Not Quite Kids’ Stuff
You know about Mr. Rogers, Big Bird and Barney, the saccharine-as-they-come purple dinosaur that raked in millions.
Well, now, kiddies, there may also be a “fun-loving, magical farmer” named Mr. Buckethead coming to a television screen near you.
Mr. B, called Buckethead because he goes around wearing a bucket as a hat, is the host of what’s been billed as the surest road to investment profits since Barney took over entire sections of F.A.O. Schwarz. And that means he and his show, “Barnyard Place,” are a very hot investment opportunity for Mom, Dad, Grandma and Grandpa.
At least, this is what was pitched according to a two-page sales script written for cold callers who operated briefly out of a boiler room in Scottsdale, Ariz.
“Barnyard Place” may indeed be a viable show. But Arizona regulators said April 6 that the telemarketers should cease efforts to sell interests in the show because the investments are unregistered and because the people doing the pitching were not registered brokers and were fudging the facts. No one connected with the sales operation could be reached for comment.
Operations like the one in Scottsdale, which play off a perceived need for more children’s television, have become a new avenue for swindles, according to regulators.
“We’re aware of it being a problem,” says G. William McDonald, assistant commissioner in the enforcement division at the California Securities Commission. “And we’re looking at a company but haven’t gone public with the case yet.”
“We’re working on several cases with similar products--programs aimed at children,” adds Philip A. Feigin, securities commissioner for the Colorado Division of Securities.
It doesn’t hurt the sales efforts that the public has heard about small entertainment production companies coming up with big hits lately, he adds. “With ‘Shine’ and other examples of independents making important movies for very little money, these guys are pitching that ‘You can get in on the ground floor, too.’ ” And the public is well aware of profits from licensing characters for toys and other products.
The Federal Communications Commission in 1996 inadvertently gave scamsters a new theme. The agency now requires that TV stations air at least three hours of educational programming for kids each week. According to a “Barnyard” video to be distributed to those expressing interest in investing, “Barnyard Place” was conceived “to meet the demand” for more good kids’ shows.
Investors also get a copy of a “Farm Pals” coloring book. “Get ready! We’re going to be on television,” reads the caption beneath an ebullient Mr. Buckethead on one page.
Arizona regulators provided a copy of the sales script after receiving a Freedom of Information Act request from Bloomberg News. It begins with an explanation that the caller--identified as an “associate producer,” not a salesperson--worked for the Frank Capra family. “I’m sure you’ve heard of some of the mega films that the Capra family has been involved in,” the script reads, citing such classics as “It’s a Wonderful Life” and “Mr. Smith Goes to Washington.”
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Indeed, Frank Capra Jr., son of the renowned movie figure, is president and an initial member/manager of the limited liability company called Barnyard Place Partners, the Burbank company formed for the purpose of raising money to produce “Barnyard Place.”
Regulators aren’t questioning the pedigree of Capra Jr., though. They’re wondering about the sales pitch being used by Barnyard and are charging that the sales team was a group of unregistered brokers selling unregistered securities.
A classified ad appearing in the Arizona Republic in late February sought “PRO-CLOSERS” who would be like to “Earn big $$” working with a “1st class team” in Scottsdale. That, regulators said, turned out to be the Barnyard peddlers employed by an unregistered brokerage firm called Scottsdale Financial.
Sharon Fox, an assistant director of Arizona’s enforcement division, says salespeople in Arizona were directed to tell potential investors that they were calling from Burbank, “right next to NBC.” To support the ruse, the callers were also instructed to tell the person on the other end of the line that the weather in Burbank was overcast, “because Burbank is always overcast and you won’t go wrong,” according to the legal complaint.
Efforts by Bloomberg News to reach the company and its executives were unsuccessful. No one answered the telephones at Scottsdale Financial. Capra did not respond to messages left for him in Burbank. Chris Paulick, a “producer” at Silver Vision Entertainment, did not return a telephone call. There was no published telephone number for Jack Walton Combs Jr., president of Scottsdale Financial, who was a stockbroker with Harris Securities Inc. until last July, according to his records with state securities regulators.
Fox says that so far as she knows, Scottsdale Financial was not in business long enough to collect any money from the investors it tried to woo. “Scottsdale Financial was only organized a month ago,” she said.
Fox says her unit regularly scouts newspaper ads for outfits recruiting cold callers. “We have an investigative staff here that goes out and gets hired,” she says. She wouldn’t say whether that’s how Arizona wound up shutting down Scottsdale Financial, but you can draw your own conclusions about how the investigators got the inside poop on the marketing of Mr. Buckethead.
Scottsdale Financial may have been shut down, but be braced to hear your phone ring with solicitors from similar operations making pitches, securities cops warn.
“Independent programming is hot stuff right now, and it takes very little money to get on local access channels, so they can say, ‘There’s our product,’ ” Feigin says.
And with the public having heard all the fuss about improving programming for children, there’s a strong subliminal message to assist with the pitch, Feigin adds.
“These guys can say anything they want because there’s no real market” for interests in television pilots, he says. “If you’re not bound by the facts, you can make up one hell of a product.”
