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16/1/2009: Warner and Fox Agree Over Watchmen
An agreement over ownership rights to the film adaptation of the cult graphic novel Watchmen was reached between Warner Bros, the producers of the forthcoming release, and 20th Century-Fox, who had successfully argued in court that they had distribution rights to the film thanks to a 1994 turnaround agreement with producer Larry Gordon. The producer had never exercised his option to acquire Fox’s remaining interests in the property, a fact which Fox had made Warner aware of prior to shooting of the film.
Talks between the studios took place to divert a court case which might have allowed Fox to block the release of the film, which Warner Bros., had scheduled for 6th March 2009. On 8th January 2009, Warner filed for an immediate court ruling on the situation as they had spent $150 million (approx. £99 million) in marketing material emphasising the 6th March release date.
The following day (9th January 2009), producer Larry Gordon sent a letter to Gary Feess, the U.S. District Court judge who had ruled that Fox had distribution rights to the film, trying to explain that he hadn’t understood the 1994 turnaround agreement because it hadn’t mentioned a 1991 quit-claim agreement giving Fox distribution rights and a share of profits if the film was made elsewhere. However, Feess refused to read the letter, calling it an ‘improper communication.’
The hearing had been due to take place on the 9th, but the studios agreed to delay it until Monday 11th January while they held talks over the weekend in an attempt to resolve the dispute. Almost immediately, attorneys for the studios began making noises that they were making progress, and in his blog, reporter Michael Cieply noted that Fox’s co-chairman Tom Rothman and Warner Bros. President Alan Horn were ‘smiling and back-patting each other’ at the Golden Globes Awards ceremony, indicating that a mutually acceptable deal had been struck.
On the 16th January 2009, the studios announced that an agreement had been reached which allowed Warner to open the film on 6th March as originally planned and without the Fox logo on the film while giving substantial recompense to Fox. Under the terms of the deal, Fox would receive an undisclosed upfront cash payment which was believed to be somewhere between $5 million and $10 million (approx £3.5 million - £7 million) to cover the cost to Fox of $1.4 million (approx. £981,000) in development fees and also legal costs incurred during the case. It was also agreed that Fox would receive a percentage of the film’s gross on a sliding scale of between 5% and 8.5% depending on the film’s global revenue. Fox would also receive a gross from any sequels or spin-offs to the film.
A joint statement issued by the studios said ‘Warner Bros. and Twentieth Century Fox have resolved their dispute regarding the rights to the upcoming motion picture "Watchmen" in a confidential settlement. Warner Bros. acknowledges that Fox acted in good faith in bringing its claims, which were asserted prior to the start of principal photography.
Fox acknowledges that Warner Brothers acted in good faith in defending against those claims. Warner Bros. and Fox, like all "Watchmen" fans, look forward with great anticipation to this film’s March 6 release in theatres.’
It was thought that Fox had initially demanded 10% of the film’s gross, and distribution rights in some overseas territories – a position that was completely unacceptable to Warner. Another option believed to have been considered and eventually discarded during the bargaining process included Warner Bros. re-scheduling the 22nd May release date of Terminator: Salvation because it clashed with the release of Fox’s Night at the Museum 2: Battle of the Smithsonian, but this proved unworkable because Halcyon, the owners to the rights of Terminator: Salvation had a stipulation in their contract that release date would be 22nd May. [ADD]
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