HFPA Sues Dick Clark Prods., Alleges Scheme to Hijack Golden Globes
UPDATED WITH NEW INFORMATION AND COMMENT FROM DICK CLARK PRODS. AND THE HFPA:
The owner of the Golden Globes has filed a juicy lawsuit against the production company behind the show, claiming it breached a contract and signed a secret deal to continue producing the NBC telecast for six years without the owner’s consent.
The Hollywood Foreign Press Assn. filed suit today in U.S. District Court in Los Angeles against Dick Clark Prods., which has produced the venerable film and TV awards show for almost 20 years, as well as DCP parent Red Zone Capital, the private equity firm led by Washington Redskins owner Dan Snyder.
The HFPA claims that DCP is acting as if it owns the rights to broadcast the show and that it “surreptitiously” entered into a deal with Globes network NBC to produce the show until 2018 without the HFPA’s knowledge. The HFPA is currently in the last year of its own 10-year deal with NBC and is jockeying for a new deal on more lucrative terms. According to the complaint, DCP is taking the position that as long NBC continues to broadcast the Globes, DCP has an option to produce the show. But HFPA says that even if that’s true, it’s an option, not a necessity, and it has revoked that option.
“This is a brazen attempt by DCP not only to extend its television production and licensing rights beyond the terms of the parties’ agreement, but to do so in perpetuity,” the lawsuit claims. “DCP contends that any unilateral agreement with NBC -- even one that involves licensing fees substantially below current market rates -- permits DCP to remain as HFPA’s licensee and to usurp HFPA’s control over the production and broadcast rights for future Golden Globe Awards shows. DCP is wrong. Its agreement with NBC has no force or effect because DCP has no broadcast rights to grant.”
The HFPA also accuses DCP and Red Zone of commandeering Globes-related trademarks and other rights for its own benefit. DCP has issued the following statement:
“The Hollywood Foreign Press Association, knowing it has no case in a court of law, is attempting to try this case in the court of public opinion. We are confident the case has no merit in either venue. Our respective rights under the contract are clear. The HFPA cannot unilaterally change the basis on which DCP and the HFPA have done business for almost three decades.”
According to the complaint, the HFPA had been in talks with DCP about renewing their contract since February, when HFPA president Philip Berk sent DCP’s Mark Shapiro an email offering to discuss their relationship beyond the 2011 show. The suit says Berk “was clear that DCP had no right to license any further Golden Globe Awards shows beyond 2011” until they came to a new agreement.
Shapiro allegedly responded to Berk the next day agreeing to early discussions and noting that there was “no need to remind me or ask me not to seek a new license agreement. I would never make a move on a network renewal or new home without your involvement.”
This summer the talks are said to have become more heated. In August, the HFPA says it sent DCP a proposal. The talks then allegedly continued through Sept. 27 when DCP allegedly said it needed time to respond with an acceptance or counter-proposal. Despite inquiries, the lawsuit says the response never arrived.
Instead, according to the suit, on Oct. 29 DCP sent Berk a letter informing him that it had made a new deal with NBC to run through 2018. “In short,” the lawsuit states, “DCP granted NBC a broadcasting license for rights that were not DCP's to grant.”
The HFPA also complains that DCP did not shop the show to other networks that might have paid a larger license fee—a violation of the contract between HFPA and DCP, which requires them to act in good faith to maximize the value of the show.
What was also happening, the suit argues, was was that Red Zone was trying to sell DCP, and at the same time borrowed $165 million though an issue of "junk bonds" secured by the library of Globes shows and pre-shows.
That money was allegedly then used to repay $51 million in bank loans and to distribute $90 million to Red Zone.
“Since acquiring a controlling majority interest in dcp in 2007,” says the suit, “Red Zone Capital has abused the corporate form and exploited DCP for its own gain.”
The suit says that HFPA was trying to license digital rights to the Globes and was close to a deal with Facebook when the social networking site said it had learned it was negotiating with the wrong people. Facebook allegedly said they had been told by DCP that it controlled digital rights, which the HFPA claims they were never granted.
The suit seeks unspecified damages and an injunction against DCP from using the Globe trademarks for anything not related to January’s Globes telecast.
“We filed a 68-page complaint that catalogues in great detail how dcp has been trying to steal the HFPA’s most valuable asset,” says the HFPA’s lead litigator, Linda Smith of O’Melveny & Myers. “The HFPA did not take this step lightly. It is confident of its grounds and it fully expects to prevail.”
NBC declined to comment.
Alex Ben Block contributed to this report.