‘Spinal Tap’ Creators Reach Settlement on Royalties Lawsuit

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Harry Shearer as Derek Smalls in This is Spinal Tap

The co-creators of This is Spinal Tap finally settled a lawsuit they had filed four years earlier for what they claimed were classic “Hollywood accounting” practices that had deprived them of millions of dollars in royalties. On October 17, 2016, Harry Shearer filed a lawsuit alleging the French conglomerate, Vivendi S.A., and its StudioCanal film division, engaged in anti-competitive and unfair business practices, as well as fraudulent accounting directly related to its management of the cult-classic film. The initial action sought $125 million in compensatory and punitive damages. On December 18, 2020, the two sides finally reached an out-of-court settlement.

At the time of the original suit, Shearer said that the studio had granted them just $81 in merchandising income and $98 in music sales based in the industry’s convoluted accounting methods. A settlement with Universal Music over the recordings had been previously reached.

On February 7, 2017, Christopher Guest, Michael McKean and Rob Reiner, all of whom were key players in the rock mockumentary, joined Shearer’s lawsuit vs. Vivendi. At that time, they upped their request for damages, to $400 million, for “anti-competitive and unfair business practices, as well as fraudulent accounting,” they said in a statement at the time.

Fast forward to August 29, 2018. The plaintiffs celebrated a significant benchmark in the suit when U.S. District Court Judge Dolly M. Gee turned the amps up to “11,” when she ruled to allow the trial to move forward, thus defeating the defendants’ motion to dismiss.

Speaking on behalf of his co-plaintiffs, Shearer said: “We are pleased with the decision in our ongoing litigation involving the film ‘This is Spinal Tap.’ The Court’s ruling makes clear that we can pursue damages both for breach of contract and fraud, including punitive damages, based on the defendants’ failure to properly account to us for our profits in connection with This is Spinal Tap. It is equally important that we can pursue our right to recapture our copyright interests and other intellectual property rights in connection with the Spinal Tap film and music, so that we can control our own creative product and benefit from it, as we should have all along. We look forward to finally getting our day in court, at a trial, with the evidence that to date Vivendi has tried to hide from us.”

Watch Guest’s character, Nigel Tufnel, explain: “Most blokes are going to be playing at 10…”

The plantiffs even created a website, Fairness Rocks.

Shearer co-created the film, co-wrote the soundtrack and starred as the band’s bassist, Derek Smalls. The actor is also well known for his voicing of 23 characters on the long-running animated television series The Simpsons.

According to the original complaint filed in Los Angeles, CA, Vivendi and its agents, including StudioCanal and Universal Music Group, “willfully manipulated certain accounting data, while ignoring contractually obligated accounting and reporting processes, to deny Shearer and his fellow co-creators their rightful stake in the production’s profits.”

“Almost 40 years ago, Christopher Guest, Michael McKean, Rob Reiner and I created the somewhat legendary band Spinal Tap,” said Shearer in the announcement. “But despite the widespread success of the film and its music, we’ve fallen victim to the same sort of fuzzy and falsified entertainment industry accounting schemes that have bedeviled so many other creators. In this instance, the fraud and negligence were just too egregious to ignore. Also, this time, it was personal.”

Watch the classic airport security scene. “Do you have any artificial plates or limbs?” “Not really, no.”

In 1982, Reiner, Shearer, Guest, and McKean signed an agreement with Embassy Pictures for the production, financing and distribution of This Is Spinal Tap. The agreement ensured profit participation payments, at the rate of 40 percent of net receipts, to the creators based on all sources of revenue, including merchandise and music.

After two years of production, the film opened on March 2, 1984 and soon became a cult favorite. In 2002, the film’s lasting appeal led the U.S. Library of Congress to designate it as a culturally, historically, or aesthetically significant film.

The film was produced on a shoestring budget of $2.25 million. The complaint alleges that This Is Spinal Tap and its accompanying music and merchandise “earned tens of millions of dollars in revenue, according to the complaint – through re-releases, album and singles sales, merchandise sales, and distribution of the film in various formats across the globe over the course of the last 32 years,” noting that “these profits were not fairly shared with the four co-creators, cast, or crew.”

Watch the classic “Hello Cleveland” scene. “Go straight ahead… turn right at the next two corners…”

The suit alleges that “when Vivendi acquired the rights to This Is Spinal Tap in 1989… it began a concerted and fraudulent campaign to hide, or grossly underreport, the film’s revenues in order to avoid its profit participation obligations. In the past two years, Vivendi has altogether failed to produce an account of any Spinal Tap revenue.”

The suit claimed that between 1989 and 2006, total income from soundtrack music sales was reported by Vivendi as $98.

“This is a simple issue of artists’ rights,” said Shearer. “It is stunning that after all this time, two cinema releases, all the various home video format releases, all the records and CDs, and all the band-themed merchandise still widely available worldwide, the only people who haven’t shared Spinal Tap‘s success are those who formed the band and created the film in the first place.

“Though I’ve launched this lawsuit on my own, it is in reality a challenge to the company on behalf of all creators of popular films whose talent has not been fairly remunerated. I am just one person seeking redress for blatant injustice, but I hope this lawsuit will, in its own way, help set a new precedent for faithful and transparent accounting practices, and fair artistic compensation, industry-wide.”