Paramount is looking to produce two more spinoffs of the successful Yellowstone franchise, after 1883 and 1923. But those plans have hit a roadblock with NBCUniversal reclaiming exclusive rights to broadcast the two new ones on its Peacock service after first airing them on Paramount Network. The NBC deal is set to end in 2029.
Apparently, the licensing of a remake, prequel, reboot, reimagining, sequel, or spinoff after the licensing of the original program is now a hot topic, but it has always been an issue among content buyers and sellers. And the language for the deals has been as complex as “first-refusal” and “last-refusal” clauses.
Commented international content distributor Ettore Botta: “When we draft a license agreement or a representation agreement of an IP, we have a clause for the rights of first refusal for a sequel and spinoff. Often the IP owners reject such a clause, we negotiate against other terms in the agreement, such as increasing our commission. If the sequel and/or the spinoff are greenlighted because of the success of the original property due to our work in selling the original property, then it should be acceptable that we also share some of the benefits from the sequel and spinoff.”
A former Fox executive who wants to remain anonymous gave a view from the IP owner’s side: “When Lucas made his Star Wars deal with Fox he insisted on owning sequel rights and also distribution rights after the first two sequels. The business executives at Fox felt that they had to agree to Lucas’ demands in order to make the deal with him. If people in the mid-’70s were to have known how enormously profitable franchise deals were to become, Fox might not have agreed to Lucas’ terms, but still Fox made a ton of money out of the deal.
But nothing is implied. You have to look at the language in the original license. I know from painful experience, having lived through Star Wars and its sequels at Fox,” he advised.
“Indeed. It’s all about the negotiated deal,” said former studio executive Len Grossi. “Nothing is standard unless it’s negotiated to be that way, and then [you can] fight over the interpretation. I have been in many meetings with some of the smartest attorneys in the business and the language and punctuation is ‘interpreted’ to support their positions. Example, you ‘may’ distribute globally or you ‘will’ distribute globally — two very different meanings and subject to context interpretation. Also, commas and “etc.” could also change the meaning of a sentence depending on the interpretation.”
Explained former studio executive Blair Westlake: “It is not a ‘given’ that the license for a series includes sequels and spinoffs of the original series. Reportedly, NBCUniversal has informed Paramount that it believes any spinoffs substantially similar to the original — featuring the same actors and characters — should fall under that deal. NBCU may be asserting that is the ‘spirit of the deal’ — that NBCU has first dibs on a spinoff. This will be an interesting one to watch and see how it unfolds.” Westlake added: “A court, judge, or jury will be scrutinizing the language of the contract on the alleged spinoff rights NBCU asserts it has, particularly since both parties were represented by experienced counsel.”
Westlake also explained that where a “last refusal” clause is included in a contract, it’s for the benefit of the licensee. “Typically, one offer is better in some areas, while less advantageous to the licensor in other terms. If one party has a ‘last right of refusal,’ the licensor is obliged to share (without naming other bidders) with the party with the last-rights to match the offer — the offer that the licensor is prepared to accept. It is then up to that licensee to decide if they wish to so match all the terms and conditions. They can’t cherry pick. One ‘trick’ some have played and can be very challenging to overcome (‘anti-circumvention’ clauses can help), is that the best offer contains one or more terms and conditions that the party with matching/last refusal right is incapable of performing. An example: upfront payment of a huge sum of money that the party with last refusal rights does not have the financial wherewithal to match.”
Over the years, in the drama area, NCIS has had the largest number of spinoffs (5), while in the sitcom genre, All in The Family (pictured above), has had seven spinoffs.
Leave A Comment