Film-Tech Forum ARCHIVE: Gibson suing Regal over "Passion" underpayment

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Posted by Ron Keillor (Member # 1790) on 06-09-2004, 12:59 AM:

from ananova.com
"Gibson launches £22m lawsuit

Mel Gibson's film distribution company is suing a US cinema chain for nearly £22 million, alleging that it failed to pay its share of box office receipts for the smash hit movie The Passion of the Christ.

The blockbuster made hundreds of millions of pounds worldwide when it was released earlier this year.

According to the lawsuit, filed in Los Angeles Superior Court, Gibson's Icon Distribution Inc agreed that it would receive 55% of gross ticket sales and Regal Entertainment Group would retain 45%.

But the suit alleges that Regal, which has about 550 cinemas around the world, has offered to pay Icon only 34%.

Icon has claimed 40 million dollars in the suit - nearly £22 million.

Icon Distribution was set up in 1990 by Gibson to distribute films made by his Icon Productions."

Posted by Dennis Benjamin (Member # 1137) on 06-09-2004, 06:10 AM:

http://news.yahoo.com/news?tmpl=story&u=/nm/20040608/film_nm/leisure_regal_dc_3

Gibson's Icon Sues Regal Over 'Passion' Box Office

Tue Jun 8,12:34 PM ET Add Movies - Reuters to My Yahoo!

LOS ANGELES (Reuters) - Actor/director Mel Gibson (news)'s Icon Distribution Inc. has sued No. 1 movie theater chain Regal Entertainment Group for more than $40 million, claiming Regal failed to pay Icon its fair share of box office receipts for "The Passion of the Christ."

In the suit, filed on Monday in Los Angeles Superior Court, Icon said its agreement with Regal called for the companies to share receipts on "studio terms," which Icon defined as 55 percent of gross ticket sales paid to it and 45 percent retained by Regal.

Icon claims Regal has reneged on that deal and offered to pay Icon only 34 percent, instead.

"The Passion of the Christ," about the final 12 hours in the life of Jesus, was the biggest movie hit of this past winter and spring. It generated slightly under $370 million in domestic markets -- the United States and Canada.

The suit did not stipulate how much of those receipts came from Regal theaters, but Icon claims it is owed actual damages in excess of $40 million. Icon also seeks punitive damages.

Regal operates over 6,000 movie screens in about 550 theaters around the world. A spokesman was not immediately available to comment.

Regal shares edged down 0.2 percent, or 4 cents, at $17.59 shortly after midday on the New York Stock Exchange (news - web sites).

Privately held Icon was formed in 1990 by Gibson to distribute films made by his Icon Productions film company, of which "The Passion" is one. Privately held Newmarket Films partnered with Icon in distributing the movie to U.S. theaters, but Newmarket is not a party in the lawsuit.

Posted by Thomas Procyk (Member # 1170) on 06-09-2004, 10:15 AM:

Can't find it now, but there's a thread on here that talked about NewMarket and how some chains might be inclined not to pay them what they're owed since they're such a small studio. Hmmm

=TMP=

Posted by Pravin Ratnam (Member # 1417) on 06-09-2004, 10:22 AM:

Can someone explain how this works? Should't Newmarket be suing since they get the receipts and pass Icon's share to them. Or does Newmarket get a cut from Icon after Icon gets paid?

Also I thought the first couple of weeks were generally pretty high in terms of percentages. Even if you average that with later weeks, how does it come down to 50% of the take regardless of whose position one takes?

Don't chains sign some sort of agreeement based on take by week? How can there be a misunderstanding?

Posted by Richard Fowler (Member # 893) on 06-09-2004, 11:34 AM:

There are "house nuts" to consider in a deal and a 55% take for a circuit wide situation would be fair...34% is more in line for a throw away independent movie. The chairman of Regal is known to be a religiously conservative person...he probably made his billions on his negotiation skills.

Posted by Jesse Skeen (Member # 586) on 06-09-2004, 12:58 PM:

Too bad a studio's never sued a theater company for bad presentation...

Posted by Bob Maar (Member # 763) on 06-09-2004, 01:02 PM:

Maybe exhibitor's should sue distributor's for hyping bad product.

Posted by Eric Hooper (Member # 1730) on 06-09-2004, 03:15 PM:

Or maybe there should also be some lawsuits on the release of DVD's while the movies are still in first run houses!!!

Posted by Pravin Ratnam (Member # 1417) on 06-09-2004, 04:22 PM:

Maybe customers should sue exhibitors for bad presentation and distributors for bad product. [Big Grin]

Posted by Steve Kraus (Member # 476) on 06-09-2004, 06:54 PM:

The house nut comes into a deal as a negotiated figure to be deducted with the remainder split 90/10 in the distributor's favor and that figure compared with a straight percentage of the gross and whichever is greater for the distrib taking precedence. The latter is the one that slides...first week or weeks at x percent, next week or weeks at y percent, etc.

With the huge upfront interest in this film 55% overall seems kind of low. The existance of a house nut deal, if it existed here which it might not have, would have no bearing as it only kicks in if the calculation it produces yields an even higher rental.

Posted by Mike Blakesley (Member # 26) on 06-09-2004, 08:35 PM:

Regal should go ahead and pay up, because Newmarket has not cashed our checks yet from when we played the film 6 weeks ago.

Posted by Dennis Benjamin (Member # 1137) on 06-09-2004, 08:42 PM:

Most of the people in Knoxville are Religously Conservative people. I lived there for two years....

But Anyways....

This same thing happened with "Blair Witch" and Regal and Edwards (?) did the same thing. They were sued and settled out of court.

Icon is only asking for 15 million more than what Regal was planning to pay them.

Taking a 'devil's advocate' point of view on the subject: If every single gross for "Passion" were, let's say, not all called into EDI or Rentrak - how will Icon or Mel ever know how much the film really made at all the Regal locations? I think Regal is on the end that has the advantage here.

Posted by Thomas Procyk (Member # 1170) on 06-10-2004, 10:27 AM:

Good point, Dennis. If the checks match the receipts, then I don't know what Gibson is screaming about.

Maybe it's some sort of hodgepodge conspiracy to sue the biggest chain so they will settle out of court for the $40M and then Gibson can comfortably chalk that up to the gross and beat Spiderman like he and Kamakshipalya Dhananjay have been planning all along. LAME LAME LAME!!!! [Mad]

Speaking of which, where was KD on Shrek 2? Seems like that would have been a winning prediction for once [Razz]

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Posted by Dustin Mitchell (Member # 372) on 06-11-2004, 02:32 AM:

Okay, is it really necessary to make fun of the guy in every single thread even slightly related to movie grosses? I'll admit I haven't been following the Farenheit 9/11 thread so maybe things got a little heated and that's why its spilling over into the rest of the damn forum. I will say this though, the guy only posts his comments in relevant threads (usually ones he's started) and he never uses teaser subjects. If you don't value his opinion or find him anyone DON'T READ HIS THREADS! This constant unprovoked badgering of him is a tad childish.

As an aside, this isn't directed exclusively at you, Tom.

Posted by Mitchell Cope (Member # 32) on 06-11-2004, 12:22 PM:

quote: Dennis Benjamin
Taking a 'devil's advocate' point of view on the subject: If every single gross for "Passion" were, let's say, not all called into EDI or Rentrak - how will Icon or Mel ever know how much the film really made at all the Regal locations? I think Regal is on the end that has the advantage here.

Isn't it the case that Regal is upfront with their "renegotiation"? They're being honest about Regal admissions, but saying that they are going to pay Icon only 34% when the agreement was to pay 55%.

Posted by Thomas Procyk (Member # 1170) on 06-12-2004, 12:33 PM:

You're right, Dustin. I re-read my post and see where it could be deemed a bit disrespectful and that I was "picking on" Kamakshipalya. My apologies. We've all posted our share of rediculous threads [Wink]

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Posted by Paul G. Thompson (Member # 655) on 06-13-2004, 12:35 AM:

An agreement is an agreement, period! It should be honored. If not, I question (among other things) the standards of honesty and professionalism of any company that tries to pull a "fast one" after the agreement was signed, sealed, and delivered.

One of the fastest ways that I know of that can cause a gross disrespect for a company or an individual is to have that company or individual misrepresent themselves and know they have no intention of honoring such an agreement in the first place. Most of you have seen it ... and so have I.

What goes around comes around.

End of story.