Gross Profit : FATAL SUBTRACTION: The Inside Story of Buchwald v. Paramount, <i> By Pierce O’Donnell and Dennis McDougal, With an introduction by Art Buchwald (Doubleday: $25; 527 pp.)</i>

<i> Bach is the author of "Final Cut: Dreams and Disaster in the Making of Heaven's Gate" and "Marlene Dietrich: Life and Legend," to be published in October by William Morrow</i>

“Buchwald v. Paramount” wasn’t about plagiarism. Or about Art Buchwald versus Eddie Murphy. Or about whether the film “Coming to America” made or lost money on a cost of $36 million and worldwide box office gross of $350 million. The case finally wasn’t even about the “breach of contract” the judge said it was about. It was about corporate arrogance, studio accounting, and contract unconscionability.

The basic beef looked a lot like plagiarism, and the authors of “Fatal Subtraction,” Pierce O’Donnell (the lawyer who represented Buchwald and producer Alain Bernheim against Paramount) and Dennis McDougal (who reported it all for the Los Angeles Times) begin with an epigraph from Dorothy Parker that “the only ‘ism’ Hollywood believes in is plagiarism.” This is cute, but irrelevant and immaterial as the case painstakingly and painfully unfolds in their pages.

What started it all was Pulitzer-prize winning columnist Art Buchwald’s eight-page movie idea (cut to two and a half pages) about an African prince who comes to America, is deposed at home even while being feted at the White House, and finds himself amusingly powerless in the Washington D.C. ghetto. Alain Bernheim sold Buchwald’s notion (and himself as producer) to Paramount’s Jeff Katzenberg, who happened to have a deal with Eddie Murphy. Katzenberg liked the idea enough to title it “King for a Day” and spend half a million dollars on two scripts before losing interest and moving on to Disney. Bernheim moved himself and the project to Warner Bros., which lost interest when Paramount announced the making of something that turned out to be “Coming to America,” with Eddie Murphy as an African prince who etcetera, etcetera--in New York instead of Washington. Paramount released the picture with a “story by” credit for . . . Eddie Murphy.


“Coming to America” sounded oddly familiar to Buchwald and Bernheim, and the whole thing might have been settled over lunch. Courtly and cultivated producer Bernheim thought so, and mentioned the uncanny story similarity to then-Paramount studio chief Ned Tanen, who took umbrage. Tanen was a late arrival to the development process and had not broken bread at Ma Maison the night Buchwald’s story was discussed by Paramount’s David Kirkpatrick with Eddie Murphy and his entourage. Several years, many lawyers, and untold millions of dollars later, it was not Buchwald’s story--or Murphy’s--but Paramount’s books that focused the case and, now, focus “Fatal Subtraction: The Inside Story of Buchwald vs. Paramount.”

It diminishes neither book nor case that very little in close to 600 pages will surprise anyone who has ever had a “net profit” deal with a major studio and wondered why studios were rich and they weren’t. If there are thigh-slappers in these pages they may be for Paramount stockholders, who will learn the extent of their investment in Eddie Murphy, or members of the Writers Guild, who will (or won’t) be surprised to learn what their dues pay for in vigilance of their rights and writes.

After an early, never unambiguous trial stage, Judge Harvey Schneider ruled that Buchwald’s “King for a Day” had provided enough basis for “Coming to America” to justify a breach of contract suit by Buchwald and Bernheim against Paramount, in spite of Eddie Murphy’s “story by” credit, based on two pages for which Paramount paid Murphy $400,000.

The second, more important trial phase determined compensation for Buchwald and Bernheim, including their contractual share of “net profits,” which Paramount claimed did not exist. The picture was still in the red despite worldwide box-office grosses of $350 million. Paramount “was legally within its rights to be an unimaginably lousy money manager,” lawyer O’Donnell tells us, but not to conceal the books and figures which might demonstrate that. Thus what the authors call “a minor breach of contract case” became “an historic legal battle over the way the motion picture studios keep their books and diddle their talent.”

“This was a cause, not a case,” we are told in the ringing first person narrative of lawyer O’Donnell. “My clients were no longer just Art and Alain, but every writer or producer who had ever been cheated in Hollywood.” O’Donnell styles himself “a dragon slayer,” defender of “a higher justice,” and takes on some juicy adversaries: Paramount chairman Martin Davis (“a Doberman pinscher in a Brooks Brothers suit”), “Coming to America” director John Landis (“something of a Hollywood pariah”; Eddie Murphy calls Landis “just a real bad guy” and “a power freak”), Murphy’s own manager (“Rasputin”), studio mogul Frank Mancuso (“Captain Queeg”), and lawyers for or from Paramount, who range from “the ultimate suit” to one characterized as “the honey badger,” in homage to a small and clever carnivore which “neutralizes much larger animals by biting off their testicles.”

The reader is boggled by glimpses at Eddie Murphy’s Paramount perks. The least of these was a trivial but eye-catching $235.33 breakfast bill from MacDonald’s, leading the authors to conclude that “the Mad Hatter was the chief financial officer in Hollywood.”


Apart from breakfast and the $200,000 per page story fee (possibly a record), there was Murphy’s $1.7 million “signing bonus,” his $8 million acting fee, plus 15% of the gross, as well as the by-now notorious monies paid to Murphy’s entourage. These included Arsenio Hall, who had a role in the movie and received a $30,000 writing fee for a “brief scene.” He would have had a story credit, too, had it not been opposed by director Landis, who was busy collecting $6 million on his gross percentage while billing the picture for his wife’s failed Academy-Award campaign as the movie’s costumer.

The surprising winkle is that Eddie Murphy’s production company was subject to the same “net profit” definition (“monkey points,” Murphy calls them) as Buchwald and Bernheim. Like them, Murphy’s company earned no profits from “Coming to America” because, as a Paramount spokesman admits, “net profits” are an “arbitrary convention,” one the authors say “balances the studio’s books on the backs of the net profit participants.”As one of Paramount’s legal mouths puts it: “(P)eople in this industry are not compensated on the profitability of a film to a studio . . . nobody is paid a part of the studio’s actual profits,” which the studio will go to any lengths to protect by refusing to open the books.

Judge Schneider ruled in favor of Buchwald and Bernheim in the breach-of-contract phase of the trial and awarded them $900,000 for fees they should have been paid under the contract of adhesion he found “unconscionable” to begin with. But three and a half years later, what Buchwald cheerily called “the lawsuit that will not die” isn’t dead yet. According to the authors it will “never be over. The studios could not allow it to be over.” Most vitally, Buchwald v. Paramount “challenged the status quo.”

“The net profit formula as written no longer exists,” the Judge pronounced from his bench. Whether appeal courts confirm or overturn this, challenging the studios’ version of the status quo is a true and overdue achievement, hugely abetted by Parmount’s arrogant refusal to open the books on the rib-tickling grounds of “trade secrets,” which must presumably remain secret from the very people creating the product on which the studio trades. Such issues are of obvious import to anyone working (or aspiring to work) in the trade, as well as to movie patrons and stockholders, who can pass up the overpriced popcorn and genuine-simulated-fake butter, but must ultimately pay for $235.33 worth of Egg MacMuffins, whether they want to or not. “The studio was the cost,” goes the most perceptive and damning line in the book.

As the Perry Mason voice of case and page, Pierce O’Donnell is every client’s night mare of a lawyerly windbag. One member of the Hollywood legal fraternity assures me that O’Donnell’s attempts to arrive through third parties at an out-of-court settlement with Paramount are handled in print with far less candor than O’Donnell ringingly demands of Paramount at his every paragraph indentation.

Conspiracy theory about “The Club” (an “emirate” of once and forever studio executives) is wildly over-stated, while the very real roles of agents and guilds in tacitly (or worse) colluding with Hollywood’s system of contracts and compensation is glossed over with breathtaking disingenuousness.

To call the movie industry’s net profit definition “the financial ‘crime of the century’ ” is a rhetorical grabber, but loses authority from a lawyer whose firm defended Charles Keating and Lincoln Savings and Loan.

For a book so self-celebratory, “Fatal Subtraction” seems sometimes oddly unself-aware. O’Donnell harps on the studios’ hits-pay-for-flops accounting philosophy, while defending his own 40% contingency fee (the basis on which he took the case) at least three different times with variations on “the winners subsidize the losers.” They do in any business; if it’s acceptable for lawyers, why is it so reprehensible for studios?

Still, everyone in Hollywood offered a net profit agreement should be required to produce an affidavit affirming he or she has read and understood “Fatal Subtraction.” Such reading will be informative, and a chore. The subtleties of the law and legal argument are not to blame: They’re rich and fascinating. It’s O’Donnell’s (or McDougal’s) constant grandstanding and attempts to make the book read like a movie (one part of the book is actually titled “Lights, Camera, Action!”) that belong on the cutting room floor along with all the Perry Mason posturing and dialogue.

O’Donnell’s legal victory (so far) requires far less wind than he gives it to sail, and seems to have infected him with Hollywooditis. “I began to feel like a movie maker myself,” he tells us, as “a trial lawyer’s craft demands mastery of all the elements essential for a successful motion picture.” He would do well to re-read Billy Wilder’s version of the Ten Commandments: The first nine are “Thou shalt not bore” and the tenth is “Thou shalt have final cut.”

The appeals court has final cut here, not O’Donnell, but even the “dragon slayer” succumbs to the lure of Hollywood. Following his deposition of straightforward and savvy veteran executive Tanen, O’Donnell admits, “I was beginning to understand the approach-avoidance conflict that is the very soul of the movie business. There was something eternally enticing about the power and prestige of making movies, even if it was a killing, thankless business about ninety percent of the time.”

The smartest line in the book reminds him “It’s not a fifty-yard dash. It’s a marathon,” but as usual, Art Buchwald in the final pages of this long, long book gets Hollywood righter, brighter, and far, far pithier: “It’s a nice place to visit,” he deadpans.