Producer Eric Schotz was getting a haircut on the morning of June 30, 2016, when his life changed.
Schotz was sitting in the barber’s chair when he got an urgent call from his son Andrew, who works at LMNO, the independent production company that Schotz headed for nearly 30 years. The FBI had arrived at the company’s Encino offices with a search warrant seeking documents in connection with an alleged embezzlement scandal that LMNO said it discovered about six months earlier involving its longtime accountant.
The raid marked a sharp escalation of a two-pronged legal battle that Schotz, 62, waged from 2016 to early 2018, with parallel lawsuits filed against the company’s former accountant, Paul Ikegami, and Discovery Communications, one of the industry’s largest buyers of unscripted programming from independent banners such as LMNO.
Discovery countersued and accused LMNO of defrauding the company through its production budgets and of keeping two sets of books. LMNO accused Ikegami of embezzlement, of mismanaging LMNO’s accounting and of soliciting an $800,000 bribe in order to keep him from making false allegations about LMNO to Discovery. Ikegami accused LMNO in a separate suit of defrauding Discovery. LMNO accused Discovery of using accounting fraud as an excuse to take control of hit shows, including “The Little Couple,” that LMNO produced for Discovery outlets.
After living through two years of turmoil and the dissolution of LMNO as an active production entity, Schotz is back in primetime this month as the executive producer and driving force behind ABC’s revival of “Kids Say the Darndest Things,” with Tiffany Haddish as host. The series bows Oct. 6.
“I saw her act and realized she had the improv skills and the empathy to talk to kids,” Schotz says of Haddish. “She was a natural.”
The dueling lawsuits between LMNO and Discovery were settled in February 2018; the litigation with Ikegami was settled in April 2018. Schotz can’t discuss anything to do with the Discovery case or the settlement — other than to say that it was “satisfactory to all parties” — because of iron-clad nondisclosure agreements. Discovery also declined to comment. Ikegami did not respond to a request for comment.
Peter Morris, an LMNO attorney with Barnes and Thornburg, said the U.S. Attorney’s Office in Los Angeles has “confirmed that the investigation of LMNO has been declined” and that all materials taken during the probe have been returned to LMNO. Thom Mrozek, spokesman for the U.S. Attorney’s Office for the Central District of California, declined to comment on the case as a matter of policy.
But Schotz can talk about how he survived the storm with the help of some of those who have been his fiercest competitors in business, as well as his family and the continuation of business relationships with other cable and streaming buyers, notably A+E Networks.
“It was overwhelming,” Schotz says. “When you think you’re losing everything you’ve ever worked for in your life — it was rough. There were days it was tough to get up and go to work.”
Headlines about the lawsuits and the FBI raid at the offices were enough to make Schotz feel like he would be a pariah in the industry. To his great surprise, LMNO’s longtime rivals in reality TV rallied to his side, going so far as to host a very public cocktail party for him in August 2016 at E.P. & L.P. in West Hollywood, and generally speaking out on his behalf in the community.
Schotz’s legal problems coincided with the rise of two trade organizations for unscripted producers, PactUS and the Nonfiction Producers Assn., which wound up merging in 2017 into NPact. Those organizations strengthened the bonds among indie producers at a time when all of them were facing business pressures as the TV marketplace underwent massive change.
“Eric has been a mentor of mine and a friend of mine,” says Brent Montgomery, executive producer of “Pawn Stars” and other cable hits, who now heads the Wheelhouse content production venture. “What he had to go through would have beaten others. I don’t know that I would have had the fortitude to come back from something like that.”
Schotz had to effectively shutter LMNO as an active production entity after the sudden loss of multiple series on Discovery channels tanked his revenue base. At the time the company had about 300-400 employees. In the eye of the storm, he was able to stay in production on two specials that were underway for A+E Networks’ History cabler: “D.B. Cooper: Case Closed?” and “Transition of Power,” examining presidential handoffs over the years.
“That was maybe the single biggest vote of confidence” from History, Schotz says.
The proactive response from his competitors — fellow producers such as Montgomery, Renegade 83’s David Garfinkle, Critical Content’s Tom Forman, Bobcat’s Thom Beers, Bunim-Murray’s Jon Murray and Atlas Media’s Bruce David Klein — became like a “protective bubble around me,” Schotz recalls. He rarely had a day without a phone call, lunch, dinner or meeting with one of his longtime associates.
“We had a group of people around us who allowed us to get through this,” Schotz says, with a catch in his voice. “It became a day by day thing. I went to Monday and got to Tuesday.”
Eventually, Schotz regrouped under a new production banner, Anvil 1893 Entertainment, which is designed as a boutique rather than the “TV factory” that LMNO had become. Anvil 1893 is run as a family business, with Schotz’s wife, Linda, his partner of 39 years, and son Andrew among its roughly 30 employees.
“It’s not a 10% margin business anymore — your whole company overhead has to come out of that margin,” Schotz says. “It’s really hard to be that large independent that is successful. It’s the boutique model that seems to be working.”
As NPact officials and others have noted, the combination of ever-rising production costs, stagnant license fees from major buyers coupled with high production value expectations from networks have made it much harder for indies to prosper, even those that have a big roster of shows.
That’s one of the reasons why a number of LMNO’s peers such as Montgomery’s Leftfield Pictures and Beers’ Original Productions have sold their operations to larger corporate entities — ITV and FremantleMedia, respectively — in during the past six years.
Schotz had been pursuing the rights to “Kids Say” for years from CBS, owner of the franchise that dates back to the 1950s with TV legend Art Linkletter, before the stars aligned and Schotz was able to complete a deal last year. LMNO produced the previous incarnation of the show, hosted by Bill Cosby, for CBS from 1998 to 2000.
With Haddish on board, “Kids Say” drew multiple offers from broadcast and cable networks. ABC persuaded Haddish and Schotz that the show was a perfect fit on its family-friendly Sunday lineup between “America’s Funniest Home Videos” at 7 p.m. and “Shark Tank” at 9 p.m., says Rob Mills, ABC’s senior VP of alternative series, specials and late night.
“Our pitch to Eric and Tiffany was that ‘Kids Say’ could be something that could run forever, just like ‘AFV,’ says Mills.
Haddish has no shortage of offers coming her way. “Kids Say” got a quick yes because she loved the 1990s version of the show, and she was eager to demonstrate a different side to her humor.
“My comedy has always been for a mature crowd,” Haddish says. “I feel like this is a great way to show the world that I can do multiple types of comedy. Kids love me.”
In fact, Haddish used to regularly land gigs as a host for bar mitzvahs and bat mitzvahs when she was just starting out. After working together on “Kids Say” for a few months, Schotz and Haddish gradually realized that she had been the host at ceremonies for two of Schotz’s three children, Samantha and Zachary, in 2000 and 2004, respectively. They dug out the family pictures to prove it.
“It’s hilarious. Look how things come full circle,” Haddish says. Adds Schotz, “You can’t make this stuff up.”
The latest iteration of “Kids Say” will take full advantage of Haddish’s “fearlessness” and skill at physical comedy, Schotz says.
The new version will feature the classic interaction between Haddish and a panel of everyday kids discussing a variety of topics. But there will also be more taped segments featuring Haddish and kids in comedic situations outside of the studio. Haddish has earned her title as an executive producer of the show, Schotz says.
“She has input in everything that we’re doing and how we’re doing it,” Schotz says. “She is the voices of the taped pieces and the pranks. She’s vulnerable and she’s engaged.”
Haddish has high praise for Schotz, especially coming from a comedian. “He’s funny,” she says. “He’s a very good producer. He’s a team player, and he gets things done.”
Despite the allegations that swirled around LMNO, ABC had no hesitation about getting into business with Anvil 1893, Mills says. “I’ve known Eric forever,” he explains. “Eric knows the ‘Kids Say’ brand so well. I think it would have been tough to do this show without him.”
The ability to regroup behind “Kids Say” has been a gift to Schotz and Anvil 1893. One of LMNO’s longest-serving employees, Ruth Rivin, is working on the show as a co-executive producer. Jack Martin, the showrunner and executive producer, worked on the 1990s edition of “Kids Say” at the bottom rung of the ladder as a production manager.
“That’s the part of this that feels so good — getting to bring people back together,” Schotz says.
Anvil 1893 is looking at branching out beyond reality TV into scripted and digital apps, as well as publishing opportunities. Schotz says his odyssey through the legal system and rebuilding a new business has made him ever more grateful for the ability to do what he has loved since he started out as a producer for KABC-TV Los Angeles in the 1980s.
“I love making TV shows,” Schotz says. “I love producing, directing and writing. I Iike collaborating. I like the process of building something from an idea up and turning it into something good. Nobody can take that from me. A lawsuit could never take that from me.”