EXCLUSIVE: Is this another wave of bad news? Now a prominent Hollywood film director just emailed me the following allegations about a heretofore unknown battle brewing between the Directors Guild and The Weinstein Co over residual payments for 20 to 30 films that may lead to arbitration or worse. (See below for the emails, which I condensed with his permission.) UPDATE: Tonight I spoke to Harvey Weinstein and his CFO Larry Madden, who both contend they know nothing about this and have not been personally contacted by the DGA. 2ND UPDATE: Harvey called again to say he's "just discovered" that The Weinstein Co uses a third party service to calculate and pay residuals. "Whatever the problem is, we're looking into it immediately." (See his full statement below.)
First, here's a condensed version of the director's emails to me:
"As you know, directors and writers rely on their residuals to survive during hard times. Well, with the past WGA strike and the impending SAG strike, times are a little rocky. I personally have been expecting my Weinstein Co residual check for six figures now since February from when it was due for the 4th quarter 2007. I had the DGA get into it and what I was just told was shocking: For the first time in the history of the company, the Weinsteins haven't paid ANY residuals for last quarter to any of the 20 to 30 films they owe on. The person I spoke to at the DGA thinks the Weinsteins may be having problems.
"The DGA has been chasing TWC for two months almost. And TWC have been stonewalling and not returning the DGA's calls for over a week now. They have an employee at TWC who is either completely incompetent or more likely is feigning incompetence to stall for time. For example, two weeks ago when the DGA called on behalf of my film and 20 to 30 others, the TWC employees asked the DGA person if they had a phone number for Axium. Like what does this have to do with anything? Axium is a payroll company that very publicly went bankrupt last year. The TWC doesn't know this? THEN when the DGA called again last week, the TWC company asked the DGA residual person if they had a list of the SAG actors in the TWC films that are in question. Why would the DGA be keeping track of SAG? Why would TWC ask this?
"The DGA has threatened to go to arbitration over this and will begin legal proceedings in approximately twenty days if TWC does not comply. This info comes from the DGA residuals department. I am extremely frustrated and I know other independent directors who are financially dying right now. Residuals are an essential ingredient to our survival. Please do NOT cite me or specifically point out my film. I don't need to be blackballed by Harvey. I have another movie in development with him."
And here's what Harvey Weinstein, with Madden in agreement, told me tonight:
"If indeed this is true, we are going to make the payments to this director immediately. Maybe there's one person, or a couple of people, where there may be a screw-up. We don't know. Until you told us, we had no idea. And we never received a phone call from anybody saying we were late. We've been current since we started the company. We are very responsible for our bill. If there was a mistake made, we'll fix it.
"This has never happpened before. Both of us have never been contacted by the DGA. Certainly you would call the CFO and certainly you would call Harvey Weinstein. This is the first I'm hearing about this. In 30 years, I've never had a complaint about residual payments. If anything is wrong and an executive screwed up, that executive won't be working for us. And if anything is owed, that will be corrected, too. I find it ridiculous that anybody would write about it. If it weren't Harvey Weinstein, it wouldn't be written about."
And Weinstein said this in a follow-up call tonight:
"I just found out we use a third party service to calculate and pay residuals. The Weinstein Co doesn't do the residuals directly. Whatever the problem is, we're looking into it immediately."
On the upside, if the weinsteins are having money trouble, maybe that fraggle rock movie will never ever happen.
Muppets and all related spinoffs not called avenue q should have died when jim did.
Comment by John — May 13, 2008 @ 6:15 pm
Maybe this is the source of all that money that Harvey was going to use to bankroll the primaries in Michigan and Florida.
Comment by Fielding Mellish — May 13, 2008 @ 6:50 pm
This is JUST the tip of a massive iceberg, folks. It isn’t just Weinstein Co. that won’t or can’t pay residuals to directors or actors. SAG had to pursue a claim against Warner Brothers to get them to pay residuals to the entire cast of one of their major animated series recently (and they’re still not caught up).
How about all those contractually owed payments to actors who had their shows stopped during the strike… Aren’t most of those claims still in litigation?
Last year I was about to start production on a feature film… when a quick phone call to the union told me they hadn’t paid the actors any residuals after their last film starting airing on tv and selling DVD’s all over the planet. They were in the middle of SAG legal action to collect that, yet they had the gall to attempt to sneak union performers in on another production.
The story gets worse if you act in tv commercials. You’d better just go ahead and hire your own monitoring company or expect to be paid a fraction of what you’re owed. They ad agencies know you can’t watch tv 24/7 all over the country, so they often ‘forget’ to pay you when your commercial airs.
My last gig was somewhere around $5000 behind when I had to get the union involved to get them to fork over what I’d earned. The money suddenly appeared when I documented their enormous ‘mistake’ I’ve heard stories from five other actors dealing with similar situations at several ad agencies.
The studios hope actors and directors aren’t paying attention while we patiently wait for mystery checks from our projects that often never arrive. The financial slight of hand in this town would land most studio execs in jail in any other lines of business. I don’t know how these people sleep at night.
Comment by Tip Of The Iceberg — May 13, 2008 @ 6:55 pm
Couldn’t happen to nicer guys. The Weinstein brothers have been running roughshod over Hollywood for far to long. I can’t imagine that I’m the only one who will be rubbing my hands together gleefully if they go bust. Probably be quite a few parties thrown in celebration.
Comment by LMAO — May 13, 2008 @ 6:55 pm
What about NINE? is there ANY word on that project. Anthony Mingehella had been hired to re-write and passed away just after finishing the polish….but we haven’t heard anything about that project since.
With the cast that was being bantered about - Javier Bardem, Penelope Cruz, Marion Cotillard and Sofia Loren…..I’d hate to see it go bye-bye.
Any word…anyone?
Comment by Anonymous — May 13, 2008 @ 6:59 pm
I assume they sleep on very expensive beds with very expensive high thread count egyptian sheets with the pharmaceutical/pleasure mode of their choice.
Then again, I find it hard to believe that there are people out there who wouldn’t notice missing a 5,000 dollar check so what do I know?
I think I’ll just stick the my idea of writing, if anyone ever buys anything taking my money and letting them destroy it as they will.
Comment by John — May 13, 2008 @ 7:11 pm
Oh sure, now the DGA gets tough. Where were these guys when the WGA needed them the most? Oh, I forgot, the DGA wanted to be sensible and decided to sign on to a horrible deal. One thing is for sure though, the countdown to the 2011 Directors strike starts right now.
Comment by Jessy S. — May 13, 2008 @ 7:14 pm
I’ve been waiting for my residual payments on a movie that KUSHNER-LOCKE produced with TAPISTRY FILMS..it’s been almost 10 years NOT one iota of residuals. Of course KUSHNER-LOCKE went bankrupt and we’ve been in bankruptcy on the movie i worked on as well as others and apparently we’re going to see some money but only on money collected after 2004, so the other 6 years ……..lost residuals never to be collected.
Comment by FirstAssistantDirector — May 13, 2008 @ 9:53 pm
Thieves. Go after your money, people.
Comment by Thieves. — May 13, 2008 @ 10:24 pm
Harvey W.’s assertion that “This has never happened before,” is simply not true. A writer friend of mine received a nice 5 figure check from the WGA years after her movie was released, because the WGA investigated and found that Miramax had somehow withheld lots of writers’ royalty earnings over several years.
Comment by Jim — May 13, 2008 @ 10:48 pm
Weinsteins have always been notorious about sluggish payments. Used to be that the excuse was Bob (as in “Bob didn’t get his manic/depressive meds yet, so he won’t sign any checks now.”). Sounds like Harvey’s got somebody else to go off their meds this time.
Comment by Anon — May 14, 2008 @ 4:20 am
Makes me wonder how many production companies who are making films at this moment known and unknown who could facing allegations from the DGA on this same issue.
Comment by chuck — May 14, 2008 @ 6:37 am
ok, maybe harvey didn’t “know” and larry may not have, but what about bob? did bob know? didn’t see a denial there . . .
Comment by parsing the denial — May 14, 2008 @ 8:05 am
Band together if you have to. Post it online. Get your money. When people don’t get paid properly, it affects everyone. Studio thuggery must stop and has been going on for some time - not just with residuals, but with upfront payments.
Comment by get your money — May 14, 2008 @ 8:24 am
LOL, TWC’s upset it was written about. Easier to not pay people in the shadows. Nothing like public shaming and collective outcry to get the wheels turning.
Can’t you affect a company’s credit rating if it reneges on a debt?
Comment by W. — May 14, 2008 @ 8:29 am
“what about bob?”, if you will. . .
Comment by witherbob — May 14, 2008 @ 9:11 am
Can somebody explain to me how the Weinstein Company even makes money??
95% of their films have bombed. They’ve literally had 1 or 2 modest hits and about 38 flops. Do DVD sales really make up the difference?
Comment by where's the beef? — May 14, 2008 @ 9:32 am
Wow! This is a great scoop. It’s why I check in with this site every day, strike or no strike.
Comment by Director'sWife — May 14, 2008 @ 10:00 am
If anyone knows of a company that actually DOES monitor residuals, outside of the unions, please post the info up. I’m sick of getting screwed, to be quite fucking honest..
Comment by VOguy — May 14, 2008 @ 12:27 pm
I wish more of the WGA’s money went to policing residuals and late payments instead of policing scabs.
Comment by Scab — May 14, 2008 @ 12:27 pm
On an unrelated issue,
why is American business incapable of handling anything in-house, and must contract everything out to 3rd parties? Just like that court that outsources your sensitive DMV data to a company in Mexico, doctors/hospitals outsource your private medical info to unsupervised outside billing companies, your bank outsources your financial data to India. When you call customer service/billing of a company, it often isn’t even the company but a hired customer service company which explains the hideous customer service everywhere.
This also allows companies like TWC to blame wrongdoing on the hired company when that company is their responsibility regardless.
Comment by stop outsourcing — May 14, 2008 @ 5:15 pm
It’s about time this issue came out publicly. N, U are right on to hold these companies responsible. Lord knows that if THEY were owed something, it would be dealt with post-haste. It’s sad to say it, but their divide-and-conquer method they use works. It may be time for the creative guilds to go to Washington (as pro-sports has e.g.) to really clean up this act.
Comment by Newenglander — May 15, 2008 @ 8:01 am
As someone who knows their “back office” procedures, it’s no surprise they’re late with payments. Kudos to you Nikki for having the b**ls to print this. Those brothers are always doing shady deals where filmmakers are always at their mercy.
Comment by unknwn talent — May 15, 2008 @ 3:19 pm
Now do you see why we need unions? With solid contracts to fall back on. Without them all we’d have is the protection of the state and I think we’ve all seen how much help Arnold would be at a time like that. And we all need to support each other’s unions All this AMPTP stuff is plain and simply union busting. No more, no less.
Think about that when you get pissed at a union just trying to get a small fraction of the pie they create and contribute to.
Peggy Lane O’Rourke
Comment by Peggy Lane O'Rourke — May 15, 2008 @ 6:38 pm
I’m sure all the upcoming deals with the AMPTP are one of the major reasons for this residuals mess. This is much worse then it’s ever been. I’d bet the AMPTP was betting on busting the unions and then not having to pay any. We can stop that.
Fight the good fight. And thanks to Nikki for shedding a light on this.
Peggy Lane O’Rourke
Comment by Peggy Lane O'Rourke — May 16, 2008 @ 11:56 am