LOS ANGELES (CN) – Warner Bros. Entertainment cheated the creator of the “Dukes of Hazzard” of his share of profits from the movie, Gy Waldron’s successor in interest claims in Federal Court. The claim presents a model case of “Hollywood accounting,” including a quarrel over what a “spin-off” is.
The First National Bank in Sioux Falls, as trustee for The Sequoia Charitable Trust, sued Warner Bros. Entertainment and Warner Bros. Television Production in Federal Court. The bank and trust claim Warner Bros. violated a 1987 settlement agreement with Waldron.
Waldron pitched the show to WBTV in 1978, signed a contract to write the first five episodes, and delivered them, according to the complaint. The show ran from 1979 until 1985.
Waldron sued Warner Bros. and others in 1983, accusing them of “grossly under-reporting revenues from the Dukes Series and cheating Waldron on their [sic] Net Profit Participation,” the complaint states. After prolonged discovery, Arthur Andersen accountants “found that WBTV had wrongfully concealed over $12 million due Waldron,” the complaint states.
Waldron and WBTV signed a new agreement in 1987. Instead of the $12 million, First National says, Waldron accepted $6.2 million, plus 6.5 percent of Warner Bros.’ gross income from any future “Dukes of Hazzard” production, including merchandise, cartoons, video games and spinoff productions.
Waldron was to begin receiving his 6.5% cut once Warner Bros.’ income from the franchise reached $293.6 million. These profits were met and exceeded in the late 1980s, according to the complaint.
The movie was released on August 2005, the DVD version in March 2007.
After the movie release, Warner Bros. “frivolously refused to pay Waldron’s 6.5% gross participation in the Dukes film and related merchandising, in blatant disregard of the 1987 settlement agreement,” the complaint states.
The complaint continues: “Defendants first falsely claimed that the Dukes film constituted a ‘spin-off’ of the Dukes series, and on this basis frivolously claimed that Waldron was only entitled to the Spin-off Net Participation, pursuant to Warner Bros.’ infamous ‘Hollywood accounting.’
“After defendants were ‘reminded’ that the Dukes film was not a ‘spin-off’ of the Dukes series (i.e. a ‘spin-off’ is a new television series such as ‘Enos,’ based on a character from the original series), Warner Bros. frivolously claimed that Waldron’s 6.5% gross participation applied solely to an undisclosed, purported internal license fee paid by Warner Bros. to WBTV for theatrical film and merchandising rights to the Dukes series, instead of to Warner Bros.’ ‘gross receipts’ from the Dukes film and related ‘Dukes of Hazzard’ merchandising.”
The plaintiffs claim Warner Bros. has “consistently underpaid” Waldron his 6.5% share.
First National is represented by Marc Toberoff.