Producer Arthur Sarkissian’s lawsuit against the Walt Disney Co. over net profits from “While You Were Sleeping” is headed for a jury trial Sept. 21 in Los Angeles Superior Court.
The lawsuit, filed in 1997 against the Walt Disney Co., Walt Disney Pictures Inc. and Hollywood Pictures, alleges that the Sandra Bullock starrer generated worldwide revenues of $300 million; Disney claims the picture is $20 million in the red and is not expected to show any profit.
Daily Variety box office figures show the movie made $81 million in the U.S.; Disney says it made $106.3 million overseas, producing a worldwide box office of $186.3 million.
According to the complaint, Sarkissian brought the script for “While You Were Sleeping” to Disney, developed the project and exec produced. He is seeking damages of about $10 million based on a net profit participation of 10%.
Sarkissian went on to produce the 1998 hit “Rush Hour” for New Line.
In 1998, Judge Marlene Kristovich dismissed two of Sarkissian’s claims — a breach of contract claim and an accounting claim. But the judge said trial could proceed on the issue of whether the contract Sarkissian signed was subject to any real negotiations or was merely a contract of adhesion–one in which the bargaining power of the two sides is so unequal that one side has, in effect, no choice.
Adam Miller, Sarkissian’s attorney, said the case is a classic “Buchwald” claim, challenging Hollywood accounting practices that routinely render net profit participation meaningless for even the most successful films.
Humorist Art Buchwald won a lawsuit against Paramount Pictures over net profits from the hugely successful “Coming to America,” based on the theory of adhesion, which is also referred to as “unconscionability.”
“Everybody but a small A-list gets offered profit participation that is basically illusory,” said Miller. Although Sarkissian was represented by a lawyer and an agent when he made his deal with Disney, Miller said that the studios dictate these kinds of contracts and that even with top representation, Sarkissian was not able to get a better deal.
A Disney spokesman said, “A court has already concluded that we properly accounted to Mr. Sarkissian under the terms of his contract and that the contract was not breached. He was represented in his negotiations by an experienced agent and experienced entertainment counsel. We are confident that his contract was not unconscionable and that the court will so find.”
Studios have conceded that on many films, the chances to receive net profits are slim because net profits — not the same as real profits in Hollywood accounting — are determined by a formula that takes into account a film’s costs, revenues and gross profit participants.