A Handy User’s Guide to Turnaround, the Hollywood Loophole That Might Kill Watchmen

Remember that time you spent over $100 million to produce that movie, and then another studio came along claiming that you didn’t have the right to produce it at all?

Of course you don’t. No one here does because we haven’t had the privilege of seeing $100 million let alone blowing it on a film production. That’s why what’s happening in Judge Feess’ California courtroom regarding Watchmen, Fox and Warner Brothers is such a mystery to most of us. All we want is to see a movie we’ve been patiently waiting for, but it’s in danger of being pushed back or worse, shelved, because of the complexities of copyright law and the fascinating little loophole known as “turnaround.”

To better understand this Hollywood business phenomenon, FSR wants to take you through the hypothetical life cycle of a film that gets caught in turnaround.

Stage 1: Acceptance

You’ve done it! After years of struggling with the right character arcs and dialog structures, you’ve sold your screenplay, “Echo in Eternity,” about a crooked diplomat who attempts a terrorist attack on Washington only to use the legal system and his immunity to fight for his freedom. Even more incredible, your crackerjack agent has gotten Gary Oldman interested in directing for the first time since 1997, Jeremy Irons wants to play the diplomat, and Catherine Keener is signed up to play the lead prosecutor who gets romantically entangled with a member of the diplomat’s envoy. Paramount was hooked and bought the package in the room. Congratulations! You’re on your way!

Stage 2: Denial

In a confusing move, the studio claims they want to hold off on your project despite eagerness from Oldman to get started and the scheduling window for Keener slowly closing. For reasons they don’t have to explain to you, they decide that it’s not the right time to make the film, and put the flick on hold for the time being. Luckily, hot shot producer Les Grossman has taken a shine to your project, and buys the rights from Paramount, including the title, with a Turnaround clause wedged deep within the text. A standard procedure really. He’s got five years to make the project himself or it returns automatically to the studio. The clause also stipulates that if the project has any “changed elements,” Grossman has to give Paramount first shot at making the film.

Stage 3: Rebirth

It’s been two years since you sold “Echo in Eternity,” and since then, you’ve sold two other screenplays and done some show running for a Showtime series that eventually bombed. One of those screenplays, “The Graveyard at Inchigeela,” made it all the way to production and premieres to giant praise from critics and from fans. It revives John Goodman’s career and sets you up as frontrunner for a Best Original Screenplay nomination. All the sudden, your agent is able to renew interest in “Echo in Eternity,” and Producer Les Grossman starts shopping it to other studios – including a very interested Universal. Keener is coming off filming, Gary Oldman is still jazzed to direct, and Irons has spent the last two years pretending to be a psychotic diplomat in methodical preparation just in case the film got the green light. Everything is coming back together.

Stage 4: A Change of Plans

One month from the start date, Oldman has to bow out of the director’s position because Christopher Nolan has finally prepped a sequel to The Dark Knight and needs him back in London. Grossman shrugs his shoulders, makes a phone call, and all of the sudden Jim Jarmusch is sitting in the director’s chair. It works for the best – Jarmusch’s vision of the project is genius, and the actors get along famously with him. Even better, the very interested Universal is still on board and decides to fast-track the project.

Stage 5: Gaining Buzz

What was once your small film has become a sensation. The production stills are leaked along with a trailer, and the internet lights up. Critics and bloggers start hailing it as the most anticipated movie of the upcoming season, and Universal decides to pump more money into the advertising campaign. But the attention hasn’t gone unnoticed. Paramount, your original studio, is starting to pay attention to the film’s giant potential, and, hooray, you’re being sued.

Stage 6: Your Day in Court

Citing the fact that your Producer failed to bring the project back to Paramount after swapping out Oldman for Jarmusch, the studio claims that Universal never had the rights to make the film. According to the Turnaround clause, and specifically to the segment about “changed elements,” Paramount should have been given the option to pick up or pass on the project in its new incarnation. Since Grossman already had Universal on the line, ready to roll, he went with them without consulting Paramount. Congratulations! The elation you felt at selling the project, at getting it off the ground, and at seeing a finished print is replaced by the distinct dread of not seeing it released.

Not to worry, though. Most likely, Grossman and Universal will have to give Paramount a large chunk of cash and a certain percentage of domestic receipts. The movie will probably not be completely canned, especially if all parties involved still see a chance to make some money off of it. Still, your parade is being rained on all over the place.

The Lesson

Turnaround exists for one reason. At some point, a producer owned a film but sold it to another entity who then made a disgusting amount of money and probably a truckload of awards producing it. In an effort never to look like a completely inept buffoon again, that producer and his team of lawyers invented the “changed elements” loophole in the Turnaround clause. Just in case.

So what have we learned here? Don’t do business in Hollywood without a lawyer with a magnifying glass, thick skin, and the foreknowledge that someone will screw you if they can profit from it. EIther that, or don’t change anything about your project, even down to the last penny of your budget, if you plan on procuring it from a studio in turnaround.

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