The Hot Button
The Hot Button
THB #21: The Globes Troubles - Some Financials

THB #21: The Globes Troubles - Some Financials

Some anonymous pazzo on Twitter, claiming to be an independent journalist (we know the HFPA standard on that), is out there explaining how HFPA has turned the corner and was never really that bad and anyone saying otherwise is just hopelessly deranged.

I, on the other hand, have spent 25 years in close proximity to the post-Pia HFPA and have no problem detailing the scam that this group has been running so effectively for so long.

I actually don’t hold the bad ol’ days of HFPA against them. I don’t really even care about the Sharon Stone Watches incident. $400 watches mean nothing to this group. I am okay with people and organizations (the Supreme Court claims there is no difference) changing in real and constructive ways.

The unpleasant history of the HFPA in recent years was reported on by Stacy Perman and Josh Rottenberg for the LA Times last February. Most of the article was about financial malfeasance. But most of the takeaway was about the lack of even a single black member of the voting organization.

This has left an opening for HFPA, even after the article finally got publicists to stand up to the long-corrupt organization and demand change, to make that change mostly about race. The result is that they have added 21 new members… 6 of whom are Black. Five are Asian, Six are Latino/Hispanic, and apparently, 4 who are Classic Caucasian. (One is, mysteriously, from ESPN Worldwide.)

But here is the thing… there are bigger issues with HFPA. And some are structural and some are financial.

The core of the HFPA scam, which surely occurred to them long after they set the thing up, is the small size of the group. If a trip somewhere fancy for 3 or 4 days costs $12,500 a head, a studio could send the entire HFPA for $1.1 million. If they were to offer such a trip to CCA/BFCA and spend only $10,000 a head, using slightly less nice accommodations, it would cost at least $4 million… and the trip and events would be less intimate and the impact less certain.

Talking about The Academy, even when was 5500 members, is not in the conversation, unless a distributor could spend $11 million to send every member a $2000 check and be sure to get what they want…. which is a silly fantasy. But even in that fantasy, sending a $1000 check is now a $9 million+ spend.

It’s easier to keep a secret amongst 100 people than 400 or 4000. And the economies of scale for 80something people who have a major broadcast network TV show are a singularity in this business.

So when HFPA’s claim of “fixing the problem” is an expansion of 21 people, taking the group to just over 100, you will have to forgive me laughing at the notion that this is a significant change. It’s a change like the 3-card monte dealer having you follow the black queen instead of the red… same trick.

So I went to the paperwork… the IRS 990 forms required for not-for profits. And here is a quick look…

How about the new President of the HFPA, Helen Hoehne? Fresh blood? No. She was elected Vice President of HFPA in 2020, before The Troubles. She became an HFPA Board director in 2014. And interestingly, she was not paid for this work in the years 2014-2017. And then, in June 2017-June 2018, the organization started paying Board members. Differing amounts. Who knows why? $41,675 for Ms. Hoehne, just behind the pay for the VP and Treasurer who were credited with working 19 hours a week while she was being paid for 13. That’s a $100 an hour. In June 2018-June 2019, she was paid $55,351. Same 8 hours a week. Up to $133 an hour or a 33% raise.

We don’t have the 2020 IRS 990 filings yet, so we don’t know how much she was paid as Vice President. But when Anke Hofman was in the slot, moving from an unpaid Board position to VP in the fiscal year June 2016-June 2017, her first pay was $32,770. Next year, $44,376. Then, $69,392. Like Ms Hoehne, these pay jumps were for working the same alleged hours.

The presidential position also pays. And that payment has also exploded over recent years. In 2014, it was $56k. 2015, $80.5k. 2016, co-presidents, $166k. 2017, they created a chairman role for Lorenzo Soria. $181k for the Chairman and President combined, $87k just for President Meher Tatna, whose individual salary rose $30k. In June 2017- June 2018, President Tatna made $136k in salary, a $50,000 bump.

So how much will the long-standing member of HFPA leadership earn from our little not-for-proft scam, moving from the Vice President slot into the President slot as she did in September? I don’t know how much she was paid as VP last year. But one would have to guess somewhere in the $80,000s, given the previous bumps in salary for that slot. Will she leap again to Tatna’s $136,000?

Just 5 years ago, she made no direct salary from HFPA. Quite the ascent, this face of change.

How about a big picture look at the financials of HFPA. They are, actually, quite simple in certain ways. The most recent filing… the June 2018 - June 2019 fiscal year…

Line 5 - 99 individuals employed by the group. This doesn’t included show production or independent contractors. Only 2 non-members are listed on the form. That leaves room for about 10 in minor staff roles and every member of the voting group. But they don’t list members who aren’t on the board as employees. And they show (line 14) no benefits paid to employees. I don’t know exactly what is hidden in the folds here.

The LA Times reporting says, “In the fiscal year ending in June 2020 the HFPA paid $1.929 million for members serving on committees and performing other tasks.”

Line 9 - I don’t know why the revenue, which is only the TV show, doubled. Perhaps some timing of payments. But it seems reasonable to assume the spend by NBC for the show each year is about $27 million, that HFPA nets $15 million, and that the production/Dick Clark Productions’ cut costs about $12 million.

Line 13 - Grants! This is what HFPA likes to claim is their mission. I will get into more detail later, but it jumped from $3.9 million to $5 million in Fiscal Year 2016 and has stayed there since. In each year, about $1.9 milion of the grants from HFPA go to the HFPA Charitable Trust. As best I can tell, this is a tax maneuver. Pretty much all the money is distributed to charitable organizations from the trust, rather than directly from HFPA.

But here is the magical question… if your not-for-profit brings in $15 million a year and does nothing other than give away a piece of that money, how much do you have to give away to remain a not-for-profit?

I don’t really want to sit around and judge where the group chooses to send their grant money. But it often seems random or off-point. Here is their stated mission as an organization as filed to the IRS.

But in their last filing, they sent a $500,000 check to an unnamed organization overseas to “help refugees.” They sent $150,000 to California Fire Foundation. They sent $500,000 to Lost Lights Projects, which publishes the Inside Climate News website, which won a Pulitzer in 2013. They sent $500,000 to Reporters Committee For The Freedom of the Press.

I am not questioning the value of these organizations. But that’s about 1/3 of the grants from HFPA that year on organizations that have nothing to do with “the development of motion pictures, television, dramatic, musical or comedy theater and audio visual recording art forms.”

Line 15 - Salaries of $3.4 million.

Line 17 - Other Expenses, $7.19 million. This includes unlisted “fees for services” of $528k, $1.4 million for travel, $530k for Conferences, Conventions, and Meetings, $1.3 million for “Banquet,” which is not the Globes, $229k for “Installation of the Board,” $159k for unspecified “Consulting Services,” and $967k for “All Other Expenses,” with no detail at all. That means more than half of that $7.19 million spend is gray, at best.

Line 22 - I don’t know how much cash HFPA is now sitting on… the list above is 18 months old. But the piggy bank is pretty full… and that $5 million a year designed to maintain the tax-exempt status of an organization that does nothing other than enjoy the revenue created by giving out an award on a TV show produced by their new CEO… seems like a small price to pay… and they get to look magnanimous at the same time.

“BUT THEY ADDED 6 BLACK PEOPLE!!!,” you scream. “Let these kind, generous, misunderstood, open-minded folks go back to the important work they have been doing all these year!”

You know, I was a friend of the late, great George Christy. He was a character. And he was a games player. And a bit of a schnorrer. He got killed (career-wise) by Anita Busch and Dave Robb at The Hollywood Reporter back when they were trying really hard to take themselves seriously. He had broken some union rules to keep his health insurance. They got him. But for me, it was a lazy crusade against low-hanging fruit… old school Hollywood fruit.. which isn’t always the cleanest, but is some of the most atmospheric there is.

Some say my strong feelings about HFPA are a swipe at low-hanging fruit. But the truth is, I have been swimming in the same pool or the pool next door to these folks for a really long time. I know some of them. I really like some of them. I even respect some of them. But that’s not the point.

Point is, HFPA is nothing but a marketing tool for publicists heading for Oscar Sunday. That’s it. And they have built a world around this purpose. With the power of Dick Clark, when he was alive and healthy, and then the power of those managing Dick Clark Productions since his demise, they took a car wreck of an organization and made it the second most powerful movie award marketing platform in the world… and really, #1, since by the time the Oscar show happens, it is not a marketing event so much as a result.

They net $15 million or so a year for this show. They give away the $5 million off the top that keeps them IRS-safe. Aside from the event that DCP creates and maintains for them, they spend the year doing… pretty much nothing. They are quite busy. They travel the world, see hundreds of movies and TV shows, get wined and dined, visit film festivals, more wine, more dine, hobknob with celebrities who almost all see them as bottomfeeders, have virtually no direct responsibilities in this part of their lives’ journey, and… well, that seems to be most of it.

This is where some say, “You are so jealous!” And I suppose I would be. But I don’t have the gene that lets me look away from my own complicitous behavior in a taking the industry for every dime I can. I don’t have the chip on my shoulder that says, “This business owes me!”

And I haven’t even gotten into the amounts of money spent by the distributors to support the allegiance of this group. Travel, dining, per diem, etc. Is it another $15 million a year? A little more? A little less? I’ll leave that for another day. (There is so much more to expose.) But spread it out between a lot of players and it becomes just another line on the marketing budget. Fifteen worthless trade covers. Money being pushed around the table.

The trouble for HFPA really began when they went from a small-time grift to the big con. For some reason, Billy Joel comes to mind…

“All your life you had to stand in line
Still you're standing on your feet, ohh
All your choices made you change your mind
Now your calendar's complete
Don't wait for answers
Just take your chances
Don't ask me why”

If only they had invited a few black members into the fold when #OscarSoWhite happened… people would have forgotten the LA Times story the way The Academy forgot the LA Times story on Dawn Hudson when they hired her to be CEO. But they didn’t do that. They thought too highly of themselves for that. Things were going too well. Especially in the last 5 years… money was flowing like a champagne tower.

The idea of HFPA is quite valid, even now. The world is getting smaller. Journalists who are not from America truly matter to movie distribution and streamers, because they have the eye - as much as any of us do now - of the customers that every company is now desperate to convert. America is still huge considering our actual size… but we are half or a third or a fifth of the territory. The future of film and TV is worldwide.

I would be happy to put everything from the past aside if HFPA showed an ounce of interest in making real change. Instead, we get a new President from a long corrupted board and a CEO who owns the TV piece of the puzzle and only wants to get these people back on TV, making him millions too. You can throw a lot of spin at me and some of it will be true… but that is really what is happening. Giving away $5 million a year didn’t make HFPA not corrupt. It was camouflage. Really great camo. But camo.

They need a bigger group. They need some (more) real journalists. They need to give away another $3 million a year, at least. The race stuff is a given… and shouldn’t be a real challenge moving forward.

Take the bottle of wine and the wheel of brie out of your pockets! That party is over.

Move on to your better angels. Cellophane tuxedos for a while. You can do your job, however it is valued, without being bottom feeders.

Or you should be history.

Until tomorrow…

The Hot Button
The Hot Button
An inside perspective on the Film/TV/Streaming Industry from a 30-year veteran seeker of truth.