Law360, New York ( January 7, 2013, 12:39 PM EST) -- A recent entertainment industry trend has seen profit participants, or "talent," aggressively auditing and suing major movie and television studios to force them to properly account for the profit participants' back-end royalty payouts. These audits and subsequent lawsuits are poking holes in studio accounting systems and uncovering several improprieties, such as the studios packaging successful films and television series with less successful films/series or those that have not reached the threshold for profit participation, and/or licensing a successful film or television series to an affiliated cable network for less than its value. The profit participants have alleged that studios engage in these improprieties to keep more money by lowering the amount they have to pay to profit participants. Two recent cases, and big wins for profit participants, Celador Intern. Ltd. v. Walt Disney Co., 347 F.Supp.2d 846 (2004); and Ladd v. Warner Bros. Entertainment Inc., 184 Cal.App.4th 1298, are putting studios on the defensive....
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