Monday, 9 August 2010

Hollywood Babble On & On #572: Perception Can Be Expensive

Welcome to the show folks...

Today I'm going to talk a little about perception and how perception can cost you more than it should. This is especially true in the movie biz, which is 99% perception and 1% actual truth.


NBC-Universal has reportedly settled the lawsuit filed by actor Jack Klugman over profits from the show Quincy M.E., which he produced and starred in from 1976-1983. Universal claimed that despite a 7 year run with consistently solid ratings, and $242 million in revenues, and decades of reruns in both syndication and cable, the show had somehow lost $66.4million. Between 1998 and 2006 the show, according to NBC-Universal, generated $40.8 million in revenue, but still somehow
lost $16.5 million.

According to Universal they spent $57.3 million
on a show that stopped production in 1983.

Doesn't that sound a twee bit fishy?

NBC-U knows it sounds fishier than a fish market on the waterfront of Atlantis, so they settled as soon as they realized that Klugman wasn't going to die in time for them to weasel out of the suit.

Now the folks who run Universal TV think they were clever by trying to screw Klugman out of his share of the show, and then settling out of court for spare change on the dollar to keep the fact that the company's accounting makes the Central States Teamster Pension Fund of the 1960s look clean.

They weren't being smart though. In fact, they were being really stupid.

This is a classic case of what I call the Self-Fulfilling Idiocy. It's like a Self-Fulfilling Prophecy, only more stupid. It begins with someone, who thinks they're being smart, imagines an ordinary part of business, like paying residuals, as a problem. Being so clever they decide to "make extra money" by denying that person of their fair share, and then paying out a token amount if they raise a big enough stink.

But these self-proclaimed clever people are being really stupid. Sure, they can grab some extra cash, and then weasel out of paying out the full amount, but doing that is more expensive than they think.

This is where perception comes in.

People now perceive studios as monetary black holes when it comes to royalties, residuals, and profit shares. So they demand all their money up front, and squeeze as much as they can depending on the clout they wield. This is why the costs of making a film have an inflation rate somewhere between Zimbabwe and Weimar Germany when new technology should be making it cheaper. They are literally pricing themselves out of viability.


Construction magnate Ron Tutor & Co.'s purchase of Miramax is pretty much a done deal. But some folks like The Hollywood Reporter are wondering who would be willing to do business with the new Miramax, and how long that will take.

Why are they asking this question?

Well, there's that old bugbear perception again.

You see Ron Tutor entered the battle for Miramax with indie producer David Bergstein as the public face.

That was a mistake.

You see Bergstein is currently being sued by.... um.... how do I put it?..... EVERYONE!

Almost every person, bank, firm, guild, or company David Bergstein's done business with is suing him for unpaid bills.

Independent film-making is already a wildly uncertain business, and you don't want to go into that business with a Bergstein shaped cloud hanging over your endeavor. Tutor is saying that Bergstein was only involved in the initial negotiations, and will not run the company, but it will take time, and a lot of money to prove that to the satisfaction of the Hollywood community.

Perception is everything in Hollywood, and like everything else in Hollywood, it can be very expensive.

1 comment:

  1. I've always been a sucker for a good heist story and lo and behold Furious D provides one in the form of NBC/Universal and Jack Klugman.Creative accounting ,the movie business and human nature play lead roles in this saga.What swell folks these execs are,promoting themselves as milk of human kindness types for disasters,elections and causes dujour. Meanwhile a different standard is applied within the business. No wonder so many actors and actresses develop tough ,son of a bitch demeanors with this crap going on. I have to say that the current movie industry is giving off a very tired,stagnant vibe.The new project energy level is definitely muted right now. It appears as if TV is getting more talent and attention.Will movies as weknow them begin to vanish?