This Lawsuit Goes to 11
The creators of This is Spinal Tap, the most influential mockumentary ever made, have been paid almost nothing. The rock gods are angry.
In comedy, as in rock ’n’ roll, nothing is quite as easy as it looks. And so it makes sense that several years before the 1984 release of the legendary rock ’n’ roll mockumentary This Is Spinal Tap, director Rob Reiner and stars and co-writers Michael McKean, Christopher Guest, and Harry Shearer first had to make a shorter version of the same movie: a sort of sample-size Spinal Tap, meant to whet the appetite of studios that might bankroll the real thing. Titled The Final Tour, this 20-minute demo reel about a past-its-prime, unselfconsciously ridiculous band makes for an uncanny viewing experience today, if for no other reason than how fully conceived the idea already was. It’s on YouTube if you’re curious.
There’s Reiner as the band’s earnest interlocutor, Tony Hendra of National Lampoon as the hapless manager, and Bruno Kirby as the cranky limo driver with a thing for Sinatra. There’s the drummer who dies in a bizarre gardening accident—and the other drummer who spontaneously combusts. There’s Shearer’s airport metal-detector scene, where the problem is in his pants. There’s the touching piano number with the surprisingly bawdy title that can’t be printed here. And there are most of the memorable songs: Big Bottom, Sex Farm, Gimme Some Money, Tonight I’m Gonna Rock You Tonight, and, of course, Stonehenge, fully staged, complete with that catastrophically tiny prop (they’d expected 18 feet and got 18 inches) and two costumed little people dancing around it.
“I was amazed when I last looked at it,” says Shearer, who plays Derek Smalls, the band’s bare-chested, mutton-chopped, pipe-smoking bassist. “We had this little pittance”—a $60,000 screenplay fee from a company that eventually rejected the idea—“to shoot characters and performances.” He remembers his long black wig costing about $5, and that it took an hour and a half to remove once the shoot was over (the costumer had used super glue). Shearer, Reiner (who plays Marty DiBergi, the fake documentarian), Guest (as lead guitarist Nigel Tufnel), and McKean (as vocalist David St. Hubbins) had been nursing and developing the idea since 1978. They first performed as the band in a 1979 variety show called The T.V. Show. Then they wrote seven new songs, played a few gigs in costume in Los Angeles, and worked out a complete band history to ensure that their improvisations had a narrative spine they all could rely on. “Michael McKean, I believe, still has the napkin on which the possible names and the possible misspellings were outlined,” Shearer recalls, “because I think at one point we thought maybe S-p-y-n-a-l?”
Armed in 1980 with that demo reel, Reiner and the others were rejected by every studio they pitched. Finally, in 1982, they got $2 million from Embassy Pictures Corp., a tiny studio run by Norman Lear, whom Reiner knew well from his days in the cast of All in the Family. (Lesson No. 1 in Hollywood: It helps to have powerful friends.) By the time the movie came out, Lear had left Embassy, which was on the verge of bankruptcy. Despite an appearance by the band as musical guest on Saturday Night Live, the movie performed anemically in theaters and faded quickly.
But then a funny thing happened: Tap refused to die, thanks in no small part to repeat viewings on VHS. “We may have been the first nonporn home video to do well,” Shearer says. In just a few years, This Is Spinal Tap became a sort of comedy-nerd Casablanca, a classic so infinitely quotable that it practically generated its own language. (If anyone has ever told you that something “goes to 11,” you probably haven’t required an explanation.) And like a low-IQ, longhaired Pinocchio, Spinal Tap transformed into the real thing, recording albums and even touring. “The thing that we joke about is called the Spinal Tap curse,” Shearer says, “where we have to go through everything that we’ve made fun of.”
It’s hard to think of another movie from the past 50 years that’s had a bigger impact on modern comedy. Spinal Tap pioneered a mock-doc genre that’s influenced everything from the long run of improvisational films directed by Guest (Waiting for Guffman and Best in Show among them) to docu-styled sitcoms such as The Office and Modern Family. This made it all the more surprising when, about four years ago, Shearer became the first of his fake bandmates to learn lesson No. 2 in Hollywood: No matter how well your movie does, there’s no such thing as net profit.
In one major respect, Shearer seems the least likely of his collaborators to be chasing after riches from Spinal Tap. He earns a reported $300,000 per episode for his work on Fox’s The Simpsons, inhabiting the characters of Montgomery Burns, Waylon Smithers, Principal Skinner, Ned Flanders, and dozens of others. Given that, rummaging behind the couch cushions of an old cult movie can seem unnecessary, even unseemly.
On the other hand, Shearer might also be the Tap member most given to righteous indignation. He seems to make a habit of falling out with people, from Albert Brooks (Shearer co-wrote Brooks’s first feature, Real Life) to McKean, whom he suggested during a 2015 interview on Marc Maron’s podcast wasn’t exactly a friend. An unnamed colleague from one of his stints on Saturday Night Live was once quoted calling him “brilliant, funny, and detestable.” Among the cast of The Simpsons, Shearer has long been the malcontent-in-chief, openly complaining about how Fox fails to appreciate the show. In 2015 he announced he was quitting because, he said, the network had introduced language into his contract that curtailed his freedom to do other work. He says he changed his mind and stayed only after the language was removed.
Sometimes it takes a malcontent to disturb something as intractable as Hollywood accounting practices. By the terms of the contract they signed in 1982 with Embassy Pictures, the four creators of Spinal Tap are entitled to a portion of income from the film, including merchandise and music, provided certain benchmarks are hit. Given the wild afterlife of This Is Spinal Tap, it seems impossible that anyone with a piece of the movie hasn’t made money. And yet this is Hollywood, where studios have claimed that some of the highest-grossing films—hits such as Return of the Jedi, Harry Potter and the Goblet of Fire, and the Lord of the Rings trilogy—somehow haven’t turned a profit. As David Zucker, one of the creators of Airplane!, once said of his own sleeper hit, “It made so much money that the studio couldn’t hide it fast enough.”
With Embassy out of business, the theatrical rights to Spinal Tap bounced around from Coca-Cola to De Laurentiis Entertainment Group to a L’Oréal property named Parafrance to, around 1990, Studiocanal, a subsidiary of the French company Vivendi SA. The home-video rights followed a separate path and landed with Sony Music Entertainment. None of those companies paid the four creators, and no one did anything about it until Shearer finally lost his patience. “We were approaching the 30th anniversary,” he says, “and this low-burning lightbulb begins to go off—‘Hey, wait a minute, what’s going on here?’ ”
A friend referred him to Amanda Harcourt, a U.K.-based intellectual-property consultant with a specialized practice helping artists secure the rights to their creations. “I always thought record contracts were mind-bogglingly abusive until I started reading movie studio contracts,” she says. Most of Harcourt’s clients don’t want to be identified publicly. Shearer does. “He said to me right at the beginning, ‘One of the reasons I want you is you’re not in Hollywood,’ ” Harcourt says, “ ‘because I don’t care who I upset.’ ”
In 2013, Harcourt advised Shearer to ask Vivendi for a complete statement of his interests in This Is Spinal Tap. Harcourt combed through the material that came back, and her conclusions were so shocking that Shearer’s response was as unprintable as some of his band’s lyrics. According to Vivendi, Shearer and his three creative partners’ share of total worldwide merchandising income from 1984 to 2006 was $81, and the total income from soundtrack sales from 1989 to 2006 was $98. That’s just dollars, with no zeros at the end. It was Stonehenge all over again: They’d expected feet and got inches.
Last October, Shearer sued Vivendi for $125 million. Asserting that the movie “has generated tens of millions of dollars in revenue in the thirty years since its original theatrical release,” the complaint notes that the four collaborators are entitled to 40 percent of all net receipts from the film, plus 50 percent of the gross receipts from the music, and that Vivendi “fraudulently underreported the revenues owed” them. The suit demands an honest accounting of what’s owed Shearer and the others and accuses Vivendi of deliberately failing to fulfill the terms of the original deal with Embassy. In response, Vivendi filed a motion expressing “genuine admiration for the talents of Shearer and his partners,” but argued that the company had “not received anything close” to what Shearer claims. “As a reality check on this lawsuit, even though Spinal Tap has garnered affection in the United States, it has generated U.S. theatrical revenue of under $5 million,” Vivendi’s motion reads. “Revenue from other sources and territories has been similarly modest.” (Vivendi’s attorneys declined to comment on the litigation.)
Shearer’s suit seemed easy to ignore—a spat started by a habitually argumentative artist. Then, on Feb. 8, he made room for three new co-plaintiffs: Guest, McKean, and Reiner. The band is back together again, and they’re demanding $400 million in damages. The other cast members aren’t commenting on the specifics of the litigation, deferring to Shearer as their spokesman on the matter.
Shearer, for his part, is happy for a chance to score a victory for Spinal Tap’s true creators and blow the lid off Hollywood’s bizarre accounting. “There is almost an overwhelming asymmetry that faces the creative artist,” he says. “You get told over and over again, ‘Well, it’s just a little cult picture, it doesn’t mean anything.’ And you internalize it. We love what we do, and they know it. And that is a rusty bayonet that we’ve handed them to insert in our innards whenever they want.”
One of the better-known axioms in Hollywood—let’s call it lesson No. 3—is that the majority of movies lose money. Unlike the other lessons, it’s impossible to tell whether this is true or just industry spin, meant to improve studios’ bargaining power. “All I can say is, I’m always amazed at the number of people who want to invest in the motion picture business,” Shearer says. “Nobody twisted Sony’s arm to say, ‘Hey, get out of the hardware business. Come make movies.’ They seem to know something.”
One well-known progenitor of the theory of Hollywood failure is Arthur De Vany. In a paper published in 2004, De Vany, now professor emeritus in economics at the University of California at Irvine, blamed pervasive reported losses on studio overhead, distribution charges, and any number of cost allocations that he had trouble precisely quantifying. The data available to him indicated that 78 percent of movies lose money—and just 6.3 percent of all movies earned 80 percent of Hollywood’s total profit over the previous decade. It’s research like this that explains studios’ efforts to persuade creators and talent to take as little as possible upfront in return for promise of payment later. It also helps Hollywood justify lobbying for stricter copyright protections, and even make the case for more media conglomeration.
And yet other studies have produced the opposite conclusion. In 2015, Sergio Sparviero, a communications professor in Salzburg, published research demonstrating that more than 70 percent of motion pictures distributed in 2007 by the six largest media conglomerates are likely to have generated a positive return for the producers. The difference between his research and De Vany’s appears to be that Sparviero accounted for the money movies make in secondary markets, such as home video, merchandising, and foreign licensing.
It’s precisely this revenue that Shearer believes is hidden from view in the Spinal Tap case. To take one example, the lawsuit accuses Vivendi of failing to account for a 2004 settlement payment of more than $1.6 million that the company received from MGM Home Video for underreported VHS and DVD revenue for This Is Spinal Tap. Shearer didn’t know about this payment until Harcourt dug it out of the material he received in 2013.
The more sophisticated the bookkeeping, the harder it can be to find the revenue. The most notorious technique is “cross-collateralizing,” or bundling the revenues and expenses of a collection of movies and then never fully separating out which movies made or lost money. It so happens that Spinal Tap was bundled during one of the many times it was sold. Shearer’s lawyers don’t know yet which movies it was bundled with—but presumably none of the others was also a beloved comedy classic whose popularity has been renewed constantly over the decades.
Muddying the waters further, a contemporary contract is likely to contain what Harcourt calls a “contractual matrix” among various parts of the company—that is, funneling revenue to related entities that, by the terms of the contract, don’t need to open their books. “When you go to audit Disney,” she says, “you say, ‘I want to see the contract between you and Buena Vista.’ And they say, ‘Well, you don’t have a contract with Buena Vista. That’s private.’ So you have no way of knowing how much Disney has allowed Buena Vista to retain.” In the case of Spinal Tap, Shearer is arguing that Vivendi’s ownership of Universal Music Group, which owns the music from the film, creates a similar conflict of interest.
The flip side of revenue reporting is cost allocating. Distribution is one highly malleable category; advertising and publicity is another. Shearer’s lawsuit questions Vivendi’s decision to factor in $2.5 million in marketing and promotion expenses and more than $500,000 in freight and other direct costs—all allegedly incurred years after the movie was released. Typically, when studios are questioned about their accounting tactics, they say the wording of the contracts permits this, and that the contract language is standard across the industry. “What’s a definition of a standard clause?” Harcourt says. “ ‘We all rip you off in exactly the same way.’ ”
Trying to track down what’s owed to you years later isn’t easy. “Audits are expensive,” says Los Angeles attorney Neville Johnson, who’s represented numerous artists against studios. His newest case is on behalf of Sylvester Stallone, who this month sued Warner Bros. Entertainment Inc. for “outright and obviously intentional dishonesty” when calculating the money owed to him for the 1993 hit Demolition Man. (Warner Bros. has yet to respond.) Suits like Shearer’s and Stallone’s represent the rare moments when these arguments spill out into the public sphere. Quite often the studios are simply too powerful to be called out, and the contracts reinforce that. “They require the audits to be done in secret, confidentially,” Johnson says. “Working talent is rightly concerned about being blacklisted or blackballed. And it doesn’t pay to litigate unless there’s seven figures involved, ordinarily.”
Increasingly, litigation isn’t even an option, because most contracts now stipulate that all audits result in arbitration. Johnson and others have long argued that the arbitrators are motivated to rule in favor of the studios, for fear that they would have difficulty finding work with any studio in the future.
But when the revenue the studios report defies basic common sense, it’s hard for someone like Shearer not to be tempted to push back. Take merchandising, for instance. The four creators of Spinal Tap are entitled to 5 percent of all gross merchandising revenue related to the film. If it really were true that Shearer and the others were collectively entitled to just $81 over 20 years, that would mean the movie brought in just $1,620 in merchandising revenue in that time. That hardly seems realistic to Shearer.
Why would anyone agree to a contract that allowed for so much secrecy, so much take-our-word-for-it? What Shearer remembers from the Spinal Tap deal is the feeling of powerlessness and desperation, and he says the studios were more than happy to take advantage of this. “We were basically in the position of beggars,” he says. “We’d been turned down by every studio in town. We wanted to make this movie. And what I’ve learned in the intervening years is that perhaps it’s best not to advertise that fact to people you’re going into business with.”
Once Shearer filed his lawsuit, Reiner and Guest called him, and Reiner in turn notified McKean. They not only joined the suit, they also filed notices along with Shearer to terminate and reclaim the copyright to the name “Spinal Tap”—a step many artists take once the copyright on their work has existed for 35 years. (Copyright reversion was designed as a way for creators to get a second chance at a copyright if, like Shearer and the others, they bargained it away the first time around.)
Vivendi, in its response to the lawsuit, argued that the creators made the film as a work for hire, and were hence not entitled to the copyright. It seems crazy, given that there’s plenty of evidence the four of them invented the band years before making their deal with Embassy, but calling a contribution work-for-hire is fairly common in copyright cases. In Shearer’s latest filing, he calls Vivendi’s position on the copyright a threat to scare him away from pressing his profit case. He also says it’s hypocritical for the company to cling to a film’s copyright while suggesting, based on what it claims is the film’s poor performance, there’s no money to be made with it.
Hollywood’s accounting practices haven’t been subject to a high-visibility challenge for more than a generation, since Art Buchwald sued Paramount Pictures Corp. over Coming to America, the Eddie Murphy hit that famously brought in $288 million and yet somehow made no profit. And that case was settled before Buchwald had a chance in court to open the studio’s books to the public. No matter how many people have accused the studios of systematically masking their profits, Harcourt says, the chances of it being investigated as a criminal matter are slim. “Los Angeles is Hollywood’s town,” she says. A class-action case would be almost as unlikely. “There are very specific rules about what constitutes a class action,” Harcourt says, “and you have to get court approval.” If something changes, it will be because of one angry person—or, perhaps, four reasonably irritated people—with an appetite for civil litigation.
“The thing that you gain if you’re very, very, very, very—that’s four verys—lucky in this business is some degree of leverage,” Shearer says. “I’ve gotten several communications from people who say, ‘Man, I’ve been in the same spot. I wish I could have been able to do what you guys are doing.’ ‘Get the bastards’ is sort of the consensus summation of what they say.”
As Shearer fully appreciates, he and his bandmates may be the perfect plaintiffs for a case like this. Their original deal with Embassy dates from the period before the Buchwald suit motivated studios to find ways to make their contracts more lawsuit-proof, such as adding the mandatory arbitration and confidentiality clauses. The creators may qualify for copyright recapture, giving them even more leverage. And Shearer, at least, has a war chest filled with all that Simpsons money—and is famous enough to get lots of publicity and start shaming the studios right away. They’re not the first to go after Hollywood accounting, but they could be the loudest.
Shearer chuckles. He gets the reference. “Well, how appropriate,” he says, “for ‘one of England’s loudest bands.’ ”