Essex Video Faces Legal, Financial Setbacks : Pornographic Film Distributor Goes Bust; Company’s President Busted

When Essex Video went bankrupt three weeks ago, owing creditors almost $1 million, it was more than just a story of another local family business gone bust. The Northridge company’s collapse marked the demise of what police said had been one of the country’s three biggest producers and distributors of pornographic films.

In its April 5 bankruptcy filing, Essex said it had no assets and produced a list of nearly 100 creditors, including movie director John Derek. Essex owes Derek--the husband of actress Bo Derek--$6,500 in royalties from a pornographic film titled “Love You” that he made in the mid-1970s and sold to the company.

“It’s strong, it’s graphic, but it’s not kinky,” Derek said. “Some people said I made a hair-cream commercial, not a porn flick.” Derek doesn’t expect to be paid. “I think people should get their money, but I’m not going to go down and stand in line,” he said.

Big 3 Producers

Only a few years ago, Essex Video, along with Caballero Home Video in Canoga Park and Video Co. of America in Chatsworth, had been the Big 3 producers and distributors in the pornographic film industry, said Sgt. Don Smith of the Los Angeles Police Department’s vice unit.

Essex Video was started in Hollywood in the late 1960s by Joe Steinman, an emigre from Colombia, who bought the rights to adult films and sold copies to movie theaters across the nation. At one time or another, all four of his sons worked in the family business doing odd jobs, helping Steinman build a library of 200 titles.

But it was his second son, Jeff, 30, whom Steinman groomed to lead Essex into the video age.

Jeff Steinman, however, has more to worry about than Essex’s financial collapse. The former president of Essex Video pleaded guilty in federal court Thursday to shipping obscene materials across state lines and was immediately sentenced to four months in prison and ordered to never work in the adult film industry again.

Judge Julia Gibbons of U.S. District Court in Memphis, Tenn., sentenced Steinman to two years in prison but suspended 20 months of the term. Gibbons also imposed a fine of $100,000 and placed Steinman on two years’ probation after his release.

The Justice Department said Steinman shipped such videos as “I Wanna Be Teased,” “Titillation” and “Fleshdance” from California to Tennessee. Sending obscene materials across state lines is a federal offense.

Steinman’s legal expenses didn’t help Essex. His legal costs were at least $100,000 in 1987, according to Essex’s bankruptcy filing. The bigger adult studios have started running up big legal fees defending themselves against criminal indictments since the Attorney General’s Commission on Pornography issued its report in July, 1986.

Denies Production

Steinman, however, denied that his company ever produced pornographic pictures, which would be a violation of California’s pandering laws if the movies were filmed in the state. “I don’t make movies,” he said. “Essex Video was never a production company.” He said it only distributed films.

After a very brief interview, Steinman refused to discuss anything further about Essex. He since has had his phone disconnected.

Steinman did say that he started working in Essex’s warehouse when he was a junior at Birmingham High School in Van Nuys. “I did anything and everything,” he said. Sometime after his father retired in 1979, Jeff Steinman was named company president.

Shortly afterward, home videocassette recorders were introduced, and for a while Essex flourished as it transferred its extensive film library to tape. Jeff Steinman refused to disclose the company’s revenue or profit figures, but several industry insiders said that at its peak Essex had 65 employees and had annual sales of $40 million.

Real estate records indicate that Steinman profited handsomely. Last year, he paid $975,000 for a five-bedroom, five-bathroom house in Canyon Country.

$750 Million in Sales

Smith said the adult film industry--arcades, retail outlets and video sales--generated $750 million in sales in the Los Angeles area last year. And by his calculations, there were 37 local adult video corporations, including Essex, with the biggest of them taking in profits of $10 million each.

The advent of videocassette recorders opened up the home market for Essex. But because videotape is inexpensive to produce and distribute, it invited new competition. Rivals began making low-budget videos, which sold at prices far below those of more established producers and distributors such as Essex. “Today there are tapes selling for $5 that were selling for $42 two years ago,” said Eugene Marino, a former Essex salesman.

But critics say Jeff Steinman spared no expense, spending a lot of money on his stars while producing about 30 videos a year. “They put out too much. You can only put so much of this garbage on the market,” said William Margold, a performer and adult movie critic.

Actress Paid $150,000

One of Essex’s strategies was to sign well-known porn stars to exclusive contracts, such as Barbara Dare, who said she appeared in 10 films a year for Essex at an annual salary of $150,000.

But Jared Rutter, editor of Film World Reports, a trade publication, said all of the money didn’t necessarily pay off in hit films. “Essex put too much money into production,” he said, and Essex produced their share of flops. Rutter’s newsletter lists the 10 biggest-grossing pornography movies every two weeks. “Essex stopped appearing on the charts about a year ago,” he said.

The patriarch of the business was Joe Steinman, who was born Jose Domingo Restrepo in Bogota, Colombia, sometime in the mid-1930s, court records indicate. By the late 1960s, Essex was up and running. In 1971, Restrepo changed the family name to Steinman; even his son Jeff isn’t sure why.

Through his son Tony, Joe Steinman refused an interview request.

New Company Begun

Another mystery is what happened to Essex’s films and licenses. Former Essex salesman Marino has started a new adult video company called Essex West. It took over Essex Video’s Northridge headquarters and has thousands of videocassettes in its warehouse.

But Marino insists that Essex West has no connection to Essex Video. “I licensed the name Essex from the copyright holder, a foreign company,” Marino said. “I have a new business.” But Marino said he didn’t remember the name of the foreign company.

He also said the Steinmans are not connected to Essex West. “I have a silent partner,” he said. Marino refused to name the individual.

Jeff Steinman’s arrest was a shock to some of his friends and neighbors. One of them was John McKeon, who sold his house to Steinman. “It’s a little surprising,” he said. “He told me he was in the construction trade. This is amazing.”