Fox hit with $179m (including $128m in punitive damages) judgment over shady bookkeeping on "Bones"

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Fox had concealed the show’s true earnings and its execs had lied under oath to keep the profit participants from getting their share of the take.

Fox got boned for $179 million US for their shitty actions. Good.


I am struck by the parallels between this (civil) case and how corporates achieve the same result by also inserting other group companies ‘earning’ a share first, in exactly the same way as was done here, to artificially supress taxable profit.

I know a civil, commercial contract case and tax law are not the same, but the same old tricks keep getting played, either way.


Book keeping: yet another thing Bones didn’t care if it got right, because it wasn’t Anthropology.


The suit turned on Fox’s “self-dealing,” whereby one division would make a program and sell it to another division at well below market rates, then claim that the show hadn’t earned very much money, thus denying payouts to those with a share of the profits: the show’s stars, the author of the novels the show was adapted from, and the show’s exec producer.

This is what film companies do with some regularity. And if I read this right, they lost not because of this practice, but because they lied about it? Maybe it will set a precedent, though. Who knows?


Whew! Disney’s absorbing Fox! That should fix things…


Hollywood still up to that shady bookeeping, imagine how much taxes they steal from the public. LOTR was supposedly a “horrible loss”


Wait, wait… “arbitrator”?

An arbitrator judging against a corporation!?


I noticed that too. And not in a small way, either. It almost gives one hope.


Yay! Disney owns everything! Death to creativity and creators!


If Fox is planning to appeal, then I guess it wasn’t “binding” arbitration, which seems to be all the rage in contracts nowadays.


Well, its an arbitrator thats about to lose a hell of a lot of corporate contracts, hella fast. Good luck getting work again.

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So does this mean Firefly is un-cancelled!?!


I think it just depends on who is being harmed by it and whether they have the capacity to sue. I mean, the practice is sort of deceptive/fraudulent on it’s face. But maybe this will give others ammunition to fight back.


Maybe not. Working on the assumption that most corporations are underhanded and double-dealing, one would actually want an arbitrator that’s fair when one is the corporation who brings the complaint.


The most creative people in hollywood are the accountants.


Actually, arbitration was dreamed up for corporations to settle things with other corporations or between a corporation and a union; it was never meant to be unleashed upon an unsuspecting public.


Yeah, “fair”, but , “fair to us”, not, “fair to them”. :smiley:

@beep54orama I’m looking forward to the day when Corporations get around to settling their disputes with Judicial Champions.


if there is anyway to profit from Firefly probably, Disney love squeezing everything until it’s dead.


Ooh, there’s some good stuff here.

Fox tries to argue that the arbitrator cannot rule on some of the the end of their final submissions, after 4 weeks of hearings. And having forced the case into arbitration in the first place.

page 3

it continues from there.

No surprise the arbitrator isn’t having any of that.

The arbitrator then points out that Fox don’t understand their own contracts and that the clause they tried to rely on as preventing punitive damages only applies to specific claims in which punitive damages weren’t in fact being sought. It also only applies to the studio and not to the other allegedly naughty parties. And in any event California law prohibits limiting liablity in that way.

There’s then the increasing sense of exasperation as the arbitrator recounts the evidence given about the alleged efforts to find information about what Fox might pay third parties for the show.

This was required by Fox’s contract with the performers and Reichs, etc. If Fox did deals with other parts of its business empire, it promised to do so on the same terms it would negotiate with a third party (i.e. they specifically promised not to do what they in fact did).

The only thing Fox was able to put forward that even halfway resembled an attempt to do that was evidence of one lunch meeting with an agent at which one other show was discussed.

Fancy some lunch?

At some point Fox’s legal team realise that they evidently have the worst clients (far more common than the other way around) and that the only way to perhaps win is to try to get the arbitrator to ignore their client’s witnesses’ testimonies.

It’s an old adage that having the law on your side is great but what matters are facts. If your witnesses don’t come up to snuff, you’re stuffed. These definitely didn’t.

Having breached their contract, the various Fox enterprises (because of course here you have the studio making the show and the network buying the show in the same group) decided to collude to hide the breach and to attempt to avoid liability by telling the actors, Reichs, etc. that they would renew the show only if they all signed a release.

Boreanaz and Deschanel flat out refused (good on them) and they then threatened Boreanaz pretty much “You’ll never work in this business again” verbatim.

Despite knowing that both Boreanaz and Deschanel weren’t going to sign, the execs present the other participants with release forms with signature blocks for both Boreanaz and Deschanel and did not tell them that Boreanaz and Deschanel had refused to sign.

Fox argues that it was obvious that B and D weren’t going to sign because the signature spaces for them were blank. Ergo, QED, I win, you lose.

That is of course such a cretinous argument that the arbitrator doesn’t really seem to know where to begin.

The arbitrator therefore very gently explains how documents are frequently executed in counterparts where each party signs their own copy of a document. Being presented with a document which you have been told everyone must sign which has spaces for other parties to sign would not be unusual in any way and would certainly not lead anyone to conclude that the other people named in the document had flat out refused to sign it.

Not content with this bit of fraud, Fox also proceeds to get the showrunner Hart Hanson to sign the release (having previously indicated he wasn’t going to) by giving him a new secret contract.

They used the fact that he had signed to try and persuade the others to do so.

The rest is then a step by step examination of exactly how badly Fox were lying throughout.

There is a bit of humour in relation to discussion with a deal with Hulu which Fox somehow try to claim was ‘at arms-length’ despite the same person signing the contract for both Fox and Hulu.

“Hello, Mr President of Digital, Fox. Meet the Vice President of Hulu.”
“No need to introduce us. We met this morning in my shaving mirror.”

The stuff about the legal action plan also includes the interesting fact that the person who wrote it (Ligouri) leaves Fox in 2009 and has no further involvement with them until shortly before he is due to testify at which point he somehow turns up at Fox again with a staggeringly generous contract.

The whole thing here just reeks of incompetence throughout.

They certainly don’t appear ever to have heard of legal privilege.

If you’re going to discuss how to solve a legal fuckup, do it with your (ideally external) lawyers. Make sure you are getting advice. That advice is only disclosable in very, very limited circumstances.

Your fucking stupid memos are fair game.