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‘Smallville’ Profit Dispute Partially Settled

Suit sought more than $100M from Warner Bros.

A lawsuit against Warner Bros. Television that involved the onetime The CW hit “Smallville” will continue, but without one of the original production companies involved.

Tollin/Robbins Productions removed itself from a case Wednesday where it had sought tens of millions of dollars in what it said were lost profits because Warner Bros. sold “Smallville” to one of its properties instead of testing it on the open market where it could’ve made more money. The lawsuit attacks what is considered an in-house discount for the licensing of the show, something that could’ve potentially cut into the profit share agreements of groups like Tollin/Robbins.

The company, owned by Mike Tollin and Brian Robbins, was settled for an unannounced sum, according to The Hollywood Reporter. The two had sought more than $100 million from Warner Bros.’ vertical integration efforts in a lawsuit filed a little less than three years ago. The trial itself was scheduled to go in front of a jury in June.

But Warner Bros. isn’t off the hook quite yet. The other plaintiff in the suit, Killara Productions and Leonardtown Productions, will continue. The two production shingles represent the co-creators of “Smallville,” Al Gough and Miles Millar.

Warner Bros. had hoped to quash the suit before it makes it to trial, and it’s not clear whether the studio is seeking to make a similar settlement with Gough and Millar. If a settlement isn’t reached, the trial could expose what has become common Hollywood accounting practice, and have repercussions through the industry that haven’t been felt since Buchwald v. Paramount.

That lawsuit, which was first filed in 1990, was intended to be a breach of contract dispute between author Art Buchwald and Paramount over the 1988 Eddie Murphy film “Coming to America.” However, once Buchwald won the contract portion of the case, the real damage to the industry came when Paramount tried to limit damages, exposing an intricate Hollywood accounting system that could deem blockbuster hits like “Coming to America” financial bombs.

Since then, profit participation contracts have been written much more strongly to help negate the so-called “no net-profit” efforts of studio accounting. At the time, Paramount claimed that successful movies paid for box office bombs, and because of that, there were no net profits to share. The courts in that case disagreed, but Buchwald settled with Paramount before such a decision could start its road to becoming case law.

“Smallville,” which started on The WB, ended its run in 2011 on The CW. It was based on the Superman story, which Warner Bros. held the rights to from DC Comics.

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