WHERE ARE THE CLIENTS' YACHTS?

In 1885, William R. Travers, prominent New York businessman and builder of Saratoga Race Track, was taken out for lunch by a Wall Street broker anxious to impress him and win his business. The broker took Travers to a nearby marina to show off his yacht and those of the other brokers who worked for his firm. The businessman looked down the line of beautiful craft and asked, "Where are the clients' yachts?".

The broker didn't have an answer. Travers took his investment business elsewhere.


For all of the detailed media coverage of celebrity lifestyles, star salaries and box office grosses, not many people in show business actually own yachts -- nor mansions, nor exotic vacation properties or private jets. Those remain mostly in the hands of the corporate executives who control our industry.

The same guys who never pay us what they promised to pay us in our contracts. The same guys we're always chasing for earnings that even massively successful films and TV series somehow never earn. The same guys who courier script notes via executive limo but send the cheques by mail.

In a lot of ways, these are the same kind of people who ran the now bankrupt Lehman Brothers and Bears Stearns investment banks, who supervised now defunct insurance companies and hedge funds or hold the reins of any number of once profitable industries now struggling to stay alive through massive infusions of public funds.

At the moment, we're going through a bit of a constitutional crisis here in Canada precipitated by political parties that would be unable to survive if they had to depend on their own supporters to pay for their campaign funding. Maybe that's democracy at its finest, insuring everyone has the means to run for office. Maybe it's just another way the entitled help themselves to our money.

Anyway, the more I watch this current world-wide Financial crisis, the more it feels like a familiar case of class warfare. A battle between those who feel they have a right to an exceptional lifestyle -- and -- those of us who are expected to pay (via money or blood) to support it.

There are also those who feel they are entitled to be in charge (even if they can't actually run things) and that the rest of us should stop demanding that they live up to the commitments (contractual, political or simply moral) which they made in order to be in line for the big paydays.


At the moment, we're about a month away from another entertainment industry strike. This time it's SAG, the Screen Actor's Guild. And in exactly the same way that the AMPTP (The Alliance of Motion Picture and Television Producers) painted the members of the Writers Guild of America as greedy and ignorant of industry realities, the Producers are now saying our Actor brethren's demands would bankrupt the system.

At the same time, news is coming out that WGA members are not being paid the new media earnings they won during the last strike. A couple of days ago, the AMPTP admitted that was true -- because doing so was "too complicated".

The next time I'm in a story meeting and somebody asks for a change, I wonder how far I'd get by saying the alterations were "too complicated".

There's a definite US and THEM thing going on here. And some of us believe the reality is the media conglomerates (and perhaps their counterparts in other industries) can't continue to function unless they are permitted to lie, cheat and steal to cover their incompetence. We're supposed to keep delivering the product they sell without interruption. Paying us fairly -- yeah, that's a little harder to figure out.

I get a palpable feeling that what those people in charge supervise in order to make their fortunes has become secondary, almost an annoyance because it takes their focus off their other priorities.

Now, I gotta back up before I go forward here:


Last summer, I had the good fortune to film a Canadian TV show in Paris and the surrounding countryside. We needed palaces like Versailles and Vieux le Vicomte, which had been built by members of the French aristocracy. I'd seen them in books and movies, but nothing prepared me for the reality of standing on the immaculate grounds of those limestone monstrosities.

And I was even less prepared for the countless great homes that surrounded them. There were hundreds, all built by the sweat and tax money of thousands for the benefit of a minuscule handful. Sometimes the hundreds of rooms and manicured acreages were intended to be enjoyed by only two or three residents.

During shooting I learned that virtually every original owner had met his end under the Guillotine of the French Revolution, victims of a people whose capacity to be overburdened or used had reached their limit.

One thing I also learned about the French Revolution is that pretty much everybody could see it coming, but the guys on top simply refused to corral their excesses or even show a modicum of understanding for the needs of the people supporting them.

If you haven't had the pleasure, there's a terrific French film entitled "Ridicule", written by Remi Waterhouse, Michel Fessler and Eric Vicaut which perfectly captures the self-absorption, skewed priorities and terrible short-sightedness of the time.

Well, those French Dukes and Marquises may be gone, but their ilk seems to still inhabit our ruling and executive classes, including those who run the entertainment media. Yes, even those who run the Canadian entertainment media.

A couple of week's ago, Canada's broadcast regulator, the CRTC, ruled against allowing our Free to Air networks collecting carriage fees. Days later, the execs of these companies began culling staff and making noises about reducing their "Broadcast obligations".

At this point, nobody is certain whether that means cutting back local news, Canadian content or any number of things the Broadcast Act requires which our broadcasters find onerous.

And since they're going to be trekking up to Gatineau with a wish list, maybe it's time for us Creative Types to be putting together a list of our own -- a list of the business practices in the industry which have severely curtailed our ability to earn a living.


I'm going to go through several of these in the weeks to come. But first up is something called "Fair Market Value".

Fair Market Value means that a studio or network sells its movies or TV series for the best prices it can get. To many people that would seem to be a given. But it's not.

In 1999, "X-Files" star David Duchovny filed suit against 20th Century Fox Film Corp., seeking $25 million he claimed the studio had cheated him in profit participation. Duchovny maintained that when Fox sold the successful series into syndication, it deliberately minimized revenues by selling to its affiliates and Fox-owned FX instead of selling to the highest bidder. Fox settled in order to sign Duchovny to the series' eighth and final season. It was reliably estimated that he was paid an 8 figure sum.

Two years ago, the writers of "M*A*S*H" received a settlement in a similar suit that amounted to tens of millions of dollars. "M*A*S*H" writer Ken Levine details the suit here.

As Media conglomeration in the US has resulted in fewer players owning more media outlets, the practice of self-dealing to lower costs and raise profits within the parent companies has become more prevalent. But the practice also eliminates payments and profit sharing to the very artists those parent companies are dependent on for their product and contractually obligated to pay.

At the moment, a bill to ensure films and TV series are sold for fair market value is near passage by the California State Legislature. And we need a similar bill here.

A few years ago, my accountant was having trouble understanding why one of our media conglomerates continually provided financial statements where the expenses and fees for distributing their product always exceeded the payments they received for use of the films.

"It costs them more to sell this stuff than anybody pays them," he said, "Who stays in that business?"

I explained that self-dealing their product to a network they owned allowed them to maximize the profits the network made from advertisers. He was still confused.

"But that's cheating you and the government. You're both profit participants." I agreed with him, acknowledged that my lawyer and I were beating our brains out trying to get answers. He still couldn't fathom what was going on. "Where's the government in all this? This is public money!"

A lot of Canadian artists are waiting for that answer. And if our Broadcasters want to approach Ottawa about adjusting their obligations to improve their bottom lines, perhaps questions needs to be asked about how their profits have been achieved in the past.

Quite simply, if our Members of Parliament feel they are entitled to $2 for each vote we cast in electing them, then maybe we're owed the same kind of consideration in our financial dealings.