Reports recently surfaced that the divorce proceedings of Jenna Dewan and Channing Tatum may be going to trial. After several years of negotiations, it appears the parties may be at a standstill due to the division of the asset “Magic Mike”. According to Dewan’s team, she simply wants what she is entitled to from the community asset under California law. Tatum’s team, however, claim “Magic Mike” is not solely a community asset and Dewan’s claimed value of the asset exceeds what would be considered a community asset under California law.
So, who is right? The answer, unsurprisingly, is the matter is complicated, and they both are technically correct.
Under California Law, Family Code §760, “Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.” As such, since Magic Mike was developed and created during the marriage, it is considered community property.
Many people find this unfair because one spouse may not have had a hand in developing and creating the asset at all. Those that look at it from that point of view, however, are mistakenly equating being compensated for work done on something and division of an asset. The first would be more of a reimbursement of income type issue, the latter is the division of an asset acquired by the community during the marriage.
If the asset “Magic Mike” were simply the first film and it was developed and created during the marriage, the analysis should be fairly straightforward as it is then considered a community asset and the value of that asset should be divided between the parties. In this case, however, “Magic Mike” is not simply the first film that was developed and created during the marriage. The complete asset “Magic Mike” includes the subsequent franchise films Magic Mike XXL (released on July 1, 2015) and Mike’s Last Dance (released on February 10, 2023). Dewan and Tatum announced their separation in April of 2018, so assuming their legal date of separation is around that time, there are two of the three films in the franchise that were created during the marriage and would assumably be considered community property.
But what about the last film that was not released until after the parties’ separation? Many would argue the value of that last film should be the separate property of Tatum because it was created after the date of separation.
Under California Law, Family Code §770, “(a) Separate property of a married person includes all of the following: (1) All property owned by the person before marriage. (2) All property acquired by the person after marriage by gift, bequest, devise, or descent. (3) The rents, issues, and profits of the property described in this section. (b) A married person may, without the consent of the person’s spouse, convey the person’s separate property.”
The income earned by Tatum for the third film would likely certainly be considered his separate property under California Family Law §771 as those earnings were earned after the date of separation (unlike the earnings of the first two films). The value of the third film as an asset, however, is not as straightforward because although it was created after the date of separation, it is the third in a franchise and arguably would not exist without the other two. Thus, the value of the third film is still linked to the first two, and some of that value of the third film is likely to be considered community property.
Additionally, the value of the franchise of all the films as a whole asset is likely different from the value each film. While it would make things simpler if we could assign a specific value to each film and divide the franchise in that way, there are other valuation considerations attached to the films, including potential intellectual property rights, good will valuations, product creations from the franchise, etc. In essence, the matter is extremely complicated and requires expert analysis to untangle. Even worse, equally credible, and competent experts can (and will) come to different values for the asset.
If you have the resources of Dewan and Tatum, retaining an expensive expert to conduct this analysis is worth the likely high value of the asset. For those of us with much smaller resources and assets, retaining an expert to determine the value for an asset may cost more than the value of the asset itself. The Court cannot, however, divide an asset without a determined value. In the case of Dewan and Tatum, they likely each have their own competing experts with significantly different values for the what the community interest in the “Magic Mike” asset is. If settlement is not reached and the matter goes to trial, then it will be up to the judge to hear that evidence and determine what they believe is the correct value and division under California law.
The solution to avoid getting yourself in a situation like this could be a valid and enforceable prenuptial agreement detailing assets such as “Magic Mike” is to be considered separate property rather than community property. Without that protection, California is a community property state, and the baseline standard is all community assets are divided equally.