CEO on board of pay TV firm tied to New Line
Despite heading SAG for the past 10 months, SAG CEO Bob Pisano has retained his post on the advisory board of Cinema Entertainment Group, a start-up pay TV company with a strategic partnership with New Line Cinema.
Pisano has insisted his CEG position does not represent a conflict of interest with his duties at SAG, even though New Line is a major employer of SAG members. The exec also asserted that SAG’s search committee and outside attorneys found no problem with his holding the CEG post prior to his hiring.
Pisano made a similar claim following recent disclosures that a trust in his name holds $865,000 of investments in Netflix, an online DVD company whose investors include five Hollywood studios (Daily Variety, June 13).
“Since assuming my duties as CEO/national executive director on Sept. 11, 2001, I have acted for the Guild and its membership without regard to the effect my actions might have upon any investment I hold or upon any company in whose corporate governance I may participate,” Pisano said in a statement.
SAG excluded Pisano’s participation on the Cinema Entertainment Group advisory board when it issued a news release about his SAG appointment last September but Pisano refused Tuesday to comment on why CEG was not included in the annoucement at that point. CEG, which is privately held, had announced in April, 2001, that Pisano had been named to its advisory board.
Pisano and CEG spokeswoman Patricia Firth also refused to disclose how much compensation Pisano has received from CEG. Firth said the company could go public in the future but offered no specifics.
Pisano’s investment in Netflix consists mostly of stock options he was awarded as compensation for serving on its board. The holdings in Netflix, which went public a month ago, are held through a trust in his name for the benefit of his children but he has refused to say whether that trust is irrevocable.
Pisano, a former MGM exec, has also refused to comment about the disposition of his options to buy over 500,000 shares of MGM stock.
“The MGM investment, CEG compensation and my service on CEG’s advisory board were all disclosed to the search committee of SAG’s national board before I was hired,” Pisano said. “The committee, in concert with outside legal counsel, determined that these facts posed no conflict of interest with my prospective duties.”
Search committee chief Gary Epp has confirmed that the panel reviewed Pisano’s investments and agreed with the opinion of outside counsel that no conflict of interest existed.
Recent disclosures of Pisano’s investments have come in the wake of SAG’s membership voting to end its franchise agreement, largely due to concerns over potential conflicts of interest created by agencies taking stakes in production entities. Despite active campaigning by Pisano and SAG prexy Melissa Gilbert for easing ownership restrictions on agencies, thesps voted down the revamp with a 55% no vote.
Pisano’s contract with SAG pays him $390,000 annually.