Stan Lee Sues Marvel Comics 680
night_flyer writes "In a story that demonstrates the way the entertainment industry manipulates its artists, Marvel is claiming that the 400 Million dollar blockbuster movie Spiderman produced no profits, and they are trying to weasel out of their contract that gives Stan Lee 10% of the profits from his creations. Nuff Said!"
Aint that just a load (Score:5, Insightful)
Seems like these things have been going on in the comic book industry from the beginning tho.
Re:Aint that just a load (Score:5, Interesting)
You also generally get a lawyer, accountant, and agent to look over any multi-million dollar contracts before signing. Especially for an established artist who must certainly have those resources at his disposal.
More than likely, folks like the actors, director, producers and the like took their cash off the gross revenue. Profits coming in get translated back to further marketing, associated products, and all kinds of other expenses to increase the gross. The higher the gross revenue, the more cash for the folks collecting on it. There is zero incentive for the studio, Marvel, or any of these folks to focus on a column labeled "profit" for the sake of Stan.
I really do feel for the guy, but it has limits. The focus on gross has been around for decades, and won't be going away any time soon. Stan himself should have known better! He's been in this game for a while now.
Re:Aint that just a load (Score:4, Insightful)
Well, it's lawsuits like this that inject a little reality into over legislated situations. Put a situation like this in front of a judge and jury ("We only made $400 million dollars so we couldn't pay him anything for the characters he created"), and common sense has a chance of asserting itself.
Stan himself should have known better! He's been in this game for a while now.
Agreed. In this case, he's been involved with movies and even personally producing and paying for distribution for over two decades that I know of... and he certainly has attorneys on payroll at Marvel that deal specifically with character licensing and renumeration for said licensing.
Still, tricky-contracts can be (and have been) slapped down in court. Common sense (aka a jury of your peers) can trump crafty contracts.
--
Evan
Um, No. (Score:5, Insightful)
But... but, that's not the American way! The American way is all about pleasing the shareholders.
Um, no. That is the corporate way. The American way is an honest wage for an honest day's work. The fact that America let large corporations hijack its government and undermine its constitution during the anti-communist ferver of the cold war may mean America kneels beneath their jackbooted heels, but it does not mean that corporatism is the ideal to which the country aspires.
Quite the opposite, in fact, and a backlash to this sort of crap is brewing.
and a backlash to this sort of crap is brewing (Score:4, Interesting)
If the economy were to *really* go into the toilet over this, Bush would go down in history as the second president to lead the nation into a Great Depression. But he would never miss a meal, or a host of other mundane worries. Chances are my family would learn about much of it, first hand.
I'll bite (Score:3, Insightful)
I would start to tax coorporations and individuals in similar manors so that the little guy, the driving force behind the economy, has more money to spend to keep the economy going. Right now coorporate tax law dictates that coorporations do not pay income tax, they pay a profit tax, in other words, no increase in net worth, no taxes. Even a small coorporate income tax would provide enough government revenue to reduce the tax burden on the american consumer, and stimulate the economy. This would also make it much more difficult for companies to dodge their financial obligations to the government (see what Marvel is doing to Stan).
Re:I'll bite (Score:5, Insightful)
That sounds great on the surface, except that it doesn't work that way in real life, because corporations don't pay taxes, as such- they pass them on to others. Who really pays taxes when they're levied on a corporation?
Now, I know you may not care about the last one, but when you tax a corporation, you're really punishing the very people you rely on to spur the economy.
Re:I'll bite (Score:5, Insightful)
Umm, that's circular logic. The same argument could be applied if you raise taxes for individual citizens, you could claim that they have less money to spend as a cosumer, so corporations will earn less, so they're the ones who really pay the taxes.
Effectively, taxes are always paid by the economy as a whole.
Re:I'll bite (Score:3, Insightful)
I'm not sure what the percentage of the tax is, but it's neither oppressing nor minimal (from what the boss says).
Re:I'll bite (Score:5, Insightful)
A tax, any tax, removes currency from the economy and places it in the government, where some of it may come back into general use again. The state of the economy is not how rich the government is, but how rich the populace is.
so that the little guy, the driving force behind the economy, has more money to spend to keep the economy going.
The "little guy" does very little one way or the other in the economy, or in taxation now. Folks who would fit into this category aren't likely to invest cash into new businesses or technology. They definitely aren't going to actually hire someone.
Right now coorporate tax law dictates that coorporations do not pay income tax, they pay a profit tax, in other words, no increase in net worth, no taxes.
Are you under the impression that corporations don't pay taxes by the truckload?
Even a small coorporate income tax would provide enough government revenue to reduce the tax burden on the american consumer, and stimulate the economy.
Lost you on this point... You want to raise taxes on the folks that produce the goods that the consumer's are going to buy from? Umm, who do you think actually pays for that? The money that companies pay in taxes really does come from somewhere. You and me.
This would also make it much more difficult for companies to dodge their financial obligations to the government (see what Marvel is doing to Stan).
A tax increase would have given Stan a better contract? You really lost me on that point. Care to work the logic that brought you to that conclusion please?
Re:I'll bite (Score:3, Insightful)
Putting money in the hands of the little guy means that he's going to spend it on something the big guy is selling, thus making the big guy better off. This is "trickle up" economics and it actually works to make everyone better off.
Taxing the higher wage earners does not "give" any more money to this "little guy" that keeps getting referred to. It puts these little people out of work, as they too are overhead. The primary difference between labor and taxes is that labor CAN be cut, and often is when other expenses that CAN'T go up.
The little guys have been shouldering an ever increasing amount of the tax burden for many years now, because the "standard deduction" and "minimum wage" have not kept up in any way with inflation.
Minimum wage?? No, I'm going to resist this time. Catch me on another thread and I'll dive deep into this can of worms. All I'll get into now is the very simple, count it on your fingers, math. When you increase overhead you must then cut elsewhere, or increase prices.
As to the "standard deduction"... it shouldn't need to exist in the first place! Lower the rate across the board, and screw ALL the deductions.
Where in America can you live on $3700?
Nowhere. That's why those of us who have realized this are no longer pushing brooms or flipping hamburgers for a living.
-1, Factually Incorrect (Score:3, Informative)
Wow. That sounds fair. Unfortunately, it isn't. The top 20% of the population may pay 80% of the taxes, but they control over 95% of the wealth. In a fair system, the group that controlled 95% of the wealth would pay 95% of the taxes.
Sorry, Slick, but you blew it with that one. Matter of fact, I was reading the numbers not even an hour ago. I don't have the breakdown at the 80th percentile of income (top 20%), but at the 75th percentile, you have 84.01% of the total income tax being paid, but only 67.15% of total income earned. Check it out for yourself: visit this page [boortz.com] (after 13 Nov 2002, get it here [boortz.com] instead) for the breakdown at the top 1%, 5%, 10%, 25%, and 50%. If you don't like the numbers, find another reputable source (Boortz takes his from IRS reports; good luck beating that for authoritative) and present it.
Short answer is, the higher income earners are paying more than their "proportional share" of income tax in this country. I am not even going to touch the issue of whether or not they should pay more than a proportional share, as that is a topic of rabid debate, but I take exception to your use of flawed data to support any conclusion. Please try to get your facts straight before using them to argue a point.
Re:I'll bite (Score:3, Interesting)
It most certainly is. Government requires an income to perform it's basic services, which are provided through taxation. I never meant to suggest that taxes are removed entirely, especially for businesses.
As your post alludes to, there is a sweet spot where the load put on the economy by taxation also allows for maximum growth in the private sector. Real growth is what truly drives how much tax revenue the government is able to collect. If tax rates are too high, growth suffers, and subsequently the revenues the government collects actually drops.
One of the policies that we saw under the Clinton administration that made sense was the brakes that were applied to keep growth down a bit. This was certainly on Greenspan's advice, but Clinton to his credit took it. Greenspan saw the very real possibility of a rapid rise followed by a massive fall.
To keep growth in check, two approaches were taken. Both interest and tax rates were held high, which puts a drag on the economy.
Now that growth has slowed down, the Fed has dropped rates over the last few years to take the drag off. Taxes need to follow suit to get more cash flowing into the economy.
The especially clever bit to all of this is that neither interest or tax rate changes have an immediate impact. There's at least a 6 month delay before results are felt.
Essentially, nothing in your post disagrees with what I was attempting to address, or my views on policies concerning the economy. There are times when the brakes need applied, and there are times such as this when they need to be taken off.
Re:I'll bite (Score:3)
If a corporation makes no profits but has to pay taxes anyway, where does the money come from? it might come from the cash reserve (but you can't build a cash reserve without profits in the first place). When the cash reserves are exhausted, without profit the only way a corporation could pay the tax you demand would be by selling assets, making it even less able to make profits the next year, when it would have to sell more assets to meet the tax demands, until it's destroyed. No companies == no jobs for the "little guy".
I believe it as Abraham Lincoln who said that you cannot make the poor rich by making the rich poor.
Re:I'll bite (Score:5, Insightful)
Taxes and the Little Guy (Score:5, Interesting)
36K a year working tech support in Portland OR.
My last surviving parent died in early March. She had been running the family farm that'd been in the family since 1952.
Before G.W. Bush - Estate (Death) Tax would have left me with $12,250 from the Estate.
Since G. W. Bush - Estate (Death) Tax left me with the money to finish college and hopefully build a strawbale home in 2003.
So personally, I feel the President's tax cuts are helping that little guy.
Re:Taxes and the Little Guy (Score:3, Insightful)
Before G.W. Bush - Estate (Death) Tax would have left me with $12,250 from the Estate.
How so? I was under the impression that the estate tax didn't apply to the first $1 million.
TheFrood
The "Little Man" ( OT ) (Score:3, Funny)
Citzens before corporations, damnit! (Score:3, Interesting)
Sadly, corporations in the US pay most of their taxes on "profit", which is defined, roughly, as "gross income minus expenses".
Here's the kicker (for me at least): A corporation can write off its salary/wage expenditures as part of those expenses (which I've been told by knowledgable business people is the largest operating expense to any corporation, or "Time is money").
Since salary and wages represent remuneration to employees for their skills and the time spent applying them on the corporation's behalf (that is to say, while the employee is working for the corporation), it is fair to say that corporations are allowed to claim the labor (which consists of skills, knowledge, expertise and time) of their employees as an expense. Thus, an employee's labor has a cost associated with it from the corporation's perspective (and the IRS' for that matter), and so has monetary value (which is deducted from gross income). The end result is that corporations can deduct 100% of that value from their gross income to derive profit.
Now, remove the corporation from the equation: If I do the exact same work for the exact same money as when I was working for a corporation, what is the cost of my labor? If I do the exact same work for myself for one half the amount that I was paid by a former employer, what is the cost of my labor?
Zero,zilch, nada. I am not allowed to claim my labor as an expense *to myself*, despite the fact that, were I working for a corporation, it would be an expense *to them*.
Huh?
Or, to phrase it succinctly - my labor has no value as an expense unless I work for a corporation, since I cannot claim it as an operating expense to myself. Or, even better: The time that that labor represents has no value unless I work for a corporation, and then it somehow magically gains value to the corporation for purposes of determining its profit.
This, in my opinion, is the most egregious example of the federal government's (and state governments', for that matter) abuse of its citizens in preference to corporate interests - the term "wage slave" comes to mind in the most literal sense.
And believe me, I know whereof I speak - I am self-employed, and see this in action each time I pay income taxes. Even were I to start a corporation with myself as the sole employee, I, personally, could never evade the fact that a corporation, ANY corporation, as a legal fiction, has privileges with regards to income taxes that I as a citizen will never realize.
So, to wrap up this off-topic rant (with apologies for wandering off the subject): All things being equal, my labor is 100% profit to me under the current tax system in the US whether I perform it for myself or for a corporation, and so I pay enormous amounts of income taxes on it, but it is a 100% expense to any corporation for whom I work, and they pay no income tax on it at all.
There isn't any other way to look at it, as far as I can tell. Somewhere along the way, that portion of my life spent working lost its value to the federal government (and, to a lesser extent, the state government as well), and any monetary recompense for it is "profit" to be taxed. The common denominator for me is this: My time.
Corporations get to write it off, I do not. All I want as a citizen of the US is to have the same tax priveleges as a legal fiction and to be treated with at least equal consideration by my governments - is that too much to ask?
And, for an interesting view on the limited applicability of federal income taxes from a different perspective, I encourage all of you to check out: http://www.taxableincome.net/
dj
Re:Citzens before corporations, damnit! (Score:3)
my labor has no value as an expense unless I work for a corporation
A long while ago I heard some radio talk show guy (not a clue who anymore) talking about individual income tax. Essentially, he was saying that there's no such thing as income for an employee. Kind of an interesting notion.
Here's the logic. An employee sells his/her services to a company at a pre-specified rate. The rate being paid has a one-one relationship to the time and talents invested. The result is that it's a zero sum game. The employee did not profit from the time spent, but was instead only compensated for it. Since the employee is only compensated for providing a service, no income resulted.
For example, let's say I wrecked your car. Sorry about that. Anyhow, let's also say that I paid to have it fixed up all perty like. That's certainly not income to you, but instead just a compensation for the damages.
Okay, so the IRS won't buy it now matter how clever. Still, it's an interesting take on the nature of the employee/employer relationship. Your comments reminded me of this tid bit.
Re:and a backlash to this sort of crap is brewing (Score:3, Informative)
That overly simplifies the matter, which I realize I did nothing to help earlier. SSE from a larger picture involves how you handle the amount of cash let into the economy, the rate in which you tax, as well as regulations that effect business.
The goal is not to have money "trickle down" to the poor. The goal is to increase growth, thereby creating more employment opportunities at better wages.
But it doesn't work.
By what measure? During the Reagan years SSE brought down unemployment to record lows, increased the growth of the GDP, and brought inflation back into reality. On practically every measure for what is intended to do, it did in spades!
The Kennedy years (actually, going into the Johnson years) saw an even higher growth rate for the GDP following massive tax cuts.
What effectively hurt both of these was that as money increased, so did the spending at the government level. Johnson with Vietnam plus his "War on Poverty". Reagan's term saw cold war spending, plus a congress that wouldn't stop spending. In both of these cases, the economy rocked! It was the government books that fell out of balance.
What does work is holding the line on taxes and redirecting some spending from supporting the bigger companies with corporate welfare and giveaways toward supporting smaller employers with special incentives.
Exactly how does this conflict with SSE? The whole concept involves keeping the cash out in the private sector, which by it's very nature is counter to any kind of giveaways to either corporations or individuals.
You might want to look a little closer at what you're calling a complete failure. You may not find yourself that far removed from what it's actually about, and how it gets there.
Re:Um, No. (Score:3, Insightful)
I wish it was still the old american way, but I can tell you that I was certainly in the (very small) minority at the major engineering institution I attended a couple years ago. I didn't have aspirations of becoming a manager and then climbing up to CEO, I wanted to sovle problems, and make enough money to afford a house and a car, and to be able to have children who wouldn't have to worry about how they would afford college.
Try going to any top campus and ask the kids what they want; when I was there they all thought of technology as the fastest path to the top, not a way to make an honest wage. I REALLY hope that this whole Enron, WorldCom, _favorite_coorporate_scandal_here_ thing has enough backlash to get US culture out of this greed driven mentality, but I don't think it will.
Re:Um, No. (Score:3, Insightful)
No, that's the Union way. The American way is freedom and opportunity, with a little bit of antitrust and federal oversight to keep freedoms from stepping on each other.
No Profits (Score:5, Insightful)
Shareholders should be complaining to the board as you read this.
Re:No Profits (Score:3, Insightful)
The profits reported are after these cuts :
Producers Pay
Actors/Director/etc pay
Cut for the guy who put in money
++++++
Some inflated expences. There is no way Stan is going to win. Marvel can easily show that the movie made a loss, well it did only after the producer took his 200 Million $ fee
Re:No Profits (Score:3, Insightful)
If no movies make profit, then how do studios make profit? Surely they must, or you'd hear about it on financial news etc. Or are they using the Enron method of financial reporting?
In other words, isn't claiming that a movie makes no profit a deliberate mistatement of financial earnings (ok, so it's not an official statement of earnings, but it is a statement), possibly punishable by the SEC. If they claim to have made no profit in court (and I'm sure a decent lawyer would ask about all the other movies they made as well), and then report an overall profit to the SEC, then they would be guilty of something. This should be part of Stan Lee's case, at least to the press, if not to the court.
Re:No Profits (Score:5, Informative)
for more on how movies don't make money.
Re:No Profits (Score:5, Interesting)
Well, I totally agree that Spiderman obviously must have made a profit, or they wouldn't be making a sequel (and an X-Men sequel, and a Hulk movie, and a new Superman movie). However, in answer to your larger question - movie studios are actually not very profitable. I read an article about this a couple years back, and basically buying a movie studio is a horrible investment. The dynamics of the industry (movies costing so much to make, basically) mean that the studios themselves are not a good ROI. Yet people invest in them for one of two reasons:
1) The glamour. People aren't always rational economic actors, or at the very least, you have to take into account that people may seek more tha money. Yes, perhaps I could make 6% profit investing in bonds, but maybe I'd rather have 3% profit but hang out with movie stars/sleep with actresses all the time.
2) Media conglomerates believe that somehow, "synergy" will eventually make the movie studios pay off. Yes, this movie studio isn't a good investment as a standalone, but maybe if I tie my magazines, TV channels, pay per view channels, and retail stores together I can make it profitable.
Re:No Profits (Score:5, Interesting)
Re:No Profits (Score:3, Interesting)
The incentive for companies then is to use up all income immediately as "marketing" (or other) expenses... new luxury cars to drive around the execs, flights to europe for a week to "promote" the movie, including the marketing VP's family so they won't miss him/her, etc...
Better to have something left over for the "company" than to give a piece to the government... I swear if there wasn't so much corporate welfare, exploitation, and "good buddy" politics, I wouldn't have to give 40% of my paycheck to taxes...
Re:No Profits (Score:4, Insightful)
Re:No Profits (Score:5, Insightful)
Generally, the establishment is lucky to make 5% net on the sale of gasoline, and that's before counting expenses for operating the pumps. Did you know that you play a flat tax of a *minimum* of 0.37 on each gallon no matter what the price is? It doesn't get any cheaper as prices go down, even though it should based on what the taxes are designed to pay for! Aside from that, it's illegal to inflate gasoline prices. I do not agree with the current taxation of gasoline, but I do agree with the price. Here's why:
Relative to the value of a dollar, gasoline is cheaper in the USA now than it has been anywhere in the world, *ever*. Granted, a couple years ago we got to see 76 cent gasoline in some places, but that was abnormilly low. Where is any company in the line from the investors on the drilling rig to the store selling you the gasoline supposed to take a $35 barrel of 50 gallons of oil and turn it into something they can make money with selling it for 38 cents/gallon (not including tax). Gasoline is already being practically given away as it is. People should stop complaining so much about it and rethink their decision to buy a new $45,000 car that gets less than half the gas mileage of the land yachts of the 70's.
Re:No Profits (Score:4, Funny)
Well somehow I doubt the gasoline in the US is cheaper then in Quatar or Abu Dhabi.
Also remember that all the oil in the world actually belongs to us. We may let other countries sit on top of our oil reserves but we reserve the right to kill them anytime we want if they mess with our oil supply.
Re:No Profits (Score:3, Insightful)
No, we're talking about companies using clever or misleading accounting to misrepresent profits. This problem is especially relevant in a down economy, where companies aren't afraid of giving lower profit reports if it means they gain elsewhere.
In this case, Marvel stands to save ~$10,000,000 USD if they can avoid paying Stan Lee. They have the rest of the money from the movie, no matter what they add or subtract before they calculate 'profit'. Investors won't worry if profits are reported low for the Spiderman movie; they know how successful it and other Comic book movies tend to be, especially if we go to war.
Spiderman is just the context, but the debate can apply to many industries.
Re:No Profits (Score:3, Interesting)
It's a little more complex than that. It's the same reason you wouldn't reasonably claim that a band made $15 million in profits because their $20 cd sold a million copies and cost $5 million to make. Columbia/Tristar or whoever the fuck made the movie bought the movie rights from Marvel Entertainment for $12 million or so.
So, even if that were mostly profit, they would owe Mr. Lee a cool million, or exactly what they've paid him every year since he signed his contract.
Actually, Marvel didn't just "sell the rights" (Score:5, Interesting)
Marvel has learnt from its past mistakes and no longer simply takes a step back from their film properties. They have a subdivision "Marvel Films", or something to that effect, which involves this guy [imdb.com] being on the set to every single Marvel film property. From what has been released, Marvel gets a profit slice, not just a flat licensing fee.
Oh and by the way, Sony Pictures made the movie and it cost about 100 million to make. It took in 800 million [imdb.com] at the box office worldwide thusfar and is the 7th highest grossing film of all time. It earnt an estimated 245 million [hollywoodreporter.com] in it's first week on video release. So out of this billion dollars, yeah, I'm sure Marvel only got "$12 million or so".
Re:Actually, Marvel didn't just "sell the rights" (Score:3, Interesting)
It has nothing to do with who paid for what. Disney takes stuff that has been around forever and remakes it, and then tries to make sure that their stuff never becomes available to anyone else to remake... ever. Disney deserves to get fucked because of the way they have been fucking the public over for decades. Marvel has done no such thing. Perhaps you can see why people don't feel the hostility towards Marvel that they do towards Disney?
Re:No Profits (Score:5, Funny)
"Oh I disagree...
We had a contract, for likeness rights; remember?
As we are not only the character basis but obviously the artistic basis for your intellectual property, when said property was optioned to Miramax you were legally obligated to secure our permission to transfer the comic book to another medium.
Since you failed to do that, Banky, you find yourself in a very actionable position..."
In this case, all Stan is saying is: "Where's my mothefsckin' movie check?"
And in other news (Score:5, Funny)
Dont mean to sound despotic, but Stan, join the queue
Re:And in other news (Score:3, Funny)
<HOMER>Look at me! I'm surfing the net! And getting PAID. Woo-hoo!</HOMER>
If I do just a little more "research" for only one more hour, I can go for lunch!
Why should Stan Lee get anything? (Score:5, Funny)
The studio did the hard part. They hired the lawyer to screw Stan! If that isn't worth the 10% I don't know what is.
Re:Why should Stan Lee get anything? (Score:4, Funny)
J:
Re:Why should Stan Lee get anything? (Score:5, Insightful)
The irony is that even those are done by artists.
Re: (Score:3, Insightful)
Re:Why should Stan Lee get anything? (Score:3, Interesting)
Steve! Come out! The Randites are winning! You can talk to us now!
This is why you never deal in profits (Score:4, Insightful)
The problem is, it's easy for acountants to find creative ways of including more "expenses" to make it look as though there were no profits. If that happens, then you have to fight it out in court. Revenues are much mroe straight forward, and harder to fudge, so it's much harder to screw you on them.
Re:This is why you never deal in profits (Score:2)
Kinda reminds me of a certain energy company that disappeared not too long ago.
=Smidge=
I completly agree (Score:5, Interesting)
Re:I completly agree (Score:3, Interesting)
It may be Urban Legend but I have heard it said that the Star Wars films haave yet to show a profit -- on paper, at least.
Re:This is why you never deal in profits (Score:5, Funny)
- Make blockbuster movie
- ????
- No Profit!
- Profit!!!!
Hah! (Score:4, Insightful)
As if Stan Lee were just some burger flipper, instead of the person who created the character that they made $400 millions dollars from.
I've had it up to here with people that seem to think that a corporate lunch every now and then with their buddies makes them "creative".
Re:Hah! (Score:3, Informative)
Maybe the studio/distributor made $400M (and that's revenue not profit), but Marvel only made $12M - that's what they sold the rights for. 10% of $12M is $1.2M. The article doesn't say that Stan Lee had a contract with New Line (or whoever).
Big companies, big lawyers, screw everyone else (Score:4, Funny)
Marvel has reported millions of dollars in earnings from the film but has told Lee the company has seen no "profits" as defined by their contract.
I guess they got to define "profits" in the same was as microsoft got to define "remedy" (its a joke!)
Not that unusual (Score:4, Interesting)
"Robert Carlyle, star of the internationally popular film The Full Monty, was puzzled because he had not received any of his share of the profits from the film. 'Surely a film that cost £5 million and has taken hundreds of millions must be showing some in profits?' he asked the film's distributers. 'No', they replied 'in Hollywood no film ever makes a profit. It's all in the overheads.'"
Remember kids, "tidal waves couldn't save the world from Californication . .
Re:Not that unusual (Score:4, Interesting)
Well, of course that's all theory and it's hard to apply to practice, especially in the case of intellectual property (which, IMO, really needs a completely different economic system to support it, although I don't pretend to know the solution)... but that's the theory. And if you think about it long enough, it makes sense that no good company would ever actually have "profits", although I'm having trouble coming up with a good way to explain why...
I think the real question here is, first of all, how evil was it for them to even offer a percentage of profits to this guy when they knew full well that "profits" don't really exist, and second, how dumb was this guy to accept a deal based on profits rather than revenue?
Lesson to everyone: When negotiating with big companies, never accept a percentage of profits in return for anything. Always ask for revenue, or a set dollar amount.
Re:Not that unusual (Score:3, Informative)
This is like those high-school physics textbooks with statements like "assume a spherical elephant". The "perfect economy" you refer to is completely abstract and bears as much relation to the real world as a perfectly spherical elephant does to real aerodynamics. Example: Say a haircut costs a corporation $0.99. It doesn't matter if Corporation X is selling haircuts for $1 in Delaware, if Corporation Y is selling them for $2 in Anchorage, then you pay $2 because it would cost you more than $1 to get to a Corporation X branch.
You can only have a "perfect economy" if the cost of price data, knowledge of all competing products (including storing and processing the data) and shipping between any two points, and storage at either end is zero, and information and product distribution is instantaneous.
it makes sense that no good company would ever actually have "profits", although I'm having trouble coming up with a good way to explain why...
The reason a corporation would avoid profit is to avoid tax on that profit. But remember that corporations do pay a lot of tax whether or not they make a profit (payroll taxes like NI in the UK, for example), VAT, etc.
Even without this distortion, the reason a company wouldn't have profits carried over from year to year is because any money left over at the end of the year would be paid to shareholders as dividends.
Re:Not that unusual (Score:4, Insightful)
You economics textbook is wrong. Theoretically, one company could always undercut the other, eventually selling everything at, or even below, cost, but this never happens unless a large company is dumping the market.
Basically, it goes like this: if you can sell a widget for $5.00, companies will be willing to produce 100 of them. If you can sell a widget for $10.00, companies will be willing to produce 1,000 of them. If you can sell a widget for $15.00, companies will be willing to produce 1,000,000. (Just example numbers). Now, if a widget sells for $5.00, comsumers will be willing to purchase 1,000,000 of them. If a widget sells for $10.00, comsumers will be willing to purchase 1,000 of them. If widgets sell for $15.00, consumers will be willing to buy 100 of them.
Because supply meets demand at $10.00, that is what the average market price for a widget will be. If you try to sell them for more, you are going to have left-over stock, and if you try to buy them for less, companies are not going to bother producing them.
In perfect competition, therefore, every company makes a profit, but not a profit so great that it hurts the consumer. Unfortunatly, perfect competition is, for the most part,a pipe dream. Fortunatly, the good people running state governments are trying to tax internet sales again [com.com], which, as we all know, will make the market much better for everyone.
You didn't read closely enough (Score:3, Insightful)
Economic profit is different than accounting profit.
Economic profit is accounting profit minus the opportunity cost of the next best thing the person/copmany could be doing. Companies do not report economic profit on their balance sheets. They report accounting profit. Accounting profit is what's at issue here.
If your textbook doesn't explain this, it's probably not a very good textbook.
The concept of economic profit is pretty interesting though. In this case, the movie studio is claiming to have made no accouting profit. This would make their economic profit negative, meaning that the company would have been better off doing something else with it's resources. This is obviously not the case, given the huge success of the movie.
What I imagine they'll do is just reinvest all their profit in the company. Since all the studio people people own stock in the company, they'll still make (theoretical) money because their stock value will rise.
There may still be a legal case here. At a whole company accouting scale they may be able to just reinvest the profit back in to the comapany, but if one looks at just a single picture, then you make be able to prove they made a profit. If they can't prove that all their "expenses" are tied to the picture, then they may not be able to figure them in when they calulated how much money the picture made.
Could be a good thing (Score:4, Insightful)
- There's a huge amount of visibility -- everyone saw the movie and knows it made shitloads of money.
- Lee is a revered and sympathetic personality -- nobody wants to see him get screwed over.
- In spite of this, due to the way the contract is worded Marvel is probably correct in their claim that they don't owe him a dime, in the strict legal sense.
End result, Lee loses his money but the public outcry is sufficient to push changes in contract law which provide new protections for artists.Okay, it might not happen this time around -- media conglomerates are hugely powerful and genuine public outcry is hard to come by and expensive to properly focus into action. But the sort of scenario I'm describing is one of the most plausible ways for change like this to be brought about -- goad the public into outrage with an example of a mediagenic victim being screwed by the bad guys. Look at history -- many important pieces of legislation are tied to individual events which raised an outcry out of proportion to their individual significance.
Yes, it's lame when someone gets screwed like this. But it happens all the time, so when it happens in a highly public way that's better for all of us because it contributes to potential reform.
Re:Outcry for artists rights? (Score:3, Insightful)
I think Stan probably has a great argument, and its something I've suspected about the "zero profit" media industry all along -- there's either fishy accounting, gluttonous overhead costs (coke, whores, lear jets, mansions, parties, lawyers, hush money), or more likely, both -- using the former to justify the latter as expenses.
But Stan will likely get mixed in with all the "bad" Hollywood news and there will be little outcry for his cause as the mud slopped by the likes of Winona, Downey, et al will stain him, too, even though he doesn't deserve it.
Re:Outcry for artists rights? (Score:3, Insightful)
Put it in simple terms: the guy who created Spider-Man didn't get a penny from the movie. Joe Sixpack, on hearing that, is going to feel sympathy for Lee. We all know there was plenty of profit to go around, if it weren't for the fuzzy accounting -- Enron, anyone? Lee could be presented as a folk hero, and Marvel comes out of this sounding like Scrooge. Spider-Man is a cultural icon, and it's icons that move the masses into action, not abstract ideals like rights.
Remember Forrest Gump? (Score:5, Insightful)
Say you have a fleet of limos sitting around to drive executives/actors around. Ah, let's put that all on Spiderman... don't want to lose corporate profit by giving out higher royalties than you absolutely need to. Etc...
The incredibly stupid thing here is that Stan Lee has control over a rather large field of 'intellectual property' that said movie studios may want to draw on in the future, not to mention the sequel(s) of current films.
Imagine... Stan Lee's contract terms for Spiderman III: "5% of gross ticket sales and, oh yeah, %5 of gross ticket sales of Spiderman 1&2 you f%&#$!!!"
Re:Remember Forrest Gump? (Score:4, Informative)
I wonder how "profits" is determined. (Score:2, Interesting)
Steve Ditko (Score:5, Informative)
Re:Steve Ditko (Score:3, Interesting)
You can hear all about it in the excellent Stan Lee's Mutants, Monsters, and Marvels [amazon.com], hosted by the always great K. Smith. It comes highly recommended.
Film returns should be made public! (Score:4, Informative)
Re:Film returns should be made public! (Score:3, Insightful)
What, did you think you lived in a democracy?
Captain America indeed.
Re:Film returns should be made public! (Score:5, Informative)
"7. SPIDER-MAN: THE MOVIE
During 1999, the Company entered into a license agreement with Sony Pictures Entertainment, Inc., ("Sony") providing for the licensing of the Spider-Man characters in exchange for a gross participation in the marketing of the Spider-Man: The Movie (which was commercially released on May 3, 2002) and related releases on DVD/VHS and likely other revenue sources (e.g., syndication sales, etc.), and established an equally owned joint venture for the merchandise licensing of the Spider-Man: The Movie characters.
Earnings associated with the Company's participation in the gross proceeds of the movie have been recognized as non-refundable advance royalty payments as received, which amounted to $10 million in 1999, and $2.5 million in the second quarter of 2002. During the quarter ended September 30, 2002, Sony reported Marvel's participation through such date at approximately $2.0 million in excess of advances previously received - which amount was subsequently collected from Sony. Prospectively, additional movie royalties will be recognized as revenue - as reported by Sony. Earnings associated with our merchandising joint venture (accounted for under the equity method of accounting) amounted to approximately $1.8 million during the three month period ended September 30, 2002, and $7.1 million during the nine months ended September 30, 2002, and represent the Company's share of merchandising royalties, net of expenses. The Company's share of the joint venture's earlier losses were $0.3 million in each of the years 2000 and 2001."
Millions in revenue, but no profits?
This is how it works. (Score:3, Informative)
Boycott? (Score:2, Interesting)
Time for the hulk! (Score:2, Funny)
that makes me angry, You wouldn't like me when I'm angry.
Typical Spidey Plotline (Score:5, Funny)
* Check written in Spiderman's Name
* False agency
* Peter's sense of morality (and flashbacks of Uncle Ben) prevents him from accepting check.
* Etc etc.
Remove copyrights on fictional works? (Score:5, Insightful)
Why then should we feed the corporations with gullible, naive people out to change the world?
I also get increasinly mad at people who continuously get money because their granddad was a good writer. That somehow is very wrong - as in, all people should have equal opportunity and equal responsibility.
Copyrights on factual works is a bit of a different story. We have not understood the world sufficiently well to do something that drastical to the science community. However, patent reform is direly needed if our industry is going to start growing again - with real growth, not just growth based upon more effective court-room tactics.
Reminiscent of Alan Moore and DC comic's Watchmen (Score:5, Interesting)
A google search didn't come up with anything substantial, but I seem to recall an interview with him in Comic Shop News or the other big weekly comic paper, maybe I'm just smoking crack regarding this. Might be best to disregard this.
Re:Reminiscent of Alan Moore and DC comic's Watchm (Score:3, Informative)
As for Alan Moore, great stuff coming out now, but he came back for a spawn issue first, which meant he had to deal with McFarlane (we all know what he did to gaiman), and I'm ever so glad he didn't decide to quit with companies on our side of the continent all together.
Movies NEVER make a profit.... (Score:5, Interesting)
It's a little like Enron in reverse -- cooking the books to remove all traces of return.
It's quite legal and easy for them to do, and it has been the tradition in Hollywood since it began. And that's how the SC ruled in a case brought by a(n other) writer of one of the Predator series of Movies IIRC. In that case, like this one, Stan seems to have gotten percentage `points' (in Hollywood jargon) instead of real dollars.
The studios find it easy to do this, as they can charge whatever they like for stock footage (stuff they've already shot and used in other movies) since they are the true producers, whatever the credits might say. And all movies use stock footage somewhere. F'rexample, the fire scenes in Gone with the Wind have been used (and charged for at inflated prices) in hundreds of movies.
This and `distribution costs' allow them the room to reduce the booked profits on any and all projects to zero.
The Predator movie the Court ruled on was, at the time, the largest grossing (worldwide) movie in history. And it never made a profit.
Neither did Goodwill Hunting or Titanic.
Source of the Claim (Score:5, Informative)
OK, there's a little more info here [comics2film.com].
Namely, that the source of the claim is not from any copyright or other rights as creator of the characters, but from a 1998 contract giving him royalties for the licensing of his creations, but not the actual comic book sales.
Looks like it's going to be a legal wrangle over whether movie profits can be considered to be royalties.
The Contract (Score:5, Informative)
Sorry, should've held the parent post until I found the contract [sec.gov].
The pertinent clause is:
(ii) You also continue to have the benefit of a single full-time assistant. (f) In addition, you shall be paid participation equal to 10% of the profits derived during your life by Marvel (including subsidiaries and affiliates) from the profits of any live action or animation television or movie (including ancillary rights) productions utilizing Marvel characters. This participation is not to be derived from the fee charged by Marvel for the licensing of the product or of the characters for merchandise or otherwise. Marvel will compute, account and pay to you your participation due, if any, on account of said profits, for the annual period ending each March 31 during your life, on an annual basis within a reasonable time after the end of each such period.
Note that profits are explicitly mentioned.
Not about creator rights, it's about Contracts. (Score:5, Informative)
This is one of the best articles I've read on this situation. It helps if you have some idea of the US Comics industry but Paul O'Brien is a good enough writer to make it all crystal clear. FWIW, Paul is a UK Lawyer.
http://www.ninthart.com/display.php?article=428
The Same Old Villain Strikes Again! (Score:5, Funny)
The "piracy" problem must be even worse than they're admitting....
yipee freakin do for corporate america (Score:3, Insightful)
That might have been the original idea, but get real people. If one were to look at the behavior of the top 100 corporations, does that rule hold true? As corporations weild more political power, they are becoming the equivalent of the ruling class. The only difference now is the rich get to hide behind some corporate name and not subject themself to public scrutiney. The more things change, the more they stay the same people.
Business is business (Score:4, Insightful)
This just proves business is business, and the entertainment industry is - what a surprise - very adept at sugar coating their activties until, of course, the lawsuits start flying.
Business is business, and anyone sticking their head in the jaw of the corporate machine has gotta watch out for themselves. I'm sure Stan had attorneys looking after his interests so I don't know what happened there, but I do know that most companies will do anything they can to screw you should the need arise.
And yep; I've got a Masters in Finance so I know of what I speak. A few of our case studies at Uni directly factored in litigation as a "cost of doing business".
Good luck Stan! I've always enjoyed your work and genuinely wish you the best!
Here we go........again again again (Score:4, Insightful)
I trade a lot with friends. I buy a movie, when I do, second hand from a second hand store (Hollywood doesn't get their cut that way.) I've given to causes that are willing to fight RIAA and MPAA.
So, what have YOU done? Obviously quite a few of you went to see Spider Man.
Business 101 (Score:5, Insightful)
Stan Lee is lucky he has a way to talk about this. (Score:3, Informative)
Stan lee is very lucky he has an avenue of complaint, as this happens with most every feature film. Hopefully this will be some kind of a wake-up call to filmmakers.
Another reason to go P2P (Score:5, Insightful)
But when shit like this happens, I wonder whether it was worth it. It's amazing how 400mil is not enough to be considered profitable. Last I checked the movie didn't cost a billion bucks to make (I don't think it even costs 500mil).
Thanks Sony... I'll repay you with my unlimited bandwidth.
Stan reaps what Stan sows (Score:4, Interesting)
And where IS Ditko in all this? Is the mainstream press just too wimpy and gutless to brave one of his Ayn Rand-esque tirades and hair-splittingly precise reproach-a-thons?
Clearly Ditko was a major part of the creation of Spider-man.. I'm not clear what kind of rights he has in the character, if in fact Lee ever let him have any. Any help?
Blurb is wrong (Score:4, Informative)
1. Stan Lee believes he has a contract with Marvel that entitles him to 10% of all profits from all tv shows and movies based on his creations.
2. Stan Lee has not been paid for the Spider-Man movie.
3. Stan Lee is suing Marvel.
Nothing in the article explains why Marvel has not paid Stan Lee. Perhaps Stan Lee misunderstood or misremembers his contract. Or maybe Marvel has no explanation whatsoever, and was just hoping that Stan Lee was too old and senile to remember the contract. Who knows? Clearly, more information is needed.
Visions... (Score:5, Funny)
Peering into my crystal ball...
StanLee: You owe me $40 million.
Marvel:Well, we calculated that 30 million copies of Spiderman were downloaded via peer-to-peer programs...
StanLee:..and..?
Marvel:
Rule of Thumb (Score:3, Interesting)
$800m (Score:3, Informative)
Marvel's been playing too much Hitch-Hikers... (Score:4, Funny)
Tune in next week, when Spidey battles the Ravenous Bug-Bladder Beast of Thrall!
Marvel -- not the Movie Studio -- you fools (Score:5, Informative)
1. Stan Lee's contract is with Marvel, and
2. Marvel licensed the intellectual property to the movie studio.
3. Marvel's lawyers knew enough to negotiate for gross points, therefore
4. Marvel made a profit, and
5. Stan Lee is therefore entitled by contract to 10% of Marvel's profits.
The contract dispute is not with the movie studios who, however evil, have done nothing particularly wrong by Lee. This is all about Marvel trying to redefine those profits.
Lost In The Noise: Movie studio accounting (Score:4, Informative)
The idea that a blockbuster movie like Spiderman made no profit seems ludicrous, but on paper, accountants paint a different picture. It sounds like Stan Lee signed a contract that would get him a percentage of the "adjusted gross". "Adjusted gross" is a movie mumbo-jumbo term that basically means "what's left over after everyone gets paid", which almost always comes out to be absolutely nothing.
Had Stan Lee been smart, and had the legal clout to pull it off, he should have tried for "gross points". "Gross points" are where the real money lives, and the types of contracts that grant gross points are usually reserved for the big name producers, big-wig movie execs, and A-list movie stars. Basically gross points are percentage points of the overall revenues that a movie brings in, before anything else happens to money - before expenses, before taxes, before the studios gets their checks.
My guess is that Marvel had a deal that would grant them something like half a gross point (which is actually a lot), and Stan Lee's contract was with Marvel (not the movie studio) which would give him a percentage of that cut deemed "profitable". The problem is that Marvel's own number crunchers probably account for every penny of that revenue granted by the movie studio, leaving nothing left for Mr. Lee, because there are no operating "profits".
It comes down to legal terminology in the actual contract, which is probably written to legally protect Marvel and the studios from the type of lawsuit that Stan Lee is seeking, and they will probably try to have the case dismissed based on legal precedent. (Hollywood sees this type of thing all the time) IANAL, but it seems like Mr. Lee's primary defense is that he was misled by the contract into thinking he would get a share of the actual *revenue*, not the *profits*.
-AAAWalrus
I'm glad... (Score:5, Funny)
Whew... What a relief!
Re:/.ed already (Score:5, Informative)
Spider-Man creator sues Marvel
NEW YORK, Nov. 12 -- The creative force behind Spider-Man, the Incredible Hulk and the X-Men filed a $10 million lawsuit Tuesday, charging his old comic book company is cheating him out of millions of dollars in movie profits. Stan Lee, who crafted a menagerie of superpowered heroes with very human flaws, now claims Marvel Entertainment Inc. has tried to shut him out of the "jackpot" success of this summer's "Spider-Man" movie.
LEE'S ATTORNEYS filed court papers in Manhattan federal court, claiming that Marvel signed a deal to give their client 10 percent of any profits from his characters used in films and television shows.
"Spider-Man" has been the year's biggest hit, grossing more than $400 million domestically -- but the 80-year-old Lee says he hasn't seen a penny.
"Despite reaping enormous benefits from Mr. Lee's creations, defendants have failed and refused to honor their commitments to him," the lawsuit charges.
Marvel has reported millions of dollars in earnings from the film but has told Lee the company has seen no "profits" as defined by their contract.
Lee hopes a judge will intervene and make sure he gets a percentage of profits from the Ben Affleck movie "Daredevil," based on another of his creations, scheduled for release in February.
He also seeks a share of profits from the upcoming movie "The Hulk," and the sequels to "X-Men" and "Spider-Man."
The lawsuit demands damages and a court order forcing Marvel to turn over Lee's share in any profits from movies about characters he created.
Marvel issued a statement saying Lee "continues to be well-compensated" for his contributions to the industry. It said the company is "in full compliance with, and current on all payments due under, terms of Mr. Lee's employment agreement."
"Spider-Man" stars Tobey Maguire as the teenage superhero, Willem Dafoe as the villainous Green Goblin and Kirsten Dunst as love interest Mary Jane Watson. A sequel is due out in 2004.
What about X-Men? (Score:3, Insightful)
Re:/.ed already (Score:3, Funny)
Re:Alec Guiness?? (Score:5, Insightful)
Remember young Jedi..."percentage of the gross".
That's how Sir Alec Guiness, a man well used to the ins and outs of the film industry, managed to get his money. I believe Peter Cushing got the same deal, although I may be wrong in that. Percentage of the gross, not percentage of the profits.
Cheers,
Ian