Creator of Spider-Man having largely contributed to the rise of the Marvel company, whose history is intertwined with his own, Stan Lee nevertheless launched a legal tussle with it in 2002. In question? Sam Raimi’s movie…
We hardly present this indestructible figure of pop culture, co-creator of thousands of characters who will be the foundation of the Marvel universe. Historically and closely associated with Marvel Comics, which over time has gone from a small publishing company to a colossal multimedia industrial group.
After his departure from Marvel, he created in November 2001 a new studio, named POW! Entertainment. Remained associated with Marvel as a historical symbol of the company, he was credited as executive producer of most of the audiovisual adaptations of the comics featuring his characters. Among his solid gold contracts was this: the guarantee of earning 10% of net profits on anything that used his creations; movies included so. Enough to generously fill his bank account for quite a few years…
“I didn’t see the color of a penny!”
When Sam Raimi’s Spider-Man hit the screens in 2002, the hit was global. A jackpot for Sony / Columbia, with more than 825 million dollars collected at the worldwide box office. Under the terms of his contract, Stan Lee should logically have received a rather generous share of the cake.
Except that Marvel Comics, involved in the production, retorted to him in all seriousness that the film had not generated any profit as provided for in Stan Lee’s contract. As a result of which nothing would be paid to him. Yes yes, you read that right.
In 2002 Stan Lee sued Marvel Comics by filing a complaint with the District of Manhattan. “Although they derived enormous profits from Mr. Lee’s creations, the defendants refused to honor their commitments to him” stated the complaint. For its part, Marvel specified that “Mr Lee continues to be very well paid” for his contributions to society and the comic book industry. Certainly. But from there to put a penknife in the contract… The affair will only be settled in April 2005 ; Marvel paying $10 million for “fund past and future payments claimed by Mr. Lee”. A straw in view of the sums at stake.
Stan The Man, victim of Hollywood Accounting
How can a film that has made more than $825 million not make a profit, or so little? Only one culprit: theHollywood Accounting”. An old practice, morally very dubious, but nevertheless… legal. What is it about ?
The idea is to inflate as much as possible the amount of the so-called “general” costs of a film (production, distribution and promotion), thanks to a company set up for the occasion, which will absorb these expenses. . A sum which is therefore deducted from the profits generated thanks to the receipts of the film at the box office.
This method thus enables the majors to notably reduce the amount of royalties to pay (or even eliminate them). In fact, studios most often set up a corporation for every movie they produce. Like any company, it calculates its profits by subtracting expenses from revenues.
The studio then charges that company/entity with a huge fee, which thus covers or camouflages the movie’s revenue. From an accounting point of view, the film becomes a “money loser”and therefore technically has no profits to pay out.
In normal times, the goal of a company is to maximize profits while limiting costs. It’s in his nature. With the “Hollywood Accounting”the majors, they seek to inflate losses by maximizing costs (overheads). Just to avoid having to donate too generous a donation… Even to someone like Stan Lee.