The Muppets

The Muppets was released a few weeks ago, the first theatrical release in over a decade, and is widely regarded as an excellent addition to the Muppets corpus. But it also contains a bit of legal finagling worth a second look. “What?” you say. “A Muppet movie? With legal conundrums?” Well… yes. In fact, the entire plot revolves around a lease-to-own contract, as pointedly lampshaded by Waldorf… which lampshading is itself lampshaded by Statler, for all your fourth-wall-leaning needs.

As a side note, there’s also a pretty good comic book series based on The Muppets.  Anyway, on to the show.

I. The Studio Lease

There’s actually a callback to The Muppet Movie going on here, where, near the end, Kermit signs the “standard rich-and-famous contract”. Well the contract terms apparently provided that the Muppets got the studio (and apparently their names? more on that in a bit) for about forty years, with an option to purchase the whole thing for $10 million at the end. This is actually a pretty common term in commercial leases. Lots of them have a provision which will permit the tenant to purchase the property after a time. Some leases are actually made with this in mind, i.e. the tenant wants to purchase the property but doesn’t have the capital right now, so it leases until the business gets up and running and then buys the property according to the terms of the lease. It’s a good deal for the lessor/property owner, as they get lease money now and potentially purchase money later.

A few little points though. The identity of the lessor isn’t made clear, so we never find out to whom they actually need to pay this money. The person that gave them the contract back in 1979 was “Lew Lord” (Orson Welles), the producer that greenlit their show. But he’s never mentioned, so again, it’s not clear who actually owns the property—or why that person would be okay with the property being condemned because the Muppets have abandoned it. Most commercial leases also have a provision which permits the landlord to retake possession if the tenant abandons the property. So whoever it was can’t have cared too much about it. It’s also not entirely clear why Statler and Waldorf seem to be able to confer property rights to the villain, or, indeed, what they have to do with anything. Which is kind of their schtick, when you think about it. In any case, it’s entirely plausible that the villain has purchased the underlying land, which would make him the successor to the original landlord and thus standing in his shoes with respect to the lease terms.

One final observation about the real property issues is that the fact that the lease is apparently for a few decades is plausible too. In the US, residential property tends to be leased for a period of months or a year, two years at the most, but commercial property is frequently leased for much longer periods. Terms of decades are not uncommon, particularly for larger businesses like supermarkets and department stores, or for businesses that tend to stay around for a while, like law firms. In the UK, on the other hand, and particularly in London, a significant portion of the residential property market is actually in leaseholds, so you’ll see a row-home or flat listed for a certain price, but also for a certain time, because the underlying property is owned by some ancient family, but it’s subject to a 200 year lease, and there’s still 150 years left on it, so you can plausibly buy the lease and treat it like a regular freehold, then sell the lease to someone else when you’re done.

II. The Muppet Name

But the contract also seems to have provided that the Muppets would lose the rights to their names if they lost the studio. This is… a bit weirder. True, things like copyright and trademark can be conferred by contract, and it’s possible for stars to find their likenesses licensed more-or-less permanently. Ironically, the female lead, Amy Adams, knows about this all to well. She starred in Disney’s kind-hearted send-up of its Princess line, Enchanted. Disney had considered adding Adams’ character, Gisele, to its official Princess property, but they realized they’d need to pay royalties to Adams basically forever for the use of her likeness, unlike with the animated characters, which Disney owns wholesale.

Where this gets sort of weird is that it’s not entirely clear what the movie thinks the Muppets are. They’re treated for all the world like people—Walter seems at least implicit evidence that Muppets are just a peculiar type of person—but they also tend to be self-aware about the fact that they’re puppets, or at least characters in a story, with some regularity. They seem almost existential about it at times, which is part of their appeal for a lot of people. So for someone like Adams, who is an actual person whose likeness is used as the basis for a character, the Muppets seem to be their characters. So it’s not quite clear if the Muppets are just playing themselves, like a lot of comedians do, or if they somehow are their characters. Someone like Adams may choose to license her likeness for a character in perpetuity—Mark Hamill hasn’t played Luke Skywalker in almost thirty years, but he’s on the cover of newly published Star Wars books to this day—they can still go on being themselves. But entertainers who aren’t actors as such, like comedians, may not actually be able to confer any rights to their acts. It’s not like anyone else can be Eddie Izzard or Robin Williams. They are who they are. So it seems most likely that the contract simply has to do with the Muppets name, because the contract isn’t going to prohibit the Muppets themselves from working ever again or from using their real names. Which is about as far as we can push that unless we want to develop a metaphysics of Muppets, something that goes beyond the scope of this particular blog.

III. Conclusion

The movie is really worth seeing, and it’s good to see that fresh blood doesn’t seem to have taken away the magic from the Muppets. There are even some legal bits to it, though they’re so caught up in the surreality of it all that the best we can probably do is to say that yep, those are some legal issues, and move on to enjoy the movie.

7 Responses to The Muppets

  1. I admit I encouraged it by asking a OPnce Upon a Time question, but we’re getting pretty far from superheroes here.

    • To be fair, movies are inherently a one-off thing. We’re not going to write a long series of posts about The Muppets, and it’ll probably be at least a year before another Muppet movie comes out. Besides, it’s the holiday season and everyone appreciates some lighter fare this time of year. We’ll be back to superheroes on Wednesday, though.

      • Chakat Firepaw

        I don’t mind the non-superhero stuff. Most of it has really been the same sort of stuff, looking at the law through the lens of abnormal realities.

        There is also the question of ‘what is a superbeing?’ Some of the non-superhero stuff has been about people who would be supers except for genre conventions saying they aren’t. e.g. Many of the Muppets are super-strong, super-tough or can fly.

    • I know its in the tagline, but personally I find some of the non-superhero posts to be highly interesting. The Muppets are precisely my normal entertainment, but then it did spawn an interesting post, and that is good enough for me.

  2. I’ve seen leases much longer than 200 years in the UK; for example, my parents purchased their home outright, but the land is leased on a 999 year ground lease that was around 150 years old at that point. Circa 2814 AD, in the unlikely event that someone keeps track of the land records that long, any distant descendants that might live here will have to think about moving…

    There’s a theory that the geological discoveries of the 19th century and realisation of the age of the Earth led to the vogue for really long leases, long term investments, and the rise of insurance companies in the late 19th century, but I’ve yet to see much in the way of proof.

    • Actually, I think a lot of it had to do with the fee tail, a form of bequest which prohibited heirs from selling real property. Maybe you can’t sell it, but that doesn’t mean you can’t lease it for a millennium or whatever. There’s a non-profit organization in the town where I grew up that is prohibited by the terms of its charter from selling an acre of land without replacing it with two. It’s the town’s largest landowner by a good bit, and there are big chunks of the municipality subject to ridiculously long-term leases that the organization has every intention of renewing. This is a slightly different situation–it’s actually a species of corporate law rather than property law, as there’s no restrictions in the deed–but it’s the same basic idea.

      In any case, this sort of bequest got to be such a problem in England that the infamous rule against perpetuities was introduced by precedent in the late seventeenth century. But even that wasn’t enough. Parliament made it possible to break an entailment by statute in 1826 and banned the creation of new fee fails completely in 1996. But there are still plenty of properties out there which are still subject to leases originated in the nineteenth century, probably because it’s just not worth the effort it would take to convert the fee from tail to simple.

      As far as why a lot of these things got started in the nineteenth century? A few theories come to mind, none of which have to do with prevailing ideological fads. First of all, insurance companies actually got their start in the eighteenth century (Lloyd’s was formed in 1715), and long-term investments had been around for a while. But the nineteenth century was really when you started to see industrial capital overtake agricultural and real estate capital. In tenth-century Europe, land was basically the only form of durable wealth, and owning land meant you were basically aristocracy. But as manufacturers, merchants, and capitalists generally started to get ridiculously wealthy, 1) they started to want more real estate, and 2) the significance of real estate as such started to decline. So the old houses found they were better off divesting themselves of land they weren’t really using anymore, only to find that there were legal impediments to doing so. Enter the long term lease.

  3. I contest one of your claims:
    “But entertainers who aren’t actors as such, like comedians, may not actually be able to confer any rights to their acts.”

    The comedian Gallagher found himself in sufficient demand as to be unable to fill all of the bookings he was offered, so he licensed his act to another person who took on the lower-tier bookings.

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