More specifically; The Multi-Attraction/Single IP Land. This story could also be called "How Harry lost Mickey".
For the purposes of this story, we will pretend Bugs Land@DCA doesn't exist, because it's existence plays no part in what came later.
The Preshow
The relationship between Team Potter and Disney goes all the way back to 1997, when all the studios were bidding on The Sorcerer's Stone movie. Disney low-balled it seeing all kinds of red flags. First off, it breaks the first rule of filmmaking, "don't work with kids". Disney also hated JK's demand of an all British cast and crew. Specifically, crew. Disney uses their own crew. But the biggest red flag was JK wanted total control of the characters and story. Well, obvioisly, WB won that round. Disney's second attempt to gain access to the Boy Wizard was after the success of SS. Disney tried to get the rights for the rest of the films. But WB thwarted that. Disney's third attempt to get Potter was an attempt to buy Scholastic Publishing, but the Disney Board balked at the price.
The First Inkling
On July 16, 2006, Jim Hill posted that Team Potter had signed a "Letter of Intent" with Disney for the theme park rights. 5 days later, on July 21, 2006, Robert Niles responded by saying he had recently heard that, in fact, Team Potter had signed a "Letter of Intent" with Universal. Oddly enough, they were both correct.
The Backstory
In 2001, Disney approached Team Potter about a theme park attraction. They were turned away because, at that point, WB was working on a stand alone attraction concept. They eventually built one in Australia. It was popular, but WB struggled at making it profitable. By 2003, WB gave up on that and called Disney. Team Potter signed a "Letter of Intent" with Disney in June 2003. But it was not an "exclusive" deal. There was already a Potter thing in one of the Legolands.
Within a month Universal was aware. At the July 2003 "Meetings With Bob", a quarterly executive luncheon with Universal Orlando President Bob Gualt, Bob was asked "Where are we with the Potter and the LotR rights". Bob's response was, "Disney has Potter locked up, but I think we can get the Tolkiens. They hate Disney".
From June 2003 to the Fall of 2004, Team Potter and Disney went round and round. JK hated the first pitch, which was a simple wand based shooter with an exit shop. She demanded a "Leaky Cauldron" with a magical portal back wall into a village square AND the shooter ride. WDI drew that up and this led to the widely, yet incorrectly relayed story of JKs meltdown. The myth is JK was in a production meeting with WDI in Orlando and JK got so mad she stormed out of the meeting and went straight to UOR, where she showed up at the gate and demanded to see the boss. 3 days later, Universal had given her everything she wanted and construction started 10 months later. "Cool story, Bro." Only, it's true with every single fact being wrong.
"The Meeting" did happened in the Fall of 2004, but in Burbank, CA. And JK blew up when the 3rd redo of the village square idea included a Sorting Hat spinner. She threw the plans off the table raging on the "Dumbo-dore" ride. She didn't storm out and go straight to UOR. The day long meeting did end at lunch, though.
At this point, WB is in a bit of a spot. They were stuck between JK and Disney, and it was falling apart. So WB set up a meeting with Universal to see if they could offer them an out. Without specifics, they explained that JK's big issues with Disney were scope and adherence to the source material. (The aforementioned "Dumbo-dore" pitch had The Leaky Cauldron leading into Hogsmeade with a hat spinner and a tiny Hogwarts facade for the wand shooter that Universal Creative dubbed pigletwarts.)
By April of 2005, UC was ready to make their pitch. They traveled to London with a cask of Butterbeer and lots of drawings. JK was blown away thrilled and yet declared it all wrong. She and the WB guys holed themselves up in the same hotel as the Uni guys for 3 days without talking to them. Basically, "you guys wait here. We're gonna go talk about this". When they all met at the end of the 3 days, JK had scribbled all over their plans declaring stuff in the wrong place. The stores were too big. The walkways too wide. Universal said, we can fix that. So that night, UC was on the way back to Orlando drinking champagne. They knew they had impressed her, but there was a long way to go before they could declare victory.
The June 2005 meeting with Disney was the beginning of the end of the Disney "Letter of Intent". Unlike when WB met with Uni the first time where they were very non-specific about Disney's actual plans. JK walked into the meeting and said, "This is what Universal wants to give me". Bob Iger listened intently and agreed to rework the concept on a grander scale. After the meeting. Bob was rather uncomplimentary about Jo and declared Universal's pitch insane. He was mad. And ready to kill the project.
The Wizarding Skillz of Bob Iger
While all this Potter headache is going on. Bob had several irons in the fire. In Jan. 2005, Bob opened negotiations with Steve Jobs to buy PIXAR. Jobs is rather non-plussed with "Michael's Little Minion". By July, Bob's getting no where and feeling defeated on 2 fronts. He needs to figure out a way to sway Jobs and rid himself of JK. Taking what he learned in the JK meeting he transforms the concept and brews up a deliciously manipulative plan. A friendly lunch with his old friend Hawaiian Shirt Guy. Iger filled his head with vodka and dreams of walking in Radiator Springs.
Iger got PIXAR.
Now Back To Our Regularly Scheduled Program
Disney and Team Potter mutually agreed to break the "Letter of Intent" in Dec. 2005. Team Potter and Universal signed a "Letter of Intent" sometime in the late spring of 2006. And by July 21st 2006 Robet Niles is talking about it on the internet. In Jan. 2007, the rumor is picked up by the mainstream media when About.com wrote an article about it.
The Aftermath
"On the 3rd day of Christmas Potter gave to me.
3 Toy Story Lands
2 Star Wars Lands
And a Banshee in a Big *** Show Building"
Anyway, that's the story as it was told to me. I hope you enjoyed.