How everybody’s favorite Christmas movie about the perils of monopoly capitalism became a victim of monopoly capitalism.

James Stewart, as George Bailey, points at Lionel Barrymore in a scene from It’s a Wonderful Life.
(Getty Images)
It was the summer of 1993 when programmers at local TV stations and others across the United States opened their mailboxes to discover cease-and-desist letters from an attorney named James Tierney. The Nation has obtained one, sent to Jeffrey Baker of Good Times Home Video.

 

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“Dear Mr. Baker,” it begins, “if you have been exploiting the film [It’s a Wonderful Life] in any media, you have been violating my clients’ rights under the copyright laws of the United States.”

The broad outlines of the Wonderful Life copyright story have been known for decades, though the details have remained murky until now. It goes something like this: The movie underperformed at the box office in 1947 and was largely forgotten—until a copyright renewal “whoops” in 1974 saw the movie seemingly fall into the public domain. Local television stations began playing the free content, only to discover a strangely receptive audience among Americans of the early 1980s—when the film become a cultural behemoth. Then, somehow, Republic Pictures found a way to reclaim the rights and make a TV deal with NBC, where it has aired ever since.

Chances are you may be one of the millions who tuned in this Christmas Eve to NBC’s 30th annual airing of Wonderful Life. That’s a long run—and a lot of ad dollars collected by NBC off this once-seemingly-public-domain film, not to mention the sales dollars collected by Paramount, who eventually became the owners of Republic.

Last year, when iHeartMedia green-lighted our pitch for George Bailey Was Never Born, a 10-episode audio-documentary podcast series released this November about the movie as a cultural phenomenon, we went in search of how all this really happened. What we learned upends what everyone thought they knew.

James Tierney had been a prosecutor in New York and Los Angeles before remaking himself into a prominent entertainment attorney to the stars. It turns out that, while attempting to strong-arm would-be Wonderful Life broadcasters, Tierney was also in the midst of covering up his own role in a conspiracy to stage the theft of two paintings, Picasso’s Nude Before a Mirror and Monet’s The Customs Officer’s Cabin at Pourville, helping one of his clients collect $17.5 million in a bogus insurance settlement. Within a few years, Tierney would be caught and sentenced to eight months in prison and forced to surrender his license to practice law.

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None of this was likely known to Russell Goldsmith, the City National Bank scion turned chairman and CEO of Republic Pictures, successor to National Telefilm Associates (NTA)—the company that had lost the copyright to Wonderful Life—when he hatched his own plan with Tierney in 1993.

Los Angeles Times journalist James Bates got wind of the letters going out and headed to Republic headquarters in Beverly Hills. There, Goldsmith made clear to him that with Wonderful Life nearing its 50th anniversary, he was aghast at the dollars being left on the table by his company.

An era of mergers and acquisitions was dominating the media landscape, and Goldsmith was working to close the deal on what would become a $100 million dollar merger between Republic and Spelling Entertainment that would end up seeing him made president and CEO of Spelling underBlockbuster—at the time a giant in home video rental. The portfolio of intellectual property they could represent would be essential.

Tierney told Bates that regarding Wonderful Life he believed Republic legally held “two barrels of a shotgun.”

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The first barrel was music rights. When the movie fell into the public domain, it’s generally understood that all the screenplay drafts and the musical score written for the production fell too, part and parcel of the broader movie’s copyright. In a rather clever move, however, Goldsmith and Tierney went to four music publishers to purchase rights to songs created before the movie was made but used within the soundtrack, READ MORE