Welcome back to What I’m Hearing...
Happy Thursday, I’m pleased to report I have rejected Elon Musk’s lucrative offer to buy What I’m Hearing…
For real, I’m gonna do a mailbag issue on Easter Sunday and answer a few reader questions. If you’ve got something you want me to dig up or offer my thoughts on, email me at matt@puck.news.
Also, some Puck author news! Starting on Monday, our legal expert Eriq Gardner is launching The Rainmaker, a private email dedicated to the inside conversation in the entertainment and media law world. Sign up here (it’ll be free for a couple weeks, then limited to Puck members only.)
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Thursday Thoughts…
Now on to a topic I’ve been thinking about for awhile….
In this era of skyrocketing I.P. value, a quirk of copyright law is suddenly a massive business, giving creatives (and their heirs) behind properties like Robocop a surprising weapon to take power back from studios. If I’m Mike Hopkins, senior V.P. of Prime Video and Amazon Studios, and I’m starting to look under the hood at MGM, the studio for which I just spent $8.5 billion, I might be asking a few questions. Like what, exactly, has Mark Burnett, the much-hyped TV impresario, actually created while being paid millions of dollars? Oh, and if Licorice Pizza cost $40 million to make, and MGM then spent tens of millions on a platform release and an awards campaign, and it grossed just $32 million worldwide… why is it now being dubbed internally as a hit? And, one more: I bought this great film and TV library, but what rights, exactly, did I actually buy?
Hopkins knew that many of the top MGM titles are tied up for years in distribution deals. But he may not have known that several other movies are essentially ticking time bombs, thanks to a legal loophole that is suddenly a big deal to legacy film and TV studios. It’s called “termination rights,” a quirk of copyright law that allows certain creators to claw back their work, and if you’re a studio or music label lawyer, it’s a giant headache.
Music companies are very familiar with termination rights because artists have been aggressive in reclaiming their masters. Hall & Oates, the favorite band of my Puck colleague Eriq Gardner, has filed 433 termination notices, according to a recent study. George Clinton, the funk legend, has filed 1,413 separate terminations. Now this issue is gaining steam at film and TV companies. Friday the 13th screenwriter Victor Miller recently won an appeal upholding his right to wrest back his rights. And at MGM alone, valuable properties like Robocop, One Flew Over the Cuckoo’s Nest, Hoosiers, Logan’s Run and many more either have come up or are due for possible termination, according to sources. (MGM declined to comment.)
Wait, what is this? Termination rights are complicated, but basically, the U.S. gives creators a chance to “terminate” copyright transfers after a set time—35 years for works created after Jan. 1, 1978. Congress’ theory, which anyone who’s ever done a studio deal for a no-name screenwriter will tell you is a correct theory, is that most creative people are in a terrible bargaining position. So by giving these creatives (or their heirs) a second bite at the fruit of their labor, artists can eventually profit from work they might have assigned initially for peanuts.
Sounds fair, right? But you can imagine why studios and labels, which exist to exploit artists—sorry, to generate reasonable profits from mutually beneficial partnerships with creative people—might not love these rights. After all, the studios have been fighting for years over valuable old I.P. like the DC and Marvel heroes, often against the families of comic book creators that earned next to nothing off those characters that now generate billions of dollars. There’s a lawyer, Marc Toberoff, who has built an incredibly lucrative business, mostly out of terminating copyrights for artists and their heirs. You might know Toberoff as the litigator who, for some reason, gets invited to all of Ari Emanuel’s parties. That’s the reason.
Anyway, after much lobbying from the content industry, the draft 1970s copyright law was amended to make it a pain in the ass to actually take advantage of termination. In addition to waiting 35 years, creators must have transferred the work themselves, meaning a “work for hire,” or even a work transferred from a loan-out company, probably isn’t eligible. Plus, a creator must follow complex and costly procedures to terminate, and if you screw it up—like, say, filing a termination notice a little too early or a little too late, based on a murky “publication” date—you lose your entitlement.
Those are key hurdles. Disney actually litigated in two different venues whether the script for Fox’s original Predator movie was “published” in 1986 or 1987, which implicated the termination window for Jim and John Thomas, the brothers who wrote Hunters, the script on which the Arnold Schwarzenegger alien franchise originated. Disney actually started a fifth Predator movie while this question was being hashed out. The cases settled in December, and yep, Toberoff was the Thomases’ lawyer. No settlement number was revealed.
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There’s another big catch: U.S. copyright law only applies in the U.S., of course, so even if you get back your rights, the studio still can do whatever it wants outside this country. The rule is important, because it means that, even in success, the most likely partner for creators who claw back U.S. rights is the original studio that still owns the property internationally. The creator can certainly put the asset on the market—split rights do happen, though rarely—but usually we’re talking about a negotiation with the existing rightsholder. “As a practical matter, the most valuable franchises for termination purposes also happen to be the ones with a big international following,” Aaron Moss, a copyright litigator at Greenberg Glusker and the proprietor of the Copyright Lately blog, told me today. “So reaching a new deal with the original owner isn’t just the path of least resistance; it usually makes the most financial sense too.”
Still, termination rights are a problem for all studios, not just MGM. According to sources, Warner Bros. is currently negotiating on Nightmare on Elm Street, Beetlejuice and Little Shop of Horrors, Disney has Who Framed Roger Rabbit? and Mrs. Doubtfire, and the other majors are all vulnerable on big titles that began as original scripts or certain literary properties. Since 2013, when the 1978 rule took effect, tons of negotiations have ensued, and the fights have heated up lately as major properties of the 1980s blockbuster era are hitting the threshold for termination. It’s only going to get more contentious.
Take Robocop, for example. The classic 1987 action satire was based on an original screenplay by Ed Neumeier and Michael Miner, who sold it to producer Jon Davison, who sold it to Orion Pictures, which made the movie with director Paul Verhoeven. Orion was then acquired by MGM, which made a bad Robocop reboot in 2014 and has contemplated doing a TV version. I’m sure Amazon would welcome that series as part of its effort to mine the MGM library for Prime Video. But… Robocop is up for termination this summer, and I’m told Neumeier and Miner will terminate if there’s no deal. MGM isn’t contesting their right, but it’s a tricky negotiation. In this era of skyrocketing I.P. value and seemingly insatiable streaming services (not to mention the relevance of the story of a militarized and automated police force in a totalitarian regime), how much are the Robocop U.S. rights actually worth? What kind of deal can a writer negotiate? Is it just money, or can they get themselves involved creatively on a new version?
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Moss has been consulting with Neumeier and Miner on this case, and their argument is that the U.S. rights drive the rest of the world, so if MGM doesn’t step up, another bidder could nab Robocop in the U.S. and benefit from whatever Amazon decides to do with the property. That’s particularly resonant for a global platform like Prime Video. It’ll be interesting to see what happens there.
The Robocop guys have competent advisors, but most creators don’t, and it gets even dicier when heirs are involved. The strict deadlines are often ignored or blown, and studios have been known to low-ball descendants with “consulting” deals or “producing” credits for small fees that also happen to include lengthy extensions of rights. When Universal or Warner Bros. knocks on your door offering $100,000 in found money, it might be easy to take the check before looking into the actual value of your rights. Even for those who recognize what they own, few have the resources for high-level negotiation or litigation, which is the exception in termination situations. Usually a quick deal is worked out, or sometimes a termination takes effect and the property simply languishes with an owner that can’t do much with it and a studio that didn’t quite care enough to keep it in-house.
As I mentioned, this issue is only going to grow, especially as the blockbuster franchises of the 1990s come up for termination. What will Home Alone be worth to Disney? John Hughes’ estate would love to know. How about Ace Ventura to Warner Bros.? In music, some songwriter publishing companies now make sure the copyright is held by the individual, not the loan-out. Lawyers for writers should probably do the same. If the history of Hollywood is a battle for money between creative people and the studios that exploit/enable them, some of those creative people now have a nice little weapon to deploy.
See you Sunday, Matt
Got a question, comment, complaint, or a present for my Easter basket? Email me at Matt@puck.news or call/text me at 310-804-3198. 
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