Universal City Studios, Twentieth Century Fox Film Corporation, Sony Pictures Entertainment and Paramount Pictures Corporation are facing class action lawsuits over the rates that they compensate "profit participants" for home video revenues.
In four separate lawsuits filed in Los Angeles Superior Court on Wednesday, Colin Higgins Productions, Stanley Donen Films and Larry E. Martindale — a trustee for the heirs of actor Charles Bronson — allege that the studios have shortchanged them with an outmoded method of calculating compensation for rentals, sales and other sources of revenue deriving from home video.
The suits claim that, in the early days of home-video distribution, studios received a flat 20 percent royalty on sales from independent home-video distributors, and would then pay out the profit participants based on that royalty.
However, now, the suit says, the studios have established their own in-house home-video divisions, and receive 100 percent of the revenues from home video.
Despite the shift, the suits allege, the studios are still paying their profit participants as if they were only receiving 20 percent of the revenues.
[The studios] continued the practice of only reporting 20 percent of actual receipts to profit participants, as if the profits earned by these divisions were not their own and not subject to eventual disbursement to the profit participants as well."
Colin Higgins Productions, the loan-out company for deceased writer/director Colin Higgins, are suing Paramount and Universal over his 1978 film "Foul Play" and 1982 film "The Best Little Whorehouse in Texas," respectively.
Stanley Donen Films, which represents director Stanley Donen, is suing Fox over the 1975 Burt Reynolds/Liza Minnelli film "Lucky Lady."
Martindale is suing Sony over the 1975 Charles Bronson film "Hard Times."
The suits, which allege breach of contract, breach of implied covenant and breach of California's business & professions code and other infractions, are seeking unspecified damages, attorneys' fees and court costs, as well as interest.
Pamela Chelin contributed to this report.