12:02pm PT by Ashley Cullins
Writer Sues Disney Over Home Video Profits
Disney is facing a class action lawsuit for allegedly relying on outdated revenue models when calculating profit participation.
The Jerk scribe and Head of the Class creator Michael Elias, through his loanout corporation Neversink Productions, is suing Walt Disney Pictures. He claims the studio has been violating his contract for 1982's Young Doctors in Love by only including 20 percent of home video revenue when it calculates the amount due to profit participants.
"When home video distribution was in its infancy, and motion pictures studios such as Disney had no yet established in-house home video departments or subsidiaries, the large, independent home video distributors paid a flat 20% royalty to the studios from home video sales," states the complaint. "However, after the studios established their own home video divisions, they continued the practice of only reporting 20% of actual receipts to profit participants, as if the revenue earned by these studio divisions were not their own, and were not subject to eventual accounting and disbursement requirements to profit participants."
Elias is seeking damages and a declaration from the court outlining the proper method of calculating payments derived from home video distribution, including on-demand, streaming and digital downloads. The proposed class includes anyone with a profit participation agreement that doesn't expressly state that home video revenue should be accounted for based on a royalty percentage.
Disney has not yet responded to a request for comment in response to the complaint, which is posted below.