New Twist in Buchwald vs. Paramount : Movies: The William Morris Agency won’t have to hand over client contracts, but the studio may be able to obtain profit- : participation statements.

A Los Angeles Superior Court judge on Thursday backed the William Morris Agency’s refusal to hand over to Paramount Pictures confidential contracts on its producer clients. But the judge also appeared to pave the way for Paramount to obtain profit-participation statements on a smaller list of clients.

“I’m not interested in contracts or what could have been renegotiated,” said Judge Harvey Schneider. “I’m interested in what was actually paid (to producers) on a movie that turned out to be very successful.”

As opposed to contracts, profit participation statements would show how much money William Morris clients actually made after their movies were released. But like contracts, these kinds of financial statements are among the best-kept secrets in Hollywood. Their disclosure-- certain to raise the ire of those producers and stars involved--would provide a further peek into the labyrinthine business practices of the entertainment industry.

Paramount had subpoenaed William Morris contracts as part of its defense in the high-profile legal battle with humorist Art Buchwald and producer Alain Bernheim over their participation in the 1988 hit Eddie Murphy film “Coming to America.” In an earlier decision, Judge Schneider credited Buchwald and Bernheim for the movie’s conception.

Later, he threw out the net profit provisions of their contracts that would have sharply limited their compensation. Now it’s up to the court to determine the “fair market value” of their contributions to the film. Paramount had contended that the William Morris contracts would help the judge determine that question even though none of the clients had anything to do with “Coming to America.”

Buchwald attorney Pierce O’Donnell, along with William Morris attorneys, had argued that Paramount was trying to punish and harass the talent agency because one of its agents had agreed to testify as an expert witness on behalf of Buchwald and Bernheim during this fall’s final phase of the trial.

William Morris officials said that the subpoena would require opening up sensitive files on such stars with producer contracts as Barbra Streisand, Robert Redford, Clint Eastwood, Sylvester Stallone and Arnold Schwarzenegger.

Paramount attorneys responded that the contracts were relevant because the William Morris agent, Jeffrey Robin, would be testifying on common industry practice. And Paramount attorney Charles Diamond noted that William Morris is an interested party, and stands to make a 10% commission on whatever its client, Bernheim, recovers.

During a short hearing Thursday morning, Judge Schneider and Diamond argued over the relevance of looking at other producers’ contracts to determine what Bernheim and Buchwald are owed. “I want to know what he or she actually got, not what the contract said,” the judge said.

“It’s determined by the (net profit) formula,” Diamond said. “How can you escape that?” “I’ve already escaped it,” Schneider said in a reference to his controversial decision to throw out the net profit provisions of the Buchwald-Bernheim contracts.

Diamond argued that producers’ profits are based on the profitability of a movie, not revenues at the box office. The producers of a movie like “Airplane!”--which was a hit but didn’t cost much to make--would earn more than the producers of “Coming to America,” an expensive movie, Diamond said.

In response, Schneider said he intended to take the cost of the movie into account when determining the compensation for Buchwald and Bernheim--a statement that Diamond later said he considered a victory for Paramount.

In the meantime, though, Paramount intends to subpoena profit-participation statements from William Morris. “Are we still hot on the trail of William Morris?” said Diamond after the hearing. “Yes, but they’ll be looking through a different set of 400 boxes.”

The judge also limited the time-frame from which Paramount could subpoena documents. The studio had sought contracts from William Morris between the years 1975 and 1987. But the judge said only the 1986-87 time period, during which Bernheim rendered his producing services, were relevant.

William Morris attorney Peter Smoot declined comment on the prospects of another Paramount subpoena. But during the hearing, he said this kind of request “raises the same kinds of privacy issues.”