Watchmen Settlement Details

Posted by Dr. Cole Abaius (cole.abaius@filmschoolrejects.com) on January 16, 2009

watchmen-lawsuit

No. Not even in the face of Armageddon. Never compromise.” -Rorschach

Can this really be it? Can it really be the end of the tunnel of my endless coverage of this legal nightmare? Forgive me for being dramatic, but I’ve been tired of this entire business back when it was originally announced, and the whole thing has played out exactly like everyone expected it to – the back and forth between Warners and Fox like a divorced pair arguing over who gets to keep the frequent flyer miles.

I’ve read pretty much everything there is to read about the lawsuit and, now, the settlement, and I wanted to share the details with you since there’s been a ton of emails about it and since it gives me a formal way of kissing this story goodbye.

The numbers, as they stand, are pretty staggering.

Fox is coming out the victor with a static cash prize of $5 million – $10 million to cover their initial development costs of the film (seriously) and the legal fees they incurred. That’s the chump change of course. The main purse prize is the 5% – 8.5% of the worldwide gross of the film – based upon a tier system that’s intricate enough to confuse even the most capable bookkeepers (like me).

For some scope – if Watchmen ends up grossing $300 million worldwide on initial release, Fox will have made somewhere between $15 million and $25.5 million for deciding not to make the movie.

If that doesn’t sound like a lot, it is. Especially since Fox also gets gross participation in any sequels or spin-offs. Which, in my mind, had to have been a bargaining chip. There’s very little legal ground for Fox to stand on concerning those fronts, but they got it any way. So, any plans for sequels to the film come with a giant albatross hanging around their development necks.

Plus, Warner Bros. has several other gross participation interests, including Producer Larry Gordon who brought the project from Fox to Warners. Be on the lookout for him (and his Fox-sized gross share) being sued by Warners in the near future, making him, probably the biggest loser in this whole thing.

Interestingly enough (and this should be fascinating to aspiring film-makers), Fox and Warners reportedly bargained on film release dates for other projects – most notably Terminator: Salvation. Apparently, when Fox offered to take 10% of the gross, Warners coughed “bullshit” under their breath and the two studios discussed a middle ground of having Warners move Terminator: Salvation off of its massive Memorial Day release in order to give Fox’s Night at the Museum 2 more possible butts in seats.

How incredible is that? Who could have thought that McG might suffer because of some poor business plans made over the past few decades? Other than his own of course.

Apparently the contracts that Warner Bros. had with other filmmakers barred them from shifting release dates. Fancy that. You have got to start reading the fine print Warners. We know it’s small, and it hurts your eyes, but this has to stop.

So to recap: Warners comes up short, at least 5% of your ticket price will go to Fox for doing nothing, Larry Gordon will probably get sued, Watchmen will be on time for its scheduled release, and I’m taking a nap to forget that any of this ever happened.

But it could be worse. Fox could have said, ‘yes’ and produced it.

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Ashvin

I'm glad it's all over, but still, the entire thing was a dick move on Fox's part (just because they were in the right legally doesn't keep it from being a dick move). Also, I hope that the fact Fox gets "gross participation in any sequels or spin-offs" doesn't mean Fox is gonna pressure Warner into that kind of guaranteed fanboy shit storm. I'd hope most people are sensible enough to know that a sequel to Watchmen would make no fucking sense whatsoever, but I don't want to see Watchmen Origins: Rorschach come out of this whole deal.

Victor

oh hell...it really could be worse....imagine a world with 20th Century producing Watchmen. In the modern-era, with Rorschach in a "ultimate Tech" suit, a fit Nite Owl, Megan Fox playing Silk Specter, and The Comedian played by Dane Cook....HELL NO!

Joshi

Wait, how does this work with Paramount handling international distribution? Surely if Warners were only distributing domestically, they were only going to get a domestic return, and perhaps a percentage of the international return... which I then suppose would mean that when Fox claims its 5-8.5%, that'll be coming out of Warners own pocket... so Warners could end up losing out on this one if Watchmen does better overseas than it does in the States.

Nish

I would actually like to see a Watchmen spin-off or TV series covering thier lives as crimefighters back in the day. This is pretty petty arguing but Im still disappointed that Fox get the money for not making a film.

JMoney

They aren't getting 5% for doing nothing, they are getting 5% because they owned the damn rights to the film! Everyone can blame Fox all they want but the reality is, whoever was at Fox back in the day had the foresight to acquire the rights to make this film, and it was their choice not to develop it. I agree it could be seen as a dick move but maybe they just didnt think it could be done properly yet, we still dont know if it can, a few wicked trailers does not a movie make. Either way, they are getting 5% because they owned the rights, not for nothing.

Imagine if you owned, say Obi-wan's original light saber from Star Wars, probably worth a fair bit of money to some people. but instead of selling it you decide to wait until it's worth more. But your buddy thinks you are foolish, comes along and takes the sword and puts a lot of work into marketing the sword and sells it, don't you think you'd be entitled to the money he got from the sale? it was your light saber, just because your buddy thought you were mishandling it doesnt entitle him to the profits. I'd say Fox is getting screwed here, 5% of something you owned is a pretty low number, we should be praising them for agreeing to this settlement so we can see the movie on time.

PS: I was going to use a baseball rookie card as an example but i figured i should relate it to movies, so thats why i used the light saber as an example.

TL_is_now_TJL

Good analogy JMoney.

I just don't understand how you can make a movie you don't own the rights to.
Years ago in college I interned for a movie producer, and one of the few things I remember learning from the experience is putting together a film project from a legal standpoint is a gigantic pain in the ass! Who has rights to this, rights to that, copyright on this, blah blah etc...
Even back then I learned that if you don't own the rights, you can't make the movie.

Cole_Abaius

Because the situation wasn't as simple as owning the rights. I know that sounds like the dumbest statement on the planet, but the case has more to do with Turnaround than pure rights ownership. Larry Gordon is the real chump in all this. And Warners are chumps for following a chump.

But you're right - Warners has got an awful track record for something that should be taken so seriously. Anyone remember The Dukes of Hazard?

Cole_Abaius

That's not a great analogy. It would be more accurate to say that you have a Nolan Ryan rookie card, don't want to sell it, but loan it out to your friend Larry to sell through any auction house he wants. Actually, there's no good analogy because Turnaround and Copyright Law is much more complex than all that. It's not like selling an object - it's about three degrees removed from that. You own the rights to create a blueprint for building a lightsaber based on another person's completed lightsaber essentially.

And praising Fox for settling assumes that they could have made money with the film on their own - which is not a very safe assumption. 5% of GROSS is much better than losing $10 million.

PS: I chose a Nolan Ryan rookie card because I'm from Texas.

JMoney

I know the analogy isn't perfect, I've studied Intellectual Property, I know the issues, I was just using a simplified analogy in order to make the point that you shouldn't be mad at Fox for wanting compensation for something they owned.

All this anger towards Fox is essentially based on the fact that everyone thinks The Watchman will be a good movie and they were potentially going to stop us from seeing it. But it could be a huge piece of shit, you cant tell everything from a couple trailers. The guys at Fox may have felt it wasnt the right time to make the movie, that they couldn't get the effects right, or convey the story correctly, that was their prerogative. If the Watchman does turn out to suck, Fox will look a lot better for wanting to sit on the rights until they were ready to make a film.

790

WB lost a crapload, however it could have been worse. If they would have lost all rIghts to the film 5 to 8.5% would be the least of there worries.

I think there damage control was pretty decent. They must expect the film to gross in the high 500 mil range and they prob don't have any (solid) sequel plans.

I have to ask if the dvd rights to the Batman tv series were involved Cole?

Watchmen Settlement Details

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