Profit Participation Practices Should Be Reviewed in Light of Recent Ladd Decision


On May 25, 2010, the California Court of Appeal issued its decision in the ongoing dispute between Alan Ladd, Jr. and Warner Bros. Entertainment, Inc. with respect to the manner in which Mr. Ladd had been accounted to for films that Warner had licensed as part of various packages to broadcast television and cable networks. Ladd v. Warner Bros. Entertainment, Inc., 2010 WL 2044878 (May 25, 2010). In light of the court’s ruling, which has been certified for publication and therefore can be relied upon by other profit participants, motion picture studios and other distributors of entertainment content should review carefully their own package allocation practices and profit participation definitions and consider whether changes to either might be warranted.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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