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WME May Take A Big Hit Over Building Dispute

LOS ANGELES (CelebrityAccess MediaWire) — William Morris Endeavor Entertainment will appeal an arbitrator's ruling against them in their multi-million dollar legal dispute with real estate developer George Comfort & Sons Inc., who built an office building the agency chose not to occupy post-merger with Endeavor Entertainment.

In 2007, the William Morris Agency (The predecessor of WME) agreed to occupy the six story office building, located at 235-269 N. Beverly Drive. However, when they merged with Endeavor in 2009 and formed WME, the agency backed out of the deal, choosing instead to move into Endeavor's former office space at 9601 Wilshire Blvd.

Comfort filed suit against WME in September, 2009, alleging that the agency had violated their lease agreement, costing Comfort millions in rent. According to THR, the arbitrator in the case recently issued a finding in favor of Comfort, but has yet to specify what damages, if any, WME was on the hook for; however, it may be a substantial amount. "Informed" sources told Deadline Hollywood blogger Nikki Finke that WME's exposure may be as much as $25 million to $70 million.

WME countered that Comfort had violated the lease as well in 2009 by allowing WME competitor Gersh to move in to an adjacent building, meaning that the two agencies would share the same underground parking lot. According to several reports, WME leadership "bristled" at the notion of sharing a valet with their rival. The original lease, as negotiated by former WMA head Jim Wiatt, is purported to have included clauses guaranteeing exclusivity. The arbitrator however, found that while Comfort had violated the terms of the lease, the breach was not sufficiently material for WME to back out of the agreement.

MGM signed on in December to move into the space originally planned for WME and is set to partially occupy the building this fall. – CelebrityAccess Staff Writers