Major Studios Sued for Home Video Profits

      LOS ANGELES (CN) – The late Charles Bronson’s family and loan-out companies for two other filmmakers claim in class actions that major Hollywood film studios cheat them of profits from home video sales.
     The four Superior Court class actions were filed against Paramount, Sony, Fox and Universal studios. All four studios are accused of using Hollywood accounting to cheat on royalties: basing royalty payments on just 20 percent of revenue, rather than all of it.
     Stanley Donen Films sued Fox. Donen was choreographer and director of “Singin’ In The Rain,” “Charade” and other hit movies.
     The Bronson Survivors’ Trust sued Sony. Bronson appeared in a string of hits, including “The Magnificent Seven,” “The Dirty Dozen,” “The Great Escape,” and the “Death Wish” series.
     Colin Higgins Productions sued Paramount and Universal, in separate complaints. The late Higgins wrote and directed “Best Little Whorehouse in Texas” for Universal, and “Foul Play” for Paramount.
     The plaintiffs claim rights to a share of total revenue from sale of movies on home video, including VHS tapes, DVDs, laser discs, video-on-demand, digital downloads and streaming.
     In almost identical language, the four complaints say that “contrary to the unambiguous terms of the standard contract” the studios engage “in a common and systematic practice of paying less revenue than it receives by including only 20 percent of said revenue when calculating the amount payable to the profit participants.”
     The studios pocket the remaining 80 percent difference for themselves, according to the complaint.
     Home video distributors used to pay a flat 20 percent royalty to the studios from home video sales, which studios used as a benchmark to pay filmmakers, artists and other “profit participants.”
     “However, after the studios established their own home video divisions, they continued the practice of only reporting 20 percent of actual receipts to profit participants, as if the profits earned by these divisions were not their own and not subject to eventual disbursement to the profit participants as well,” according to the complaints.
     Colin Higgins Productions says Higgins was entitled to 7.5 percent of 100 percent of Paramount’s home video revenue for writing “Foul Play,” and 5 percent for directing the 1978 picture, which starred Goldie Hawn and Chevy Chase.
     Higgins’ “Best Little Whorehouse in Texas,” starring Burt Reynolds and Dolly Parton, entitled him to 7.5 percent of revenue in excess of $50 million, and an amount equal to 10 percent of revenue in excess of $65 million, the complaint states.
     Donen’s company claims it was underpaid for “Lucky Lady,” a 1975 film starring Burt Reynolds, Liza Minnelli and Gene Hackman, and says Donen was entitled to back-end compensation of 5 percent of gross receipts if the project broke even.
     The trustee for the Bronson Survivors Trust, Larry Martindale, claims the Bronson family is entitled to 10 percent of back-end revenue from the 1970s drama “Hard Times,” which starred Bronson as a Depression-era slugger.
     The plaintiffs seek court orders forcing the studios to comply with the terms of the profit participation agreements, and to include 100 percent of income when calculating a cut of future home video sales.
     They also seek court costs and punitive damages for breach of contract, breach of implied covenant, money had and received, declaratory judgment, open book account, unfair competition, and conversion.
     Consumers spent $18 billion in the home video market last year, with streaming and digital downloads through retailers such as iTunes and Amazon accounting for 30 percent of the home video market, according to the Digital Entertainment Group, a Santa Monica-based industry watcher.
     The plaintiffs are represented by Neville Johnson with Johnson and Johnson of Beverly Hills.
     Paramount spokesman Robert Lawson declined to comment.
     Sony, Fox and Universal representatives could not immediately be reached for comment.

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