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The complaint was filed today in Los Angeles Superior Court. This really sounds like one of the worst cases of phony-baloney studio accounting, not to mention sheer arrogance, in Hollywood history. Geez, when is Big Media going to stop this larceny? For instance, according to the lawsuit, NBC Uni is claiming that, as of the end of fiscal year 2006, Quincy M.E. has accumulated over $66 million in net losses — this after we all know that the 1976-1983 series is a classic shown all over the world even to this day. Through his Beverly Hills attorneys Johnson & Johnson [UPDATE: This firm and another are representing me in a class action lawsuit related to a personal matter. I forgot to disclose that when I wrote this post on a busy news day. I apologize for the omission.]
Klugman just gave this statement to me: “I don’t want their money. I want my money. I can’t believe they’ve collected over $250 million dollars and they say they are still in the hole. I have 28% of the net and they won’t even give me a copy of my contract. I worked for them for almost 8 years. I got up at 4 o’clock in the morning. I would rewrite. I did a ton of work. It’s on every day. I haven’t gotten a penny for years.”
Worse, the lawsuit claims that when Klugman asked to see his paperwork with NBC Uni, the network and studio ”have refused to give Plaintiffs a copy of the contract”. So on June 21, 2007, Klugman’s attorney wrote a letter to NBC Uni requesting “a copy of any and all contracts pertaining to Klugman and Quincy M.E.” On September 26, 2007, NBC Uni responded that it’s “unable to comply with your request … because it is NBC Universal’s policy not to provide copies of talent contracts or other confidential documents.” The lawsuit notes that, under the terms of the NBC Uni contract, Klugman and his company Sweater Productions are entitled to a “Participant Share” of 25% of all “net profits” attributable to Quincy M.E. But NBC is required to “properly account” for the net profits to Sweater/Klugman which has a right to audit the records of NBC Uni if a dispute arises. On March 5, 2008, Klugman’s attorney gave notice to NBC Uni of Klugman’s intent to audit the TV series.
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Same old story. It takes a lawsuit to see profits 100% of the time. And it will continue until someone actually sees it all the way through instead of settling the day before trial.
There’s a term I heard that fits the people who engage in such accounting skullduggery: A Shower of Bastards.
But I call the practise itself a “self-fulfilling idiocy.”
The studio cheats the star/writer/producer out of their fair share of royalties claiming mythical losses. Stars/writers/producers then start demanding more money up front.
Production costs go up, way beyond the rate of inflation, and suddenly the studio is looking at real losses.
So a stupid act of short term greed causes long term grief for the company because they’re pricing themselves out of business.
Am I the only one who cracked up at reading that Jack Klugman’s law firm is Johnson & Johnson?
Welcome to the wonderful world of showbiz. This is how studios and recording companies have been screwing artists out of their fair share of the pie ever since performing began.
they made a mistake here in that this entire issue is finally going to bite them in the ass. “creative accounting” might be age-old and rampant, but it is, at least in spirit, utterly unamerican, evil, and yes- illegal. its called fraud people. sooner or later, what was the old normal is today’s outlandish abuse. just ask the catholic church.
Another sobering example of what actors, writers, directors other creative types are increasingly up against in getting what is fairly owed them.
Thanks to vertical integration of the entertainment corporations, it becomes easier to hide profit and produce false evidence of profit loss. In addition, new profit models in the digital age necessitate new contract language and new form of accountability.
If Peter Jackson and Jack Klugman, with their resources and reputations, have this amount of difficulty, imagine what the rest of us are up against, as our work is digitized, streamed and downloaded on the web, VOD, cell phones, iTunes, xbox’s, etcetera, increasingly for “free” with new forms of profit bundled in.
Tracking and accounting for all this– in addition to getting our employers to come clean on it all– becomes increasingly difficult.
and Hollywoods representative in DC, Rep. Howard Berman, who heads a congressional panel in charge of writing copyright legislation, lashed out at Internet pirates this week and defended his effort to add stiffer anticopying penalties to federal law. (cnet news)
Let’s be clear about who the real pirates are–the studios and the record companies
Dear Quincy,
Unfortunately, your show is losing money at an exponential rate. By the year 2012, we will have to bill you to continue to air this program.
Sincerely,
“JZ”
I saw this episode. At the end, it turns out the head of the studio was using the money to make self-aggrandizing interstitials. And he had to kill the former character actor to keep his lawsuit from ruining his plan.
They also still won’t tell him what Quincy’s first name was on the show.
Fuckers!
This is the exact same thing that James Garner went through with the Rockford Files. Garner was successful, and I hope Klugman will be as well. Moneygrubbing greedy bastards.
The scummiest part is that Jack Klugman isn’t getting any younger, while a lot of the corporate people are young twits tooling around in Porsches and sipping lattes paid for by his hard effort.
Scum.
“Net profit” is a defined term in a participation agreement. As many already know, it doesn’t matter what the “real” profit is. If Klugman agreed to a participation with an awful definition of “net profit,” that’s the way it goes.
Of course, he needs to be able to see his contract in order to see how “net profit” is defined, but that makes me wonder why he or his attorney/agent/manager didn’t already have a copy of it. In films, all of the above and below line costs obviously count against “net profit.” So do all of the marketing costs (often around 50% – if not more – of the production budget). All of the print costs count against it – even if those costs only represent one segment of a distributor/studio paying another wholly owned segment. An overhead percentage is counted against. And so on. Those box office grosses that get reported on Sunday don’t mean anything when the issue is “net.”
When you have one segment of a distributor/studio charging costs to a project, that often isn’t an arm’s length transaction. So a project can actually be negative while the marketing and other auxillary supporting segments are making plenty of real money.
There isn’t anything particularly “creative” about Hollywood accounting. It’s all defined in the agreements and not particularly difficult to figure out.
Anyone who has a “net profit” agreement is just holding a sheet of paper. Nothing more.
If NBCU was foolish enough to charge costs in excess of the net profit definition, Klugman wins.
If not, Klugman loses – as most people with these bad deals do. It’s much easier to have supporting segments charge outrageous amounts for their services than cheat on the net profit definition. In that case, Klugman probably has a better case against the people who negotiated such a shitty deal on his behalf as opposed to NBCU.
Hollywood isn’t the only place where this happens. Most advances paid to authors by publishers are never fully earned because of the costs charged to producing and selling the book.
Gimme da money!
Simple Seth, “Doctor.” In any case, I believe the reason why the series is losing money is because it ran for 8 seasons. In Fact, if a series is losing money in its eighth season, it most likely was losing money in its first. It is either that, or Jeff Zucker is holding money that isn’t his.
What’s doubly interesting about this lawsuit is that “Quincy” is the show that Universal used to hide the profits of “The Rockford Files” from James Garner when he sued them in 1989 with identical claims.
According to the Lew Wasserman bio “The Last Mogul” by Dennis McDougal (pp468-469), both series were sold as a package with the earnings for “Rockford” attributed to “Quincy” to hide them.
Garner walked away with over $14 Million. Hopefully, Jack Klugman can do the same.
When will these people realize it’s so much cheaper and easier to just be honest.
Harold is correct about the net profits issue.
If Klugman’s deal was for net profits, he cannot prevail, as the language in his contract would prevent him from collecting. It also means that whoever negotiated such a terrible deal did a disservice to Klugman. It is a given in the industry that the only profits in which anyone can share are the gross proceeds. And anyone with any clout will have a deal that gets them first dollar gross, with a very specific definition that insures they will indeed share in the income.
I still remember the lawsuit filed against Warner Bros. in the early 90′s by producers of the 1989 BATMAN movie. They too had net profit participation in a film that made hundreds of millions of dollars. And they were told by the studio that the film had actually lost money in terms of net calculations. Their attorney famously commented about the then current production of BATMAN RETURNS, “Somebody better get over to Warner Bros and stop the bleeding”, as the studio was clearly investing in a losing proposition!
Oscar, Oscar, Oscar!
[with apologies to the late great Tony Randall]
Jim Henshaw has the ace in the hole in a post above.
What sleazy tactics.
I hope Klugman gets what he was promised by a legal, binding contract.
And that his grandchildren enjoy the loot.
Harold: couple probs with your comments.
- If NBCU had a copy of a contract that showed Klugman’s net profit agreement with an awful definition of net profit, they’d give it to him.
- You have to be on crack to think that Quincy is $66 million in the red after 25 years of syndication
- You’re wrong about Hollywood accounting not being creative. In every one of these cases that come to even the slightest light, the studios are always shown to have made millions and millions of dollars in outrageous and absurd charges against net profit
- Good thing James Garner didn’t listen to attorneys like you
Can’t wait for the discovery process to begin. That’s where the real, sanctionable kind of the-dog-ate-the-contract, kind of behavior begins.
So the only question is how long will a judge tolerate that kind of hide-the-ball, behavior. In this day and age, not long.
Ask any of Qualcomm’s so called, top-tier attorneys.
http://www.law.com/jsp/article.jsp?id=1199700332309
I’ve seen Quincy, ME on TV in the Middle East (either MBC4 out of Beirut or OneTV out of Dubai) as recent as 2006. How could it not be making money yet today?
It is exactly for reasons like this that so many people feel no guilt and are completely justified in downloading movies and TV shows and generally ripping off Hollywood studios in any way we can.
The discovery process will never start. This case must be settled or the whole business will change. There’s a good chance that NBC had made ten times what Klugman and his people believe they eraned.
To NBC Universal,
GIVE THE MAN HIS FUCKING MONEY!!!
BASTARDS!
…that’s what you get for working with GE!
…geez, the consumers are not the only one’s getting screwed!
- Andrew, MALL727net -
Jamie,
My problem with your comments is that you’re just some random uninformed person commenting about things of which you haven’t a clue. If I say something in a contract is a “defined term,” you probably think I’m referring to a Webster’s dictionary. There should be some sort of vetting process to post comments.
“If NBCU had a copy of a contract that showed Klugman’s net profit agreement with an awful definition of net profit, they’d give it to him.”
When you agree to a contract, you get a copy. You’re supposed to keep it and safeguard it. After looking a little further, Klugman claims he lost his copy when his agent died. Oh, well. In addition, if you tell someone that you’re going to sue them, don’t expect for them to give you ANYTHING. If you’re truly entitled to a document, you can request it in discovery.
“You have to be on crack to think that Quincy is $66 million in the red after 25 years of syndication”
Thanks for the drug accusation, uninformed person. When they sell a show in syndication, it’s often packaged with something else. In the case of Garner’s suit over the Rockford Files, NBCU would allegedly sell Quincy for an X amount and toss in the Rockford Files for free. Garner’s attorneys claimed that all of this “sweethearting” to get stations to buy the less popular Quincy by providing the more popular Rockford Files for free with it artificially lowered the revenue for the Rockford Files. FYI, Garner never won his suit, but he settled out of court for 80% of what he was seeking. That’s far better than most people do.
“You’re wrong about Hollywood accounting not being creative. In every one of these cases that come to even the slightest light, the studios are always shown to have made millions and millions of dollars in outrageous and absurd charges against net profit”
All of the charges that will be against the gross are defined in the participation agreement. EVERY ONE. The only time that anyone is doing anything wrong is if they make charges against net profit that are not stated in the participation agreement. If the lot wants to charge $10 million dollars per second against the project for using one stage to tape and the participation agreement allows that, oh, well.
The audit that Klugman’s attorneys are requesting is going to look at the net profit definition and what was actually charged against net. It will likely not be a satisfying answer for Klugman.
“Good thing James Garner didn’t listen to attorneys like you”
The irony of you mentioning Garner was that his claim was that some of the revenue from Rockford Files was going to Quincy. In other words, if you believe Garner, Qunicy revenue is overstated, so the loss that NBCU is claiming should be even LARGER. LOL! Since NBCU never formally admitted to that allegation, they won’t use it against Klugman, but it’s ironic nonetheless.
There is no mystery here. NBCU either cheated on the definition or they didn’t. They either did some Rockford-type deals in syndication or they didn’t. Klugman is likely just another member of the shitty contract club. You can’t be compensated for having an agent/manager/attorney that negotiates a shitty deal for you unless you sue them.
Ask Sigourney Weaver about non-existance net. I think she is still waiting on her net from “Ghostbusters.”