Sheen rehab could prove costly as show shuts down

Thu Feb 25, 2010 1:16pm EST
 
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By Matthew Belloni and Eriq Gardner

LOS ANGELES (Hollywood Reporter) - The future of CBS' "Two and Half Men" has become Topic A in Hollywood since production on the series was put on hold Tuesday after star Charlie Sheen checked himself into rehab.

Attention is focusing on Sheen-related contracts for the show. Two important deal provisions -- the "morals clause" in Sheen's contract with producer Warner Bros. TV and the "key man" language in the show's insurance policy -- might be driving forces behind what happens next.

As TV's top-rated comedy, "Men" is a cash cow, so CBS and WBTV have an incentive to keep the show going as long as possible. But Sheen, who also faces charges stemming from a Christmas Day arrest for assault in Aspen, Colo., might not return as quickly as the net and production company would like.

Which raises the question: Who's responsible for any financial hit from Sheen's absence?

WBTV and CBS declined to comment on Sheen's deal. But legal specialists offered their informed speculation. Here are some predictions for how this might play out.

First the morals clause:

Sheen likely has some kind of morals clause in his contract. Standard language allows employers to alter or terminate an employee's deal for bad behavior that harms the production. It would take a prolonged absence for TV's No. 1 star to get fired, but morals clauses often include liquidated damages provisions, meaning a star can be responsible for losses incurred due to his unruliness. Sheen reportedly earns more than $900,000 per episode, making him the highest-paid actor on TV. If he violated his morals clause, the show's producers might go after him to recoup some of the money it loses when he's away.

"If the conduct is considered a material breach" of his deal, says Aaron Moss, a litigator at Greenberg Glusker, "then the network may be able to file a lawsuit for breach of contract."   Continued...

 
<p>Actors Charlie Sheen (L), Jon Cryer (C) and Angus T. Jones celebrate backstage after winning the award for Favorite TV Comedy for "Two and a Half Men" at the 35th annual People's Choice awards in Los Angeles January 7, 2009. REUTERS/Phil McCarten</p>