Small Films, Big Drama

Rachel Abramowitz is a Times staff writer

Woody Allen was a month away from beginning principal photography on his upcoming release, "The Curse of the Jade Scorpion," last year when he received a panicked phone call from his close friend and producing partner, Jean Doumanian. She told him there was a cash-flow problem.

It was an unusual predicament, given that in the seven years they had done business together, the dark-haired, dark-eyed 67-year-old appeared to have billions at her disposal. The money belonged to her boyfriend, Swiss-Lebanese financier Jaqui Safra, nephew of the late Edmond Safra, founder of the Republic National Bank of New York. When TriStar Pictures had gotten cold feet about handling Allen's films during the Soon-Yi scandal, Doumanian, backed by Safra, stepped in.

Now, according to two of Allen's associates, she announced that she needed to step out. In 1995, Safra had spent a reported half-billion dollars buying the Encyclopaedia Britannica, which in 1999 he was expanding online--at great cost.

She gave her longtime friend 48 hours to find new financing to save his production. Allen begged her to reconsider. He had an entire film crew working away on sets, casts and locations.

In the end, DreamWorks, which had cast Allen as a voice in the computer-animated hit "Antz," rode to the rescue, buying domestic rights to the next three Allen films. The German company VCL ponied up for the foreign territories.

For Allen, this was just the latest wrinkle in his dealings with a woman he'd once likened publicly to a Medici. Until this point, their professional relationship had been almost idyllic. She permitted Allen unparalleled creative freedom. He controlled everything from the casting to the final cut to the images that appeared on the video box. At least one former associate claims Doumanian didn't even read the scripts before green-lighting them. She practically never visited the sets and only saw the films when they were completed.

They were supposed to split all the profits after Doumanian and Safra recouped their investments, according to documents filed in the case.

Of course, the Medicis weren't like multinational corporations, subject to Federal Trade Commission rules and investor scrutiny. While Doumanian was immaculate in her dress and the way she decorated her offices and numerous houses, she and Safra were less than immaculate about some of the bookkeeping, never bothering, for instance, to send Allen the customary financial statements that studios usually send out quarterly, according to sources on both sides of the case.

After almost four years, Allen's business managers began to regularly ask Doumanian and Safra for an accounting, and eventually Allen himself asked.

"Jaqui would say, 'Jean will take care of it,' while Jean would say, 'Don't call Jaqui. He's very busy with the Encyclopaedia Britannica. I'll speak to him about it,"' says Letty Aronson, Allen's sister, who worked for Doumanian and Safra. "Woody's not good about pushing things with friends."

"I don't think they [Doumanian and Safra] were the most organized people when it came to paperwork," says Helen Robin, a production manager who's worked for Allen off and on for 15 years. "I've tried to close the books on the last films since 'Mighty Aphrodite' and haven't been able to because of missing paperwork. There have been a lot of things left hanging in the air."

Finally, earlier this year, Allen's manager, Steve Tenebaum, hired the auditing firm Sills & Adelmann to fly to Amsterdam, where Doumanian and Safra's production company is based, and elsewhere in Europe to examine the books.

Based on the auditors' report, Allen's business manager reckoned he was owed money--a figure close to $10 million--says a close associate of the director.

Allen, who continued to socialize with Doumanian and Safra, begged them to settle the dispute privately by taking the matter to an arbiter, but they refused.

"Up until the night before he filed the papers, he said, 'Don't make me do this,"' says Aronson.

In May, the writer-director finally sued not only their corporation, Sweetland Films, but Doumanian and Safra personally, in New York City. He claimed that Doumanian and Safra's accounting of the pictures was "false and misleading," and that the pair "breached, reneged on and failed to abide by their agreements to pay Moses [Allen's company] its agreed-upon shares of the gross profits."

Perhaps not surprisingly, Doumanian has taken the lawsuit very badly, friends say, feeling horribly betrayed.

"The worst thing Woody Allen did was to go beyond suing the corporation with which he had the contract and to sue his two old friends as individuals, embarrassing and subjecting them to media attack," fumes Bertram Fields, Doumanian's lawyer, who denies the charges on his client's behalf.

Last Monday, Doumanian and Safra responded and countersued. They claim that they don't owe Allen any money because all the films were cross-collaterized, that all the profits and losses on the films were assessed as a collective whole.

That would mean the heavy losses sustained on "Sweet and Lowdown" (1999), in particular, canceled out the profits on such films as "Small Time Crooks" (2000) and "Deconstructing Harry" (1997).

Under traditional studio financing, the filmmaker enjoys any possible rewards, and the studio suffers any possible consequences. But in the contract for the first three pictures--a portion of which was viewed by the Los Angeles Times--the filmmakers and his financiers were to share both the upside and the downside on all the pictures, collectively.

"Now Mr. Allen would like to take more money from his old friend by claiming the contrary," Fields says. "He'd like to not count the significant losses he incurred. In effect he's saying, 'Ignore my losses and pay me more money."'

There is no written contract for the last five of the eight films. After making "Bullets Over Broadway" (1994), "Mighty Aphrodite" (1995) and "Everyone Says I Love You" (1996), the pair hadn't even bothered to extend their written contract, preferring simply to operate on a handshake agreement. According to Allen's suit, those films were done on a series of "single-film" agreements.

In almost two dozen interviews with current and past business associates and friends, a portrait emerges of a multimillion-dollar film business run like a tony mom-and-pop operation with a world-class artist in commercial free-fall who nonetheless made a film a year, backed by a rich woman with a hefty allowance from her mysteriously reclusive boyfriend.

"Once we have successfully dismissed these individuals from the case, I want to sue Mr. Allen and his advisors for malicious prosecution," threatens Fields. "This trial is going to show the world a side of Woody Allen they've never seen before."

It's hard to imagine what more sludge could be thrown at Allen, who has survived a brutal child-custody battle and allegations, now dismissed, of child molestation.

Yet since Allen's May filing, the battle has quickly devolved from a simple accounting dispute--the most common in Hollywood--into a full-scale media war with both sides lining up their trusty PR lieutenants (PMK for Allen, Dan Klores for Doumanian). None of the participants will comment publicly, and the threat of publicity is one of the land mines of the trial, seen as a potential danger for Allen, Doumanian and the reclusive Safra, who lives primarily in Switzerland, only visiting the U.S. for a certain number of days a year, or--as Doumanian explained to associates--his tax status would be adversely affected.

Apparently, Doumanian's ire was the last thing Allen expected.

"Have you lost your mind?" he wrote her in a handwritten note right after the suit was filed. "... [T]hat you could think that I would ever suggest you crooked me!"

"This is totally a little business disagreement. It nowhere says a tiny bad thing about you or Jaqui or Sweetland," he adds, pleading with her to have dinner with him in a high-profile restaurant to show the newspapers their solidarity. Indeed, he described their continual talks about how they would handle the situation using a line from "Adam's Rib," the classic Hepburn-Tracy film: "Lawyers by day, friends by night."

Now that word of Doumanian's unhappiness has seeped into the press, Allen, through his lawyers, Michael Zweig and Sunny Brenner of Loeb & Loeb, says, "Common sense would tell you that if the defendants actually believed in their positions on the merits, they would not have to resort to smears or distractions that have nothing to do with this accounting dispute."

"By contract, he's due an accounting. They refused to give it. It's really that simple," says Aronson, who's producing "Jade Scorpion." "Believe me, he thinks if they haven't paid him, it's an oversight, it's a mistake."

For Hollywood insiders, the whole brouhaha seems somewhat absurd because the conventional wisdom is that Woody Allen films don't make money. Indeed, as Peter Bart, editor in chief of Variety wrote in an incredulous editorial, "Financing the Woody oeuvre has always been a semi-philanthropic endeavor."

Certainly the grosses of Allen's recent films do not approach the high-water mark of 1986's "Hannah and Her Sisters," which earned $40 million in the U.S. The seven films Allen directed during Doumanian's tenure grossed only $65 million domestically. Yet, Allen's films, whose budgets ranged from $14 million to $29 million, have continued to perform overseas, and Doumanian, by several accounts, was adept at selling them to foreign distributors.

"Believe me, he's not on a government grant," says Robert Greenhut, who produced 21 films for Allen, including three with Doumanian. "The films do OK. No one's getting rich, but they make money. Jean, to her credit, engineered profit on those films. She's a smart, tough businesswoman who was able to sell those films in a way that created profit."

From Doumanian and Safra's perspective, they've been nothing but generous to a man she considered her oldest, dearest friend, already paying him $3 million in profits. Noted Fields, "They don't owe him anything!"

Some of the current dispute stems from the intimate nature of Allen and Doumanian's relationship. They spoke constantly on the phone, dined regularly at their hangout Elaine's, attended Knicks games, weekended together, traveled through Europe on the Safra private jet. Following the Soon-Yi scandal, Doumanian defended him with the roar of an acid-tongued lioness, telling New York magazine that Mia Farrow (Allen's former girlfriend and Soon-Yi's adoptive mother) "threatened to kill him, and asked if Soon-Yi was better in bed than she was. She made Woody's life a living hell."

"Everyone was very friendly," Greenhut says. "That was the problem. When everyone's friends, normal business procedures get swept under the rug. This has been going on eight years. With anybody else, the litigation would have gotten plugged in five years ago. Woody's been incredibly patient."

For Doumanian's advocates, this chumminess is proof-positive that Allen, despite his contentions, knew precisely how the films were faring.

"The production accountant sat in Woody Allen's offices; Woody attended budget meetings," Fields says. "His sister was intimately involved with all the finances. Letty signed all the checks. He knew what the grosses were, what the major territories were sold for."

Still, Allen isn't the only one who believes Doumanian owes him money. Greenhut, to whom Allen allotted a share of his profits on "Mighty Aphrodite," "Bullets Over Broadway" and "Everyone Says I Love You," says she also owes him money.

Doumanian hired Oscar winner Barbara Kopple to direct one of the films named in the suit, the 1997 documentary "Wild Man Blues," about Allen's tour of Europe with his jazz band and his then-girlfriend, now wife Soon-Yi. "I'm owed money too, although I'm not part of the lawsuit," says Kopple, who claims that Doumanian promised to share the profits.

"Everyone's written her lots and lots of letters and sent invoices," Kopple says, "and we've never gotten a response, and never gotten an accounting of what the film did."

Fields denies both Greenhut and Kopple's claims. He points out that Greenhut only worked on the first three films. "Bob Greenhut is talking through his hat," Fields says. "There's no way he could know the finances of the pictures after he left." As for Kopple, Fields says her film hasn't reached the point of profitability at which Kopple would receive additional money.

Doumanian has known Allen since meeting the young comic at the Chicago comedy club Mr. Kelly's in the mid-'60s, and her friendship with him has grown steadily through the years. When Allen bought a cream-colored Rolls-Royce in the '80s, it was Doumanian who advised him. When Allen bought a summer house in the Hamptons, she supervised the decorating, an experiment in cool, all-white interiors and bleached pine antiques. According to two biographers, he spent one night there before deciding to sell the place.

"Jean was like a sister to him," says celebrity photographer Lynn Goldsmith, who's known Doumanian since the film producer was a buyer at Saks Fifth Avenue in the '60s. "If I didn't do business with Jean, I'd like her. She speaks well. She dresses well. She has excellent taste. She has that thing which many celebrities have ... when they want something from you, they make you feel like they're your new best friend."

After Doumanian divorced her husband in the mid-'70s, she moved to New York, where Allen helped her land a job as a talent booker for talk-show host Dick Cavett, a friend of his. This was followed by a job booking talent for "Saturday Night Live" and a brief stint running the show during the 1980 season.

While her ascension was a breakthrough for women in the entertainment business, it was also something of a debacle. The writers hated her, dubbing her "Ayatollah Doumanian." The best that can be said is that Eddie Murphy was discovered on her watch.

In the decade that followed, Doumanian dabbled unsuccessfully in show business, working on a screen bio of Broadway showman George Abbott, and producing several TV pilots that never aired. Finally in 1991, she produced "The Ox," directed by cinematographer Sven Nykvist, whom she had met through Allen. The film was nominated for a foreign-language Oscar.

It was in the mid-'80s that she hooked up with Safra, who made it possible for her to enter the Woody Allen business. Doumanian and Safra have homes in Ireland, France and Switzerland, and several properties in New York.

During the midst of the Soon-Yi scandal, Sony, where he was contracted for several more pictures, asked him to delay his next production six months. This provided an opportunity for Doumanian and Safra, who according to Aronson, had been begging Allen for years to let them finance his films.

"I think that Jaqui's interest in the films was primarily for Jean. She really wanted it and that's why he did it," Aronson says.

The official line, which Doumanian reiterated publicly, was that her company, Sweetland Films, was backed by a "consortium of European investors," although several people who worked with her say the prime investor, if not the only investor, was Safra.

Safra, who appeared as a diction student in Allen's "Radio Days" (1987), took an executive producer credit on all the films under the pseudonym J.E. Beaucaire. Lined with vintage European movie posters costing in the neighborhood of $50,000 each, Doumanian's offices were in the Madison Avenue suite of Safra's company, Global Pursuits. When there were major financial questions, Allen dealt directly with Safra.

Most independent films are financed with bank loans, but for Allen's projects, the necessary millions were simply wired into production accounts weekly. Safra did not even charge interest for the use of his money. Only after the films were finished did Doumanian sell the rights to U.S. and foreign distributors, sight unseen. Prospective buyers were given only a cast list and brief description.

In the last decade, Allen has gone through a number of domestic distributors, bouncing from Miramax to Fine Line to Sony Pictures Classics. Yet, his foreign distributors were loyal. Although his overseas market was eroding 10% to 15% a year, the buyers knew about how well the films would perform, a certainty that allowed them to buy his films for appropriate prices.

"She was a tough negotiator," says one source, with expertise in the foreign marketplace. "She kept the prices up and never trashed the marketplace by underselling the films."

Indeed, Doumanian impressed at least one American distributor with her professionalism. "Jean's always been straight with us. Very clear," says Michael Barker, co-president of Sony Pictures Classics, which released "Sweet and Lowdown."

Doumanian generally sold the domestic rights for $3 million to $10 million and the foreign rights for $15 million to $20 million, according to sources on both sides of the case. Because Allen was very stringent in how he wanted his films to be played, there were limited TV deals.

In his studio deals, Allen had sought to keep the cost of the films down by paying actors nominal fees and taking his cut out of the gross profits of the film. Then, he paid himself scale (Directors Guild minimum in 1980 was $72,000), although his fee rose to $250,000 and later $500,000. He did, however, take 15% of the first dollar gross, meaning a cut of every dollar the studio earned, from the moment the first patron walked through the door. This could be very lucrative on films like "Annie Hall," which earned $39 million at the domestic box office. Unlike the vast majority of filmmakers, Allen also owned his negatives.

Under his agreement with Doumanian, he essentially took a cut in fee. Allen was paid $2.5 million upfront and shared the profits with Doumanian and Safra--but only after they recouped their investments. Moreover, Doumanian and Safra owned the negatives, while Allen was simply a profit participant.

By many accounts, Doumanian never subjected Allen's artistic vision to fiscal limitations.

"She would rant and rave about the things he would do, but he had complete freedom," says one former production staffer. "There was never a discussion of that stuff."

However, she did institute cost-saving measures--ones that antagonized a number of longtime employees. Before Doumanian arrived, working for Allen was about as secure a job as could be had in the notoriously insecure film business. Doumanian slashed salaries, cutting crew fees down to scale. In previous years, Allen paid the actors $10,000 a week. That was cut to $5,000.

Some of the cuts were smaller. On the set of "Mighty Aphrodite," she mandated that craft services, which usually provides an unending stream of doughnuts and munchies to fuel crews through long shooting days, would no longer serve coffee after lunch. After a mini-rebellion, the coffee was reinstated.

"All the slashing and cutting was just on the surface, just cosmetic things," Greenhut says. "It created a bad atmosphere, with no real rewards. The budgets if anything have gone up."

Doumanian also trimmed the fees of Allen's key collaborators.

Greenhut's salary was cut 60%, and he ultimately quit. He was followed out the door by Thomas Reilly, Allen's longtime first assistant director; Susan Morse, his editor; set photographer Brian Hamill; and costume designer Jeffrey Kurland. All were replaced by less expensive employees. Of his longtime brain trust, only casting director Juliet Taylor and production designer Santo Loquasto (whose salaries were not cut) remained. Doumanian friends say nothing was done without Allen's agreement, and indeed, Allen is famed for his need for total control.

Doumanian, meanwhile, raised her own salary from $500,000 to $750,000, Aronson says.

Despite Doumanian's cost-cutting, some who dealt with her felt she had little grasp of the mechanics of filmmaking.

While it was Doumanian's idea to make the documentary "Wild Man Blues," which portrays Allen as an amusing narcissist and Soon-Yi as his practical helpmate, her interest in the actual product seemed minimal.

"She would come in with Letty [Allen's sister] and talk on her cell phone. She didn't look at the movie," Kopple recalls.

This film produced a lawsuit from photographer Goldsmith, who had been hired at Allen's request to take publicity stills. Doumanian refused to return the pictures, and after a year of making numerous requests, Goldsmith finally sued her. Goldsmith said Allen ultimately paid for the settlement of the suit.

During this time, Doumanian spread her wings in the business, producing David Mamet's film "The Spanish Prisoner," as well as several films by novice filmmakers. While most of the little films did not find American distributors, she sold them overseas as a package with the Allen films.

This side business produced another lawsuit from filmmakers Rob and Webb Stone, who claim that Doumanian stole their project and made a film of it. The suit was settled, reportedly for more than a million dollars.

According to Fields, the lost Goldsmith photos were "never Jean's responsibility. In the case of the Stone brothers, Fields says Doumanian simply cut them out of the dealmaking, preferring to negotiate directly with the writer on the project.

In any event, the Allen-Doumanian alliance might have continued happily were it not for "Sweet and Lowdown" The Depression-era tale of a selfish jazz guitarist's relationship with a mute woman had provided more than its share of drama, from star Sean Penn's bitter tirade about Doumanian in front of 100 extras, to the $29-million picture's ultimate demise at the box office. According to those familiar with the production, Doumanian and Safra are believed to have lost more than $10 million on that film.

Over the years, Safra, claims an Allen associate, had begun to complain about the vagaries of the film business, from the length of time it took to recoup the revenue from the various territories to the fact that Allen was a profit participant in all the films, meaning that Safra and Doumanian's library of Allen films would be worth less to a potential buyer.

Allen, meanwhile, was increasingly frustrated by the lack of accounting. According to two sources from different sides of the dispute, he was also unhappy that his salary hadn't increased in the seven years he'd done business with Safra and Doumanian. He'd supplemented his income with occasional acting jobs. Allen had recently sold his longtime Central Park bachelor apartment for $14 million, and bought a townhouse on the Upper East Side for $17.7 million, which he was renovating.

Soon after the "Sweet and Lowdown" debacle, Aronson said Allen faxed Safra a proposal to solve their respective gripes. "He said, 'Settle what you owe me. I'll give up my 50% [ownership] of the movies as a gift. On future movies, double my salary. Don't give me any back end, and the movies are yours,"' Aronson says.

Safra never responded and soon after pulled the plug on the financing. At Doumanian and Safra's behest, a statement was issued that their professional divorce was amicable. Afterward, Doumanian took possession of all the joint assets, from Allen's editing system to the two warehouses of costumes and furnishings--everything from china to chandeliers that the filmmaker had accumulated from his days working for Orion Pictures and TriStar and recycled through his productions.

When Aronson asked Doumanian if they could use some of the costumes for "Jade Scorpion," which is set in the '40s, "Jean said, 'Absolutely not. If you want to use it, you'll have to pay for it,"' Aronson recalls, and they were forced to rent back the clothing from Doumanian.

Allen's supporters believes he owns half of those assets, however Fields says, "Studios typically retain their props."

Whatever the truth, almost everyone who's ever dealt with either Allen and Doumanian is perplexed and fascinated by the drama, from those who assert that an ungrateful, solipsistic Allen is merely lashing out at an old friend, to Allen sympathizers who can't believe Doumanian and Safra are arguing over a few million dollars.

Fields says that Doumanian and Safra would be happy just to give Allen his films back and be done with it. In the countersuit, they're asking the judge to abrogate the terms of the initial agreement, meaning Allen would get the films, and Doumanian and Safra would get back all the money they've spent.

Adds Fields, "Jean doesn't want anything to do with this guy anymore."

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