Before High School Musical and Hannah Montana became multimedia juggernauts, Disney enjoyed major success (and still does) with the Cheetah Girls. The multi-ethnic girl group spawned two Disney Channel movies (a third one is in production) and sold millions of CD's and DVD's, not to mention warehouses of merchandise.
You'd think Deborah Gregory, the author of the books Disney built the franchise on, would be reaping the benefits of all this success.
Since selling her first Cheetah Girls book to Disney's Hyperion Books in 1998, Gregory has pocketed only a few hundred thousand dollars, mostly from publishing advances and co-producer credits. It's a drop in the bucket compared to the mountain of cash Disney has made from her creation, and not a nickel of it is part of the 4% "net profits" her 2001 contract promised.
Of course, as any creative accountant will tell you, net profits hardly ever materialize in Hollywood.
As Josh Getlin with the L.A. Times reports:
"This is an old, old story in Hollywood," said literary agent Nicholas Ellison, who has represented numerous clients in book-to-film negotiations. When studios are asked why an author has not received any net profits, he said, they often point to expenses that have grown larger than expected and contend that a hit picture has not, in fact, made money.
It's called "Hollywood accounting," and in some cases studios may be on solid ground, citing legitimate costs such as promotion and development. But in other cases, contracts contain definitions of "net profits" that make it all but impossible for an author to collect money that once seemed tantalizingly at hand.Asked about Gregory's case, longtime industry observers offered differing takes: She was a first-time author who didn't know the ropes when she negotiated her deal. Her attorney had only limited leverage because she was an unknown author. Disney officials grabbed whatever advantage they could, just like any studio. And although it's easy to be bitter about monster profits in hindsight, few could have predicted that the Cheetah Girls would become such a marketing sensation.
Others blame Disney: "What happened to Deborah was unconscionable," said an insider who is familiar with the Cheetah Girls project but asked not to be identified, citing business considerations. "At the very least, they should have cut her in on the revenue from the DVDs and CDs.""I never dreamed things would turn out the way they did," said Gregory, recalling the heady days when she had first written "The Cheetah Girls" and the Disney Channel expressed interest. "I really believed I would be able to share in everything that was created, that I was going to be a participant. Well, honey, that was a sham."Full Story: Eaten alive in the studio jungleDisney officials, asked to explain why Gregory has not received any net profits -- and to estimate the collective revenue that the Cheetah Girls has generated -- declined to respond. "Disney Channel doesn't comment on the terms of its contracts," spokeswoman Patti McTeague said in an e-mail.