Golden Globes Trial: Inside One of TV's Messiest, Nastiest Battles
Clark sold his namesake company in 2002 for $136 million to Mosaic Media Group. It was sold again in 2007 for $175 million to Red Zone Capital, a private investment firm run by Daniel Snyder, the billionaire owner of the Washington Redskins, and Dwight C. Schar, executive chairman of Fortune 500 home builder NVR Inc. A minority interest of 40 percent was also sold to Six Flags, the amusement park company that Red Zone had acquired in a hostile takeover in 2005.
Red Zone had hired Shapiro, then 35, as CEO of Six Flags in 2005 after his tenure as an executive at ESPN frequently raised storms of criticism.
At the time of the DCP acquisition, Red Zone touted the synergy with Six Flags. They arranged a deal in 2007 to incorporate images from the Globes and other DCP-produced events into Six Flags rides, restaurants and the overall decor. However, their efforts at synergy fizzled, and in 2009, Six Flags' debt and the global recession drove the company into bankruptcy.
Snyder found a more friendly playing field in Hollywood. In 2010, Red Zone engineered a $165 million junk bond sale secured by DCP assets that allowed it to cash out $105 million. The private-offering memo prominently boasted that DCP held rights to the Golden Globes "in perpetuity," or as a footnote explained, at least as long it continues on NBC.
That cash-out left DCP saddled with debt that has to be repaid beginning in 2013, spawning rumors that Red Zone is looking to sell. A spokesman for the company says DCP "is not formally for sale, but we have a fiduciary responsibility to follow up on indications of interest as they arise and have done so at multiple times over the course of our ownership."
There is also pressure to sell from Six Flags, where the new post-bankruptcy managers have identified DCP as a noncore asset.
The situation adds an extra level of urgency to the HFPA litigation. It appears that any potential sale is on hold until at least after the first phase of the trial, which will determine who controls broadcasting rights to the Globes. The second phase, set to begin sometime next year or the year after, will deal with contractual issues such as the preshow, digital rights and more.
If DCP loses phase one of the trial, the company's prime asset would be in jeopardy, threatening a sale and putting NBC in position to sue for damages if it loses the Globes to another bidder.
The nonjury trial, which is expected to last eight to 10 days in front of U.S. District Court Judge Valerie Baker Fairbank, promises some courtroom fireworks, if only because there is such bad blood on all sides. One lightning rod will be Mirjana Van Blaricom, a Yugoslavian journalist who, as president of the HFPA in 1993, signed the key contract with Dick Clark Productions that is now at the center of the dispute.
In 1996, Van Blaricom was forced out of the HFPA in a bitter battle. Later that year, she formed the International Press Academy, which hands out the Satellite Awards.
In an op-ed written in August, Van Blaricom makes clear she won't be supporting her former colleagues in the trial. "After years of denying my efforts and 20-year contribution to their association," she wrote, "HFPA wants to focus attention away from their own internal politics and motives to shift the emphasis to me, their much-maligned past president."
That dissension could set up a testy cross-examination by HFPA lawyers Linda Smith and Daniel Petrocelli. Conversely, DCP's legal team, led by Martin Katz and Bradley Phillips, hope to use Van Blaricom to show that the HFPA understood it was making the deal in perpetuity and how valuable DCP has been to the evolution and success of the Globes.
Snyder, Shapiro and DCP president Orly Adelson all declined comment, as did Aida Takla-O'Reilly, who was elected HFPA president in June.
If DCP prevails, the 2012 Globes -- set for Jan. 15 -- will air on NBC as planned. But an HFPA victory likely would mean an open bidding war among all the networks for the right to broadcast the Globes. In addition to CBS and NBC, Fox has expressed interest, according to sources.
And if the HFPA prevails, the first thing the organization would likely do is fire DCP as producer of the Globes, ending a 28-year partnership that has generated hundreds of millions of dollars and led to one of Hollywood's most dominant awards shows. The message from the HFPA is clear: the organization will do what it needs to protect its prime asset.
"It's beyond dispute that thanks in large part to the Golden Globes, we have a degree of influence and are given importance by studios and producers," an HFPA member says. "It's understandable that some people on the outside wonder how this bunch of 85 or 90 people with an accent reach such a degree of influence. I share some of the critiques, but it is how we make our living, and we will work very, very hard to keep it going."
ON THE WITNESS LIST: Hollywood insiders expected to testify during the trial to determine the future of the Globes
Dick Clark: The retired TV legend and company founder, 81, is expected to testify about the history of Dick Clark Productions' relationship with the HFPA and the intent of the 1993 contract to produce the Globes.
Marc Graboff: The NBC executive will testify about Dick Clark Productions CEO Mark Shapiro's representations during negotiations to extend the network'sdeal to air the Globes until 2018.
Leslie Moonves: The CBS Corp. president and CEO could be called to discuss talks with the HFPA about bringing the Globes to CBS for $10 million more than what NBC was offering.
GLOBES BY THE NUMBERS
- 67: Years old
- 28: Years produced by DCP
- $13.3 million: License fee (in 2010 from NBC)
- $6.98 million:DCP gross profit from Globes
- 24: Percentage Globes represents of DCP annual revenue
- $7.5 million: HFPA gross profit for license fee
- 17 million: U.S. viewers (January 2010)