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Author: esxokm Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 49678  
Subject: Another lawsuit Date: 3/3/2013 2:33 AM
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This is exactly why I think deals should be made where talent takes no profit participation. The sweetheart deal rears its ugly head again. This involves "Home Improvement."

http://www.hollywoodreporter.com/thr-esq/home-improvement-te...

The thing that's really terrible about this is I'm certain the talent in this case is correct about what Disney promised. From what I've read, what usually happens is -- and I'm sure everyone knows this already -- Disney makes a deal and then tries to prevent distributing monies due by shielding revenue through various overhead charges, company divisions, etc. So, in my mind, Disney (as well as other studios) make false promises so that they can get talent to work for it. In the article, you will note that supposedly Disney promised 75% of net profits to certain participants in the production company that made Improvement. Again, I'm sure Disney did, but Disney needs to stop doing this. Bigger talent have ways of combating ambiguous accounting practices, but for the benefit of everyone, including shareholders, studios should pay talent one-time fees for the delivery of projects, forget setting up annuity streams tied to future exploitation of content via ancillary distribution mechanisms.

Shareholders want, and expect, Disney to use vertical integration to its benefit -- but without the frictional costs of litigation.
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Author: esxokm Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 48448 of 49678
Subject: Re: Another lawsuit Date: 3/3/2013 2:43 AM
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I have to correct something: I was reading the actual lawsuit itself that is linked in the article, and it appears that this isn't a sweetheart-deal case, but simply a case where the plaintiffs believe Disney did not do its best to sell the series at maximum cost. The details are interesting.

This still does not alter my opinion of profit participation by talent, but I did have to point out that it does not involve vertical integration like I thought. The TV stations involved were owned by other media concerns.

One reason for my confusion is that, in the linked article, there is mention of the Improvement's team previous battle in terms of the sweetheart deal.

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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 48449 of 49678
Subject: Re: Another lawsuit Date: 3/3/2013 3:21 AM
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Litigation is a cost of doing business.

Fuskie
Who expects the lawyers are out for a settlement and don't expect a victory...

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Author: esxokm Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 48453 of 49678
Subject: Re: Another lawsuit Date: 3/4/2013 9:34 AM
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Fuskie,

Litigation certainly is a cost of doing business, but you misunderstand the true meaning of that phrase.

Litigation can be justified as a cost when unforeseen issues that are bound to happen actually happen. It's only a matter of time before a business is sued if it is successful. Or, if you are a very successful screenwriter, it is only a matter of time before you are sued for plagiarism. You don't do anything that could cause it, but it just happens because you become a target virtue of success.

In this case, Disney and other studios open themselves up to litigation simply by promising talent the moon and not delivering it. It's a bait and switch tactic that is purposely done. Disney should pay up if that's the deal it makes, not try to obfuscate wrong doing.

If studios didn't offer profit participation, this wouldn't happen. Just my opinion, of course, but when you think about it, this isn't like an accident at Disneyland. It unfortunately is studio accounting and studio promises as far as distribution is concerned.

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