CLS Blue Sky Blog

Oscar Law: Governance and Other Legal Issues Involving the Industry of Elite Entertainment Awards

(photo by Amanda Brown/Rutgers Law School)

Each year, roughly 35 million television viewers tune in to watch live telecasts of the Oscars, Grammys, Emmys, Tonys, and Golden Globes. That celebratory ritual of broadcast television, which honors the year’s best stage, screen, and recording performances, has grown from humble beginnings a century ago into a distinct cottage industry that now generates hundreds of millions of dollars in direct annual turnover.

In a new article, we present the first comprehensive scholarly account of how the law protects and regulates the entertainment awards industry. To capture an accurate snapshot of this unique legal landscape, we conducted a broad, cross-cutting legal survey of disparate subfields: federal tax exemption, corporate governance, intellectual property, tangible personal property, antitrust, contracts, federal broadcasting, and trespass, among others. Our findings lead us to conclude the following: The law plays a singularly pivotal role in helping the elite entertainment academies maintain the prestige, exclusivity, and goodwill of their world-famous awards, which, in turn, helps entrench their status as industry arbiters and cultural tastemakers.

We began our research by examining the academies’ corporate structure and tax-exempt status, finding that they all employ a somewhat obscure legal entity structure for their awards-related activities — the non-charitable, nonprofit business league. Under 26 U.S.C. §501(c)(6), non-charitable business leagues are entitled to federal income tax exemption and may engage in political lobbying activities that are off limits to charitable nonprofit organizations exempt under §501(c)(3).  But the internal dynamics of a business league can facilitate anticompetitive conduct among industry competitors, thus implicating the market-regulating principles of antitrust law. Allegations of monopolization and anticompetitive collusion thus emerged as a recurring theme in our review of civil litigation. In 2019, for instance, the U.S. Department of Justice warned the Motion Picture Academy that a recent amendment to its Oscar award nomination criteria would disproportionately burden films produced by internet streamers and, thus, might violate federal antitrust laws.

Second, we examined each academy’s internal rules governing admission to the voting membership and eligibility for award nomination.  Both areas turned out to be significant sources of controversy, but the academies have the upper hand. We found that courts tend to exercise judicial restraint when reviewing an academy’s internal deliberations in deference to a private organization’s right of self-governance. One notable example involved the $75 million lawsuit filed by the late borscht-belt comedian Jackie Mason against the Broadway League, which had ruled that his one-man show Jackie Mason: Politically Incorrect was ineligible for a Tony Award. The court dismissed Mason’s claim of unfair bias against one-man acts as “patently frivolous” and rejected his argument that the Broadway League had breached a duty by failing to comply with its own Tony rules. Those rules expressly granted the nominations committee “power to make final determinations regarding all matters of eligibility,” which led the court to conclude that “[f]urther inquiry as to the wisdom of their action is precluded.”

Third, we examined laws and regulations relating to the production of annual awards-show telecasts. Because the academies are thinly staffed, they contract with vendors to procure the various specialized services and goods necessary to produce a major awards telecast. We found that academy-vendor relationships are not always amicable. One high-profile battle involved an especially bitter dispute over the interpretation of a renewal clause in a telecast broadcasting agreement between the Hollywood Foreign Press Association (“HFPA”) and Dick Clark Productions (“DCP”), the HFPA’s longstanding broadcasting partner for the Golden Globes. The parties’ long history of amicable collaboration had degenerated, in part, because of the HFPA’s “unbusiness-like display of misplaced priorities,” such as bickering over “whether to serve soup or caviar” rather than tending to more serious matters like understanding and assenting to written contract terms governing contract renewal of its broadcasting agreement. The court ultimately sided with DCP, but only after rendering 50 pages of factual findings and conclusions of law, prompting the court to lament that “[r]esolution of [this] dispute . . . should not have required a trial.” Other legal aspects of telecast production involve enforcement of ticket transferability restrictions and federal regulations governing the broadcast of fleeting expletives over public airwaves, such as Bono’s infamously profane utterance, “This is really, really fucking brilliant!,” at the 2003 Golden Globes. The Federal Communication Commission’s fleeting expletive regulations have deeply affected live broadcast protocols for entertainment awards despite litigation challenging their validity reaching the U.S. Supreme Court twice in recent decades.

Fourth, we examined the reliance placed by academies on property, copyright, trademark, and contract laws to protect, control, and exploit the most important symbols of their brand identity. For instance, we found that courts generally uphold alienation restraints on the sale and transfer of award statuettes, but that a robust underground auction market has long evaded the academies’ enforcement efforts. Yet it was our archival plunge into the annals of intellectual property litigation that unearthed one of our most surprising discoveries: a 1989 federal district court decision holding that the copyrighted design of the iconic Oscar statuette reverted to the public domain in 1941 because the Motion Picture Academy had exposed its work to copyright-divesting general publication by allowing award “recipients to advertise the Oscar for their own commercial benefit.”  That industry-rattling decision remained in place for two years until the Ninth Circuit eventually reversed it.

We believe that “Oscar Law,” as we’ve coined this legal subfield, deserves scholarly attention because the entertainment awards industry has matured into an important, highly visible microeconomy. The industry’s direct economic impact represents a relatively small but notable slice of the broader show business sector. Its indirect economic impact has spawned a sprawling cottage industry of journalists and publications devoted to satiating the fervent worldwide demand for media coverage and commentary.  The major entertainment awards also punch vastly above their weight in cultural influence, having cultivated global reputations as standard-setting arbiters of the performing arts. The elite academies have achieved that stature by investing heavily in their brand identities, by legitimizing their nomination and award selections through the promulgation of written rules and democratic voting procedures, and by televising their awards in a showcase format that promotes public demand for their artistic disciplines.  The cumulative effect of those efforts has clothed the elite academies with thought leadership status that reverberates cultural influence across large domestic and international audiences.

This post comes to us from Reid K. Weisbord, a Distinguished Professor of Law and Judge Norma L. Shapiro Scholar at Rutgers Law School and a visiting professor of law at Columbia Law School, and from Jordan Bondurant, a 2024 graduate of Rutgers Law School. It is based on their recent article, “Oscar Law,” available here. A version of this post appeared on the Oxford Business Law Blog, here.

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