Leo wins as Sony nixed from 007 pix

With an 11th-hour settlement, James Bond was restored to his home at Metro-Goldwyn-Mayer, and Sony Pictures Entertainment has declared itself out of the Bond business.

But in a twist worthy of a 007 plot, Kevin McClory — who once collaborated with Bond creator Ian Fleming — has pledged to go it alone against MGM. He also hinted darkly that he would have claims against Sony for “settling the case out from under him.”

The settlement is a clear victory for MGM and producer Danjaq LLC. In the battle against Sony, Sony chairman John Calley and Columbia Pictures, the Lion not only beat back an aggressive attack on its most valuable asset, it solidified its claim to be the exclusive rights holder to the James Bond franchise.

As for Sony, it ends up with a net profit of $5 million under complex terms of the settlement. However, its losses outweigh that gain: After trumpeting Bond as the kind of tentpole franchise that the studio needed to create, Sony retreated with no Bond rights whatsoever, not even the chance to remake “Thunderball.”

With the settlement, Sony is prohibited from making Bond movies in the U.S., which effectively makes permanent the injunction issued by U.S. District Court Judge Edward Rafeedie last summer.

MGM acquired Columbia Pictures’ rights to the 1967 Bond film “Casino Royale.” (In 1962, Danjaq had bought rights to all the James Bond works, with the exception of “Casino Royale.”)

Additionally, MGM obtained from Sony a worldwide prohibition that precludes Sony from attempting to make a Bond film outside of the U.S.

The reason for the separate agreement on “Royale” and the worldwide prohibition was that even after MGM’s preliminary victory last summer, it had not gained these rights.

In terms of dollars, Sony paid MGM $5 million to settle the outstanding tort claims — most prominently MGM’s claim that Sony had timed its 1997 press release announcing a competing Bond franchise to disrupt MGM’s initial public offering.

However, Sony ends up ahead $5 million, since MGM paid Sony $10 million for “Casino Royale” and the worldwide prohibition.

MGM chairman Frank G. Mancuso said, “The end of this case reaffirms that James Bond resides at one address — that of MGM and Danjaq, his constant home for the last 37 years. From the beginning, the objective of this case was to stop Sony from making a Bond film. We have accomplished that with this settlement.”

MGM attorney Pierce O’Donnell called it a “fair and honorable settlement” and Sony attorney David Steuber said the studio is “comfortable being out of the Bond business and pursuing its other slate of pictures.”

Despite the air of mutual goodwill Monday, the litigation featured extra animosity, due to the fact that MGM sued Calley individually, alleging that he tried to steal Bond and inflict as much damage as possible on MGM/UA since he was motivated by ill will toward his former employer.

The MGM-Sony settlement leaves McClory out in the cold. In a dramatic appearance at Monday’s hearing, the aged McClory stood up, brushed his lawyer aside, and told Rafeedie he would pursue his copyright infringement claims against MGM even if he had to defend himself.

In a claim O’Donnell once dubbed the “Rip Van Winkle claim,” McClory alleges he is owed profits from the last 35 years of Bond films because he is the joint creator of the cinematic Bond.

McClory’s lawyer also hinted that there were breach of contract claims against Sony for settling the case with MGM. The basis for Sony’s claim of a competing Bond franchise was its 1997 agreement with McClory to license his Bond rights.

McClory collaborated with Fleming on the script to “Thunderball.” Following the settlement of a 1963 suit between him and Fleming, McClory got rights to “Thunderball,” and in the last 35 years his rights have been the basis for two Bond films: “Thunderball” and its remake, “Never Say Never Again.”

But before Sony, no one ever claimed the McClory rights could be the basis for an entire Bond franchise. McClory was paid $2 million by Sony, and sources said he would have received approximately $15 million if the movies had been made.

Rafeedie said he would approve the settlement and gave McClory until May 3 to determine whether he wants to pursue his claims and in what manner.

The litigation began in 1997, shortly after Sony announced it would make a competing Bond franchise based on the McClory rights. MGM sued, claiming copyright and trademark infringement, and hotly disputed Sony’s theory that McClory was the joint author of the cinematic Bond.

Last summer, Judge Rafeedie found for MGM on all the major copyright and trademark points and issued a preliminary injunction preventing Sony from going forward with a Bond film in the U.S. He also found that McClory’s rights in the “Thunderball” material had reverted to the estate of Fleming under the principles outlined by the U.S. Supreme Court in the “Abend” or “Rear Window” case.

At that point, Sony claimed it would make a Bond movie outside the U.S. Last month, Rafeedie denied virtually all of both parties’ motions for summary judgment, but he did dismiss the so-called “Calley claims” alleging misappropriation of trade secrets and breach of fiduciary duty. The trial had been set to start April 6.

The last two 007 pics have been MGM’s sole recent B.O. mega-hits, aside from the swashbuckler “The Man in the Iron Mask.” Released in 1995, “GoldenEye” brought in $350 million worldwide. Two years later, “Tomorrow Never Dies” had a total take of $337 million.

MGM’s 18 Bond films have grossed a total of $3 billion at the box-office. Adjusted for inflation, this would be an estimated $7 billion in 1999 dollars. That figure does not include revenue from video, broadcast licensing (CBS paid $20 million for TV rights to “Tomorrow Never Dies”), soundtracks, interactive games and merchandising rights.

The next film in the franchise, “The World Is Not Enough,” is scheduled for release Nov. 19.

(Bill Higgins contributed to this report.)

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