February 10, 2012 6:16pm PT by Alex Ben Block
Golden Globes Trial Analysis: Too Close to Call As Both Sides Make Final Pitch to Judge
Don’t expect a quick final judgment in the legal battle over the Golden Globe Awards—but do expect the losing side to appeal.
Although the courtroom portion of the high-profile two-week trial concluded Friday, the Hollywood Foreign Press Association, which owns the annual awards show, and Dick Clark Productions, which produces it, are further apart than ever. Executives are barely civil to one another, even when standing outside the courtroom.
The final day of the trial in federal court in Los Angeles was a mix of answering questions posed by Judge Howard Matz, and each side making final arguments; but even as the attorneys framed the issues, what was really exposed was the anger and deep distrust that now exists between them.
Daniel Petrocelli, representing the foreign press group, charged that DCP had “effectively enslaved the HFPA,” which he said raised an issue of basic fairness. “It’s about their rights and freedom to make a choice about who they want to deal with,” said Petrocelli, adding that we all have the “right to end a marriage or a partnership. It’s not their right to claim the HFPA can only end this at their discretion.”
Petrocelli said the Golden Globes belong to the HFPA and existed before Dick Clark became the producer but now they have been hijacked: “The servant has become the master. How did this happen? By putting 12 words that nobody saw in the middle of a contact.”
Martin Katz and Brad Phillips, representing DCP, insisted the foreign press group’s leadership has known about those 12 words and their implication – that the producer can remain involved and in charge as long as the show stays on the NBC network – since at least 2002 and possibly as far back as 1993.
Over that time, the show has become more successful and conditions have changed in the market, argued the DCP lawyers, so now the HFPA wants a new, richer deal and wishes the contract it signed in 1993—which DCP argues made the show the success it is today—would go away.
“The starlet has become a star and doesn’t want to be tied to their partner any more,” said Philips, “but that is not the way contracts work.”
That is what Judge Matz will have to decide, but he indicated that might take him a while. He said he has other matters to attend to before he gets around to making this decision. In the meanwhile, he asked the attorneys for both sides to provide him with “a decision tree,” a document outlining the choices he can make in deciding the case. If the two sides can’t do that together, the judge said each side could submit their own version of how he could rule.
Unlike the earlier days in the case, the courtroom was nearly full on the final day, with the front row filled by members of the HFPA, a side gallery where the DCP contingent sat, a back row with lawyers from NBC who were on hand to keep a close eye on the outcome and lots of media.
NBC’s presence wasn’t a surprise. If DCP loses, and the deal it made with NBC to keep airing the show through 2017 is collateral damage, there is a good chance NBC could turn around and sue one or both parties.
First, however, even Judge Matz has said he expects the loser in the case will appeal his decision. That could add months, or even years, to the process of reaching a final decision.
Whether the show would continue during an appeal on a year-by-year basis with DCP producing and NBC airing the highly rated telecast probably will depend on who wins the first round. If DCP wins, it almost certainly will continue as it has. If the HFPA wins this round, however, they are likely to want a new producer and will auction the rights to the highest bidder.
In January, both the HFPA and DCP put aside their differences long enough to produce another Globes show that aired on NBC, so as not to damage the franchise they are fighting over. Given the acrimony on display in the trial, that will be even more difficult to do in the future.
“They would have to work with people they don’t trust who have betrayed them,” said Petrocelli. “That is not possible.”
Petrocelli was especially pointed in describing DCP under CEO Mark Shapiro, who in his testimony admitted that he had lied to both NBC and the HFPA in 2010 as a negotiating tactic when he quietly worked out a new contract with the network without the HFPA’s active knowledge or consent – which DCP said it did not need actually need.
“He (Shapiro) is a master puppeteer who was playing both sides,” said Petrocelli, adding: “Our clients hardly know this guy and do not trust him.”
Katz said it was true that the HFPA wanted to re-negotiate the deal with DCP in 2010, which would have lowered the producer’s share of the proceeds below the 50 percent it has been for the past two decades. He said DCP was willing to discuss that, but not on the terms HFPA was offering.
He said DCP, on the other hand, wanted to expand the deal to monetize even more rights – things like digital distribution and a post-show program – that would increase the take for both sides. But, he said, that did not interest the HFPA; they only wanted to cut DCP’s share massively to enrich themselves.
Katz argued that it was incorrect to say that their contract existed “in perpetuity,” as the HFPA charged. He said that it could have ended if NBC had not wanted to continue carrying the show. And that could have happened if there had been another scandal.
That was a pointed reference to situations in the past. In the 1970s the FCC raised questions about the credibility of the awards and NBC dropped them. In the 1980’s there was an uproar when Pia Zadora was given the newcomer award for a movie that hadn’t been released after her husband threw lavish parties for HFPA members at his Las Vegas hotel; and CBS stopped airing the show.
Dick Clark became producer and helped arrange for the Globes to be seen in syndication and then on cable TV before making the 1993 deal that returned the show to NBC. In the meantime, the HFPA worked hard to create rules and procedures that made their methods and choices more credible, even if critics continued to harp on them.
In the past decade, the show has become a ratings powerhouse for NBC, and a global television event. Airing in advance of the Academy Awards, it is seen as a harbinger for the rest of awards season (even though that isn’t always the case).
Under the new deal NBC made in 2010 with DCP, the network would pay an average of $21 million for each telecast, plus additional amounts for the pre-show and other rights. During the trial Leslie Moonves, CEO of CBS Inc., said in a taped deposition that he would likely bid $25 million for those rights, and that was just a starting bid.
The DCP side tore into former HFPA president Philip Berk for having that 2010 lunch with Moonves, saying it violated their contract, which prohibited the press group from discussing the broadcast rights during an exclusive period which DCP had to negotiate.
Berk and the HFPA characterized his luncheon as just a friendly off the record gathering. Katz, in his summation, said that calling it off the record did not mean it was not a violation of the contract with DCP.
That too will be something the judge will have to consider as he decides the case. There are numerous other points of contention as well, over the contract, over who said what when, over which witnesses were credible, over whether certain evidence was ambiguous, over who knew what when about the extension clause and much more.
In the end, the judge will have to either be a strict constructionist on the contract, which could favor DCP; or he can agree with Petrocelli that it isn’t about 12 words in a clause, but rather about the entire contract, which could favor the HFPA.
To borrow a sports analogy, at this point how the judge will rule is simply too close to call.