members who evaluated it. But the campaign — long since under way — will continue largely because the authority has no legal or financial obligation to Disney, said Frank Haas, marketing consultant for the authority.
Instead, the board demanded that the bureau more specifically outline the benefits of the marketing deal and revise its annual tourism marketing plan to include those details. The plan will then be presented to the board next month, said Haas.
The authority's decision followed three hours of debate over whether the bureau had violated procedural rules when it struck the deal with Disney.
In the wake of criticism earlier this year from the state auditor and legislators about after-the-fact contract approvals, the authority had recently scrutinized the bureau for negotiating with Disney before receiving consent from the authority, which said it must review and sanction bureau expenditures of more than $500,000.
But Tony Vericella, executive director of the bureau, said the rule applies only to a single "major market area." The Disney deal, he argued, is worldwide so he said he felt the bureau was free to move forward and sign a contract.
The differences once again illuminate the lack of clarity in the working relationship between the bureau and the authority, which provides $45 million of state money to the bureau for tourism marketing. The debate's timing also is crucial for the bureau, whose contract with the authority expires in December.
Tourism authority officials also questioned whether the deal with Disney was for one or several years. The authority does not want the bureau to engage in multiyear contracts because the bureau's contract ends this year and the authority is not to engage in projects that go beyond the term of the current board.
Vericella said that while the deal is essentially for three years — at a previously reported cost of $3.9 million — those subsequent years are contingent upon yearly funding from the authority.
Should the tourism authority choose to reject the "Lilo & Stitch" campaign or end the bureau's contract, the bureau could legally extricate itself from the deal after 2002 or find other sources of funding.
"Nothing is committed or guaranteed ... beyond the first year," Vericella said.
For the investment, Vericella said Hawai'i would receive exposure on three nationally televised programs, 100 minutes of scenic footage and content about the state on the film DVD — to be released in December — and market research from Disney's "Lilo & Stitch" mini-Web site, which is linked to the bureau's own Web site.
"This is not about the movie. It's really about what we get beyond the movie," said Haas.
The bureau has not asked the tourism authority for additional money. The money for the Disney campaign will come out of the bureau's $37 million budget for leisure marketing, which includes the family market that "Lilo & Stitch" targets.
Also included in the deal with Disney is the right to produce additional material for the company to insert into DVD packaging, said Vericella. Whatever is produced would cost extra.
