Golden Globes Trial Exposes Dick Clark CEO's Misleading Negotiating Tactics

Dick Clark Production's Mark Shapiro cops to bluffing — former NBC exec Marc Graboff also takes the stand

Dick Clark Productions Chief Executive Officer Mark Shapiro had to admit in Los Angeles District Court late this week that he employed bluffs and half-truths to get NBC to agree to an $150 million deal to air the Golden Globes. 

The practice is likely standard operating procedure in Hollywood, but copping to the ploys can not have been pleasant for Shapiro. 

The deal is at the center of a legal scuffle between DCP and the Hollywood Foreign Press Association, the non-profit group behind the Globes, over who controls the rights to the broadcast of the highly-rated awards show. Marc Graboff, NBC's former business affairs chief, took the stand Friday morning, with testimony from CBS CEO Les Moonves expected next week. 

Also read: Battle Over Golden Globes TV Rights Heads to Court

The HFPA sued DCP and its parent company Red Zone Capital in November 2010, alleging that the company negotiated a new contract with NBC without their consent and that by failing to put the rights out for bidding by other networks, potentially cost them millions of dollars. 

DCP claims that thanks to an amendment in its contract, the production company retains the rights to the broadcast every time it reaches a new deal with NBC. It also claims that it did not need the approval of the HFPA to extend the pact with the network. 

Under questioning by HFPA attorney Linda Smith this week, Shapiro shied away from using the word “lie” or “mislead,” but he did acknowledge that he led NBC executives to believe that he had HFPA's approval for the extension agreement. 

Asked directly by Judge A. Howard Matz, at one point, if he had made false statements during negotiations with NBC, Shapiro said, "right."

Also read: BOMBSHELL: Former Golden Globes Publicist Sues HFPA for $2M, Claims Fraud, Payola

He also claimed that he could hammer out a deal with NBC to air the awards pre-show, but said that he would need HFPA's approval before an agreement could be reached. He acknowledged that he told network executives that the HFPA was primarily interested in working out an extension of their deal before they tackled the issue of the pre-show. 

Graboff told the court that NBC would not have done a deal for broadcast rights to the show if it had known that the HFPA was not being kept in the loop. But he also said if he had known that the organization was shopping the show to other networks — as they apparently were trying to do with Moonves and CBS — he would have tried to block a deal from taking place. 

Moonves will likely emerge again during the course of the trial. The CBS chief is scheduled to testify next week — although whether that testimony is given remotely via video conferencing or in-person is still the source of some debate.

HFPA Chairman Philip Berk met with Moonves in summer of 2010 to discuss the possibility of the Globes migrating to CBS, but DCP attorneys plan to argue that the lunch was in violation of its agreement with NBC. Under that pact, the HFPA was not allowed to talk to any third party about distributing the show until its deal with the network had expired.

The uncertainty around who would control the broadcast of the red carpet arrivals caused some friction. In a note, Graboff told Shapiro that DCP’s reluctance to negotiate terms around the pre-show, while insisting that NBC immediately sign the extension agreement, "raises red flags for us.” 

As part of its justification for its “extensions clause,” attorneys for DCP have argued that the HFPA was willing to give the production company broad rights to the program because its reputation was in tatters. The Golden Globes had been pushed off of the major broadcast networks for decades following a series of scandals involving their voting practices and allegations that Pia Zadora’s husband had bought his wife an award by giving the group’s members gifts.

Private correspondence that surfaced during the trial revealed Shapiro’s unvarnished opinion of the controversial organization. In an email to William Morris Endeavor partner Ari Emanuel, Shapiro said that former NBCUniversal Chief Executive Officer Jeff Zucker understood the difficulty in dealing with the HFPA.

Wrote Shapiro: “Jeff knows these people are crazy.”