PwC's Oscars flop may not do long-term damage to its reputation

It’s a dream job for those who normally toil in obscurity poring over rows of dry financial statements and complex tax returns.

But for giant accounting firm PricewaterhouseCoopers, its handling of the balloting process for the Academy Awards suddenly turned into a public-relations nightmare.

One of the two accountants in charge of Oscars vote counting mistakenly handed actor Warren Beatty the wrong envelope for the best picture award, sparking the chaotic ending of the Academy Awards ceremony, a spokesman for the accounting firm said Monday.

Beatty was handed the wrong envelope during Sunday night’s show by Brian Cullinan, a managing partner and its lead partner for the Oscars balloting, PwC spokesman Mao-Lin Shen said. Shen declined to elaborate, but the firm is continuing to investigate what happened. 

When he opened the envelope for the best picture award, a confused Beatty showed it to actress and fellow presenter Faye Dunaway, who proclaimed “La La Land” when the award, in fact, belonged to “Moonlight.”

The two presenters had been reading from a card announcing that Emma Stone was named best actress for her work in “La La Land,” the award that had occurred just before the best picture announcement.

Moments before the mistake, Cullinan had posted a photo on Twitter of Stone holding her Oscar; it wasn’t immediately clear if that contributed to him then handing the wrong envelope to Beatty. Cullinan deleted the Stone photo tweet, but Times reporters have seen copies of the tweet accessible on Google’s servers. 

After the error was rectified on the stage of the Dolby Theatre in front of a shocked audience — where, in video replays, a grim-faced Cullinan can be seen on stage trying to straighten things out with the two movies’ principals — PwC went from being a venerable partner of the Academy of Motion Picture Arts and Sciences to a punchline. That was especially true on social media such as Twitter, where the firm repeatedly was lambasted with snide remarks about how it “had only one job” at the Oscars and blew it.

Shen declined to comment on whether Cullinan faced any disciplinary action or whether the firm’s contract with the academy might be affected by the mistake.

In any case, PwC’s reputation has taken a hit, at least for now, some analysts said. But PwC’s long-term reputation and brand loyalty among its corporate clients should remain intact — if PwC quickly rectifies what went wrong and tells the world about it.

“The spotlight is so big and bright that there is no conceivable way for PwC or the Academy to move forward without being transparent with the public,” said Jeremy Robinson-Leon, chief operating officer of Group Gordon, a public relations and crisis management firm.

Bernhard Schroeder, a marketing expert who heads the Lavin Entrepreneurship Center Programs at San Diego State's business school, said that while the mistake “is embarrassing, to be sure, in the short-term, the long-term damage to PwC will be fairly nonexistent to their bottom line.”

“Large corporate companies that use PwC use them to provide solid audit and accounting services, not to organize envelopes for the Oscars,” Schroeder said.

Even so, the mistake was “as bad a mess-up as you could imagine,” Nigel Currie, a branding specialist in London, told the Associated Press. “They had a pretty simple job to do and messed it up spectacularly.”

Full coverage: Oscars 2017 » »

PwC is one of the Big Four accounting firms and a huge enterprise that provides accounting, tax and consultant services around the world, services that typically are far more complicated than tallying Oscar ballots. The London-based firm has $36 billion in annual revenue and 223,000 employees.

PwC also has been tabulating the Oscar winners for 83 years, nearly as long as the awards show itself, and PwC makes a big splash of how its two Oscar representatives, Cullinan and Martha Ruiz, oversee the voting and keep the awards secret until the show’s telecast.

Cullinan, often teased as a Matt Damon lookalike, is the lead partner for the academy and the managing partner for PwC’s Southern California practice. Ruiz, who’s been with PwC for 19 years, also is a tax-compliance specialist for entertainment clients in Southern California.

After overseeing the vote tabulation, they each bring a set of the winners’ envelopes to the awards, taking separate routes with police escorts, then join up at the theater to walk along the red carpet — briefcases in hand — as they enter the show.

Cullinan and Ruiz then take up positions on each side of the stage — again, with each holding the envelopes of all the winners to hand to the presenters — depending on which side of the stage the presenters emerge to face the audience.

In a promotional video on the PwC’s website ahead of Sunday's show, Cullinan said he and Ruiz are the only two who know the winners before the envelopes are opened live on stage.

He also said PwC's relationship with the Academy Awards was a testament to the firm's reputation in the market for being “a firm of integrity, of accuracy and confidentiality.”

This wasn’t the first time there had been a mistake in announcing an Oscar winner. In 1964, Sammy Davis Jr. was given the wrong envelope for a music-score award, to which Davis quipped: “Wait until the NAACP hears about this.”

And The Times had a hand in the envelopes even becoming part of Oscars tradition.

There were no sealed envelopes during the Oscars’ first decade, and then local newspapers were given the names of winners the day of the ceremony with the caveat that they didn’t print them until the awards were over.

But The Times jumped the gun by prematurely publishing the 1939 winners, led by “Gone with the Wind” as best picture, after which the academy began the sealed-envelope tradition.

james.peltz@latimes.com

For more business news, follow James F. Peltz on Twitter: @PeltzLATimes

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UPDATES:

3 a.m.: This story has been updated to emphasize analysis that PwC’s reputation may not be harmed in the long term.

2:25 p.m.: This article was updated with more details about how the mistake occurred, and a history of similar mix-ups.

12:35 p.m.: This article was updated throughout with Times staff reporting.

This article was originally published at 7:10 a.m. on Feb. 27

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