Stan Lee and Profits

In a probably-futile attempt to save myself some e-mail answering time, let me answer some questions here about the supposedly-threatened Stan Lee lawsuit against Marvel which may never be filed and, if it is, will probably never go to trial.  This is, from what I can tell, not an argument over who "deserves" what in the sense of whose contributions warrant the greatest compensation.  It's a contract dispute: Stan is saying his contract says he's entitled to X dollars and that Marvel hasn't given him those X dollars.  Marvel says they've given him whatever he's supposed to receive.

The real arguable part seems to come if, as stated, he's entitled to a percentage of profits.  That would mean this is probably all about what some call "Hollywood Accounting."  This is when the studio makes a movie, grosses twenty times its cost but arranges the bookkeeping such that every conceivable expense of operating the studio is considered an expense of the production in question…ergo, no profits for the profit-participants.  This happens often.  Until a few years ago, I believe Paramount was claiming that the entire Star Trek franchise had never shown a profit.  Eddie Murphy famously dubbed profit share as "monkey points" because, said he, no matter how much the film took in, the studio would always find a way to argue on paper that it was still in the red.  This is why stars like Murphy get their cuts from gross (all cash received) instead of net (all cash received minus expenses).  I once did a project where the definition of the profits in which I was to share was so unfavorable, it could have been replaced by the phrase, "There aren't any."  If the show had become a monster hit and taken in $100 million over its cost, the studio could have just paid itself a $100 million consulting or facilities fee and said, "Sorry, Mark.  Still not in the profit column."

Huge lawsuits are threatened every day in Hollywood over "Definitions of Profits" — contract riders that lay down the rules for what the studio can and cannot deduct as an expense of the production.  Sometimes, the suits are settled out of court because the studio finds an excuse to pay the claimant some cash in exchange for dropping all actions.  Frequently, the studio stonewalls and the participant in the theoretical profits gives up and goes away.  Only rarely do these cases get before a judge and, even then, they're usually settled before a verdict.  One of these scenarios will presumably occur with Stan's threat…though, knowing Stan, it will also involve an outer space invasion, a couple of gods and at least one tragically-misunderstood hero.  I do hope he gets every nickel to which he's entitled, if only so he can pick up the check next time we have lunch.