Trial to give devil his due

'Exorcist' case spins heads over unseen profits

It’s been hailed as a horror classic and it’s undeniably a money machine, but the question occupying an L.A. court this week is just how much of the money thrown off by “The Exorcist” belongs to author William Peter Blatty and director William Friedkin.

The case — basically a profit participation dispute on steroids — raises a host of issues, including “Is an old film ever new?” and the perennial “When’s a deal a deal?”

“The Exorcist — The Version You’ve Never Seen was the second-biggest re-release ever,” eclipsed only by “Star Wars: Episode IV” and grossing nearly $120 million in worldwide box office.

In May of 2001, Blatty and Friedkin sued Warner Bros., which released both the 1973 and 2000 versions of the film, claiming they have been cheated out of profits. Bert Fields, who represents the pair, pegs actual damages at about $10 million.

The main issues at trial are whether Warners reneged on a new deal for Friedkin and whether the studio gave away cable rights to its sister company, Turner Broadcasting, while underselling network rights to CBS.

Fields considers Friedkin’s new contract the major issue in the suit and says it will be worth millions of dollars over time. Warners says this part of the dispute involves about a million dollars.

After initial reluctance at Warners, Friedkin began work in December 1999 on a version of the film and spent several months on it. He enhanced the sound work, redid the music and restored the famous spider walk scene using modern special effects. Altogether, he added 11 minutes to the original 121-minute film.

A test release of the new version was unexpectedly successful and a wide release followed.

Key to the dispute is whether “The Exorcist — The Version You’ve Never Seen” is a new film — as Friedkin and Blatty maintain — or the re-release of an old film, as Warners maintains.

Ironically, it’s Warners that insisted on the “Version You’ve Never Seen” subtitle.

Over the years, both Blatty and Friedkin had occasion to question Warners over their profit participation in the original “Exorcist,” which is typical with an enormously successful film. Blatty, who co-owns the copyright in the film with Warners, has a 35% net participation, Friedkin 10%. The film has been in profits for years, and according to Warners, it has paid Blatty $27 million and Friedkin over $7 million as their share of net profits.

“I have nothing personal against anyone at Warners,” said Friedkin. “This is a business dispute that a jury will have to decide.”

Blatty added, “Litigation is sickening and stomach-churning, but I had to do this.”

With trial due to start this week, the two sides are far apart, as reflected by their rhetoric.

Michael Bergman of Weissmann Wolff Bergman Coleman Grodin and Evall, who represents Warners, said, “These claims are totally without merit. Warner Bros. did a phenomenal job of bringing in revenue with this picture. This case only proves that in dealing with Mr. Friedkin and Mr. Blatty, no good deed goes unpunished.”

Fields said, “It’s a very sad situation that Warner Bros. is taking the positions they are. It’s sad that because they filed a lawsuit, Warners took away Billy’s contract and they gave away rights to a sister company without justification. I have good friends at Warners, and that’s why it makes me sad more than angry.”

Blatty and Friedkin have had some bumps along the way to the courthouse. A companion copyright case they filed in federal court was dismissed in 2002 and is currently on appeal. Shortly before trial in the state court case, the judge dismissed their breach of fiduciary duty claim. While that portion of the case is on appeal, the practical effect is that a jury will not be able to consider punitive damages.

“When Billy started to work on the new ‘Exorcist,’ he told Warners he didn’t want to devote months to the project without additional pay,” said Fields, and the studio agreed.

Friedkin’s agent and Warners negotiated a new deal under which the studio would separately account and take a lower distribution fee on the new version. And Warners did begin to pay Friedkin under the new deal.

“Warners will claim we repudiated the contract,” said Fields, “but we did no such thing. A jury will see that Warners reneged once the lawsuit was filed just to punish Billy.”

Bergman says nothing of the kind happened. “We thought we had a deal,” he said. “But then Bert’s firm came in six months after everyone had signed off and started making major changes, such as the right to audit other films in a group television sale, and we wouldn’t agree to it.”

Fields declared: “There were no changes to the basic terms of the deal. We asked for dinky changes to the longform agreement. If Warners takes the position that requesting changes to the longform means we broke the contract, it will radically change the way people do business.”

By most accounts, it was television sales that pushed matters into litigation. Friedkin and Blatty charge that Warners gave the film away to Turner and undersold network rights to CBS for $1.5 million.

Fields said: “Warners has come up with four different stories about why they gave away the rights to Turner: Story 1 is Turner required the new version in exchange for a window; story 2 is they did us a favor and we did them a favor; story 3 is it’s customary to give the new version for free; and story 4 is that it’s the same picture –it’s not a new picture.” But Fields says he will show at trial that it is not customary to give the new version and that the box office alone shows that this was not an old film.

The rule of thumb for valuing TV rights on new releases is that the combined network and cable window for a period of five to 10 years should equal 15% of domestic box office, meaning Blatty and Friedkin expected close to $6 million for the TV window.

But Bergman says that formula is inapplicable to “Exorcist” because it’s not a new film. The television window was already occupied by the original “Exorcist,” and the subject matter has always made the film a hard sell for television.

In 1998, says Bergman, Warners licensed “Exorcist” to Turner for 17 months for $400,000. With subsequent licenses to HBO and USA Networks, the cable window was occupied until 2005. When the new film was released ready for limited release, Warners asked Turner for a hiatus and the latter granted it. Turner granted a second hiatus after the film was released wide and a third hiatus so Warners could make a network sale.

Bergman says the testimony at trial will be that it is common practice to give the new film in exchange for the hiatus. Bergman also says that Turner did Warners an unprecedented favor by agreeing to the hiatus without asking for more time, additional runs or a portion of the license fee paid by CBS.

As for the CBS sale, Warners maintains that every other network passed. CBS bought one run for $1.5 million and ended up not showing the film.

Long genesis

“The Exorcist — The Version You’ve Never Seen” had a long genesis. Since “The Exorcist” was released in 1973, there was talk about a new version. Blatty, who had written the bestselling book and the screenplay, wanted a more spiritual version and the return of scenes that had been cut from the original.

“Blatty and I had a friendly dispute about this for almost 30 years,” said Friedkin. “The footage that wasn’t used was taken out because I thought it would slow down the movie. But as I got older, I thought more about it and I felt I owed Blatty a great deal. It was his book and his screenplay, and he chose me to direct. So when he asked me if I would look at some of the footage I never used, I agreed.”

That was in February 1999. In July, the two talked to Dan Fellman, Warner’s head of distribution, who said he saw potential in a new version.

“Over the years, I tried to convince Terry Semel and Bob Daly to have a re-release, but it fell on deaf ears,” said Friedkin. “It was only when Fellman became head of distribution that the idea gained momentum. The confluence of viewing the footage, feeling I owed this to Blatty and Fellman saying we had to give him a new picture (for a theatrical release) convinced me to do it.”

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