The Non-Star Treatment


Reviewed by Kyu Hee Chu

We all know movie stars get certain things in life for free.  Complimentary service, award show SWAG, five-star hospitality—all just perks of the film industry.  But what happens when those in the limelight are not only receiving freebies, but also (allegedly) getting paid at the expense of the playmakers behind the scenes?

Film investors, like any project financiers, serve as the bankroll and lifeblood for a film.  Sure, movie stars can fill the seats and make or break a film, but investors are the ones who fuel the production and distribution processes well before the first dollars ever flow out of the pockets of the popcorn-toting masses.

Marathon Funding, one such investing vehicle, found itself shortchanged following its backing of the 2007-released critically-acclaimed film, No Country For Old Men.  The film, which went on to win the 2008 Oscar award for Best Picture, brought in more than $170 million in ticket sales worldwide for the distributor and now-dissolved specialty film division of Paramount Pictures, Paramount Vantage.

Marathon, which has had a lawsuit pending against the studio behemoth since April of 2010, claims its contract with Paramount entitles it to 25% of the film’s net distribution revenue—money it has not seen in full.  Notably, Marathon cites an unusual $3.75 million deduction from a March 2010 profit statement.

Curiously enough, Marathon’s suit alleging financial error on Paramount’s part is not the first of its kind in relation to No Country.  Tommy Lee Jones, one of the film’s stars, demanded at least an additional $10 million from the studio in a 2008 lawsuit in which he claimed he received a lesser up-front fee in return for “significant box-office bonuses and ‘back-end’ compensation.”

Jones was then awarded a hefty $15 million payment from Paramount.

How has Paramount recouped this discrepancy, one may ask?  Well, Paramount maintains that the $3.75 million deduction from Marathon was, in fact, intended to cover 25% of the $15 million payment it was required to shell out to Jones.  Further, Paramount argues this payment was covered under the original contract with Marathon.

Marathon’s suit, in essence, suggests that the deduction was a charge—and a breach of fiduciary duty—by Paramount to minimize its damage owed to Jones.  The payment to Jones, as Marathon’s lawyers are describing it, was caused by “gross and inexcusable blunders,” more or less an act of favoring a Hollywood star at the expense of the non-visible investor.

With lawsuits and claims of miscalculations abound, the directors of the film, Joel and Ethan Coen, along with producer Joel Rudin, also had their own issues with Paramount’s payment calculations.  The three men (not quite stars, perhaps) took the higher road, ultimately agreeing to abide by earlier contracts and taking lower payments for their work on the film.

The question still to be answered, of course:  why would a studio like Paramount refuse to acknowledge Marathon’s claims yet give one of its star performers such a hefty one-time payment above and beyond his usual profit margin?

This past Friday, in the Superior Court of California, County of Los Angeles, Judge Mark Mooney ruled that Marathon’s suit would not be decided by a jury.  Mooney reasoned that Marathon’s sole claim—Paramount’s alleged breach of fiduciary duty—turned on equity decisions, and therefore Marathon was not entitled to a jury.

While the jury trial had been set for September 19th, the case will now be settled at a bench trial in October instead—perhaps, illuminating whether the star treatment is truly reserved for the stars.

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