In a guest column for The Hollywood Reporter entitled “When Stars Sue Studios: The Truth About Profit Participation Cases,” Dale Kinsella and Nick Soltman examine the recent buzz in Hollywood surrounding profit participant lawsuits following Scarlett Johansson’s Black Widow lawsuit. Drawing upon their experience litigating these cases, Dale and Nick highlight common misconceptions–some of which are believed even by those most intimately involved with Hollywood dealmaking.
The article sheds light on what types of profit participation deals wind up being litigated in court, and describes how the threat of litigation alone is rarely enough to get a studio to rectify profit participation issues. “The reality is that self-dealing is usually a nuanced issue, and the studios have defenses — sometimes contractual, sometimes factual, and sometimes based on ‘custom and practice.'” Dale and Nick also note how the belief that “arbitration should be avoided at all costs” is a misconception in practice. In their view, however, even amidst the buzz, the Black Widow suit is unlikely to prompt a wave of similar cases, because, “the average profit participant has a steep road to climb.”
Read the full article here.