HFPA trial testimony centers on approval issue
The trial over rights to the Golden Globe Awards on Thursday delved into the dealmaking strategy deployed by the head of Dick Clark Prods. in 2010 as he secured a long-term rights deal with NBC.
In proceedings in a federal courtroom in Los Angeles, Mark Shapiro, CEO of Dick Clark Prods., admitted that he told NBC’s Marc Graboff that he needed the approval of the HFPA to secure a rights deal with the network when he knew that he did not.
Shapiro called his representations to Graboff a “negotiating strategy,” one he carried throughout the year even though he never told the HFPA that there was a new deal with NBC until it was actually done.
“It was not entirely accurate,” Shapiro said. “I did not need approval from HFPA.”
DCP negotiated a deal with NBC that would give the broadcaster rights to the Globes through 2018. The HFPA sued DCP in November 2010, claiming that its longtime producer made the deal without its permission.
But DCP contends it never had to, citing an “extensions clause” in a 1993 pact with the HFPA giving it the option to produce the show in perpetuity as long as it continued to secure the Peacock network to broadcast the show.
With NBC’s broadcast rights due to expire after the 2011 show, Shapiro said that as DCP started negotiations with NBC in 2010 he faced obstacles if he was to dramatically increase the amount that NBC paid for the show. HFPA members had pressed him to seek at least $20 million, double the license fee it was earning.
For one, ratings were not as great as they were before the 2008 WGA strike, which forced the Globes to abandon the show and instead hold a press conference announcing the winners. But Shapiro said he also worried that if NBC was to pay so much, it would ask for much more in return, including rights giving it the flexiblity to change the date of the show and even its locale, as one suggestion had been to move it to the Universal lot.
So Shapiro said he told NBC multiple times that he needed the HFPA’s approval, as the negotiating strategy was to give “a sense that I had a higher authority to answer to” and was limited in what the exec had the power to negotiate away.
“I did believe that (Graboff) believed me, that the negotiating strategy was working,” Shapiro said.
As the deal dragged on, Shapiro told NBC that he faced a “deadline” to get it done. In fact, there was no such thing. But he said there was “urgency” to do a deal, as Comcast was about to take over the network and NBC Universal CEO Jeff Zucker wanted to land a new Globes pact as part of his legacy.
Even when the deal was done, Shapiro admitted that he told Graboff that he had to take it back to the HFPA for approval. In fact, Shapiro said he did no such thing, and had only told the HFPA that he was “talking” to the network but did not include the HFPA in the negotiations, inform them of his strategy or inform them of the progress of the deal with the network as it was unfolding.
Shapiro said he did think that the HFPA would be pleased with the deal he got: an average of $21.5 million per year. Instead, the HFPA took legal action against DCP just weeks later. Shapiro told the court that he was not aware that then-HFPA prexy Philip Berk met with CBS’ Les Moonves to discuss moving the show to that network.
HFPA’s legal team argues that even if the 1993 pact did not explicitly state that DCP needed to secure its approval, the contract has been interpreted that way through the years.
Linda Smith, repping the HFPA, pointed to a Feb. 9, 2010 email that Shapiro sent to Berk in which he said, “I would never make a move on a network renewal or new home without your involvement. We’re together on this.”
But Shapiro said “there were a lot of reasons to involve them that had nothing to do with legal rights or contracts. They were our partners.”
Under questioning from DCP’s trial counsel, Martin Katz, Shapiro recounted a lunch he had with Berk in late February 2010 in which Berk struggled in the dim light of the restaurant to take his own notes of their conversation on his Blackberry.
Shapiro offered to take notes for him, and typed “what we agreed to,” including a reference to DCP having “rights in perpetuity.” Shapiro said he showed the notes to Berk, who suggested a few changes but didn’t take issue with them.
Katz asked Shapiro on the stand Thursday whether there was any question of clarity.
“None whatsoever,” Shapiro responded.