Authors Always Get Screwed

The Los Angeles Times reports today about how CHEETAH GIRLS novelist Deborah Gregory got screwed by Disney. Hollywood cheating novelists isn’t a new story, but the timing of this
one, on the same day the strike ends, underscores why screenwriters
need the Writers Guild of America:

Gregory expected to get a piece of the action when she signed a 2001
contract promising her 4% of the net from all of this activity. But
like many other authors who have signed away dramatic rights, she says
she never got a penny of the profits. Unlike screenwriters, who were
backed by a strong union in their recently ended strike, most literary
writers are at a disadvantage when negotiating with Hollywood. And it
is difficult, if not impossible, for them to crack the safe.

Gregory said she’s pocketed $125,000 over the last nine years in option
fees and payments for her title as co-producer of the movies. Although
she’s asked for them, she has never gotten "net profit participation
statements" from Disney, spelling out details of expenses and revenues.
If anyone is getting rich on this formidable franchise, Gregory noted,
it’s not the woman who created it.

[…]The stakes are high because 43% of Hollywood movies in the last five
years were adapted from books and other written materials, according to
estimates by the Writers Guild of America. What makes Gregory’s case
unusual is that she didn’t simply write a book, she wrote bestsellers
that led to a movie and marketing bonanza.

The article says she got $180,000 in advances for her 16 CHEETAH GIRLS novels, which have sold 2 million copies. What the article doesn’t say is whether she earned out and, if so, how much she has made in royalties thanks to the huge marketing push behind the movies, DVDs and CDs. Even so, whatever that figure is, it doesn’t come close to the financial bonanza that she ought to be sharing in as the creator of the franchise.

22 thoughts on “Authors Always Get Screwed”

  1. The New York Times reports that the Tolkien estate has a solid agreement to receive seven and a half percent of the gross from the three Tolkien films, which exceeds six billion, but the estate hasn’t received a dime from New Line Cinema nor has it been allowed to examine the books. New Line is a Time Warner subsidiary. The estate and HarperCollins are suing for $150 million, and their attorney says that they are victims of creative accounting. Years ago, Art Buchwald beat the studios on much the same turf, but only after a long and bloody lawsuit. I’m glad WGA is there for you people. Even now, a good friend of mine, Gatz Hjortsberg, is being helped by WGA in a studio-nonpay situation.

  2. You may be on to something. The LA Times article notes:
    “Yet Gregory didn’t share in this bounty. Asked to explain what happened to her former client, Richardson declined to comment, even though Gregory gave her permission to talk about the case. The attorney said she represented the author long ago and that the files were in storage.”

  3. Studio accounting has always made Enron look like Amateur Hour. I believe it was Joseph Wambaugh who once said accounting departments of studios buy red ink in 55-gallon drums to save money. According to legend, Gene Roddenberry never saw a dime for STAR TREK, the studio claiming the original series never turned profitable. Chris Carter had to sue Fox over X FILES (at one point, the studio said Carter’s contract was “too favorable” and they were going to fight it.) Jeff Rice never received a penny for Kolchak: The Night Stalker.
    Anyone dealing with La-La-Land should take the money and run. Run like hell.

  4. Galleycat and FishbowlLA have pointed out an interesting side note: the story just appeared in the LA Times, but Black Enterprise reported on the situation fourteen months ago.

  5. Disney has overtaken Warner Brothers (again) as the studio most likely to sexually assault you, deal-wise.
    You should hear the deal the writers of the hugely successful Peter & The Starcatcher series have…
    Books, movie deals, merchandising, etc., and I think they make about three cents for every one thousand Disney makes.
    And they have to split that.

  6. It’s an apalling situation. It’s scary. It’s like, there’s no one to trust in these studios and networks, or with agents or with accountants. And yet you’d think something could be done.
    For instance: Could Ms. Gregory have had an entertainment lawyer set up a company run by a certified general accountant that would borrow money from the studio (to establish a bank account and seed money) and then collect all revenues and pay all expenses? In other words, could a public set of books be kept? And could the project have been limited to a partnership between the studio and this single company and be kept separate from other studio projects, entities and accounting? Why should the writer place all her or his trust in networks, studios, agents and lawyers without having a public and transparent record of all transactions? Banks do it. Insurance companies are completely transparent down to the individual transaction record. You’d think that entertainment lawyers would offer such a service as all writers in Hollywood would want it. But then, what do I know?
    Anyway, stories like these make me really angry. They made Sue Grafton so angry she won’t let Hollywood touch Kinsey Milhone. If 43% of Hollywood movies over the past five years have been made from books and other writings, then that’s clout. I would argue that the WGA needs to step up to the plate and be the “honest broker” between the writer and the producer and get an agreement for the transparent accounting to routinely be put in place, where the writer receives a part of the gross and where the expenses are spelled out and estimated in advance and where the entire term “net profits” is eliminated from the business. All in favor, say “Cool.”

  7. Looking at this from a lawyer’s POV, all I can say is people get what they agree to get. I can’t imagine that Disney is not honoring its contracts. Want more money as an author or creator? Then get a bigger contract up front, if you can. The creator of a work (e.g. author) is entitled to what the contract says. But there’s a lot that goes into the success equation than just the initial creation. There’s publication, production, promotion, etc., all done at the expense of someone other than the creator. So that entity is entitled to something too. If the parties agree as to how any profits will be split, then that’s the deal. Don’t sign the deal and then complain about it afterwards.

  8. The appellate decision in Gene Roddenberry’s ex-wife’s suit against Roddenberry’s estate (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634) provides an interesting glimpse into the accounting concerning the Star Trek franchise. According to the opinion, the first Start Trek series recouped its production deficit in 1984, 15 years after cancellation; and Roddenberry’s loan-out corporation, Norway, then began receiving profit participation payments based on that series.

  9. Hello JMH,
    No, people do not always get what they agree to get. It’s not a perfect world. You’re idealism is laudable, though.

  10. “No, people do not always get what they agree to get. It’s not a perfect world. You’re idealism is laudable, though.”
    It’s not idealism, it experience after representing large companies for over 20 years. Remember, the contract is signed before the ultimate success or failure of the project is known.
    Take an example where a publisher gives an author an advance and then looses money because the book does not even cover costs. Is that an example of an author cheating a publisher? Of course not… The author got the better of the deal in that case. In other cases, the publisher gets the better of the deal. It’s all a gamble, as anyone in the creative business knows.
    Both the publisher/studio and the author/creator sign a contract not knowing what will happen. If the author/creator thinks higher of the project than what the buyer is willing to pay, then shop it around and get something better if you can.
    But to assume that studios or publishers are not paying according to their contractual obligations is not realistic. I’m not saying it might not happen in an isolated occurence, but that would be very rare. As rare, for example, as a self-published author succeeding.

  11. I agree and disagree, Jim. Yes, you get what you agreed to in your contract…and if you want a better deal, you have to negotiate one at the outside. But the studios don’t always live up to their contractual obligations or they play “unconscionable” games with the numbers, as the Judge said in the Art Buchwald case, to avoid paying what they rightfully owe. That’s why the WGA has a large staff monitoring residuals compliance and often catches studios not paying what they contractually owe (the WGA has done this on many occasions for me, on their own and at my prompting).

  12. “Disney has overtaken Warner Brothers (again) as the studio most likely to sexually assault you, deal-wise.”
    Boy howdy. I got hurt on a sitcom and was fired on my way to the motion picture clinic in Toluca lake. The message was waiting at the desk when I got there.
    JMH has never been out here!

  13. Contracts in any business work only as long as both parties adhere to them; if one side chooses to violate the terms of the agreement, then stands there and says “Go ahead, sue me,” there’s not a lot of options.
    Mark, you were fired because you got hurt? That’s a new one.

  14. I don’t understand this at all. Writer and studio agree on a certain percentage share in the profits and then the studio does not pay out, because they claim there are no profits and refuses to show proof for that? How can you not win your case in court when such behaviour seems to be an open secret and there seem to be many precendents for such cases?
    I think Peter Jackson sued New Line as well and the dispute was only settled a short time ago.
    How did Rowling do it? She seems to have no such problems yet?
    I often buy bootlegged DVDs of series/movies not (yet) available on “official” DVDs. But I have always made sure to buy the official sets as well when they came out, because I didn’t want to rob the people who created the work of their profits. Now I have to admit that I have meanwhile so often heard of creators/actors/crews not sharing in the seemingly immense profits made on their work by the studios that I have less and less qualms about buying bootlegs. Why would I want to feed the sharks?

  15. My friend William Hjortsberg had a clearcut contract with the film company doing one of his stories giving him a percentage of all subsidiary sales of items (such as tee shirts or coffee mugs) based on his characters. The rights to the film were sold to another production company, whose view is that the original contractual arrangement with the writer doesn’t apply to them. Hjortsberg cannot even get an accounting, or an acknowledgement that such items exist, even though he has some of them. WGA is doing its best to help him, but it is a bad situation. Yes, authors get screwed.

  16. JMH says: “people get what they agree to get. I can’t imagine that Disney is not honoring its contracts.”
    Maybe, usually. But isn’t the issue that the author/creator signs a contract thinking he or she will get a share of “net profits” and then the studio/network plays games with the accounting so that there very seldom, if ever, is any “net profits”? So the point is, as I understand it, that the financial books are being manipulated so that the writers don’t get paid “what they agreed to get.” Aren’t the studios/networks/producers robbing the writers and getting away with it through fuzzy contract language and legal loopholes?
    This practice really ticks me off. A writer takes his book to a publisher. He is saying, “If you think you can make money with this, publish it, but for the right to do so, pay me something upfront.” The advance pays for this right and the publisher has gotten value for it. The publisher publishes the book and supports it with publicity, expecting to recoup the investment and let’s suppose this happens and the book starts making “a profit”. The publisher gets, say, 90% and the writer 10%. Then tell me, how can any other expenses (and relating to other books!) be charged against the writer’s 10%, in all good conscience and without the writer being told this would happen up front, so he could agree or disagree to it and not have it hidden in the details, fuzzy contract language and legal accounting loopholes? It is absolutely unacceptable. The writer gets 10% of the gross, period. The publisher doesn’t like that, don’t publish the book.
    Anyway, this issue has dragged on in the industry for decades and it needs immediate attention. The WGA, the DGA and the SAG need to present a united front demanding that all accounting be transparent at all times (if not publicly, then to a “watchdog committee.”) It’s the secrecy that leads to the cutting abuses. The writers are the ones with the scars.

  17. Regarding Kete, I bet you are surprised Lee that a fanfiction writer buys bootlegs of TV shows and movies and then tries to rationalize it to herself as not being an illegal act.


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