EXCLUSIVE: Bohemian Rhapsody screenwriter Anthony McCarten has filed a breach of contract suit against Graham King and his GK Films for money owed on the 2018 Best Picture-nominated film about Queen and its iconic singer Freddie Mercury.
The lawsuit hit today and shows a fascinating peek behind the curtain into what happens when participants rely on studio net point deals. The $55 million budget film grossed $911 million worldwide, and yet according to accounting statements issued by Twentieth Century Fox Film Corporation, Bohemian Rhapsody is in the red, to the tune of $51 million.
The legal action is a bit twisty, because the producer King and his GK Films are named, but not Fox or Disney, which acquired the studio and holds Bohemian Rhapsody in its vast library. The reason for this is, McCarten’s suit maintains he made a deal directly with King to receive 5% of GK’s take. Eventually, King turned over all of those deals to Fox and now Disney. McCarten maintains that the deal accounting definitions changed and he has not been paid a cent from his backend deal and that King has been unresponsive to his appeals to get paid.
This is a problem the CAA-repped McCarten and his Kinsella Weitzman Iser Kump Holley LLP attorneys want to see solved with “monetary damages in an amount to be proven at trial,” a full accounting of the movie, and “a judicial declaration of the parties’ contractual rights and duties in connection with the Writer’s Agreement…By this Action, McCarten seeks to hold GK Films to its promise in the Writer’s Agreement,” says the 50-page filing Wednesday in LA Superior Court, citing the first of three deals the scribe struck with production company WAGW, Inc in 2015 for an “amount equal to 5% of 100% of the ‘Net Proceeds'” (read it here).
Fox boarded the Queen biopic in 2016, and the studio is insisting McCarten is only due any profits via their “’Defined Net Proceeds’ definition, rather than GK Films’ standard ‘Net Proceeds’ definition, as modified through good faith negotiation.
Representatives for GK Films tell Deadline that they believe Fox/Disney should be a party to this action and will be reaching out to them forthwith to consult on future responses.
“Even worse, it is not even clear that GK Films has ever had a standard definition on any film,” states the filing by attorneys Dale Kinsella and his partner Nicholas Soltman. The suit maintains the parties had no intention of developing such a definition, because it had no intention of ‘comput[ing]’ and ‘determin[ing]’ Net Proceeds at all.
McCarten is one of the elite screenwriters of fact-based biographical pictures. Bohemian Rhapsody won Best Actor Oscar honors for Rami Malek and The Theory of Everything did the same for Eddie Redmayne and Darkest Hour claimed the prize for Gary Oldman. More recently, The Two Popes garnered nominations for its stars Anthony Hopkins and Jonathan Pryce. He has in the works the Kasi Lemmons-directed Whitney Houston film I Wanna Dance With Somebody at Sony. He is a producer on that film. It has traditionally been rare for writers to be able to receive gross pay, unless they are also producers or directors. That leaves them vulnerable to the net definition, something Eddie Murphy famously called “monkey points” during a suit against Paramount over Coming to America remaining in the red despite grossing $350 million. In an even more egregious example, Deadline revealed a Warner Bros profit statement that claimed that despite Harry Potter and the Order of the Phoenix grossing $938 million, the film was $167 million in the red.
Per the suit, as he was negotiating his fee for the film, McCarten anticipated a Coming to America scenario like he is now in and believed a solution had been agreed on:
Relevant here, at the time he entered the Writer’s Agreement, McCarten was aware of the reputation major studios have for snatching losses from the jaws of profits-most notably, by “defining” profits in byzantine ways and then applying arbitrary, onerous distribution fees administrative fees, overhead fees, etc. At the same time, McCarten knew that indie producers, such as GK Films-which had famously financed the $156-$170 million Hugo, among other mid- and big-budget projects offered a little less money upfront than did the major studios, but more favorable backend definitions. GK Films, for its part, embraced the reputation. For example, late in the negotiations, when he was frustrated over the low fixed fees that would inspire the side letter, McCarten called Denis O’Sullivan, a then-GK Films executive. O’Sullivan told McCarten, “The number is what it is, but Graham wants me to tell you that as he did with Cameron Diaz on Gangs of New York, he will take care of you in success.”
McCarten, no industry naïf, understood what Graham was telling him, and what he
wasn’t telling him. “He”-Graham King, not Fox, and not any other studio-was going to make up for the low fixed fees by paying him out on the backend. But only “in success.” With this background, it made perfect sense that the definition would be that of GK Films, and the “net proceeds” those of GK Films. Simply put, McCarten understood that GK Films’ “Net Proceeds” would actually resemble 5 percent of what GK Films made on the Picture-the difference between GK Films’ actual and “net” proceeds being the home video royalty and his unrecouped development expenses (if any). And there was no question GK Films’ “net proceeds” definition would be more favorable to him than whatever a major studio called its net profit definition.
Reps from Disney, which took over Fox assets and obligations, did not respond to requests for comment.
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