Buchwald v. Paramount

Buchwald v. Paramount (1990) was a breach of contract lawsuit filed and decided in California in which humorist and writer Art Buchwald alleged that Paramount Pictures stole his script idea and turned it into the 1988 movie Coming to America. Buchwald won the lawsuit and was awarded damages, and then accepted a settlement from Paramount before any appeal took place.

Implications

Hollywood accounting has long been derided as a cynical attempt by movie studios to cheat individual authors out of royalty payments. The accounting formulas used by the studios have allegedly been designed specifically to ensure that it is almost mathematically impossible for any movie to show a net profit. Specifically, the net profit formula in authors' contracts does not correspond to the net profit formula of generally accepted accounting principles that the movie studios use when creating their financial statements that are reported to the U.S. Securities and Exchange Commission and to the investing public. The "unconscionable" formula in the authors' contracts effectively double-counts many costs borne by the movie studio.

Related Topics:
Hollywood accounting - Generally accepted accounting principles - Financial statements - U.S. Securities and Exchange Commission

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Some commentators have claimed this lawsuit was a watershed that would affect Hollywood's payments to anyone who enjoyed "profit participation", by forcing a change to the net profit formulas. However, another California Superior Court ruled in Batfilm Productions v. Warner Bros. in the case of the original Batman movie that a similar formula was not unconscionable. To date, there has been no review of this type of claim by an appellate court, meaning that the superior courts cannot look to an appellate court's decision for guidance. The "watershed" role of this lawsuit has therefore not been demonstrated.

Related Topics:
Batfilm Productions v. Warner Bros. - Batman

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