From The Hollywood Reporter:
For a Hollywood accounting case, this one is an 11.
Harry Shearer has launched a $125 million fraud and contract-breach lawsuit against Vivendi and StudioCanal over the 1984 rockumentary classic This Is Spinal Tap. The complaint, filed Monday in California federal court, is packed with enough nuggets to instantly make this a must-watch “Hollywood accounting” case. Through the lawsuit, Shearer also reveals he is attempting to claw back rights to the film and its continually popular soundtrack.
Shearer, perhaps best known for the 23 characters he voices on The Simpsons, co-created the semi-fake band Spinal Tap in the 1970s with Christopher Guest and Michael McKean. The film, directed by Rob Reiner and featuring Shearer as bassist Derek Smalls, was produced and released by Embassy Pictures. After a series of transactions, rights to Spinal Tap landed in the hands of Vivendi, the French conglomerate that once had the ambitious goal of becoming one of the largest studios in the industry.
Despite the film’s legacy and Spinal Tap’s enduring success as an actual band able to sell out arenas, Shearer’s company Century of Progress Productions alleges that the four lead creatives have received just $81 in merchandising income and $98 in musical sales income in the past three decades from the franchise.
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“The accounting between the Vivendi subsidiaries is not at arm’s-length, is anti-competitive, and deprives the TIST creators of a fair reward for their services,” states the complaint.
With other accounting improprieties alleged, such as undocumented marketing expenses and improper deductions, Shearer’s lawsuit references the Copyright Act’s termination provisions, which allow authors to cancel grants and regain rights after 35 years.
“Particularly given that Vivendi has offset fraudulent accounting for revenues from music copyrights against equally dubious revenue streams for film and merchandising rights also controlled by Vivendi subsidiaries, Shearer is concurrently filing notices of copyright termination for publishing and recording rights in Spinal Tap songs he co-wrote and co-recorded, as well as in the film itself,” states the complaint.
That means that Vivendi would potentially lose rights to This Is Spinal Tap in 2019. Copyright termination has been a big subject in the music industry, but is only beginning to impact the film business.
. . . .
Shearer’s company says that in 2013, in anticipation of the film’s 30th anniversary, it commissioned a study of accounting statements and revenue streams that “first discovered that Vivendi had engaged in a pattern of anti-competitive and unfair business practices, had abandoned enforcement of valuable TIST rights, and had willfully concealed and manipulated years of accountings to retain monies due and owing to Plaintiff.”
Link to the rest at The Hollywood Reporter and thanks to Meryl for the tip.