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Iowa Bad Boys

October 7th, 2009

The investigations into possible abuses of the Iowa Tax Incentive program has now become a criminal investigation by the Iowa Attorney General’s office.

IowaIn early September, the Tax Incentives Program was suspended when it was discovered that many potentially fraudulent documents had been created for 20 out of 22 film projects that received tax credits, which would ultimately benefit film makers directly.

The manager of Iowa’s Film Office was fired and two other executives resigned after a review by independent accountants revealed, contracts were changed to increase budgets, signatures were copied and moved to the new contracts, film makers expenses up to $650k were wrongly approved, along with numerous other falsifications.  Approximately $32m in tax credits had already been issued when the problems were discovered and the state will seek to recover those obtained fraudulently.

It was also discovered that an actor in one movie claimed the full price of a brand new Range Rover at $61k and the director of another claimed over $67k for a brand new Mercedes, even family members of some film makers benefited from the massaged incentives claims.

The suspension of the Iowa Tax Incentives program, means film makers will now be taking their projects to other states including Louisiana and Texas, creating a loss to Iowa’s economy in the region of $300m.

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Posted in: US - Film news

The Curious Case Of The WGA And The Foreign Levies

September 22nd, 2009

Settlement is imminent on a curious, below-the-radar, case against the WGA which has been ongoing for four years and in which it’s alleged the WGA has made little effort to distribute foreign funds it has collected on behalf of member and non-member writers.

The Berne ConventionA class-action suit filed by writer and director William Richert alleged that millions of dollars collected by the WGA from the foreign re-use of writer’s work, hasn’t got to the writers concerned.  The money isn’t the same as residuals and relates to the different status writers have as ‘authors’ in countries other than the US.  In the US, full copyright in the writer’s work was held by the studio or producer, then in 1989, the US became signatories to the Berne Convention, which originated in 1886 and which European and other countries had already agreed to.  This stated that writers remained the author of their work and so in the case of screenwriter’s, were entitled to part of the foreign levies.

Foreign levies are taxes collected from ancillary uses such as, video and DVD sales and rental, cable retransmissions, and indeed on blank VHS tapes and blank DVD’s.  Until 1989, the levies went straight to the studios as owners of the work.

So, the WGA began collecting these monies from the foreign collection agencies, on behalf of writers, but found it difficult to redistribute it to the right members, and virtually impossible to find non-members who were eligible for payment.  As of March this year, they had over $30m held in trust for members.  The lawsuit alleges the WGA didn’t have the right to collect the money on behalf of its members in the first place, let alone non-members.

They’d kept the whole thing pretty much under wraps until in 2006 a staff member who looked after collecting the money and making the payments, went to federal investigators, concerned about irregularities and was subsequently fired in what they believe was for becoming a whistle blower.

wga-logoThe proposed settlement calls for the WGA to use ‘its best efforts’ to make all payments within three years, under scrutiny of independent accountants.  The details of amounts collected are to be posted on the WGA website to remain for five years.

This could be the unexpected windfall writers have been waiting for.

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Posted in: US - Film news, US - TV news

The Campaign Trail

September 2nd, 2009

Tom HanksIn the States, campaigning for president is a big affair whether it be for the Whitehouse or the unions.

All over the Hollywood press at the moment is the campaign for the presidency of the major Hollywood union, SAG, repping actors.  SAG threatened a strike around the same time as last year’s 100 day writer’s strike,  studios prepared for it but it didn’t quite happen.  The writer’s strike caused chaos, lay-offs and no Letterman, so the power of the unions is to be reckoned with.

The SAG campaign is a two horse race, veteran actor Ken Howard v Anne-Marie Johnson.   Howard leads the moderate, Unite For Strength, campaign which wants to unite SAG with the smaller actor’s union AFTRA, both of which have had their problems recently.  Howard has heavyweight backing in the form of videos from top Wooderati like Tom Hanks and William H Macy.

Johnson, the more hard-line candidate,  also favours a merger but only with those actors who are already members of both unions as a quarter of AFTRA members aren’t actors but include recording artists and DJ’s.  Strange as it may seem, two unions for the same trade, both negotiating their own contracts with producers.  And when earlier this year, SAG went a bit shaky and laid-off 35 staff as a cost-cutting measure, some members walked over to join AFTRA.  SAG’s finance’s are still written in red as their dues come from actor’s and when they’re not working, SAG loses money.

It’s thought Howard and his top line supporters will win-out with the full merger proposal as in the event of a strike studios won’t be able to get members of the other union to work instead.  AFTRA isn’t sure about the merger because of SAG’s internal bickerings and the ultimate question will always be, who controls what.

Something they’ll have to look inside themselves to answer.

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Posted in: US - Film news, US - TV news

Paramount Looking For Straws

August 26th, 2009

Shutter Island PosterOctober 2 was a much anticipated date for Marty and Leo as since the early summer, trailers had been announcing it to be the release date for their movie Shutter Island. In a follow-up to recent woes at The Weinstein Company and Summit, Paramount now say they can’t afford to put it out then.

The director and star were relying on the October release to allow a lot of time for Oscar voters to get to see their movie, but Paramount have pulled it as they don’t have the money for the $50m – $60m marketing campaign in 2009.  Or so they say, as word is that they do, but their expectations for DVD sales this year are low because of the economy and DVD sales provide a highly lucrative second swipe at the market.

So Paramount’s planned release date is now, February 19. Why?  Because, they say, in 1991, Silence Of The Lambs, was released on February 19 and went on to win the Oscar.

Now where’s my crystal ball….?

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Posted in: US - Film news

Axed Agents’ Double Dealing

August 26th, 2009

Hollwood AgentsThe recent merger of top agencies William Morris and Endeavor has naturally meant too many agents for too few desks, but those let-go have found a loophole to their benefit.

The merger between the two agencies meant a number of agents were back on the job market when looking for a job didn’t promise the most positive outcome.  A number found jobs at rivals, CAA, UTA, ICM and Paradigm, though for some it meant a cut in their average $225k salaries.

However, part of their contracts with their previous employers said that if they were made redundant and had to take a job for a lower salary, the previous employer would have to make up the difference for the duration of their old contract.  So if they had six months to run at William Morris, then William Morris would have to pay the difference between the lower salary they’re getting at their new job and what they were getting when made redundant.

Agents though are natural wheeler-dealers and some took advantage of this by doing a favourable deal with their new employer. By offering to take a lower salary in return for a bonus at the end of the year or into the next year, making their salary up to what they previously received, they would get the booster extra money from their previous employer, plus the bonus on top!

WME figured this and told them they wouldn’t pay-up on their old contracts so the agents sued and WME backed-down.

And I thought being fired was bad news….

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Posted in: US - Film news, US - TV news

Redbox Bites Fox

August 13th, 2009

Redbox DVDRemember the piece we ran about Redbox a couple of weeks ago?  The DVD booth in convenience stores where you can rent a DVD for $1 a night?  Well Fox thinks it’s too cheap and will affect their own DVD sales so they asked Redbox to hold off selling their new releases for 30 days. Redbox declined and Fox told their wholesalers not to supply Redbox with DVD’s so Redbox sued.

They claim Fox is trying to eliminate competition and to prevent customers from having timely access to its new releases from Redbox outlets.  Last year Universal similarly tried to stop supplying Redbox for 45 days while Sony and Lionsgate are happy to supply their titles to Redbox at the same time as everyone else and have lucrative fiver year deals with the company.

Other studios including, Paramount and Warners are on the sidelines at the moment while Redbox CEO Mitch Lowe says, the low cost means people rent more movies than they would normally and if they like them, they buy them.

What I want to know is, when are they coming to the UK??

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Posted in: US - Film news

The Bribery Business

August 11th, 2009

doj-pressIt won’t be news to know that some aspects of business in tinseltown are corrupt, but the level of such has been revealed at the start of the trial of two producers and their $1.7m bribe.

Gerald Green, executive producer of Christian Bale starrer, Rescue Dawn, and his wife, wanted the contract to run the Bangkok International Film Festival for which they would stand to make $10m. So between 2003 and 2007, they made various payments to the Governor of the film festival and the head of the Thai tourist authority, totaling $1.7m.  If convicted they could face a maximum of 5 years in jail.

Bribery in foreign countries isn’t uncommon with a lot of industries and nor, it seems in movies. Indeed, during the making of Matthew McConaughy starrer, Sahara, in Morrocco, payments of over $237,000 were made to smooth the way with locals.

Heads are up in Hollywood though, as it’s thought once the fed’s discover illegal practices within an industry, they investigate the industry as a whole.

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Posted in: US - Film news

The Jackson Tapes

August 11th, 2009

Michael JacksonWell the AEG store was open and the sale was on for the tapes of Michael Jackson’s rehearsals for the O2 shows and behind-the-scenes footage. Over 100 hours of material.

AEG, the promoters of the whole show,  set the start for the bidding at $50m for the movie rights and $10m for the television special.  Sony won the bidding war for an undisclosed amount – they already own the rights to his music.  They plan to release the movie of the rehearsals on October 30 and expect it to be huge.

This reminds me of the feeling I had when Paul Greengrass’ movie, United 93, came out.  This was the film of the doomed aircraft that wasn’t flown into the twin towers, but into a field after the passengers fought back.  Isn’t there something wrong with making money out of tragedy?

I’m sure the majority of the proceeds from the Jackson movie will go to his estate and to pay off some, if not all of his debts, but even so.

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Posted in: US - Film news

Make More Films

July 23rd, 2009

Stunning news from industry research company SNL Kagan. As money gets tight in Hollywood and lay-offs are reported on a regular basis, contrary to the studio’s solution of cutting back, Kagan’s say no, make more films, spend more money!Bruce Willis Are they crazy??

Well, maybe not.  They looked at 611 films released by the majors between 2004 and 2008 and broke them down into genres, – action, comedy drama etc. then they reassembled them as slates of five, ten and fifteen films.  They then anaylsed the mix of each slate in terms of probability of making big at the box, where action was high and drama low.

The result was, the bigger the slate, the more likelihood for profit. Where the five film slate made a loss of $94m, the fifteen film slate made a staggering $466.4m profit!

This was over a 12 year period of exploitation and included the usual revenue streams.

So the word is, make more to make more.  Simple!

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Posted in: US - Film news

Redbox

July 22nd, 2009

redboxNothing to do with Red Camera, or Redsox, Redbox is the familiar DVD vending machine found in over 17,000 locations like convenience stores, grocery stores and pharmacies across the States, and of course in McDonald’s where it all began.

Now independently owned, Redbox has just done a deal with Sony’s Home Entertainment, the first publicly disclosed deal with a major studio.  Even with the modest $1 a night rental, renting DVD’s from vending machines has become a source of huge revenue and Sony expects to make around $450m over the next five years.

While some executives in the home entertainment biz are concerned that Redbox is significantly undercutting rental prices at traditional outlets like Blockbuster, others are concerned about how it may affect DVD sales.  However, lower DVD sales have been offset by the rise in Blu Ray sales, more expensive per unit and rentals are up over 150%, thought to be largely fuelled by vendors like Redbox.

Looks like the things you most want are cheapest in the US – DVD’s and petrol.

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Posted in: US - Film news

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