Franchise head made oral deal with Baeres on bloated costs
In a third day of testimony, Franchise CEO Elie Samaha was quizzed by Intertainment attorney Scott Edelman about the inflated budgets on a slate of pictures he produced.
The questioning culminated in the screening for the jury of an interview Samaha gave in which he said he always kept four different budgets.
In the interview given to a Daily Journal reporter three years ago, Samaha said the highest budget went to Intertainment, a slightly lower budget went to the bank, a lower budget went to the director because “you never want them to know how much fucking money you have” and the lowest budget went to the guilds, which collect payments based on the budget.
On direct examination by Franchise attorney Bill Price, Samaha said he hadn’t sought out the interview and he wasn’t boasting about the multiple budgets. He also said the guilds were paid the proper amount.
Price had Samaha remind the jury that he never graduated from high school and didn’t speak English as a first language. “I learned English from Clint Eastwood movies,” said Samaha, provoking one of the few laughs of the day.
Secret oral deal?
German distributor Intertainment is suing Franchise Pictures for $100 million, claiming it was given grossly inflated budgets on the films, thereby financing 60%-90% of such films as “Get Carter” and “Whole Nine Yards” instead of the 47% it was supposed to provide in exchange for European rights. Franchise claims the budgets were inflated pursuant to a secret oral deal Samaha had with Intertainment CEO Barry Baeres.
Samaha stuck to his story that the budgets were inflated with Baeres’ knowledge, but he offered various explanations of what was in it for Baeres. Samaha said Baeres wanted the films at any cost to prop up his stock price but conceded that Baeres went to him instead of a studio for films because Franchise was cheaper. Samaha also reiterated that the plan always was that Baeres said he would buy Franchise so it didn’t matter what the budgets were.
Under questioning by Price, Samaha said that on at least three films Baeres was aware the budgets were inflated. Samaha testified that on “Battlefield Earth” Baeres became very agitated when his lawyers discovered the true budget. On “Get Carter,” Intertainment was sent a budget with an absurd $9 million producing fee, which an Intertainment executive protested. Baeres, Samaha claimed, said he would take care of it. Similarly, Baeres became upset when an Intertainment board member saw the real budget on “The Whole Nine Yards.”
Didn’t want Baeres deal
Samaha alternatively said he never wanted to do the multipicture deal with Baeres and that he had to because Franchise was broke. “I was blackmailed,” said Samaha. “Barry was dangling a letter of credit in front of me.”
In his third day on the stand, Samaha continued to give long, discursive answers, at one point prompting U.S. District Court Judge Alicemarie Stotler to say, “Actually, no one asked you a question.”
In other testimony about the inflated budgets, Samaha acknowledged that other foreign distributors besides Intertainment got inflated budgets on films such as “The Heist,” which had a real budget of $28 million and a phony budget of $36 million. At times, Samaha claimed the higher budgets were “guesstimates” but conceded it was “wrong” to send the phony budgets to other foreign distributors.