Just a few weeks before the Golden Globe ceremony, tension is soaring between dick clark productions and the Hollywood Foreign Press Association as the telecast producer’s contract is about to expire and a lawsuit stands between the parties and a new agreement.
The HFPA contract with Dick Clark Productions -- which reaps the producer an estimated $3 million in annual revenues -- ends after the 2011 telecast.
Relations have been deteriorating between the two sides for some time, but took a serious turn for the worse in September when Dick Clark Productions unilaterally negotiated a new, seven-year contract with NBC to air the Golden Globes.
The HFPA sued DCP – with whom they’ve been in business since 1983 – accusing the producer in October of having “surreptitiously signed a television broadcast license agreement with NBC for the Golden Globe Awards shows through 2018, without HFPA’s consent or authorization.”
While the surface cause of the tension is the new NBC contract, the underlying dispute is over what the HFPA believes are inflated fees by the telecast producer.
The telecast brings in about $6 million in revenue. According to the current contract, the two parties split the profits from the telecast, which is defined as the revenues minus distribution fees, sales commissions and the cost of production.
It is that cost of production – and associated overhead fees – that is currently in dispute as inflated.
For its part, DCP is arguing that it has the right to produce the show “in perpetuity,” per language in the original contract. The HFPA has rejected that as unenforceable and in the lawsuit says it “strains credulity.”
DCP is owned by Red Zone Capital, whose primary owner is Washington Redskins owner Dan Snyder. The CEO is Mark Shapiro. The namesake TV producer is no longer part of the company he founded.
In a joint statement to TheWrap, the HFPA and Dick Clark Productions said that "Everything is business as usual and both the HFPA and dcp are looking forward to a great 2011 Golden Globes. Our primary and mutual goal is to produce an exciting show in January.”
But insiders said that this is far from reality.
“That relationship has been deteriorating for some time,” said one executive with knowledge of both sides. “Dick Clark is being paid an awful lot of money that may or may not be deserved.”
From a business perspective, the entire arrangement strikes many as lopsided.
One executive close to the network acknowledged that NBC could easily produce the show in tandem with the HFPA, without the need for an independent producer at all.
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But given the idiosyncracies of the HFPA, NBC may well want the assurance of an established telecast producer like Dick Clark, given the group's continual internal bickering, off-kilter behavior and power-brokering led by President Phil Berk.
That internal troubles at HFPA most recently broke into public view when longtime publicist Michael Russell was fired after raising concerns over what he called “unsavory” business dealings. TheWrap published the letter exclusively this month.
Russell is still considering filing his own lawsuit against the HFPA, he told TheWrap this week. He confirmed that he had submitted a legal brief outlining his complaints to the HFPA board in the fall, including the accusation that the group is open to influence-peddling.
“It’s an ongoing matter,” he told TheWrap. “A lawsuit is under consideration at this point.”
An individual with knowledge of the HFPA’s thinking said that the group would not sign a new contract while the lawsuit with DCP was pending.
NBC declined comment for this story, but insiders say that the network would have legal recourse against either Dick Clark or the HFPA should either reneg on the new agreement.
The Golden Globe awards air on NBC on January 16.