'Chicago' Producer Sues Miramax for $10M March 21, 2006
By Samuel Maull
A producer of the Academy Award-winning movie "Chicago" filed a $10 million lawsuit Monday against Miramax Films Corp., accusing it of failing to give his company its share of hundred of millions of dollars the movie earned.
The Producer Circle Co. says in its lawsuit it is the owner of the film rights to the musical "Chicago," a Broadway hit of the 1970s that Miramax agreed to produce with PCC as a movie. PCC said it was to receive part of the film's gross.
Martin Richards, founder and principal of PCC, says in court papers he and Miramax founders Bob and Harvey Weinstein were producers of "Chicago." The movie opened in December 2002 and became "the highest grossing and most profitable movie ever released by Miramax," court papers say. It won six Oscars including best picture, with Richards collecting the producer award.
Miramax spokeswoman Emily Baer said she had not seen the lawsuit and could not comment.
The film, which starred Richard Gere, Catherine Zeta-Jones and Renee Zellweger and was directed by Rob Marshall, was based on a play by the late Bob Fosse and Fred Ebb. They based their work on an earlier play written by Maurine Dallas Watkins.
The musical is about two women is 1920s Chicago who achieve celebrity and notoriety while awaiting trials on separate murder charges.
PCC said that although it believes the movie has grossed more than $300 million, Miramax has failed to pay PCC the percentage it is owed.
"While PCC is unable to determine with precision the amounts that it is owed, it estimates that Miramax' breach of contract has cost it no less than $10 million," court papers say.
Richards says he and his company were victims of Hollywood-style accounting in which two types of accounting occur at the same time: One type is for financial reporting purposes, and the other is for calculating how much individuals will get.
Those who get "gross profit" deals earn huge sums while those who get "net profit" deals -- money that is left after many deductions and expenses -- generally get nothing from a film's profits, court papers say.
The lawsuit says Miramax is trying to impose upon PCC a "net profits" deal that it never agreed to.
In addition, court papers say, PCC charges that Miramax has shortchanged PCC by not accounting for DVD sales, foreign distribution and other sources of income.
It is not clear how much Richards and his company have received, but court papers only mention $500,000 -- $300,00 as a producing fee and $200,000 when the movie passed its "first cash break even level."
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