An announced sequel to It’s A Wonderful Life ran into legal problems in the 2010s – we examine the rights situation surrounding Frank Capra’s Christmas classic.

Widely regarded not only as one of the best Christmas movies but one of the greatest films of all time, Frank Capra’s It’s A Wonderful Life was a bit of a grower as festive classics go. Its status was buoyed by US TV broadcasts in the 1970s and 1980s and it had comfortably joined the canon of great American films by the time some enterprising film producers announced plans to make a sequel in 2013.

Presumptuously titled It’s A Wonderful Life: The Rest Of The Story, the independent sequel was set up by Star Partners and Hummingbird Productions. With a script by writers Bob Farnsworth and Martha Bolton, and 75-year-old Karolyn Grimes reprising her role as little Zuzu Bailey, the sequel was pencilled in for a 2015 release, but ran into negative PR and various legal problems shortly after it was announced.

In case you’ve somehow never gleaned the story from various spoofs and re-tellings, the original film sees James Stewart’s George Bailey contemplating suicide on Christmas Eve when he’s shown the value of a life spent in the small town of Bedford Falls by divine intervention. The sequel would have been a reversal of this idea, with Zuzu visiting her spoiled, rich great-grandson and urging him to change his ways.

Like Henry Travers’ second-class angel Clarence, who finds George contemplating suicide at the beginning of the original, you can see the troubles that led to the sequel project being cancelled. As we’ll explore, the ownership and rights to It’s A Wonderful Life are muddled all the way back to the source material.


The Greatest Gift

It’s A Wonderful Life is based on the 1943 Christmas short story The Greatest Gift, by American author Philip Van Doren Stern. After failing to attract interest from publishers, Stern self-published the 4,100-word story to send as a Christmas present to his friends and family. The story eventually came to RKO’s attention and producers optioned the film rights for $10,000 in 1945.

During the Second World War, Capra had enlisted in the US Army, and when he returned to filmmaking after the war, he co-founded an independent production company, Liberty Films, with fellow directors William Wyler and George Stevens. Aiming to make films without interference from established studios, Capra chose to develop The Greatest Gift as part of a nine-film deal with RKO.

After extensively rewriting the studio’s existing script with co-writer Jo Swerling, Capra brought the story to the screen as It’s A Wonderful Life.

With an eye on an Oscar-qualifying run, RKO brought the film’s release forward to Christmas 1946 from its intended January 1947 release. Sure enough, it earned warm reviews and a clutch of award nominations, but was also a financial disappointment due to strong competition from Wyler’s MGM picture The Best Years Of Our Life, which also went on to sweep the board at the Academy Awards.

Partly due to the film’s financial losses, Liberty Films would only complete one more film, 1948’s State Of The Union, before the studio was bought out by Paramount in 1951. Consequently, the studio held the rights (including the TV broadcast rights) to It’s A Wonderful Life until 1955, when they sold them off to National Telefilm Associates, (NTA) a company which specialised in syndicating films to local television stations, and later evolved into Republic Pictures.


Public domain

At a pivotal moment in the film, George’s scatter-brained Uncle Billy (Thomas Mitchell) manages to misplace $8,000 of the Bailey Brothers Building & Loans’ money. It may not be life imitating art, but NTA similarly misplaced the copyright to It’s A Wonderful Life when the company failed to renew it in 1974.

This clerical error effectively made the film part of the public domain, enabling it to be widely broadcast and circulated without incurring royalty payments to NTA. Over the next two decades, the company sought to regain control by acquiring the screen rights to The Greatest Gift, (enabling them to charge royalties for screening a work derived from Stern’s story) and then the original film negative and soundtrack.

In the meantime, NTA’s efforts effectively excluded Capra from financially and creatively participating in an effort to revamp the film during the colourisation fad of the 1980s, prompting both the director and Stewart to speak out against it. Colourised versions were eventually released by both Hal Roach Films and Republic that decade, and another, digitally enhanced colourisation was produced for a disc release in 2007.

On the other hand, this lapse allowed for productions like ABC’s 1977 Sunday Night TV movie It Happened One Christmas to exist as an unofficial remake. As well as aping the title format of Capra’s It Happened One Night, the film borrows extensively from the original script, including direct dialogue lifts, but gender-flips the story with Marlo Thomas’ Mary Bailey-Hatch and Cloris Leachman’s angelic Clara in the main roles. Had Twitter existed back then, we’d never have heard the end of it.

Also starring the great Orson Welles as Mr Potter, the remake slipped into obscurity as the film’s rights situation led to it being screened more and more frequently on US television. NTA and its successor, Republic Pictures Home Video, eventually won a landmark legal decision in 1993, restoring their copyright for the film.

The effect of this ruling was immediate as, in a marked contrast to the It Happened One Christmas situation, it led to a title change for another made-for-TV production. Even PBS’ 50th-anniversary filmed version of the 1947 hour-long radio play of the film wasn’t allowed out under the title “It’s A Wonderful Life”. With an enviable cast including Bill Pullman as George, Nathan Lane as Clarence, and the likes of Martin Landau, Sally Field, and Christian Slater in supporting roles, the 1997 special was called Merry Christmas, George Bailey instead.

Subsequent reimagined takes on the story have also gone by different titles, ranging from The Family Man, (which applies Bullseye logic to Nicolas Cage by showing him the life he could have had) to Click, (in which the Capra-esque quality that some critics ascribe to Adam Sandler’s pre-Netflix work is more obvious than in any other film of his aside from Mr Deeds).

We’ve also seen major franchises do off-brand re-imaginings of the familiar story, whether it’s Shrek (in Shrek Forever After) and the Muppets (in the lesser festive TV special It’s A Very Merry Muppet Christmas Movie). As far as we can tell, the only one that got away with directly referencing the title is Peter Capaldi’s Oscar-winning 1995 short film, Franz Kafka’s It’s A Wonderful Life, a much looser parody starring Richard E Grant as the creatively blocked title character.

Due to a complicated cycle of mergers and acquisitions, Republic’s library was eventually snapped up by Paramount’s parent company Viacom, but for some reason, the perception that the film was still in the public domain lingered…


The Rest Of The Story


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What would the world be like if It’s A Wonderful Life: The Rest Of The Story had got made? At the moment, 2018’s Mary Poppins Returns is the most belated sequel to a film that still features members of the original cast, 54 years later. This 2015 sequel starring Grimes would have beaten that by a good 15 years, so it would have had that going for it.

From what we know of the plot to the planned It’s A Wonderful Life 2, the film would have subverted the story to bring it more in line with Christmas Carol fashion. It also reminds us of that parody sketch from A Bit Of Fry And Laurie where Stephen Fry’s Clarence introduces Hugh Laurie’s Rupert Murdoch to a world in which he was never born (and much nicer it is too).

What’s more, Grimes would really be Zuzu in name only, if she’d be acting as the guardian angel this time.

When The Rest Of The Story was announced, producers Allan J Schwalb and Bob Farnsworth were seeking a director and a budget ranging from $25 – 32 million. Judging by the immediate negative reception when the sequel was announced in 2013, it wouldn’t have been smooth sailing, but then Farnsworth, also a co-writer, anticipated this.

Speaking to The Hollywood Reporter when the sequel was revealed, he said “look, no one can make another It’s a Wonderful Life. But our story is solid, and we are going in with our eyes open. There is no doubt about it, there will be a ruckus.

“But I have this motto: All it takes to be a leader is to have a cause you believe in. And the stronger you believe in the cause, the more adversaries you will have. And we strongly believe in this.”

Unsurprisingly, Paramount issued a statement later in the same week threatening legal action against any unauthorised sequel. To cut a long story short, every time a bell rings, an angel would need to find a legally distinct way of flying, like a helicopter or a jetpack or something.

We’ve had next-to-no updates on the sequel since then, but in a November 2020 interview for the film’s impending 75th anniversary, Grimes told Coming Soon that “it was a great project and I think it would’ve been a great story. […] But there’s still hope. They’re still hoping that it will happen. You never know.”

Nearly three-quarters of a century after it was originally released, It’s A Wonderful Life remains an essential Christmas story, inspiring countless affectionate parodies and spiritual successors over time. It’s a hell of a lot for any potential sequel to live up to, but handily, the original will be indestructible whatever happens, and its extended spell as a public-domain property has unquestionably boosted its now-classic reputation.


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