BATTLE OVER THIS YEAR’S SUNDANCE FESTIVAL PHENOM REVIVES AGE OLD QUESTION: WHEN IS A DEAL CONSIDERED A DEAL?
The fight over the rights to “Push: Based on the novel by Sapphire” reflects the same battle that has been fought time and again in Hollywood: when is a deal considered a deal. “Push” was the undisputed darling of the Sundance Film Festival last month. The film built up a steady buzz during the festival week. “Push” ultimately garnered the festival’s US grand jury and audience prizes. And now, “Push” has spawned dueling lawsuits in New York and Los Angeles filed by the two suitors for North American distribution rights, The Weinstein Company (TWC) and Lionsgate.
So who knew that this drama — about an illiterate African American teen in late ’80s Harlem who is pregnant by her own father and abused by her mother — could cause such a legal ruckus?
THE EVENTFUL DAYS FOLLOWING SUNDANCE
All of the events giving rise to TWC’s lawsuits in New York and Lionsgate’s lawsuit in Los Angeles happened in the few days following the end of the Sundance Film Festival. As reported by The Hollywood Reporter, TWC negotiated with “Push” producer/financier, Smokewood Entertainment Group, and Cinetic Media, Inc., a powerful sales agent representing Smokewood, over the rights to the film. TWC says that it accepted an “offer” conveyed by Cinetic by email on January 27, waiting only for Smokewood/Cinetic to send over the written license agreement. So the deal was done, right?
Not so fast.
On January 30, Cinetic and Lionsgate apparently agreed upon a different deal — in which Lionsgate (together with Oprah Winfrey’s Harpo Productions and Tyler Perry’s 34th Street Films) reportedly paid $5.5 million for the North American rights to the film.
On February 4, Lionsgate filed suit in Los Angeles against TWC seeking a declaration that TWC had not entered into a valid license agreement for “Push” and has no rights thereto. Not to be deterred, TWC filed multiple lawsuits against Lionsgate, Smokewood and Cinetic in New York. TWC asserts various legal theories: interference with contract against Lionsgate; fraud and breach of contract against Cinetic; and breach of contract against Smokewood. Interestingly, TWC’s complaints seek monetary damages but — at least in their current form — do not seek the rights to “Push” or any injunction preventing Lionsgate from distributing the film.
THE END GAME
The legal questions which the courts will need to answer include whether TWC’s acceptance of Cinetic’s offer was sufficient to create a binding license agreement — and whether Cinetic’s alleged email could even be considered an “offer” for contractual purposes. At the heart of the dispute will be whether all the “material” terms of a license agreement for the film were agreed to. In my own experience, a court could find that the deal can be “a deal” when even just the most basic terms were agreed upon. The suits will require proof of what is/was “material” and may likely involve the customs and practices in the movie industry on what is “a deal.” Proving these things will not be an easy task for the parties or the court.
However, the vast majority of lawsuits settle before a court has to rule on the various competing claims. These lawsuits have the potential of becoming a complex mess — starting with the question of which court, New York or Los Angeles, is the proper court to hear the case(s). At some point, the parties will negotiate a settlement. Whether that requires each side to spend substantial legal fees to “beat each other up” before they come to the settlement table remains to be seen.
To the lawyers representing the parties, this case could be interesting and very lucrative. For those not involved in the case, the legal battles between well-financed parties can be entertaining.
Hopefully, the film will be as entertaining as the lawsuits it spawned.