By: Hayden Gramolini
2000s sketch comedy fans can finally rejoice as one of the most critically acclaimed TV shows is now available again. After a fifteen-year dispute, world renowned stand-up comedian Dave Chappelle has settled with ViacomCBS regarding the digital syndication of “Chappelle’s Show”, allowing for access on both Netflix and HBOMax.
Chappelle’s Show was a sketch comedy show on Comedy Central, a subsidiary of ViacomCBS, from 2003-2006. The show was wildly popular but its creator and star, Dave Chappelle, walked away after just two seasons and a reported $50 million deal. Among other reasons, Chappelle decided to step away in part because of a rocky relationship with Comedy Central in which Chappelle believed he agreed to a bad contract.
Chappelle avoided the public eye for years after he left Chappelle’s Show until he returned to the stand-up stage with a series of specials with Netflix in 2016. His deal was for a total of $60 million and he has had an expected resurgence since. However, on November 1st, 2020, Netflix and HBOMax both broadcast Chapelle’s Show on their platforms after acquiring digital steaming licenses for the show. In a stunning move, Chappelle released a mini-special on his Instagram page, in which he told the public that Netflix removed his show from their library via his request and asked his fans not to watch it on HBOMax. He explained that this call to action was in response to Chappelle not being paid for any of the digital streaming licenses that the show generated revenue from, since he had left back in 2006.
This dispute brings light to a relatively new contract issue and that is the world of digital streaming licenses. A license is defined as “The permission granted by competent authority to exercise a certain privilege that, without such authorization, would constitute an illegal act, a trespass, or a tort.” Licenses are a commonly negotiated provisions in entertainment contracts and nowadays, digital streaming licenses are likely more important than any other. Specifically, a digital streaming license is the permission to broadcast content on a specific digital platform (ie. Netflix, Hulu, Amazon Prime, etc.).
What makes Chappelle’s dispute interesting is that while digital streaming licenses are now standard cash cows for digital content providers, they were impossible to imagine in 2003 when Chappelle signed his initial deal. At that time, the world still got all of its television entertainment from cable television. The entire market transitioning into an app-based industry was unfathomable then. Therefore, Chappelle’s contract understandably had no mention of revenue shares from digital licensing agreements. Since then, however, ViacomCBS has capitalized on these licenses and refused to pay Chappelle for any of them stating that he had no contractual right to the proceeds.
There really is a strong argument from either party’s perspective. ViacomCBS genuinely had no legal duty to pay Chappelle anything from the revenue of the show’s digital streaming licenses. The term was absent from the agreement and all other licenses were the property of ViacomCBS. Similarly, Chappelle was understandably frustrated that he received nothing from the only main, current means of revenue from the show that he created merely because there was unforeseeable change in access to content after he signed the contract. While there have been other disputes regarding the ambiguity of digital streaming rights, like Taylor Swift’s conflict with Spotify, Chappelle’s matter has particularly brought attention to this grey area of the law in the context of the consumption of older television shows on digital platforms.
Thankfully for everyone who keeled over laughing at the “World Series of Dice” or the “Playa Haters’ Ball”, Chappelle’s protest worked, and the two parties finally put the lengthy dispute to bed. Chappelle and ViacomCBS settled for an undisclosed amount of money in response to the boycott. Chappelle put out another mini-special in which he explained the reconciliation and publicly thanked his fans for their support as well as ViacomCBS’s president for making the situation right. As of February 12, 2021, Chappelle’s Show is now available on both Netflix and HBOMax to comedy fans’ delight.
Chappelle’s boycott and negotiations with ViacomCBS should be a strong reminder to the legal community about the care needed in contract drafting. While Chappelle had issues with the initial contact for other reasons, the digital streaming license issue was unpredictable in 2003. Lawyers should ensure that they utilize forward-looking language in agreements so that they can at least attempt to anticipate unexpected changes in the future. Creative language can go a long way in a contract and drafters should do their best to open as many doors as possible for revenue streams in business agreements.
Student Bio: Hayden Gramolini is a third year law student at Suffolk University Law School and a staff member for the Journal of High Technology Law. He attended Quinnipiac University for his undergraduate degree where he majored in Legal Studies and minored in Sports Studies. He has a strong interest in practicing In-House in the future and recently declared for a business law concentration.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
