Dispute centers on Golden Globe broadcast
Setting up a battle for control of the Golden Globe ceremony, the Hollywood Foreign Press Assn. is suing the longtime producer of its telecast, Dick Clark Prods., claiming that the company is trying to steal the rights to the lucrative kudocast away from it.
The org filed suit in U.S. District Court in Los Angeles on Wednesday against Dick Clark Prods. and its owner, private equity firm Red Zone Capital Partners, claiming, among other things, trademark infringement, breach of contract and breach of fiduciary duty.
DCP has the rights to produce the Globes in 2011 — and plans are moving forward for that ceremony — but the litigation raises doubts about what happens after that.
The suit was triggered by a deal Dick Clark Prods. made with NBC on Oct. 29 to broadcast the Globes through 2018. But the HFPA says the licensing agreement was made “surreptitiously” and “without their consent or authorization,” even after
HFPA informed DCP not to do so.
“Months earlier, HFPA had specifically instructed DCP not to discuss television broadcast rights with anyone unless and until HFPA and DCP were able to consummate a new deal to extend their soon-to-expire contractual relationship,” the suit states. “DCP assured HFPA that it would never do such a thing, but then broke its commitment by commencing and completing broadcast rights negotiations with NBC — all behind HFPA’s back, and all while pretending to negotiate a new contract with HFPA.”
The suit says that Mark Shapiro, CEO of DCP, e-mailed HFPA president Philip Berk in February with assurances that “I would never make a move on a network renewal or new home without your involvement.”
The HFPA also says DCP “has taken great liberties with its accounting for revenue generated by the Golden Globes Awards shows,” that it has started to pursue agreements to “produce, create or exploit digital rights, ancillary shows, sponsorships and promotional campaigns, even though it lacks the rights to do so.”
“And now, DCP has dropped all pretense of cooperation or good faith, and is attempting to assume complete control over rights to the show,” the suit alleges.
A spokeswoman for Dick Clark Prods. said in a statement: “The Hollywood Foreign Press Assn., knowing it has no case in a court of law, is attempting to try this case in the court of public opinion. We are confident the case has no merit in either venue. Our respective rights under the contract are clear. The HFPA cannot unilaterally change the basis on which DCP and the HFPA have done business for almost three decades.”
The HFPA’s suit seeks damages, as well as an order directing Dick Clark Prods. to “account to HFPA for all revenue and profits generated by each of the Golden Globe Awards shows.” It also seeks a preliminary and permanent injunction to stop it from using HFPA’s trademarks for any purpose other than the 2011 Golden Globes, and a declaration that HFPA is a co-owner of “all rights, title and interest in the copyrights” to a number of ceremonies and preshows.
DCP has produced the show since 1983, when the Globes were still suffering from the fallout of the infamous Pia Zadora scandal and had no network licensee. But DCP secured a deal with TBS that year, and, a decade later, as the Globes grew in popularity, it landed a deal with NBC. According to the suit, the arrangement has been that the HFPA and DCP split the proceeds from the show 50%-50%.
But the relations between the HFPA and Dick Clark Prods. has grown more chilly since Red Zone acquired the production company in 2007. The private equity firm is controlled by Daniel Snyder, owner of the Washington Redskins.
According to the suit, DCP has contended to HFPA that so long as it grants the broadcast rights to NBC, it can control the production and broadcast rights in “perpetuity.” The lawsuit suggested that DCP “claims to be empowered” by a 1993 amendment to its agreement with the HFPA, with a clause that talks of DCP obtaining the rights “to exploit such productions in all media through the world in perpetuity.”
The HFPA says that Dick Clark Prods. “never bargained for such unlimited and unchecked rights; indeed, it strains credulity to imagine what DCP could have given to induce HFPA to interminably abdicate its most valuable asset.”
The HFPA further suggests that DCP’s most recent agreement with NBC involved license fees “substantially below current market rates.” It did not say how much NBC was to pay for the rights, but included in the suit is a 1993 agreement showing NBC’s license fee gradually increased from $3.1 million in 1996 to $4.7 million in 2005.
The HFPA’s complaint goes beyond the most recent NBC deal and into Red Zone’s motives, claiming that Red Zone “is manipulating its control to drain DCP of its assets,” by putting up the library of Golden Globe shows and preshows as security to obtain a $165 million high interest short-term loan in part to pay for past debt. It also claims that the “timing was not a coincidence,” and suggested that Red Zone has been “quietly seeking buyers” for DCP. It says that DCP has “claimed for itself” the copyright ownership over the show, even though HFPA is a “rightful co-owner of those copyrights.”
In addition, it says DCP, claiming it owned the digital rights to the show, scuttled a meeting HFPA was to have with Facebook, with several other companies involved in digital plans.
The HFPA also argues that DCP “made questionable claims as production costs,” and sold sponsorships without telling them. They cited a $200,000 promotional deal with an undisclosed third party for the 2010 ceremony that the HFPA says it only discovered after learning from the third party.
O’Melveny & Myers represented the HFPA in the filing of the suit.