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Owning Celebrity Rights Is Not As Easy As You

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Owning Celebrity Rights Is Not As Easy As You A Newsletter for City National Bank Entertainment Clients SPECIAL EDITION Owning Celebrity Rights is Not as Easy as You Might Think Read on for a candid interview conducted by Jeff Loeb, partner at Loeb & Loeb whose area of practice is estate planning and trust administration. Jeff will be interviewing Mark Fleischer. Mark Fleischer’s grandfather, Max Fleischer, founded Fleischer Studios Inc., in 1919. Max, along with his brother, Dave Fleischer, produced some of the world’s best-known cartoons, including the beloved Betty Boop. JEFF: What are the celebrity rights owned by and in connection with activities as a Their management team consists of a Fleischer Studios? For example, besides spokesperson for a product or service. president, a COO, heads of domestic the “image” of Betty Boop itself, does For example, we have licensed Betty and international licensing, a head of Fleischer own other rights? Is that com- Boop’s likeness to roughly 250 product creative affairs, a head of legal and mon among the owners of celebrity manufacturers in the United States alone. business affairs, a head of marketing/ rights? In today’s world, celebrity/character promotion and a head of new media/ attributes are being used in connection Internet. In today’s licensing market- MARK: Fleischer Studios owns the copyright, with a wide variety of digital and other place, I can assure you that anyone who trademark rights and other intellectual uses, from cell phone ring tones tries to serve as his or her own agent property rights in the Betty Boop char- to website avatars/hosts. creates a substantial risk of losing a acter and her family of characters, such lot of value, not to mention revenue. as KoKo the Clown, Bimbo, Pudgy and J: Is there an “art” to licensing celebrity What happens all too often is that the Grampy. Fleischer Studios also owns rights? Do you recommend the use of rights owner is not in the mainstream the rights in a later developed character, a licensing agent? of licensing opportunities and, lacking Baby Boop (Betty as a baby). Included M: Licensing celebrity/character rights is the experience, knowledge and expertise in this group of rights would be rights a true art of commerce, and, unless needed to evaluate licensing opportuni- similar to those that a living celebrity you are a genuine expert in that field, ties, jumps at whatever comes his or owns and has the right under California I strongly recommend that you not try her way. Often, however, the long-term law to pass on upon death, specifically this at home; rather, engage a profession- strategic play will yield far more than the the celebrity’s name, voice (in some al licensing agent. Let me use Fleischer deal that generates a modest amount of cases), signature, photograph and likeness. Studios as a case in point. King Features money in the short term but, in some J: What are the traditional methods of Syndicate (a unit of Hearst Holdings) way or another, damages the property. exploiting celebrity rights? What are has been our worldwide exclusive licens- some of the newer, developing methods ing agent since 1973. [ CONTINUES ] you’re seeing in the digital era? M: The traditional method of exploiting celebrity rights is to license the person’s or character’s attributes (such as likeness, name, signature, voice, etc.) to third par- ties for use on articles of merchandise J: What are some of the things you should M: This is one of the most important where you really need to rely on the consider before selecting a licensing aspects of celebrity/character rights own- knowledge and expertise of your agent agent? ership. If you are not vigilant in your who should know what was required efforts to enforce your rights, you create to be reported by the licensee on the M: Before selecting a licensing agent, you a risk either of those rights falling into periodic statements and to flag any omis- need to consider the depth of the pro- the public domain such that you lose sions. The most common mistake of spective agent’s expertise, sophistication your exclusivity, and, therefore, no one which I’m aware is letting too much time and infrastructure, all of which are need- needs to pay you a license fee for the use pass before exercising an audit right only ed to have a real understanding of this of those rights, or of being barred from to learn that the license agreement placed business. That understanding includes later pursuing any claims because of a time limit on your right to do so. knowing which licensees are the most the mere passage of time. Enforcement effective in which markets and are reli- J: How do you keep the Betty Boop image efforts typically begin with a sternly- able in their accountings, knowing how fresh and current particularly in view worded letter from legal counsel advising to efficiently weigh competing opportu- of Betty’s age and the changing demo- the infringing party to cease and desist nities, knowing how to create appropri- graphics in the consumer marketplace? from further exploitation of your rights, ate yet marketable style guides and other to recall any merchandise currently in M: Keeping Betty Boop fresh is an art unto artwork and knowing when and how to the marketplace and to account for, itself. It really comes down to the art- enforce the applicable quality standards and turnover to you, any and all funds work treatment of the character, at all required of the licensees. In addition, the received through the wrongful exploita- times retaining those elements that have licensing agent must be able to service tion of your rights. If that doesn’t work, made her so universally and timelessly the hundreds of licenses that may be in then the next step is to file a legal action popular, yet updating the character suffi- force at any given time. to enjoin the wrongful conduct and ciently to make her constantly accessible J: Are there any industry standards in obtain an award of monetary damages to successive generations of fans. We terms of agency commissions? including compensation for any dam- have always had to push the envelope a age to the reputation of the property little without stepping over the line. For M: A typical licensing agency agreement will occasioned by the wrongful conduct. Of example, Betty Boop has always been give the agent a commission of between course, doing this on a global basis has sexy, but without being sexual. What 25 percent to 50 percent, depending become a real challenge for many rights our culture considered sexy in 1930 is on the strength of the property and the owners simply because some countries not exactly what we consider sexy today. degree of infrastructure the agent will don’t recognize these rights as being If you compare the original 1930’s look be required to bring to bear, and will subject to exclusive ownership. of Betty Boop to her look today, you require the agent to obtain the owner’s will see a character who has gradually approval over key creative, business and J: How do you make sure you’re receiv- morphed from a primarily voluptuous, financial matters. ing all of the income due you from rounded body to one with a harder, the worldwide exploitation of your J: Is there such a thing as “too much more athletic one. Additionally, Betty rights? What are some of the common exploitation,” and what’s the downside has always been iconoclastic, but without mistakes made by rights owners in the associated with that? being radical. As society’s perception of audit process? those values has changed, Betty’s charac- M: The primary risk here is that consumers M: We’re very fortunate in that King ter has similarly evolved without having tend not to buy merchandise bearing a Features is very vigilant on our behalf in ever crossed over the line. I think one celebrity image or voice if that merchan- enforcing with the licensees the timeli- major reason we have been so successful dise is so widely available in the market- ness and accuracy of their accountings. in doing this is due to the partnership place or so prevalent in the consumer Their ability to do this is due in large that has developed between Fleischer population as to make it too common- part to the strength of the relationship Studios and King Features – the two place. A good example is the absolute King has with its licensees. Revenue companies have worked so closely glut of T-shirts, coffee mugs, key chains, shortfalls that result from erroneous together to balance the need to keep con- and other merchandise for sale in the calculations are typically caught by sistency in the character with the need to shops near Times Square in Manhattan. the agent upon conducting a careful develop and grow. Ultimately, we have You won’t find Princess Diana’s image review of the statements rendered by the to remain true to the foundational course on any of that merchandise for reasons licensee, for example, applying the wrong set by my grandfather. His signature that I think are obvious. formula for determining the license fee was surrealism, so there must always be J: What’s involved in trying to protect to be paid on a particular form of exploi- something surreal about Betty Boop. My your rights from infringement on a tation. The more difficult situation is grandfather gave her certain core values, domestic and global basis? What’s the where there has been a complete failure but, while remaining faithful to those, he risk of rights falling into the “public to report a particular source of revenue, was not afraid of taking risks.
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