Tommy Lawson
02-20-2010, 02:45 AM
With the previous discussion board for this topic down from Fuņaroboard, and knowing that perhaps there is a lot of speculation about what the agreements actually are between Toei and Disney are since there is no new Super Sentai adaptation for 2010, I've found information that will help explain things much more clearly. It appears the answer to why "BVS Entertainment" is used on the copyright notice of Disney-produced Power Rangers episodes has been right in front of us the whole time. This information are all taken from SEC Filings from back in the Fox Kids Worlwide days, which would become Fox Family Worldwide, and then ultimately ABC Family Worldwide, which is the current company listed.
Note that the original MMPR agreement never spells out the name of the sentai program as "Zyuranger" and is the reason we see "Galaxy Rangers" listed in the end credits, although the name "Galaxy Rangers" doesn't appear in the end credits of the original MMPR Season 1 episodes we're seeing now , so they're also not listed in the Reversioned End Credits either (I checked this). I am including here the most interesting and important info from the contract in the post. The entirety of it can be viewed here. For reference, the "Licensee" is Saban, and "Licensor" is Toei. The whole contract (with some payment information deleted so it can be viewed by the public) can be viewed here (http://www.secinfo.com/dSq2u.759.15.htm).
1. PROGRAM. A minimum of forty-fine (49) and a maximum of fifty-two (52)
-------
half-hour episodes of the live action children's television series entitled "Che
Je Yu Ranger" a/k/a "Galaxy Rangers".
3. TERRITORY. The "Territory" shall include:
---------
(a) SISI TERRITORY: The United States of America, its territories,
commonwealths and possessions, U.S. Military Installations located outside of
the U.S. and the U.S. Armed Forces Radio and Television Network.
(b) SINV TERRITORY: The Universe excluding the SISI Territory, Brazil,
Japan, Singapore, Thailand, Hong Kong, Malaysia, China, Korea, Taiwan,
Indonesia, Laos, Vietnam and Cambodia.
4. DELIVERY DATE. The episodes shall be delivered by Licensor to Licensee
-------------
on the following schedule:
(a) First 26 episodes prior to September 30, 1992;
(b) Next 8 episodes prior to October 31, 1992;
(c) Next 5 episodes prior to November 30, 1992;
(d) Next 4 episodes prior to December 31, 1992;
(e) Next 5 episodes prior to January 31, 1993;
EX-10.35 3rd Page of 20 TOC 1st Previous Next Bottom Just 3rd
(f) Next 4 episodes prior to February 28, 1993.
5. LICENSE FEE. [*********************************XX] per episode payable
-----------
as follows:
(a) [*********************************X] executed by Licensor;
(b) The [*********************************XX] upon Delivery of each such
episode in accordance with the delivery schedule in Paragraph 4 above as
follows:
(i) First 26 episodes: [******]
(ii) Next 8 episodes: [******]
(iii) Next 5 episodes: [******]
(iv) Next 4 episodes: [******]
(v) Next 5 episodes: [******]
(vi) Next 4 episodes: [******]
6. MERCHANDISING PARTICIPATION. Provided that Licensor is not in material
---------------------------
default hereunder, Licensor shall receive an amount equal to [******************
************************************************** ****************************XX
************************************************** ****XX] Notwithstanding
anything to the contrary contained in this Agreement, this Agreement, including
without limitation the rights and obligations of the parties herein,
[************************************]
7. LICENSED RIGHTS. Licensor hereby grants to SISI in the SISI Territory
---------------
and SINV in the SINV Territory the sole and exclusive rights ("Licensed
Rights"), under copyright or otherwise, during the Term, to: (a) adapt the
Program to be suitable for exploitation in the Territory, including, without
limitation, shooting new footage, adapting story lines and dialogue to
accommodate Licensee's international version, and incorporating existing footage
of the Program or other programs, all at Licensee's cost and responsibility and
at Licensee's discretion, and of a quality which is at least equal to that of
the original Program; (b) distribute, exhibit, lease, license, market, sell,
publicize, advertise, promote, perform and exploit the Program, and all dubbed
and other versions thereof and all elements, parts, characters,
characterizations or character names therein, either apart from or in
conjunction with the work, by way of All Media now known or hereafter devised,
including, without limitation, by way of Television Use, Theatrical Use, Non-
Theatrical Use, Video Cassette/Disc Distribution and Ancillary Distribution Use,
including, without limitation, by way of soundtrack albums and phonorecords,
music publishing, literary publishing, so-called "merchandising rights",
amusement and theme parks, and musical groups; (c) cut, edit, alter, add to,
subtract from, translate, dub in any languages and use outtakes of the Program
(specifically including, without limitation, the right to substitute all or part
of the music, effects and title). It is acknowledged that the music shall be
replaced for creative reasons and that consideration for the creators of the
original music is included in the License Fee; (d) include on the prints of the
Program and trailers thereof and in all advertising and publicity related thereto:
(i) Licensee's name, trademark, logo,
presentation announcement and copyright notice; (ii) the designation of Licensee
or any of its licensees as the distributor of the Program; and (iii) any
additional credits in connection with any adaptation of the Program; and (e) use
and license others to use Licensor's name and the name, voice, likeness and
biographical material concerning all persons and characters appearing in or
connected with the Program for advertising, publicity and trade purposes of
Licensee and its licensees and any sponsors of the Program.
14. ADDITIONAL EPISODES AND PRODUCTIONS. Licensor grants to Licensee the
-----------------------------------
exclusive option to acquire under the same terms and conditions herein: (a)
additional episodes of the Program; (b) each remake, sequel, prequel, spin-off,
series spin-off and feature film based on the Program or its underlying literary
material (including, without limitation, any character(s) therein); and (c) each
live action series which Licensor either presently owns or controls, or produces
or otherwise acquires within the period ("Option Period") commencing upon the
date hereof and ending eighteen (18) months after the first U.S. broadcast of
the Program (provided, however, that such eighteen (18) months shall commence no
later than September, 1993), such options to be exercisable by Licensee during
the Option Period.
Let there be no doubt that from the very day this contract was signed, on August 21, 1992, Power Rangers was intended to be a merchandise driven show, and Item Number 6 shows that. Number 14 is THE big one for Disney, since in addition to this particular contract, there are amendments to it, that IMO absolutely 100% explain why "BVS Entertainment" is used for the Power Rangers copyright.
[LOGO OF SABAN ENTERTAINMENT]
August 26, 1994
Mr. Masoyoshi Endo
Deputy Director
Toei Company, Ltd.
2-17, 3-Chome, Ginza
Chuo-Ku, Tokyo 104 Japan
Dear Mr. Endo:
Saban International N.V. and Saban International Services, Inc. (collectively,
"Saban"), and Toei Company, Ltd. ("Toei"), have entered into a Distribution
Agreement dated August 21, 1992, and thereafter have entered into additional
distribution agreements pursuant to which Toei has granted Saban exclusive
rights in Che Je Yu Ranger a/k/a Galaxy Rangers, Metalder, Dai Ranger, Spielvan,
and Kaku Rangers. Pursuant to these agreements, Saban includes action footage
from Toei's programs in new programs produced by Saban. For example, action
footage from Galaxy Rangers and Dai Ranger is included Mighty Morphin Power
Rangers.
Saban has granted Toei the right to exploit, in Toei's reserved territories, the
new episodes Saban creates using Toei's material. Saban's term of rights in
Toei's material is ten years with an option to renew for an additional fifteen
years; Toei's rights in the episodes Saban creates using Toei's materials, such
as Mighty Morphin Power Rangers, is for the same term as Saban has from Toei.
Toei and Saban now agree that Saban's term of rights under the distribution
agreements mentioned above and under future distribution agreements for Toei
live-action series will be in perpetuity and that Toei's term of rights, in
Toei's reserved territories, in the programs Saban produces using Toei's
material also will be in perpetuity.
Thank you.
Sincerely,
/s/ Bill Josey
Bill Josey
Senior Vice President
Business Affairs
Mr. Masoyoshi Endo
Toei Company, Ltd.
August 26, 1994
Page 2
ALL TERMS AND CONDITIONS SET FORTH ON THE PRECEDING PAGE ARE AGREED TO AND
ACCEPTED:
TOEI COMPANY, LTD. SABAN INTERNATIONAL SERVICES, INC.
By By /s/ Bill Josey
---------------------- --------------------------------
Its Its
[signed by an authorized signatory; SABAN INTERNATIONAL N.V.
signature illegible]
By /s/ R.A. de MEZA
--------------------------------
Its Managing Director
There are only two words that need to really be known - "in perpetuity." In contract language, that means forever (http://www.investorwords.com/2481/in_perpetuity.html). The fact that it mentions future distribution agreements will be in perpetuity is the real key here. The "BVS Entertainment" name exists to make sure these contracts and agreements remain valid. It makes me wonder if the "S" part of the BVS name is actually meant to be "Saban" and not "Studios" as Disney uses it to make sure the Saban-era contracts remain valid with Toei. Just as important is an agreement regarding the extension of what is called the "Option Period" Between Toei and Saban.
[Saban Entertainment Letterhead]
October 7, 1994
Mr. Masoyoshi Endo
Deputy Director
Toei Company, Ltd.
2-17, 3-Chome, Ginza
Chuo-Ku, Tokyo 104 Japan
Dear Mr. Endo:
Saban International N.V. and Saban International Services, Inc. (collectively,
"Saban"), and Toei Company, Ltd. ("Toei"), have entered into a Distribution
Agreement dated August 21, 1992, granting Saban certain rights in Toei's live
action children's television series entitled "Che Je Yu Ranger" a/k/a "Galaxy
Rangers".
Paragraph 14 of the Distribution Agreement grants Saban the option to acquire
additional live action series owned or controlled by Toei. Saban and Toei
hereby agree that the Option Period set forth in paragraph 14 will be extended
automatically by one year for each Toei series acquired by Saban, including Dai
Ranger, Spielvan, and Kaku Rangers.
Thank you.
Sincerely,
/s/ Bill Josey
Bill Josey
Senior Vice President
Business Affairs
ALL TERMS AND CONDITIONS SET FORTH ON THE PRECEDING PAGE ARE AGREED TO AND
ACCEPTED:
TOEI COMPANY LIMITED SABAN INTERNATIONAL SERVICES, INC.
By: /s/ [Signed by an authorized officer; By: /s/ Haim Saban
------------------------------------ -------------------------------
signature illegible] Its: ______________________________
------------------------------------
Its: __________________________________
Mr. Masoyoshi Endo
Toei Company, Ltd.
October 7, 1994
Page 2
SABAN INTERNATIONAL N.V.
By: /s/ R.A. de Meza
--------------------------
Its: Managing Director
The following are not from the contract agreements, but from other parts of SEC Filings, here is a basic explanation of how the Saban and Toei deal worked, and I'm also including, because it is hugely ironic now, the portion that includes Marvel. You can view it here (http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=1101067&SessionID=J8wqW6aPNiYd8G7).
Relationships with Marvel and Toei
The two most significant third party sources for characters on which the Company bases original programming have been, and are currently expected to continue to be, Marvel and Toei.
In June 1996, the Company and Marvel reached an understanding on the principal terms of an agreement granting to the Company the exclusive right to produce and distribute animated series, subject to other preexisting agreements, based on characters from Marvel's library of approximately 3,500 comic book characters, including Silver Surfer, Captain America and Daredevil. Marvel has agreed, subject to the negotiation and execution of definitive documents, to contribute a portion of the Company's production costs while the Company will bear all development and distribution costs. The parties are in the final stages of negotiations with respect to the definitive agreement, and the Company expects this agreement to be executed in the near future. The remainder of this paragraph assumes that the agreement is executed in its current form; no assurance can be given that the final agreement will not vary materially from the discussion which follows, or that any agreement will be executed. Pursuant to the agreement, the Company will commit to produce a minimum of 52 episodes of at least four new series over the next seven years. The Company will have worldwide television and home video distribution rights to all series produced for a period of 21 years. The term of the agreement may be extended for an additional three year period if during the first two years, the Company orders a minimum of 104 episodes and such programming is comprised of a minimum of 8 separate series, with each series based on a different Marvel character. While Marvel has retained all merchandising and other ancillary rights to its characters, the Company will receive a portion of worldwide merchandising revenues received by Marvel from characters or series broadcast on the Company's Fox Kids Network. The Company and Marvel will share U.S. syndication revenues. To date, the Company plans to develop, produce and distribute either a Silver Surfer or Captain America series for inclusion in the 1997-1998 Fox Kids Network schedule.
Although the Company's relationship with Toei dates from the 1980's, it was through an August 1992 distribution agreement that the Company acquired the right to adapt elements of Toei's live-action programming into new series. The first adaptation resulted in Mighty Morphin Power Rangers. The distribution agreement granted the Company the exclusive right to acquire additional Toei live-action programming through March 1995, subject to extension by one year for each new series so acquired. To date, the Company has exercised this option nine times, thus extending its exclusive right to acquire additional series through March 2004. The additional series acquired by the Company have been used as the basis for additional Power Rangers episodes, VR Troopers, Masked Rider and Big Bad Beetleborgs. The distribution agreement grants the Company the right in perpetuity to distribute, adapt and exploit all elements and characters of these series in all non-Asian markets through all media outlets including television, video, music, soundtracks, theatrical use and literary publishing and all other ancillary rights. In general, the Company pays Toei a fee per episode for all rights to exploit the applicable property throughout the world (other than certain parts of Asia) in all media and pays Toei a royalty based on merchandising royalties and/or certain distribution revenues.
This was further clarified on March 12, 1998, in another SEC Filing, that you can view here (http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=245769&SessionID=3bHjWv7XX3Ugrl7).
KEY CONTRACTS
The Company has master toy license agreements with Bandai America Incorporated ("Bandai") pursuant to which the Company has granted to Bandai worldwide toy manufacturing and distribution rights to three existing series, including Power Rangers, and to as many as two new series each year through the end of the year 2002. For the fiscal year ended June 30, 1997, and the six months ended December 31, 1997, 12% and 1%, respectively, of the Company's consolidated revenues and, giving effect to the IFE Acquisition as if it had occurred on July 1, 1996, 6% and 1% of the Company's pro forma consolidated revenues, for the fiscal year ended June 30, 1997 and six months ended December 31, 1997, respectively, were derived from its license agreements with Bandai. Should the Company's agreements with Bandai terminate, there can be no assurance that the Company would be able to enter into license agreements with other toy manufacturers on the same or more favorable terms. See "Business-- Merchandising and Licensing." In addition, two of the Company's 16 series for the 1997-98 broadcast season are based on programs originally developed by Toei Company, Ltd. ("Toei"), which is currently one of Japan's largest film companies. The Company has been granted rights in perpetuity to each of these series, including Power Rangers. Toei is obligated to provide the Company with an exclusive option to acquire additional children's programming through at least 2006. While the Company believes that its ability to successfully develop future programming is not materially dependent on its relationship with Toei, the possibility nonetheless exists that any change in the Company's relationship with Toei, or the failure of Toei to perform its obligations under its agreements with the Company, could have a material adverse effect on the business, results of operations and financial condition of the Company.
Note that the "option period" is eight years from the filing date in 1998. The additional two shows were "Beetleborgs Metallix" and "Power Rangers in Space" (Megaranger agreeement). From that point, one Super Sentai was adapted each year meaning that since the option was not exercised in 2009, the remaining option period for Disney is to the year 2016, based on continuing the agreement to the present. We could assume that Toei may try to take out a year for Masked Rider, since they were unhappy with that adaptation, which would make it 2015. Note that this excludes the earlier Super Sentai Series (Goranger to Jetman). I'm trying to be as conservative as possible with the "option period" estimate. Just as Sony will likely keep making Spider-man movies indefinitely to make sure the theatrical rights never revert to Disney (now owners of Marvel), nor 20th Century Fox with the X-Men and Fantastic Four movies, I have a strong feeling Disney will never allow the "Exclusive Option Period" to expire with Toei, provided they keep making Super Sentai shows, for the exact same reason the Marvel films will likely not revert back to Disney - they do not want the rights going to another entertaiment company.
Note that the original MMPR agreement never spells out the name of the sentai program as "Zyuranger" and is the reason we see "Galaxy Rangers" listed in the end credits, although the name "Galaxy Rangers" doesn't appear in the end credits of the original MMPR Season 1 episodes we're seeing now , so they're also not listed in the Reversioned End Credits either (I checked this). I am including here the most interesting and important info from the contract in the post. The entirety of it can be viewed here. For reference, the "Licensee" is Saban, and "Licensor" is Toei. The whole contract (with some payment information deleted so it can be viewed by the public) can be viewed here (http://www.secinfo.com/dSq2u.759.15.htm).
1. PROGRAM. A minimum of forty-fine (49) and a maximum of fifty-two (52)
-------
half-hour episodes of the live action children's television series entitled "Che
Je Yu Ranger" a/k/a "Galaxy Rangers".
3. TERRITORY. The "Territory" shall include:
---------
(a) SISI TERRITORY: The United States of America, its territories,
commonwealths and possessions, U.S. Military Installations located outside of
the U.S. and the U.S. Armed Forces Radio and Television Network.
(b) SINV TERRITORY: The Universe excluding the SISI Territory, Brazil,
Japan, Singapore, Thailand, Hong Kong, Malaysia, China, Korea, Taiwan,
Indonesia, Laos, Vietnam and Cambodia.
4. DELIVERY DATE. The episodes shall be delivered by Licensor to Licensee
-------------
on the following schedule:
(a) First 26 episodes prior to September 30, 1992;
(b) Next 8 episodes prior to October 31, 1992;
(c) Next 5 episodes prior to November 30, 1992;
(d) Next 4 episodes prior to December 31, 1992;
(e) Next 5 episodes prior to January 31, 1993;
EX-10.35 3rd Page of 20 TOC 1st Previous Next Bottom Just 3rd
(f) Next 4 episodes prior to February 28, 1993.
5. LICENSE FEE. [*********************************XX] per episode payable
-----------
as follows:
(a) [*********************************X] executed by Licensor;
(b) The [*********************************XX] upon Delivery of each such
episode in accordance with the delivery schedule in Paragraph 4 above as
follows:
(i) First 26 episodes: [******]
(ii) Next 8 episodes: [******]
(iii) Next 5 episodes: [******]
(iv) Next 4 episodes: [******]
(v) Next 5 episodes: [******]
(vi) Next 4 episodes: [******]
6. MERCHANDISING PARTICIPATION. Provided that Licensor is not in material
---------------------------
default hereunder, Licensor shall receive an amount equal to [******************
************************************************** ****************************XX
************************************************** ****XX] Notwithstanding
anything to the contrary contained in this Agreement, this Agreement, including
without limitation the rights and obligations of the parties herein,
[************************************]
7. LICENSED RIGHTS. Licensor hereby grants to SISI in the SISI Territory
---------------
and SINV in the SINV Territory the sole and exclusive rights ("Licensed
Rights"), under copyright or otherwise, during the Term, to: (a) adapt the
Program to be suitable for exploitation in the Territory, including, without
limitation, shooting new footage, adapting story lines and dialogue to
accommodate Licensee's international version, and incorporating existing footage
of the Program or other programs, all at Licensee's cost and responsibility and
at Licensee's discretion, and of a quality which is at least equal to that of
the original Program; (b) distribute, exhibit, lease, license, market, sell,
publicize, advertise, promote, perform and exploit the Program, and all dubbed
and other versions thereof and all elements, parts, characters,
characterizations or character names therein, either apart from or in
conjunction with the work, by way of All Media now known or hereafter devised,
including, without limitation, by way of Television Use, Theatrical Use, Non-
Theatrical Use, Video Cassette/Disc Distribution and Ancillary Distribution Use,
including, without limitation, by way of soundtrack albums and phonorecords,
music publishing, literary publishing, so-called "merchandising rights",
amusement and theme parks, and musical groups; (c) cut, edit, alter, add to,
subtract from, translate, dub in any languages and use outtakes of the Program
(specifically including, without limitation, the right to substitute all or part
of the music, effects and title). It is acknowledged that the music shall be
replaced for creative reasons and that consideration for the creators of the
original music is included in the License Fee; (d) include on the prints of the
Program and trailers thereof and in all advertising and publicity related thereto:
(i) Licensee's name, trademark, logo,
presentation announcement and copyright notice; (ii) the designation of Licensee
or any of its licensees as the distributor of the Program; and (iii) any
additional credits in connection with any adaptation of the Program; and (e) use
and license others to use Licensor's name and the name, voice, likeness and
biographical material concerning all persons and characters appearing in or
connected with the Program for advertising, publicity and trade purposes of
Licensee and its licensees and any sponsors of the Program.
14. ADDITIONAL EPISODES AND PRODUCTIONS. Licensor grants to Licensee the
-----------------------------------
exclusive option to acquire under the same terms and conditions herein: (a)
additional episodes of the Program; (b) each remake, sequel, prequel, spin-off,
series spin-off and feature film based on the Program or its underlying literary
material (including, without limitation, any character(s) therein); and (c) each
live action series which Licensor either presently owns or controls, or produces
or otherwise acquires within the period ("Option Period") commencing upon the
date hereof and ending eighteen (18) months after the first U.S. broadcast of
the Program (provided, however, that such eighteen (18) months shall commence no
later than September, 1993), such options to be exercisable by Licensee during
the Option Period.
Let there be no doubt that from the very day this contract was signed, on August 21, 1992, Power Rangers was intended to be a merchandise driven show, and Item Number 6 shows that. Number 14 is THE big one for Disney, since in addition to this particular contract, there are amendments to it, that IMO absolutely 100% explain why "BVS Entertainment" is used for the Power Rangers copyright.
[LOGO OF SABAN ENTERTAINMENT]
August 26, 1994
Mr. Masoyoshi Endo
Deputy Director
Toei Company, Ltd.
2-17, 3-Chome, Ginza
Chuo-Ku, Tokyo 104 Japan
Dear Mr. Endo:
Saban International N.V. and Saban International Services, Inc. (collectively,
"Saban"), and Toei Company, Ltd. ("Toei"), have entered into a Distribution
Agreement dated August 21, 1992, and thereafter have entered into additional
distribution agreements pursuant to which Toei has granted Saban exclusive
rights in Che Je Yu Ranger a/k/a Galaxy Rangers, Metalder, Dai Ranger, Spielvan,
and Kaku Rangers. Pursuant to these agreements, Saban includes action footage
from Toei's programs in new programs produced by Saban. For example, action
footage from Galaxy Rangers and Dai Ranger is included Mighty Morphin Power
Rangers.
Saban has granted Toei the right to exploit, in Toei's reserved territories, the
new episodes Saban creates using Toei's material. Saban's term of rights in
Toei's material is ten years with an option to renew for an additional fifteen
years; Toei's rights in the episodes Saban creates using Toei's materials, such
as Mighty Morphin Power Rangers, is for the same term as Saban has from Toei.
Toei and Saban now agree that Saban's term of rights under the distribution
agreements mentioned above and under future distribution agreements for Toei
live-action series will be in perpetuity and that Toei's term of rights, in
Toei's reserved territories, in the programs Saban produces using Toei's
material also will be in perpetuity.
Thank you.
Sincerely,
/s/ Bill Josey
Bill Josey
Senior Vice President
Business Affairs
Mr. Masoyoshi Endo
Toei Company, Ltd.
August 26, 1994
Page 2
ALL TERMS AND CONDITIONS SET FORTH ON THE PRECEDING PAGE ARE AGREED TO AND
ACCEPTED:
TOEI COMPANY, LTD. SABAN INTERNATIONAL SERVICES, INC.
By By /s/ Bill Josey
---------------------- --------------------------------
Its Its
[signed by an authorized signatory; SABAN INTERNATIONAL N.V.
signature illegible]
By /s/ R.A. de MEZA
--------------------------------
Its Managing Director
There are only two words that need to really be known - "in perpetuity." In contract language, that means forever (http://www.investorwords.com/2481/in_perpetuity.html). The fact that it mentions future distribution agreements will be in perpetuity is the real key here. The "BVS Entertainment" name exists to make sure these contracts and agreements remain valid. It makes me wonder if the "S" part of the BVS name is actually meant to be "Saban" and not "Studios" as Disney uses it to make sure the Saban-era contracts remain valid with Toei. Just as important is an agreement regarding the extension of what is called the "Option Period" Between Toei and Saban.
[Saban Entertainment Letterhead]
October 7, 1994
Mr. Masoyoshi Endo
Deputy Director
Toei Company, Ltd.
2-17, 3-Chome, Ginza
Chuo-Ku, Tokyo 104 Japan
Dear Mr. Endo:
Saban International N.V. and Saban International Services, Inc. (collectively,
"Saban"), and Toei Company, Ltd. ("Toei"), have entered into a Distribution
Agreement dated August 21, 1992, granting Saban certain rights in Toei's live
action children's television series entitled "Che Je Yu Ranger" a/k/a "Galaxy
Rangers".
Paragraph 14 of the Distribution Agreement grants Saban the option to acquire
additional live action series owned or controlled by Toei. Saban and Toei
hereby agree that the Option Period set forth in paragraph 14 will be extended
automatically by one year for each Toei series acquired by Saban, including Dai
Ranger, Spielvan, and Kaku Rangers.
Thank you.
Sincerely,
/s/ Bill Josey
Bill Josey
Senior Vice President
Business Affairs
ALL TERMS AND CONDITIONS SET FORTH ON THE PRECEDING PAGE ARE AGREED TO AND
ACCEPTED:
TOEI COMPANY LIMITED SABAN INTERNATIONAL SERVICES, INC.
By: /s/ [Signed by an authorized officer; By: /s/ Haim Saban
------------------------------------ -------------------------------
signature illegible] Its: ______________________________
------------------------------------
Its: __________________________________
Mr. Masoyoshi Endo
Toei Company, Ltd.
October 7, 1994
Page 2
SABAN INTERNATIONAL N.V.
By: /s/ R.A. de Meza
--------------------------
Its: Managing Director
The following are not from the contract agreements, but from other parts of SEC Filings, here is a basic explanation of how the Saban and Toei deal worked, and I'm also including, because it is hugely ironic now, the portion that includes Marvel. You can view it here (http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=1101067&SessionID=J8wqW6aPNiYd8G7).
Relationships with Marvel and Toei
The two most significant third party sources for characters on which the Company bases original programming have been, and are currently expected to continue to be, Marvel and Toei.
In June 1996, the Company and Marvel reached an understanding on the principal terms of an agreement granting to the Company the exclusive right to produce and distribute animated series, subject to other preexisting agreements, based on characters from Marvel's library of approximately 3,500 comic book characters, including Silver Surfer, Captain America and Daredevil. Marvel has agreed, subject to the negotiation and execution of definitive documents, to contribute a portion of the Company's production costs while the Company will bear all development and distribution costs. The parties are in the final stages of negotiations with respect to the definitive agreement, and the Company expects this agreement to be executed in the near future. The remainder of this paragraph assumes that the agreement is executed in its current form; no assurance can be given that the final agreement will not vary materially from the discussion which follows, or that any agreement will be executed. Pursuant to the agreement, the Company will commit to produce a minimum of 52 episodes of at least four new series over the next seven years. The Company will have worldwide television and home video distribution rights to all series produced for a period of 21 years. The term of the agreement may be extended for an additional three year period if during the first two years, the Company orders a minimum of 104 episodes and such programming is comprised of a minimum of 8 separate series, with each series based on a different Marvel character. While Marvel has retained all merchandising and other ancillary rights to its characters, the Company will receive a portion of worldwide merchandising revenues received by Marvel from characters or series broadcast on the Company's Fox Kids Network. The Company and Marvel will share U.S. syndication revenues. To date, the Company plans to develop, produce and distribute either a Silver Surfer or Captain America series for inclusion in the 1997-1998 Fox Kids Network schedule.
Although the Company's relationship with Toei dates from the 1980's, it was through an August 1992 distribution agreement that the Company acquired the right to adapt elements of Toei's live-action programming into new series. The first adaptation resulted in Mighty Morphin Power Rangers. The distribution agreement granted the Company the exclusive right to acquire additional Toei live-action programming through March 1995, subject to extension by one year for each new series so acquired. To date, the Company has exercised this option nine times, thus extending its exclusive right to acquire additional series through March 2004. The additional series acquired by the Company have been used as the basis for additional Power Rangers episodes, VR Troopers, Masked Rider and Big Bad Beetleborgs. The distribution agreement grants the Company the right in perpetuity to distribute, adapt and exploit all elements and characters of these series in all non-Asian markets through all media outlets including television, video, music, soundtracks, theatrical use and literary publishing and all other ancillary rights. In general, the Company pays Toei a fee per episode for all rights to exploit the applicable property throughout the world (other than certain parts of Asia) in all media and pays Toei a royalty based on merchandising royalties and/or certain distribution revenues.
This was further clarified on March 12, 1998, in another SEC Filing, that you can view here (http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=245769&SessionID=3bHjWv7XX3Ugrl7).
KEY CONTRACTS
The Company has master toy license agreements with Bandai America Incorporated ("Bandai") pursuant to which the Company has granted to Bandai worldwide toy manufacturing and distribution rights to three existing series, including Power Rangers, and to as many as two new series each year through the end of the year 2002. For the fiscal year ended June 30, 1997, and the six months ended December 31, 1997, 12% and 1%, respectively, of the Company's consolidated revenues and, giving effect to the IFE Acquisition as if it had occurred on July 1, 1996, 6% and 1% of the Company's pro forma consolidated revenues, for the fiscal year ended June 30, 1997 and six months ended December 31, 1997, respectively, were derived from its license agreements with Bandai. Should the Company's agreements with Bandai terminate, there can be no assurance that the Company would be able to enter into license agreements with other toy manufacturers on the same or more favorable terms. See "Business-- Merchandising and Licensing." In addition, two of the Company's 16 series for the 1997-98 broadcast season are based on programs originally developed by Toei Company, Ltd. ("Toei"), which is currently one of Japan's largest film companies. The Company has been granted rights in perpetuity to each of these series, including Power Rangers. Toei is obligated to provide the Company with an exclusive option to acquire additional children's programming through at least 2006. While the Company believes that its ability to successfully develop future programming is not materially dependent on its relationship with Toei, the possibility nonetheless exists that any change in the Company's relationship with Toei, or the failure of Toei to perform its obligations under its agreements with the Company, could have a material adverse effect on the business, results of operations and financial condition of the Company.
Note that the "option period" is eight years from the filing date in 1998. The additional two shows were "Beetleborgs Metallix" and "Power Rangers in Space" (Megaranger agreeement). From that point, one Super Sentai was adapted each year meaning that since the option was not exercised in 2009, the remaining option period for Disney is to the year 2016, based on continuing the agreement to the present. We could assume that Toei may try to take out a year for Masked Rider, since they were unhappy with that adaptation, which would make it 2015. Note that this excludes the earlier Super Sentai Series (Goranger to Jetman). I'm trying to be as conservative as possible with the "option period" estimate. Just as Sony will likely keep making Spider-man movies indefinitely to make sure the theatrical rights never revert to Disney (now owners of Marvel), nor 20th Century Fox with the X-Men and Fantastic Four movies, I have a strong feeling Disney will never allow the "Exclusive Option Period" to expire with Toei, provided they keep making Super Sentai shows, for the exact same reason the Marvel films will likely not revert back to Disney - they do not want the rights going to another entertaiment company.