My wife found this news brief this morning. Since our Brand Squared division specializes in licensing, I found it interesting enough to offer some thoughts.
As you can see, it seems like most of the former "Happy Days" sitcom stars (all except Fonzie and Richie Cunningham that is) are more than a little annoyed with CBS these days. That’s the network owner of their former hit TV show "Happy Days". According to a law suit that they filed together, none of them have received a dime of licensing royalties from CBS since the show since it ended almost 30 years ago. These royalties come from merchandise such as lunch boxes, greeting cards, comic books, t-shirts, etc., that all display their likenesses on them. They claim that CBS profited immensely from sales of these products, while they made nothing. And now, they are asking for $10 million in compensation to recoup these losses.
Wow. That’s a lot of Potsie and Ralph Malph lunch box sales.
This blogger thinks that these former actors (and that’s what all of them are), have either gotten plain greedy or just gone crazy because there is no way a Happy Days licensing program would be worth that much $$$,
Does CBS owe Potsie, Ralph and Joanie some dough? You bet. They have a right to a small percentage of the royalties that were generated and taken by CBS. But, it’s hard to imagine that CBS could ever generate $10 million on its own for "Happy Days", much less for all of the hit TV shows it produced over the last 30 years. That’s just a lot of licensing money that doesn’t come so easy for one single property.
In a trade article from last year, CBS reported $340 million in annual merchandise sales to consumers. After you factor in retail markups and average royalty rates, CBS actually generates about $20 million in annual profit from all properties they license out– "Happy Days", "Survivor", "Price Is Right", "NCIS", and many more. What would "Happy Days" as a property contribute to that $20 million (when the property was in high demand)? Maybe 5%? So you have Happy Days generating $1 million in merchandise-related profit annually, when the show was at its peak. Happy Days was on for 10 years. Essentially, a forgotten supporting cast with a $10 million lawsuit seeks 100% of what CBS earned (because after all, why should the producers, writers, creators, Richie and Fonzie get a share of that revenue). One might expect that collectively, the former stars could earn upwards of 5 percent on that figure (again being generous). That would equal a combined pay-out of $50,000 among all the parties involved. Clearly, a far cry from the $10 million that is being demanded.
While the publicity surrounding this law suit might unearth other hidden pay outs that CBS (and other networks) has failed to make, it certainly won’t help these desperados collect money that just isn’t theirs. My estimates are probably off, but within the general ballpark of reality. Therefore, this blogger thinks that the Happy Days crew should put on a happy face, take their fair payout of a few dollars and drop this bogus law suit.