(1973) Tags: Universal
Newman v. Franchise Tax Bd.
Newman v. Universal Pictures
Newman v. Franchise Tax Bd.
In filing their tax return for 1975, the Newmans allocated their income from “The Sting” using a denominator of 30 (days in California) and the numerator of 25 (days filming), 25/30 or 83.33 percent of the income. For the years 1976 and 1977, the Newmans allocated “The Sting” income using a numerator of 30 (days in California) and a denominator of 54 (total contract days), 30/54 or 55.56 percent of the income.
The Franchise Tax Board rejected the Newmans’ allocation and excluded all travel days and days of exclusivity and included only the days on which Newman was called to work for actual filming. Since he was called to work for filming during 27 days of the contract (25 in California and 2 in Chicago) and worked in California on 25 days, the Board allocated to California 92.59 percent (25/27) of the Newmans’ gross income from “The Sting.”
Judgment: The trial court found in favor of plaintiffs/respondents Paul L. Newman and Joanne W. Newman and against defendant/appellant Franchise Tax Board.
Newman v. Universal Pictures
Appellants are Paul Newman, a well-known film actor, George Roy Hill, a prominent film director, and Pan Arts Production corporation, Hill’s closely owned corporation. Between 1972 and 1976, they contracted with appellee Universal Pictures to provide their services in two feature films, “Slapshot” and “The Sting,” in exchange for a percentage of the revenues. They filed this action for damages arising out of Universal’s distribution of revenues from the sale and rentals of video cassette versions of those films. Appellants allege in their complaint that after the emergence of video cassette technology in the early 1980s, Universal Pictures and other major motion picture studios conspired to fix the percentage of the revenue paid to artists, including Newman and Hill, for their services, in violation of sections 1 and 2 of the Sherman Act. Appellants allege that they therefore received smaller percentages of the cassette revenue for “The Sting” and “Slapshot” than they would otherwise have received.