While her alter ego Lizzie McGuire was dealing with teen traumas like being dumped by a cute paperboy and shunned by snotty cheerleaders, actress Hilary Duff was facing a more daunting foe: the Walt Disney Company. On May 9, Disney ended negotiations with Duff for a sequel to ''The Lizzie McGuire Movie,'' which in May opened strong to $17.3 million and will soon surpass $40 million.
''Disney thought they'd be able to bully us into accepting whatever offer they wanted to make, and they couldn't,'' Duff's mother, Susan, told Entertainment Weekly in her first interview since the deal unraveled. She has overseen Hilary's career since its beginning six years ago. ''We walked away from a sequel. They walked away from a franchise.''
A franchise that might have become an empire. Since its 2001 debut, ''Lizzie McGuire'' has become the Disney Channel's highest-rated show, establishing Duff as an international star with a fanatical fan base of tweens willing to spend millions on anything Lizzie: the soundtrack from the ''Lizzie'' movie (which has gone gold); several best-selling teen novels (with five more scheduled to hit bookstores this year); and Lizzie McGuire apparel.
With 15-year-old Hilary growing up, Disney was clearly counting on Lizzie growing with her. In addition to the movie sequel, Disney had plans to make Lizzie a prime-time debutante on its ABC network. Set in junior high, the Disney Channel's current show has five new episodes yet to air, and ABC was developing a series to follow Lizzie into high school.
Forget about it. ''We weren't feeling the love,'' says Susan. ''They weren't giving Hilary the respect she deserved.''
Or the kind of money other networks were dangling. Knowing Hilary had received offers of six figures per episode from at least two competing networks for shows casting her as a high schooler, ABC offered $35,000 per episode for its new Lizzie-in-high-school series. ''They were telling us we'd get an offer and be very happy,'' says Hilary's lawyer Michael R. Fuller. ''We didn't hear anything for months, and then came this anticlimactic proposal.'' Meanwhile, the Duffs' negotiations for the second ''Lizzie'' movie faltered over a $500,000 bonus Disney promised to deliver when the first film reached $50 million. The half-a-million-dollar bonus -- upped from $100,000 -- was on top of an overall offer of $4 million for the sequel, against 4 percent of the studio's gross for the film (essentially quadrupling Hilary's big-screen salary). When Susan insisted the bonus be paid immediately, Disney withdrew the movie deal. ''Duff's lawyer played a hand and didn't expect the deal to go off the table,'' says a Disney source. ''He misstepped greatly.''
Disney execs then began making public statements about the failed negotiations. ''We feel we were generous and we reached to make this happen,'' Buena Vista Motion Pictures Group president Nina Jacobson told the Los Angeles Times. ''We're only sorry the other side didn't feel the same way.'' A few days later, columnist Marilyn Beck quoted unnamed insiders saying that Susan was ''a handful to deal with'' and that Hilary now had ''T-R-O-U-B-L-E stamped in front of her name.''
One source speculates that the leaks were an attempt by Disney to justify to its shareholders the loss of the franchise. ''Disney kept leaking stuff and using undisclosed sources,'' says Susan. ''And because we didn't say anything, it sounded like it was true. I thought it would run its course, but they kept coming at us. In my wildest dreams, I cannot imagine adults beating up on a 15-year-old kid in the papers like they have.''
Jacobson opted not to be interviewed for this story but gave this statement: ''We tried very hard to close a deal on the 'Lizzie McGuire' sequel. We think Hilary is very talented and we very much wanted to stay in business with her.''
Hilary also chose not to comment but issued a statement: ''I am very supportive of my mom and dad's involvement in my career and appreciate the guidance of my management team.''
Lizzie aside, Hilary is pursuing numerous opportunities: Disney's Buena Vista Music Group still plans to release her debut pop album in September. She is committed to a role in Fox's ''Cheaper by the Dozen'' remake and a lead in Warner Bros.' ''Cinderella Story.'' She's also negotiating to star in a film for Miramax (a Disney subsidiary). This week, she'll unveil a line of cosmetics, apparel, footwear, and accessories called Stuff by Hilary Duff.
Not everyone thinks Hilary should be in such a hurry to leave Lizzie behind. As CEO of Dualstar Entertainment, the Olsen twins' company, Robert Thorne knows about the kid-to-adult career transition: ''I would have counseled Hilary to continue to work with Disney for a couple years to build the franchise. It's a win-win.'' Instead, it may be a lose-lose.