4:39pm PT by Ashley Cullins
Kevin Costner Sues 'Open Range' Distributors Over Profits
Kevin Costner has filed a $12 million lawsuit against the distributors and sales agent of Open Range, a 2003 film that he describes as "one of the best and most popular western movies of all time."
The actor, through Open Range Productions, is suing Cobalt Media Group, Kew Media Group and several of their other business entities. He claims he's been shorted millions in profits and has never been given a proper accounting statement.
The film, which Costner directed and starred in alongside Robert Duvall and Annette Bening, cost less than $28 million to make and has brought in more than $250 million in worldwide gross revenues.
According to the complaint, Costner championed the film and personally paid for development costs — after having done so successfully for Dances With Wolves. That film was produced for "well under $30 million" and has brought in "well over $1 billion in worldwide gross revenue."
"It is against this backdrop, and at a time when Costner was one of the biggest (if not the biggest) and most sought after stars in the world, that [Cobalt] negotiated to finance a portion of the Picture and license valuable international distribution rights," writes attorney Howard Kaplan in the complaint.
Costner says Cobalt understood he was taking pay for acting and directing that was "well below his market value" and deferred $18 million so that profit participants could start collecting their earnings sooner. Under their deal, Cobalt would put up $16 million for production and distribution and ORP would collect 70 percent of the revenue in perpetuity. Cobalt agreed if it intended to make a sale below its guaranteed minimums ($23,245,000) it would notify Costner in writing.
"No such notification was provided by Cobalt to Plaintiff," states the complaint. "Instead, years later, and following numerous demands by ORP and its representatives, Cobalt and the other defendants provided a sales report indicating that it made sales in numerous territories that were well below the stated minimums."
Costner estimates the shortfall is at least $9.7 million and alleges Cobalt used Open Road to leverage higher sales for products in which it had a larger stake, licensed it as part of multipicture packages and intentionally licensed it at below market rates to gain goodwill and "other off the books compensation" from customers. He also alleges that Cobalt has failed to provide the accounting statements required by their agreement and licensed internet distribution rights without Costner's consent.
According to the complaint, Costner believes Cobalt is no longer "qualified to do business in California" and its rights were transferred to Kew, although he hasn't seen evidence that there was a "proper assignment."
Costner also alleges that the full legal names of the entities asserting distribution rights have never been disclosed and "together with its business structure, gives the appearance of a shell game designed to further conceal both the entity that is asserting distribution rights and the amount that entity owes."
The actor-director is suing for breach of contract, breach of fiduciary duty, breach of the obligation of good faith and fair dealing and conversion. He wants the court to order an accounting from all defendants from 1991 to present regarding all financial dealings related to the picture and a declaration to clarify who controls distribution rights of the film. Costner is seeking $12 million in general and special damages, plus punitive damages.