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Stan Lee Sues Marvel Comics
night_flyer writes "In a story that demonstrates the way the entertainment industry manipulates its artists, Marvel is claiming that the 400 Million dollar blockbuster movie Spiderman produced no profits, and they are trying to weasel out of their contract that gives Stan Lee 10% of the profits from his creations. Nuff Said!"
According to my Accounting lecturer (don't look at me like that - it's compulsive for my ComSci Masters course) this isn't that uncommon. He pointed us to this from the Guardian . . .
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"Robert Carlyle, star of the internationally popular film The Full Monty, was puzzled because he had not received any of his share of the profits from the film. 'Surely a film that cost £5 million and has taken hundreds of millions must be showing some in profits?' he asked the film's distributers. 'No', they replied 'in Hollywood no film ever makes a profit. It's all in the overheads.'"
Remember kids, "tidal waves couldn't save the world from Californication . .
"If being a geek means being passionate about something, then I pity those who aren't geeks." - Pike65
That's the thing the story's missing: it doesn't say what the terms are. It just says "10% of profits as defined." That's not very good: maybe "profits" was defined as "stuff left over after we paid everything out," which would always be $0, since they probably don't manage a reservoir of cash to pay 10% from...
Everybody dies.
Why Not? There's enought comic buyers in the US, not to mention the world, that $40M might actually be worth paying to avoid a boycott.
This sounds a lot like DC's dispute with Alan Moore over Watchmen. (Doesn't DC own Marvel now?). Basically, Alan Moore (one of comics writing gems) created a wonderful story that made DC millions. Posters, T-shirts, coffee mugs sold like hotcakes, and Alan Moore got zilch (even though he was entitled to royalties and such). DC said the Posters, et al were "advertising" and thus were not subject to the royalty clause, thus legally screwing Alan Moore. It was that event that caused Alan Moore (a UK citizen) to quit writing for US based comics altogether for a good long while (until the advent of some of the more independent labels who actually treat their artists right). I may have some details a bit fuzzy, but I believe that's the gist of the story. (There were apparently other factors that also led to his "retirement" from US comics, as well).
:P
A google search didn't come up with anything substantial, but I seem to recall an interview with him in Comic Shop News or the other big weekly comic paper, maybe I'm just smoking crack regarding this. Might be best to disregard this.
If you were me, you'd be good lookin'. - six string samurai
The Supreme Court of the US ruled more than ten years ago that the tradition of the US movie industry is well-known to cheat its stockholders and others by accounting tricks that reduce `profit' to zero -- at least on the books.
It's a little like Enron in reverse -- cooking the books to remove all traces of return.
It's quite legal and easy for them to do, and it has been the tradition in Hollywood since it began. And that's how the SC ruled in a case brought by a(n other) writer of one of the Predator series of Movies IIRC. In that case, like this one, Stan seems to have gotten percentage `points' (in Hollywood jargon) instead of real dollars.
The studios find it easy to do this, as they can charge whatever they like for stock footage (stuff they've already shot and used in other movies) since they are the true producers, whatever the credits might say. And all movies use stock footage somewhere. F'rexample, the fire scenes in Gone with the Wind have been used (and charged for at inflated prices) in hundreds of movies.
This and `distribution costs' allow them the room to reduce the booked profits on any and all projects to zero.
The Predator movie the Court ruled on was, at the time, the largest grossing (worldwide) movie in history. And it never made a profit.
Neither did Goodwill Hunting or Titanic.
This is similar to the little pie chart you see on gas pumps claiming only 5% profit on gas sales. The problem is that profit is purely subjective since all expenses are subtracted from profit. Send the entire company on a 1-week vacation in Hawaii? It gets deducted from profits. Hire a hundred people to act as a permanent "think-tank"? Deducted. Free beer in the cafeteria? Deducted. You can burn hundred-dollar bills for warmth but still claim no profits. When a company cries poor due to low profits you need to take a closer look. Operating losses, declining sales, or decreased revenue are better indicators of corporate health. Pharmaceutical companies, oil companies, and now Marvel comics all cry poor in profits but are throwing buckets of money into a woodchipper 'cause they've run out of places to stack it...
This is usually how rookie unproven writers get screwed, especially authors who have had succesful novels. This is unfortuantly very common in the movie industry. Established names usually never have a problem getting Gross Points instead of Net Points, they are real tight with Gross Points because there are only so many of them to go around (Gross Points also count as an expense driving down the pool available to Net Points). I don't get why Stan didn't have a better entertainment lawyer.
I mod down any one who says "I'm sure I will get modded down for this"
I thought so too, before last Tuesday. Now I'm not so sure, and I'm more than a bit scared. In particular, last Tuesday seems to be taken for a mandate for more Supply Side Economics (tax cuts) when our real problem is a demand-strapped economy.
If the economy were to *really* go into the toilet over this, Bush would go down in history as the second president to lead the nation into a Great Depression. But he would never miss a meal, or a host of other mundane worries. Chances are my family would learn about much of it, first hand.
The living have better things to do than to continue hating the dead.
See, the thing is, Billy, Marvel Entertainment didn't make a Spider-Man movie.
It's a little more complex than that. It's the same reason you wouldn't reasonably claim that a band made $15 million in profits because their $20 cd sold a million copies and cost $5 million to make. Columbia/Tristar or whoever the fuck made the movie bought the movie rights from Marvel Entertainment for $12 million or so.
So, even if that were mostly profit, they would owe Mr. Lee a cool million, or exactly what they've paid him every year since he signed his contract.
El Karma: excelente(principalmente la suma de moderación hecha a los comentarios de los usuarios)
Anyone remember the shameful treatment given Jack Kirby when he tried to reclaim his original art from Marvel when Stan was at the top? I do hope that Stan wins this, but find the irony just a little bit delicious - Lee has not been known for giving creators their due.
And where IS Ditko in all this? Is the mainstream press just too wimpy and gutless to brave one of his Ayn Rand-esque tirades and hair-splittingly precise reproach-a-thons?
Clearly Ditko was a major part of the creation of Spider-man.. I'm not clear what kind of rights he has in the character, if in fact Lee ever let him have any. Any help?
This sort of thing happens a lot in the movie industry. Typically, profits are juggled like this in order to reduce taxes. That's why, if you ever make a royalty deal with a movie studio, make sure you're getting a percentage of the gross, not the net profits.
You can hear all about it in the excellent Stan Lee's Mutants, Monsters, and Marvels, hosted by the always great K. Smith. It comes highly recommended.
Stan Lee is paid a salary of one million dollars a year. For this salary, he works nominally 10 hours a week as a spokesperson. His wife and child continue to be paid after he dies.
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The movie cost about $120 million to make and about $100 million in marketing. Marvel is paid a small percentage of Sony's take. Marvel did not take in $400 million dollars. More like $20-30 million. And then they have their expenses.
Stan Lee screwed Steve Ditko and other writers/artists over the years when he ran Marvel.
Here is the actual employment agreement: http://www.sec.gov/Archives/edgar/data/933730/000
If he's already had problems like this, why the hell is he allowing them to make more movies?
If it was me, I'd say "You've already voided the contract with the first violation, I'm gonna take my rights and sell them to somebody else. Idiots."
These guys sound like three year olds, stealing candy a week before Christmas. You'd figure they'd be able to see the big picture and realize that they risk huge future returns by so blatently stealing. Hell, give him 1%, 2% and he'd probably wouldn't have noticed. Jesus, be professional about it.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Marvel has learnt from its past mistakes and no longer simply takes a step back from their film properties. They have a subdivision "Marvel Films", or something to that effect, which involves this guy being on the set to every single Marvel film property. From what has been released, Marvel gets a profit slice, not just a flat licensing fee.
Oh and by the way, Sony Pictures made the movie and it cost about 100 million to make. It took in 800 million at the box office worldwide thusfar and is the 7th highest grossing film of all time. It earnt an estimated 245 million in it's first week on video release. So out of this billion dollars, yeah, I'm sure Marvel only got "$12 million or so".
s200.org - visit it (me), love it (me).
Why is profit today always being put ahead of the ability to make a profit infinitely into the future?
Simple. During the 80s and 90s, stock options were thrown at top executives (Funny thing about stock options, they don't count as an expense since their value is difficult to account for).
Anyway, Executive sees pile of stock options and wants to make as much as they can off them. As a result, business leaders often make decisions that are disasterous in the long term, but profitable in the short.
The idea of stock options is to put managers in the same boat as shareholders. Too bad it seems to have taken the opposite effect as it encourages bad business decisions that encourage short term stock valuations (Hence Enron, etc...).
I'm a little guy.
36K a year working tech support in Portland OR.
My last surviving parent died in early March. She had been running the family farm that'd been in the family since 1952.
Before G.W. Bush - Estate (Death) Tax would have left me with $12,250 from the Estate.
Since G. W. Bush - Estate (Death) Tax left me with the money to finish college and hopefully build a strawbale home in 2003.
So personally, I feel the President's tax cuts are helping that little guy.
The incentive for companies then is to use up all income immediately as "marketing" (or other) expenses... new luxury cars to drive around the execs, flights to europe for a week to "promote" the movie, including the marketing VP's family so they won't miss him/her, etc...
Better to have something left over for the "company" than to give a piece to the government... I swear if there wasn't so much corporate welfare, exploitation, and "good buddy" politics, I wouldn't have to give 40% of my paycheck to taxes...
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Folks, this ain't a new story. In the 1980s, Art Buchwald sued a movie studio over the Eddie Murphy movie "Coming to America" (I think that's the name)-- the one where Eddie Murphy plays an African prince who goes to Queens (ha-ha) to find his future queen. Buchwald won the suit, succesfully proving in court that he had presented a very similar idea to the studio before the movie was made. But with all the "creative" bookkeeping the studios do, Buchwald ended up with a settlement worth nothing, because he was entitled to a share of what the studio was saying was zero. If I were a person in the entertainment industry, I would never have accepted a profit-based deal after the Buchwald case. If I were a person in the entertainment industry who already had a contract with a profit basis, I would have sought a new contract or renegotiation of the profit-based terms after seeing the Buchwald case. Lee did not. I feel for him, but I can't help but think he was knowingly swimming with sharks, didn't pay attention to other cases of people getting bitten by those same sharks, and therefore did not take proper precautions (like a cage). I think it's terrible that the sharks ate him alive on this one, but a part of me has to think it's at least partially Lee's own fault. Don't even get me started about the MP3-related lawsuits and settlements "in the name of the artists" that never produced a cent for any artists. Only Courtney Love had the courage to go after the recording labels on that one, and her story was largely ignored.
"It is nice to know that the computer understands the problem. But I would like to understand it too." --Eugene Wigner
As for Steve Ditko, he doesn't get much ink today, but that is because he took Ayn Rand's philosophy a bit too seriously, to say the least, and hasn't come out of his apartment in decades. Or talk to people. Something about his personhood. Lee has no idea what his problem with everyone is. No one does.
Steve! Come out! The Randites are winning! You can talk to us now!
If no movies make profit, then how do studios make profit? Surely they must, or you'd hear about it on financial news etc.
Well, I totally agree that Spiderman obviously must have made a profit, or they wouldn't be making a sequel (and an X-Men sequel, and a Hulk movie, and a new Superman movie). However, in answer to your larger question - movie studios are actually not very profitable. I read an article about this a couple years back, and basically buying a movie studio is a horrible investment. The dynamics of the industry (movies costing so much to make, basically) mean that the studios themselves are not a good ROI. Yet people invest in them for one of two reasons:
1) The glamour. People aren't always rational economic actors, or at the very least, you have to take into account that people may seek more tha money. Yes, perhaps I could make 6% profit investing in bonds, but maybe I'd rather have 3% profit but hang out with movie stars/sleep with actresses all the time.
2) Media conglomerates believe that somehow, "synergy" will eventually make the movie studios pay off. Yes, this movie studio isn't a good investment as a standalone, but maybe if I tie my magazines, TV channels, pay per view channels, and retail stores together I can make it profitable.