February 6, 2012
Bernard Schlink sues the Weinsteins: There is no gross
by Kelly Burdick
Swiss publisher Diogenes and author Bernard Schlink are suing The Weinstein Company, claiming that the studio is fraudulently overstating production costs for The Reader and thereby avoiding paying “2.5%-5% of gross receipts” from the film, which grossed nearly $110 million in theaters worldwide. A report at Deadline.com says the suit alleges that the film’s only compensation report
contains misstatements of facts regarding production and distribution of The Reader. Allegations include under-reporting of U.S. theatrical and foreign receipts, U.S. home video receipts and television distribution. The suit also alleges overstatement of production costs of which $10 million were subsidized by the German government, overstatement of distribution fees as well as overstatement of costs of advertising, marketing, publicity, promotion and of the negative cost of the film. Additionally the suit claims that the overstatements include amounts for costs the The Weinstein Company did not incur including interest and overstatement of gross participations paid.
As Edward Jay Epstein documents in The Hollywood Economist, this kind of deceptive accounting is not uncommon: in reality only a handful of Hollywood’s most powerful players receive 100 percent accounting and an actual gross participation in their films.
Kelly Burdick is the executive editor of Melville House.