E.T., phone lawyers.
Steven Spielberg's little guy has just discovered that the law can be as perplexing as space travel. On Tuesday, the New York State Supreme Court enjoined MCA Records from distributing any more copies of its "E.T. -- The Extra-Terrestrial" storybook album, which features a song and narration by superstar Michael Jackson, who is under exclusive contract to Epic Records, a subsidiary of CBS.
CBS asked for the injunction and also is asking for compensatory damages and $2 million in punitive damages, according to CBS' outside counsel John Kuh. CBS charges MCA with "interfering with CBS' contractual arrangements with Jackson," and claims it approved the storybook project (which includes Jackson singing "Someone in the Dark") on the condition that it not be released before Christmas.
CBS also claims that MCA had agreed to withhold the single from the storybook so that it would not compete with Jackson's new CBS album, "Thriller," scheduled to come out Dec. 1. The MCA single, distributed to select radio stations, reportedly has been pulled back.
Judge Myriam J. Altman, saying that the simultaneous release of albums "may confuse consumers," stated that in the court's opinion, "MCA is clearly utilizing Jackson's reputation and selling power in the production and marketing" of the album and that CBS would suffer "irreperable harm" by losing the benefits of "an exclusive contract with a unique performing star," adding that "the essence of such a contract is its exclusive nature."
On Wednesday, MCA moved in New York's appellate division to stay the manufacturing and distribution injunction, but the motion failed. The court, however, did grant MCA's request that advertising already committed could continue. Robert Dudnik, outside counsel to MCA, said "MCA's position is that it had relied on representations made by Michael Jackson's representatives that those people would deal with CBS. It is traditional, for a record company 'borrowing' an artist, for the artist to make arrangements with his own record company."
Dudnik says there was "not even an inkling" of problems relating to a pre-Christmas release of the storybook album "until only two days before the album was shipped" on Nov. 12. "Quite to the contrary, Jackson's representatives were always eager to have the album released for Christmas," Dudnik says, adding that by the time MCA learned of the CBS position, it had already spent $1.5 million on the project and "had sold it to customers on the representation that it would be in the stores for the Christmas selling season, which traditionally begins the day after Thanksgiving."
There are big dollars involved, because retailers regard both the storybook and Jackson albums as prime Christmas packages. In its suit, CBS said it had spent "more than $5 million in promoting and advertising Jackson and his group, the Jacksons." Jackson's last solo album, "Off the Wall," included four No. 1 singles and sold more than 7 million copies. Both the storybook and "Thriller" were produced by veteran studio wiz Quincy Jones.
The court ruling did not affect the 450,000 storybook albums already shipped to retailers, but MCA reportedly has another 500,000 boxed sets ready to ship. The storybook, which lists for $11.98, includes a 24-page, four-color book, a four-color poster of Jackson and E.T. and a record with Jackson narrating the story over audio clips from the film.
Jackson and "E.T." director Spielberg could not be reached for comment. "E.T.," a box-office phenomenon, is expected to become a merchandising bonanza that could rival "Star Wars."