Did Relativity Media Run a $100M “Romance Scam” on a Film Investor?

RKA Film Financing has sued a group of film executives and financiers claiming that they schemed with much-hyped film distributor Relativity Media to pull off a $100 million-plus fraud. Putting movie industry context side, RKA’s fraud allegation, in key respects, looks like a classic “Romance Scam”, in which the scammer: **       posts great-looking photos ** […]

“Bones” Complaints: Did Fox Properly Account for Hulu monies?

Twentieth Century Fox produces the hit TV series Bones for its broadcast network and also makes the series available on Hulu of which it is a one-third owner. Did Fox properly report and share monies it received from its license of Bones to Hulu?  Two complaints recently filed by revenue participants claim it did not.[1] […]

Harlequin e-Books Royalty Case: A Dollar or a Dime?

In entertainment and media, sometimes business practices evolve more quickly than standard contracts. As recently as 2004, Harlequin Enterprises, the leading publisher of romance novels, did not specify a royalty rate for e-books in its author agreements.  Rather, e-book sales were lumped into an “other rights” category originally intended for book clubs and other activities […]

Crash Profits Restated; Court Responds with “Big Interest”

Can a film company issue a participation statement, then later revise and reissue it, making major changes in its favor? If the changes are decidedly wrong, can there be consequences? Profit definitions typically give film companies an express right to correct mistakes, even retroactively.  After all, mistakes get made. But on January 31, a California […]

Motion Picture Investing: Avoiding Basic Mistakes

Sometimes, financiers from outside the entertainment industry seem to think: “I’ve succeeded in [real estate, tech, oil, fill-in-the-blank]. So I can make money in movies.” Then, too often, they invest and fail. Their mistakes typically involve both their business plans and (yes) their metaphysics. Common mistakes include: (1) departing from the business plan without good […]

Napoleon Dynamite Litigation: Pick the Correct Video Royalty

Participation reporting for certain media and uses can be idiosyncratic. Multiple Choice Question: Cult phenomenon Napoleon Dynamite generated a phenomenal $139 million in DVD sales in its first few years of release.  What percentage of this amount did distributor Fox Searchlight share with the movie’s producers? A.  100% B.  31% C.  12.88% D.  10% E.  zero For […]

Another $300 Million for Guitar Hero Purchase; When is a Statement Final?

Eager buyers often overpay for entertainment assets.  Add a problematic earn-out[1] and the possibility of overpayment increases. In the latest Guitar Hero case[2], the problem was that an earn-out statement became final against Viacom, the purchaser of videogame company Harmonix Music Systems, notwithstanding a sudden, rapid decline in the value of Harmonix’s game inventory. If you’re in […]