The elaborate Hollywood studio accounting system is infamous for its ability to make even the most profitable movies and long running TV shows seem like they owe the studio money for the privileged of being distributed to fans. The Walt Disney Studios is no stranger to this practice.
According to a story in The Hollywood Reporter, a lawsuit against Disney has opened a crack in that obscure system by settling the long-running dispute of the profits from the ‘Home Improvement’ sit-com.
The owners of Wind Dancer Production Group and the show’s writers, including Matt Williams, Carmen Finestra, Tam O’Shanter and David McFadzean, filed suit against Disney claiming that the sit-com starring Tim Allen and Patricia Richardson had generated $1.5 billion for Disney, much of that in syndication. The lawsuit claimed Disney owed them 75% of net profits, or about $40 million, but that Disney’s arcane financial rules hid that money from them in a series of massive distribution fees and low balling sweetheart deals to some markets.
The case has dragged on for six years while the creators of ABC’s hit television “Home Improvement” and ABC negotiated behind the scenes and in court. The lawsuit was set to get a hearing in open court as soon as next week, which probably led to the settlement.
The case is important because an appellate decision that ruled in favor of the plaintiffs stating Disney’s delaying tactics meant that the lawsuit would not be dismissed for having been filed too late. Most Hollywood studios use this technique of delaying audits or withholding assets or accounting files for as long as possible to frustrate those who were hoping to share in the profits of a TV show. That tactic will no longer work.
If you’re a creator in Hollywood in to Hollywood legal minutia, this was a big day. Unfortunately, neither party is revealing what the settlement involved. We hope that Hollywood studios give up this practice which, in the end, only hurts shareholders who lose out on the talents of successful writers and producers who feel burnt by the studio’s shady dealings.
Correction: Patricia Richardson co-starred with Tim Allen.