In April a Texas jury decided Big Idea Productions, creator of the popular values-laden VeggieTales series, breached a contract with a distributor. The judge in the case has not yet issued a final ruling, but the jury said Big Idea must pay more than $11 million in lost compensation.
Texas-based Lyrick Studios, producer of Barney & Friends, claims the two companies had an unsigned contract starting in 1997. Lyrick began distributing Big Idea videos and CDs the next year. According to court documents, Lyrick paid Big Idea more than $40 million from the profits in four years, saying it had exclusive rights to sell VeggieTales products in North America.
But in December 2001, Big Idea terminated the relationship and announced a new distribution deal with Warner Home Video. Lyrick filed suit in January 2002.
Lyrick's lawyers argued that the companies had a binding, though unsigned, agreement. They cited verbal assurances and a number of memos. Two actions in particular, Lyrick argued, showed that Big Idea assumed Lyrick and Big Idea had a binding contract: In 1998, court documents say Big Idea bought back "plush rights" from Lyrick to produce stuffed VeggieTales toys. Lyrick also said Big Idea touted its distribution deal with Lyrick as collateral for a $24 million bank loan.
"We believe this case is simply about keeping commitments," Lyrick attorney Thomas Williams told the jury. "The parties did make a commitment to one another. Big Idea made those commitments, and we believe that Big Idea should be held to that commitment."
Big Idea's defense said the drafted agreement only laid out terms to guide the companies. Merely working together, attorneys said, does not imply or create an exclusive contract.
Mark Litwak, entertainment lawyer ...1