The 10 Most Common Ethical Sins in Hollywood
1 GRAND ILLUSION
The smoke and mirrors of Hollywood accounting How do major studios manage to be profitable when most of the movies they make show no profits? It’s called creative accounting, and it’s all in the way contracts are written and income is recorded. Profit participants with power, including the studios, make sure they get their shares of income from “gross” receipts--the money paid to the distributor by theater owners for the rental of the movie. Profit participants without leverage share in “net” receipts--the money left over when all expenses and gross profits have been paid out (this moment, by the way, is often referred to as a “cold day in hell”). Most studio executives and industry lawyers do not think creative accounting is unethical, because it is legal. Many “net” participants question whether what is legal is always ethical.
2 LAW AND DISORDER
The so-sue-me mentality You’re an independent producer who has promised to pay a writer $100,000 for a couple of rewrites of a script that you’ve already bought for $50,000. Now, after all the rewrites, no one wants to make the movie and you’re out $150,000--or you would be if you had actually made good on your debts. Instead, you tell the writers, “Sue me,” figuring that they will settle for 50 cents on the dollar rather than wait five years and blow most of their earnings on legal fees.
3 THE CARPETBAGGERS
What’s yours is now mine You’re a producer and your wife’s cousin has just asked you if you’d look at a screenplay a friend of his has written. You do and, amazingly, it’s a scream. So do you offer him a $10,000 option and see if you can get him a development deal? No, you slip it into your briefcase and shop it around as if it was already yours. If you sell it, you make yourself a hero with the writer. If not, what’s he got to complain about? All you agreed to do was read it.
4 THE BAIT
The old “now you see a star, then you don’t.” This version of the shell game is usually played by unscrupulous producers attempting to get investors interested in a project by baiting them with a big name star. “Bob Redford loves this role, he just wants to know somebody shares his enthusiasm.” This is a low-rent scam, because knowledgeable players check out the claims. But there are a lot of potential investors who are not knowledgeable.
5 THE LIFT
What? Me lie about money?!? Agents take a big interest in their clients’ welfare--a 10% interest usually--so they hike the fees whenever possible, claiming their star got X dollars for his last job when he only got Y. This is also easily verified by people in the know, unless the agent has knowledge of a “side letter,” which is the subject of our next sin.
6 SIDESHOW
I have a $2 million letter in my pocket . . . . You’re a major star and even though you’re not as important as the Hubbell Space Telescope, you’re worth plenty. For your next movie, you think you should get $10 million. The studio has offered you $8 million, saying that’s the most they’ve ever paid for an actor and they don’t want to give Another Star any ideas. The deal? They write a contract calling for an $8 million salary, then give you a side letter guaranteeing to pay you another $1 million, plus cover your mortgage on that hot condo in Key West. Hey, who’s gonna know?
7 NO WAY TO TREAT A LADY
I’ve forgotten her name already. You’re just about to go into production on a big studio movie when you get a call from an agent saying the box-office star you originally wanted for the lead role is now available. What do you do with the star you’ve got? First, you offer to buy her out of her contract. When she says “Hell no, I won’t go,” fire her, claim she has bad work habits or something, and bring in No. 1. Won’t No. 2 sue? Of course, but you can’t worry about that now. You’ve got a movie to make.
8 SORRY, WRONGNUMBER
What? Me lie about money?!? II. You’re the head of a major studio’s distribution department, it’s Monday morning and your new weekend release is running neck-and-neck with another studio’s new movie for the coveted top spot on the weekend box office chart. The news media is on deadline and clamoring for grosses. You’d love to be No. 1--who knows what it might be worth in profits and prestige--so you jack your figures up $500,000. When the real figures come in tomorrow, you can always blame it on the stupid computer.
9 LOOKIN’ TO GET OUT
Heads, I win. Tails, you lose. You’re an independent producer with an exclusive deal about to expire at Studio Alpha. You hear about a hot script that another producer at your studio is trying to buy, so you go to Studio Beta and get them in a bidding war for the script, figuring that if Beta beats Alpha, you can switch studios and go in as a hero.
10 THE GREAT IMPOSTER
What’s yours is now mine II. You’ve been knocking around the fringes of Hollywood for a long time but it’s clear you’re not going to get to direct unless you can bring a good script to the party. Then a young writer with no credits lays one on you, just up your alley. The only problem is you can’t get rid of him. He won’t sell it you outright (he wants the writing credit as bad as you do), so you tell him no thanks and steal it. What do you have to lose? If the film’s a flop, there are no profits for him to sue against. If it’s a hit, the studio’s insurance will cover the settlement.
