Who Owns James Bond?

Sony Pictures Entertainment President John Calley must harbor a deep grudge against his former boss, Metro-Goldwyn-Mayer chief Frank Mancuso.

Why else would Calley--who headed MGM’s United Artists unit for three years--attempt to snatch another studio’s most valuable movie franchise out from under it?

Calley alarmed many in the industry earlier this week by proclaiming Sony’s intention to create a new James Bond franchise based on a long-term licensing deal with Kevin McClory, producer of the 1965 Bond movie, “Thunderball,” and its 1983 remake, “Never Say Never Again.” Sony says its Columbia Pictures studio will make a series of Bond films based on original works created by McClory, James Bond novelist Ian Fleming and Jack Whittingham--all of whom collaborated on the screenplay for “Thunderball.”

Even in a business as cutthroat as Hollywood, where competitors will go to almost any length to kill each other--Calley’s action was seen as a breach.

“It’s just awful,” said the head of one rival Hollywood studio. A top talent agent agreed: “It goes way beyond the law of the jungle.”

Of course, these very same individuals may applaud Calley if he can successfully pull this off. In fact, Calley, who has a history with the Bond franchise and once persuaded Sean Connery to reprise his role as 007, may be regarded as a genius if he can bring his close friend back for one more go-round.

However, Calley may find himself in a vulnerable legal position since, in his former role as an officer of UA, he helped resurrect the Bond franchise with the hit “GoldenEye,” which grossed more than $350 million worldwide. Employment contracts typically include confidentiality clauses prohibiting former employees from exploiting trade secrets.

MGM is threatening to take legal action against Sony to protect its franchise and has retained noted entertainment litigator Pierce O’Donnell. Mancuso said Monday, “Today more than ever we will vigorously pursue all means to protect this valued franchise that United Artists and the Broccoli family have nurtured for more than three decades.”

Having collected more than $3 billion in worldwide revenues over the course of 35 years, James Bond is the most valuable franchise in motion picture history.

“When you have the most valuable asset in the world and someone says they’re going to steal it from you, you don’t take it lying down. John Calley has picked the wrong studio to poach from,” says O’Donnell, who for the last four years has acted as MGM’s lead counsel in protecting the Bond copyright.

Sony contends that it not only has the rights to launch a new Bond franchise, but that there’s nothing personal about it. Sony has a clear mandate from its Tokyo-based parent to build as many worldwide cross-promotional movie franchises as possible.

But, it hardly seems the studio is hurting for its own home-grown product given the array of potential franchises it has cooking with such titles as “Men in Black” and its upcoming releases “Starship Troopers,” “Godzilla” and “Zorro,” to name a few.

For more than three decades, nearly all film rights to Bond have been controlled by the late producer Albert “Cubby” Broccoli, and currently by his heirs, and UA, which has been responsible for 18 of the 20 Bond movies ever made. Ironically, in 1967, UA co-ventured with--of all studios--Columbia Pictures on the Bond spoof “Casino Royale.”

To start its own Bond franchise, Sony will have to fight a long, bloody court battle. Sources speculate that if MGM doesn’t take legal action right away, it’s only because it may be waiting until Sony develops a script that MGM can then claim as a copyright infringement.

While Calley supporters defend his action as sensible business, the timing of Sony’s announcement Monday was curious.

MGM, purchased last year by Kirk Kerkorian’s Tracinda Corp. and Australia’s Seven Network, is poised to launch a $250- million public offering next month (Nov. 10 is the target date) to dovetail with the December release of its next Bond movie, “Tomorrow Never Dies.”

O’Donnell said: “The only conclusion I can reach is that Sony made a calculated decision to damage MGM on the eve of its public offering and release of its new James Bond film. Because no reasonable person could fairly conclude that McClory has such rights.”

Other industry observers question Calley’s motivation.

“The timing clearly is aimed at MGM in a seemingly personal fashion,” said Jeffrey Logsdon, an analyst with Cruttenden Roth.

“It seems this is personally motivated, otherwise you wouldn’t get into this kind of warfare,” mused one Hollywood insider.

Responding to the suggestion that this is somehow personal, Calley said Thursday: “There is nothing personal about this. I have the utmost respect for Frank Mancuso and Kirk Kerkorian. There was no personal element in this situation, whatsoever.”

But, there is much speculation suggesting the contrary. Sources say Calley, who left UA last year immediately after the sale was finalized, was miffed at Mancuso for the way he was treated during the auction process. Once potential buyers completed their due diligence on MGM, Mancuso kept both Calley and MGM President Mike Marcus in the dark about what was going on with the sale, sources said.

“There’s a lot of ill will. Frank was pretty nasty to John and Mike. They were completely cut out of the loop when negotiations were going on,” recalls a former MGM executive.

When the company was sold for $1.3 billion, Calley was known to be furious about not being well compensated for his role in helping revitalize the then-moribund studio with such hits as “GoldenEye” and “The Birdcage.”

A source familiar with the equal settlements Calley and Marcus received characterized the amount as “a very small piece of the action.” Another source estimated it as a “low seven-figure amount.”

At the time of the sale, Calley and Marcus were aware that Mancuso was to receive a big chunk of change, but only recently did they learn how huge that sum really was--$14.5 million--in published reports about MGM’s filing with the SEC related to the company’s planned public offering.

This revelation, some suspect, may have pushed Calley to aggressively pursue the deal with McClory, though Sony co-Vice Chairman Gareth Wigan had apparently initiated talks with McClory before Calley came to the Culver City lot last November.

Wigan said in an interview Monday that he contacted McClory--whom he knew in the 1960s while living in London (Wigan is British)--about a year ago after reading an ad he took out in the trade publication Variety saying that his company planned to make a new Bond film.

“I said, ‘If you’re interested in talking to us, we’re interested in talking to you,’ ” recalled Wigan, noting he told Calley of the conversation when he came aboard. “I thought it was a 50-to-1 longshot.”

Wigan said he was well aware that “there have been legal disputes over the rights for a very long time.”

MGM maintains that it jointly owns the copyrights with Danjaq, the company controlled by the Broccoli family, to all the Bond films UA has made over the years. Mancuso said: “Kevin McClory’s claims of ownership to rights to James Bond have been disputed for over 10 years. Any claim that he can create a James Bond franchise is delusional.”

While Sony says it did its own due diligence long before making a deal with McClory, executives at the studio still seem somewhat unclear as to the exact legal status of the underlying rights, which makes Calley’s bold pronouncement appear oddly premature.

“Obviously, we would not be saying we intended to make a number of films based on these rights if we didn’t think we could,” Wigan said Monday, adding, “I can’t define it legally.”

O’Donnell says that a year ago he carefully studied McClory’s claim that he intended to make another Bond film called “Warhead 2000 A.D.” and concludes now, as he did then, that “McClory has absolutely no right to launch a new James Bond series.”

Fleming had written 10 Bond novels before McClory came to him with a movie idea and the two collaborated with screenwriter Whittingham on a script that Fleming eventually turned into the novel “Thunderball.”

When Fleming failed to credit McClory and Whittingham, McClory sued Fleming in a British court and in a settlement won the right to be listed as a producer on “Thunderball” as well as a right to eventually produce a remake, which 20 years later would be distributed domestically by Warner Bros. as “Never Say Never Again.”

Calley, who had been a top executive at Warner in the ‘70s, was recruited by former Warner chief Steve Ross to lure Connery back into the role of Bond, which proved to be a difficult production and major disappointment for Connery when the film bombed.

Whether McClory, and now Sony, control enough rights beyond the “Thunderball” story to build a new franchise is likely to end up in court. In the meantime, an interim solution to ease tensions between Calley and Mancuso might be for UA and Columbia to plan a remake of “Casino Royale.”

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Sony vs. MGM

James Bond is the most successful film franchise ever, generating more than $3 billion in worldwide revenue since its debut in 1962. The Bond series is the most potent weapon in MGM’s arsenal. Now Sony is threatening to snatch that franchise, claiming it has rights to make new Bond films.

MGM

* Its United Artists unit has made 18 of the 20 bond movies, including the upcoming “Tomorrow Never Dies.”

* For more than three decades, nearly all film rights to Bond have been controlled by the UA and the late producer Albert “Cubby” Broccoli. His heirs now hold his stake.

* The threat to its most important film franchise could hurt a planned public offering next month to raise $250 million.

Sony

* After years of disastrous performance, the studio is having terrific results this year but is under pressure to build worldwide movie franchises.

* The studio has licensed rights from Kevin McClory, who produced “Thunderball” in 1965 and a remake of that film, “Never Say Never Again,” in 1983, to make a new series of Bond films. MGM disputes these rights.

* The studio employs former UA chief John Calley--now Sony Pictures’ president--who has a history with the Bond franchise and a close relationship with original Bond star Sean Connery.