Who's Watching the 'Watchmen' Case

By Eriq Gardner

Much of the attention in the "Watchmen" case has so far been focused on whether Warner Bros. will be able to distribute its $100-million-plus film next March, or whether Fox will be able to block the superhero blockbuster based on two deals it made with producer Lawrence Gordon in the early 1990s. Sunday's LAT updates the situation with an overview discussing the "changed elements" clause in Gordon's deals that could impact the case.

As illustrated with "Watchmen," projects that are put into turnaround trigger boilerplate "changed elements" language in contracts. In this case, Fox claims Gordon was required to resubmit "Watchmen" to Fox if the movie changed director, lead actor, script, budget or any crucial aspect of the film.

"Watchmen" indeed changed its core elements as it was passed from one studio to another. According to the LAT: "Forsaken film adaptations include versions from directors Terry Gilliam ("Brazil"), Paul Greengrass ("The Bourne Ultimatum") and screenwriter David Hayter ("X-Men"), with countless script revisions along the way. Joaquin Phoenix was once considered for Crudup's starring part..."

One might ask why Fox didn't more forcefully hold Gordon to his contract during those intervening years. Many questions will be answered if the case ever gets to trial.

But regardless of the outcome in the "Watchmen" case, the situation also exposes some of the interesting twists and turns of turnaround. For example:

A project-in-turnaround often gets revived by the studio that put it there in the first place. Such was the case with last year's "Michael Clayton," a film that was put on the shelf by Castle Rock until Tony Gilroy made progress in advancing his project by, among other things, attracting George Clooney as lead actor. Then, Castle Rock re-engaged its rights.

At other times, a studio might put a project in turnaround and then a second studio becomes interested in making it. The second studio might give the first either a financial interest in the film or some reimbursement for the first's development costs. As an example, "Watchmen" has bounced from Fox to Universal to Paramount to Warners. When Paramount became involved, it paid Universal 10% of its development costs, according to the LAT, with the rest to be paid had Paramount's version gone forward. Negotiations like this are common.

But this system largely depends on the cooperation and trust of all parties concerned. We're sure there are plenty of legal affairs lawyers checking their turnaround and changed element language--and watching the "Watchmen" case closely.