Hollywood lawyers, or where did the budget go?

What happens when a book author takes a Hollywood production company to court? In 2005 Clive Cussler, author of the bestselling book Sahara sued Crusader Entertainment for not respecting his right to approve the final movie script leading to a five year, $20 million dollar court battle.

This is an unusual case in Hollywood law because it actually went to trial; most lawsuits in Hollywood are settled out of court and whatever the outcome the settlement is usually sealed. It took a jury six weeks to hear the case. The jury was in favour of Crusade Entertainment. It was determined that due to Clive Cussler undermining the movie’s $130 million dollar success the judge awarded Crusader Entertainment $5 million dollars in damages. Cussler also had to foot the hefty legal bills on both sides of the dispute. An appeal nullified the original decision resulting in the lawyers being the only beneficiaries.

In general Hollywood lawyers tend to do very well in the fee-fuelled economy of the movie industry. Individual movies are usually their own franchise and seldom make money on the books. They assist in the gathering and distributing of fees that are set out in the contracts drafted by Hollywood lawyers.

Studios funding film productions typically do very well for themselves, with fees that can top those of screenwriters, talent agents, managers and even the lawyers. They get anywhere from 10% to 33% of every dollar made regardless of source from the movies it produces. This fee is known as the distribution fee and is intended to return the initial expenditure of funding a production.

Studios are able to finance movie productions using income from past productions and bank loans. However 20 to 60 percent of the financing is done by raising money, tax credit agreements, title copyright leases, pre-sales agreements, product placement and hedge funds. All of which requires the Hollywood lawyers to draft reams of contracts, for which they are paid.

Even though most movies appear to take a loss, as Sahara most certainly did after its lengthy lawsuit, not everyone involved loses out. The author, the production company, the director, writers, editors, actors, and all the support staff were paid as per their contracts; as were the lawyers.

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