In 1952, singer Peggy Lee entered an agreement with Disney to work on the animated film Lady and the Tramp. Peggy Lee wr
Posted: Mon Apr 25, 2022 7:21 am
In 1952, singer Peggy Lee entered an agreement with Disney to
work on the animated film Lady and the
Tramp. Peggy Lee wrote six songs, sang three, and was the voice for
four characters in the 1955 film.
Lee was paid $3,500 for her participation. Disney retained all
rights to revenues earned from distributing
the movie to theatres and television broadcasting companies in
domestic and foreign markets. Lee
retained the right to residual payments at 12.5% for such items as
phonographic recordings sold to the
public.
Specifically, the contract gave Disney the right to distribute the
film including the rights to “any other
technology yet to be invented,” but § 12(b) of the agreement
provided that
Anything herein to the contrary notwithstanding, it is agreed that
nothing in this agreement
contained shall be construed as granting to us (Disney) the right
to make phonograph recordings
and/or transcriptions for sale to the public, wherein results or
proceeds of your services
hereunder are used.
In 1987 Disney began distributing videocassettes of the film. Lee
sued in March 1988, claiming she was
entitled to $9 million. Specifically, she claimed that she was
entitled to 12.5% of the profits Disney
generated from the sales of videocassettes of Lady and the Tramp on
the basis that the distribution of the
videocassettes was not authorized by the 1952 contract. Disney
countered that the distribution of the
videocassettes was authorized in the contract and that Lee was
therefore entitled only to residual
payments for her songs and voice performances, which would be
capped (under union rules) at
$381,000
Exhibit 1 Lady & the Tramp Project Income Statement *
For the year ended 12/31/87
Sales $ 77,970,000
Cost of Goods Sold 32,698,047
Marketing Expenses 3,610,772
General & Administrative 10,050,027
Profit before Tax $ 31,611,154
1. Assume that Lee prevails in the lawsuit; calculate the amount
of Lee's damages based
on 12.5% of profits. Support your calculation with an explanation
of your logic.
2. Assuming that Lee prevails, the court will allow her
prejudgment interest at the rate of 8%
from the date of demand (assume that this is from February 28,
1988) until the judgment
date (assume that this is March 1, 1991.) Using your calculations
in question 6, calculate
the interest that Lee will receive on her judgment and the total
amount, interest plus
damages, that Lee is likely to be awarded.
work on the animated film Lady and the
Tramp. Peggy Lee wrote six songs, sang three, and was the voice for
four characters in the 1955 film.
Lee was paid $3,500 for her participation. Disney retained all
rights to revenues earned from distributing
the movie to theatres and television broadcasting companies in
domestic and foreign markets. Lee
retained the right to residual payments at 12.5% for such items as
phonographic recordings sold to the
public.
Specifically, the contract gave Disney the right to distribute the
film including the rights to “any other
technology yet to be invented,” but § 12(b) of the agreement
provided that
Anything herein to the contrary notwithstanding, it is agreed that
nothing in this agreement
contained shall be construed as granting to us (Disney) the right
to make phonograph recordings
and/or transcriptions for sale to the public, wherein results or
proceeds of your services
hereunder are used.
In 1987 Disney began distributing videocassettes of the film. Lee
sued in March 1988, claiming she was
entitled to $9 million. Specifically, she claimed that she was
entitled to 12.5% of the profits Disney
generated from the sales of videocassettes of Lady and the Tramp on
the basis that the distribution of the
videocassettes was not authorized by the 1952 contract. Disney
countered that the distribution of the
videocassettes was authorized in the contract and that Lee was
therefore entitled only to residual
payments for her songs and voice performances, which would be
capped (under union rules) at
$381,000
Exhibit 1 Lady & the Tramp Project Income Statement *
For the year ended 12/31/87
Sales $ 77,970,000
Cost of Goods Sold 32,698,047
Marketing Expenses 3,610,772
General & Administrative 10,050,027
Profit before Tax $ 31,611,154
1. Assume that Lee prevails in the lawsuit; calculate the amount
of Lee's damages based
on 12.5% of profits. Support your calculation with an explanation
of your logic.
2. Assuming that Lee prevails, the court will allow her
prejudgment interest at the rate of 8%
from the date of demand (assume that this is from February 28,
1988) until the judgment
date (assume that this is March 1, 1991.) Using your calculations
in question 6, calculate
the interest that Lee will receive on her judgment and the total
amount, interest plus
damages, that Lee is likely to be awarded.