More Creative Hollywood Accounting Revealed In Goodfellas Lawsuit

from the what-do-you-mean-these-books-look-funny? dept

For years now, we've discussed the somewhat creative nature of Hollywood accounting and how things get set up so that almost no movie ever technically makes a profit. We've shown how a Harry Potter film that brought in nearly a billion dollars still showed an accounting loss, just like Return of the Jedi -- one of the most successful movies of all time. Now, apparently, we can add Goodfellas to the list. The movie, which just had the 25th anniversary of its release, is widely considered a true classic -- one of the all-time greats in film history.

As creative as the movie may have been, it appears the accounting may have been even more creative -- at least according to one of the producers of the film, Irwin Winkler, who is wondering what happened to his promised cut of the profits. While the specifics vary, here's a quick explanation of the usual way in which Hollywood Accounting works. Each film -- even when it's a major Hollywood film studio producing it -- is actually set up as its own independent "company." This company really serves no purpose other than to lose money. The film studio gives the specific film "company" a chunk of money as its budget, which is then spent on the production. But, on top of that, the studio "charges" the film company a "marketing and distribution fee." This is not actual money that changes hand (it's all still the same company). It's just a way to create a huge cost to make sure the "company" doesn't have any profits, and thus never has to pay anyone promised royalties that are based on "net profits." As some film producers have noted, you're better off asking for a ham sandwich in your film deal than a piece of the "net" profits.

In this lawsuit, Winkler claims some of that happened... but then says even more happened on top of that:

Plaintiffs produced a hugely successful film for Warner Bros. called "Goodfellas." By contract, plaintiffs were entitled to 50% of its net profits plus 5% of its gross receipts after "breakeven." "Goodfellas" took in more than $275 million at the box office and from other revenue sources. It cost less than $30 million to produce. Yet, Warner Bros. claims that "Goodfellas" made no net profits and actually lost money. Warner Bros. even charged $40 million of "interest" on its $30 million cost of production. But that was only the tip of the iceberg. This was "studio accounting" on steroids. It was also fraud. What Warner Bros. represented as receipts of "Goodfellas" were really only a fraction of the actual receipts. Warner Bros. concealed more than $140 million of its actual receipts. In fact, "Goodfellas" made very substantial net profits. But Warner Bros. quietly pocketed Winkler's share of those profits, plus years of unearned interest on Winkler's money. Winkler only discovered the truth in 2014.

It does seem weird that this would only come to light 24 years after the movie came out. The lawsuit notes that WB sent periodic reports to Winkler, but those reports "intentionally misrepresented the receipts of Goodfellas such that he only just found out about the $275 million number. More specifically, the lawsuit alleges that WB only shows 1/5 of the revenue from the home video market -- thus concealing approximately $140 million in revenue. The trick, according to the lawsuit, is that Warner used the fact that it also owned Warner Home Video to move money around, playing a series of accounting games. From the lawsuit:

Warner carried out its scheme by exercising its complete and absolute control over Warner Home Video, its wholly owned home video subsidiary. That total control gave Warner the ability to determine, in its own sole and controlled discretion, what part, if any, of home video receipts from "Goodfellas" Warner would elect to withdraw from its subsidiary and what part, if any, of such receipts it would elect to retain in its subsidiary's bank account, subject to Warner's complete and continuing control. If Warner had simply instructed its wholly owned video subsidiary to pay over to Warner only 20% of the home video receipts from "Goodfellas" and not pay Warner the remaining 80%, in order to exclude from plaintiffs' contingent compensation the 80% of receipts that Warner voluntarily rejected, Warner's conduct would have been a violation of the implied covenant of good faith and fair dealing inherent in every contract.

But Warner's scheme was even more cynical and devious than that. Warner didn't reject the 80% balance. Quite the contrary. After drawing down the first 20% of home video receipts, Warner subsequently took the 80% balance as well, but tried to disguise and conceal that subsequent receipt by calling it something else. Warner actually withdrew from its wholly owned home video subsidiary 100% of the receipts from the home video distribution of "Goodfellas," less home video costs. But, seeking to deprive plaintiffs (and others with the same contract) of any benefit from most of the home video revenue it received, Warner withdrew that revenue from its subsidiary in separate intercompany transfers and tried to disguise its transfers by giving them a different label. As the home video revenue from "Goodfellas" was received by its subsidiary, it was commingled with other funds, and Warner withdrew from its subsidiary an amount equal to 20% of that revenue, which it reported to plaintiffs as the "total" such revenue. Later, having complete and absolute control of its wholly owned subsidiary, Warner withdraw from that subsidiary an amount equal to the remaining 80% balance of such video revenue, less video costs. That balance, although received by Warner, was concealed and went unreported.

Basically, this is a similar trick to the classic "marketing and distribution fees" paid to the parent studio, but here, the wholly owned "home video" division effectively is charging an 80% fee on all revenue, even though it then turns that money over to the studio anyway. As the lawsuit points out, since it was a wholly owned subsidiary and WB was taking all the money anyway, it could "negotiate" whatever percentage it wanted the home video division to "keep."

Oh, and then it added insult to injury (or fraud to scam?) by charging additional fees on the 20% for distribution -- which it didn't even do:

And, in computing what it falsely reported as net losses, Warner further reduced the twenty percent of home video revenue it disclosed to plaintiffs by improperly charging and deducting from that twenty percent of home video revenue, substantial "distribution fees," despite the fact that Warner claims it was not even the home video distributor. And Warner even kept all such distribution fees for itself, rather than paying them over to the wholly owned subsidiary that it represents was the home video distributor. In all of their interactions alleged herein, Warner treated its wholly owned home video subsidiary as simply another division of Warner that did, in every respect, as it was told. And Warner treated the home video receipts of its wholly owned subsidiary simply as money to be paid over to Warner after deduction of home video costs.

Eventually, Warner allegedly told Winkler that the film was so far in the red that it would no longer even bother to send updated reports, because "there was no realistic chance of 'Goodfellas' ever achieving 'breakeven' or net profits...." That was in 2009. In 2014, Winkler's (new) accountant requested the latest report anyway, and it's in that report that WB revealed the fact that only 20% of the receipts were being counted. As Winkler's lawyers note, this certainly suggests that WB directly misrepresented the earlier reports.

There have been a number of similar suits over the years (hence some of the earlier stories), and they continue to reveal examples of really, really sleazy Hollywood accounting practices. These lawsuits have actually done fairly well in the courts, so it's likely more will be revealed if WB doesn't come up with some way to settle with Winkler to get him to shut up and stop revealing the details of how it makes some of its most successful movies look like they're losing money.https://www.techdirt.com/articles/20150922/23582632339/more-creative-hollywood-accounting-revealed-goodfellas-lawsuit.shtml

Fears Mount that the USDA’s Organic Certification Process Is Being Hijacked by Corporate Interests

By J. D. Heyes

Global Research, September 23, 2015

Natural News

Region: USA

Theme: Biotechnology and GMO

Some organic food experts are worried that the term used to describe non-genetically modified crops and produce may soon become nearly meaningless, thanks in large part to undue (readcorporate) influence on the Department of Agriculture.
According to Jerome Rigot, PhD, writing in a blog posted at the Cornucopia Institute, which promotes food safety backed by science, it may no longer be accurate to rely on the USDA’s “organic” labeling as remaining “true to its mandate of assuring consumers that food under this label is truly healthy and grown or raised with minimal impact to the environment,” as well as respecting “the health and well-being of the workers and animals involved.”
Rigot notes that, among other concerns, Consumers Union, the publisher of Consumer Reports, recently downgraded its rating of the Agriculture Department’s organic seal and label. The director of the Consumer Safety and Sustainability Center for the magazine, Dr. Urvashi Rangan, testified to the National Organic Standards Board in late 2014: “Organic is slipping. And as a result, we have downgraded its rating from highly meaningful to meaningful.” He further noted that the rule of the magazine “is to help educate people about what organic means as well as what it doesn’t mean.”
Regarding these concerns, Rigot wrote:

As an example, the Cornucopia Institute filed formal legal complaints with the USDA in December 2014 against 14 giant poultry and dairy CAFOs (read: concentrated animal feeding operations or “factory farms”) for allegedly violating the USDA organic regulations requiring outdoor and pasture access. Each complaint was summarily dismissed, withoutan investigation, by the enforcement division of the National Organic Program (NOP), which stated, “The NOP has reviewed these complaints and has determined that investigation is unwarranted.”

Inept, corporatists or lobbyists
The determination was odd, says Rigot, because literally hundreds of high-res photos, satellite imagery and state regulatory documents were submitted as evidence to the NOP which, together, should have produced more than enough doubt to motivate someone to launch an investigation.
A former NOSB board member who manages the country’s first certified organic dairy farm, Kevin Englebert, was clearly disappointed by the NOP decision, seeing it as a lapse of the organization’s responsibilities.
“For the NOP to not even investigate these facilities means one of three things: 1) the personnel who made that decision are inept, 2) they are too close and friendly with corporate lobbyists and multimillion-dollar certifiers that are involved in the process, or 3) the most likely scenario, corrupt politicians are preventing them from enforcing the law,” he said, as quoted by Rigot, who intimated that elements of all three reasons might be at play.
He noted that the National Organic Program is a very small part of the Agriculture Department. However, many large corporations have a significant vested interest in organic foods, especially the processed foods industry (including General Mills, Smuckers, Coca-Cola, etc.), and similar to GMO corporations, they’ll do whatever it takes to expand their bottom line.
“Circumstantial evidence makes it reasonable to conclude that the same type of undue industry influence that appears to have prevented Vilsack and the USDA from acting quickly to end the Salmonella outbreak [in 2014] and limit the health toll is behind efforts to dilute the federal organic standards, control the NOP leadership, and limit or obstruct the ability of the congressionally authorized National Organic Standard Board from doing its job efficiently and with integrity,” Rigot wrote.
For more breaking news regarding organic agriculture, check out Organics.news, powered by FETCH.news.
Compromised board members

In September 2014, we reported that the Cornucopia Institute had conducted a study to examine the voting records and backgrounds of the 15 members of the NOSB.

The board is an advisory body created by the secretary of agriculture to make recommendations aimed at preserving and protecting the organic farming industry. What’s more, the board is also required to maintain and update the National List of Approved and Prohibited Substances – a list that identifies substances and other compounds that cannot be used in organic crop and livestock production.
The NOSB’s seats are supposed to be filled with members representing farmers, environmentalists, public interest advocates, handlers, retailers, scientists and a USDA certifying agent. However, Cornucopia found in its study that corporate representatives were filling seats intended for farmers and other independent organic industry stakeholders, often leading to decisions that were not beneficial to the organic food and livestock industry.
Details surrounding that study are posted here.
Sources:
Cornucopia.org
NaturalNews.com
AMS.USDA.gov

Copyright © J. D. Heyes, Natural News, 2015

RUSSIANS IN SYRIA FIGHTING ISIS

Posted on September 23, 2015 by Joseph P. Farrell •http://gizadeathstar.com/2015/09/russians-in-syria-fighting-isis/

Were the human element of the ongoing tragedy in Syria not involved, the mess would be more akin to a Gilbert and Sullivan operetta, or, perhaps, to a badly written libretto for an 18th century opera by a mediocre composer. Yesterday's freedom fighers are today's enemies, and Russia has had enough and is now actively and openly sending aid and support to the embattled regime of Bashar al Assad. The American response has been all-too-typical, with the usual flannel-mouthed denunciations of the Russian actions as "destabilizing," with no mention, of course, of what the West's actions have been.
But the Russian presence may be disturbing to the ongoing insanity in another sense altogether, one that Western hawks surely have to be contemplating. Consider this story shared by Mr. S.D.:
Reuters: Russian Boots on Ground in Syria Seeking to Destroy Western Created ISIS
Before we even tackle the article itself, note two prominent factors right off the bat: (1) the title of the article: Russian Boots on Ground in Syria Seeking to Destroy Western Created ISIS,(emphasis added) and (2) the fact that it is Reuters which has run the story under this headline. This is not an alternative news source, this is not internet conspiracy theory, this is very much a mainstream western newswire service, and that is indicative, I suggest in one component of my high octane speculation (and as we'll see shortly, fantasy), of growing "dissent in the ranks" within the West itself, or, if one prefers, some major "factional infighting" in the "house that NATO built."
But when one turns to the actual text of the article, the language is even less guarded, and more directly accusatory(and I am citing nearly the entirety of the end of the article here):

This incredible news is the culmination of a string of crises that have taken place as a result of the Syrian conflict. The central problems, of course, being the obviously Western created Migrant Crisis and ISIS terrorist forces.
Russia’s President Putin has been the only world leader to openly name and shame the West for being directly responsible for the crisis and growth of ISIS, with others in the Russian government branding Western interference in the Middle East as ‘social engineering‘.
The military forces deployed to work with Assad in his fight against ISIS will most likely be special forces units with tight objectives, which is in massive contrast to the regular occurrence of Western mission creep.
This development confirms analysis calling out further Western interference as ‘incalculable folly‘, as it would now lead to a potential confrontation with Russia – a situation that would become truly earth shattering.
The difference between this intervention and Western meddling, is that this is an entirely legal and sanctioned act of cooperation between two internationally recognised nation states. Anyone saying anything different should have their motives questioned.
(bold and italics emphases added)

It doesn't take any reading "between the lines" here, because everything is said crystal-clearly right in the lines themselves: (1) Russian "special forces" are involved (and one can only contemplate the results of ISIS what will happen when ISIS beheads its first Russian or meets its first speznaz unit), and (2) the whole refugee/ISIS mess is of the West's own creation (this from Reuter's naming unnamed US sources), and (3) the Russian intervention, unlike the West's, has at least the letter - if not the spirit - of international law behind it.
I suggest that the real news here is between the lines, for Russian on-the-ground forces clearly have "specific mission objectives," even though we don't know what they are. One, of course, is suggested by the title of the article itself: the Russians mean to destroy ISIS (and hence, the deployment of Russian special forces, who will be playing with a very different set of "rules of engagement" than ISIS is used to fighting thus far). The other, however, is one that might have certain lights in a whole lot of places burning late at night with a bit of worry and anxiety, for yet another mission that the Russians might be on is an "evidence-gathering" mission to find out, and perhaps eventually expose, just exactly who is behind ISIS, who long they've been behind it, and where the money and equipment is really coming from, with irrefutable proof.
I can almost see it now... instead of an angry Adlai Stevenson confronting a Sphinx-like Valerian Zorin in the UN Security Council with photos of Soviet missiles in Cuba and insisting he's going to wait for an explanation until hell freezes over, we have Sergei Lavrov in the UN Security Counil, producing photos and documents(perhaps some containing Hillary's emails) to the nameless and amoprhous shapes that fill the chairs of the west's permanent members on that body,or, even better, Zbgnw Brzznsk (could we PLEASE get some vowels, or at least some vowel points?), with the Germans, Chinese, Indians, Brazilians, and Argentines, looking on quietly, scarcely able to contain their smiles, as Mr. Lavrov asks for an explanation, and says he'll be happy to wait until hell freezes over.
Ok ok... I'm dreaming in my high octane speculation run-amock... but still, it's a nice fantasy...
But one thing is clear, once again messages are being sent from within the power structure of the West, from one element, to another. And here the message is being sent without obfuscation, without careful language, and without hesitation.
That should give one pause...

VOICE 2 SKULL: THE TRUTH ABOUT ARTIFICIAL TELEPATHY

• Posted on September 4, 2015
• by Ron Patton
• in Articles

VOICE 2 SKULL

THE TRUTH ABOUT ARTIFICAL TELEPATHY

I was having a conversation with my new producer, Alex. He was telling me that he recently realized he had some credit left over from an Amazon account and was so excited about having enough credit to get a new “Smart Watch” for virtually no money.
The latest “Smart Watches” are very powerful and are catching on because, the watch itself talks to your Android mobile device so it can display your texts, emails, Facebook and Twitter posts, and more, without your having to take the phone out of your pocket.
It is something more advanced than the two-way wrist radio that Dick Tracy wore in the old comic strip.
Now, I can just imagine how excited he was because he is into all kinds of electronic gadgets, including an Oculus Rift where rudimentary virtual reality can be achieved if you just wear a special apparatus over your eyes. He also has an unrivaled collection of old video game consoles from the Atari 2600 to the older version of the X-Box.
However, sometimes its gadgets like these that make me feel old and irrelevant. The reason I say this is because, is it really that much of a hassle to pull the damn cell phone or Smart phone out of your pocket to check messages and e-mail?
A listener once brought up in an e-mail the idea that these new Smart phones are part of a conspiracy. Now, there was no explanation as to why it was a conspiracy so I had to write back and ask why it was such a big deal.
The reply was something I did not expect. The person that wrote back told me that she was a victim of electronic harassment. She believed that someone was targeting her and using microwave technology to beam voices into her head.
She expressed to me the idea that Smart Watches are a gateway device to creating artificial telepathy. I had never heard of the term before and she explained that the watch is used to be an electronic assistant to the phone. It becomes a convenience to use a watch instead of looking at the phone.

The exercise acclimates the consumer into the habit of “think, tap, and receive” – an exercise that eventually will become a mental imperative similar to brushing one’s teeth or automatically using a car signal to make a turn. No longer will you have to physically answer your phone or your watch. You will think, tap a part of your skull and then hear a voice through technology which has already been developed by the military.
Mind-reading as a model for mobile phone communication is an old story. In the 1967 science-fiction political-satire movie, The President’s Analyst, starring James Coburn, one of the subplots involved a plan by the company TPC to develop “the Cerebrum Communicator,” a microelectronic device that can communicate wirelessly with any other Cerebrum Communicator in the world.
Once implanted in the brain, the user needs to just think of the number of the person they wish to reach, and are instantly connected, thus eliminating the need for the phone company’s massive and expensive-to-maintain wired infrastructure.
This type of technology could also be used to send telepathic commercials or thoughts where brands or brand names would flash into your head and by the power of suggestion, McDonalds could send you a message about a value deal on Big Macs and Lund time, or Starbucks can send you a mental “treat receipt” reminding you that after Two PM you can have a delicious latte for a pick me up.
This technology already exists in the form of Voice-to-skull technology, Neurophone technology – and microwave tech that can generate artificial telepathy.
Some call it artificial schizophrenia or political control technology,
Neurophones are not really phones but are known as a bio-hacker for the brain. It is a handheld device that emits a subtle ultrasonic frequency to create left/right brain synchronization through two transducers that are applied to the user’s forehead.
It is literally a mind control device that was inspired by an old science fiction novel.
In 1911, Hugo Gernsback, often referred to as “The Father of Science Fiction”, wrote a book entitled Ralph 124C 4+ in which he depicted a sleep learning device called the Hypnobioscope. A young inventor Patrick Flanagan ran with the idea, creating the Neuro-phone, Gernsback later thanked him and gave him his blessing for inventing it. The Neurophone can be worn while sleeping and includes an audio jack in which you may connect sound, theoretically enabling auditory learning while you are unconscious.

Literally, reprogramming the brain in dream time.
While Neurophones are available commercially, the idea of answering a cell phone in your head is not commercially available yet, but it is coming very soon.
The use of voice-to-skull technology, LRAD tech and other forms of artificial telepathy is being used as a tool for the military.
While most people think private enterprise is responsible for innovation, a great deal of the technology Americans rely on comes the U.S. military.
Over the years, the military, and the private enterprises developing products for the military, have created some of the most important products we use today. Some of the inventions have been less groundbreaking than others, such as Silly Putty and Aviator sunglasses. But some military research also directly led to significant innovations such as the microwave oven and the GPS.
The military has now developed Long Range Acoustics or LRAD systems that they can use to emit sound that completely misses the ears and goes directly into your head. The LRAD beam was originally used to emit a loud sound to apprehend disable someone. Now it is being used to send spoken messages up to 300 meters.
Oddly enough, the LRAD system has been nicknamed the ‘Voice of God’.
Concerns about microwaves, V2K (Voice to Skull technology) and how it creates, artificial telepathy and mind control date to the 1960s, when the U.S. government discovered that its embassy in Moscow was being bombarded by low-level electromagnetic radiation. In 1965, according to declassified Defense Department documents, the Pentagon, at the behest of the White House, launched Project Pandora, top-secret research to explore the behavioral and biological effects of low-level microwaves.

For approximately four years, the Pentagon conducted secret research: zapping monkeys, exposing unwitting sailors to microwave radiation and conducting a host of other unusual experiments.
They were sub-projects of Project Pandora and were titled Project Bizarre. The results were mixed, and the program was plagued by disagreements and scientific squabbles. The “Moscow signal,” as it was called, was eventually attributed to eavesdropping, not mind control, and Pandora ended in 1970. And with it, the military’s research into so-called non-thermal microwave effects seemed to die out, at least in the unclassified realm.
However after Project Pandora there are many citizens who were reporting that they were hearing voices and thought they were losing their minds. The word had gone out that this voice-to-skull technology or the Voice of God technology was being used as a form of gang stalking.
The victims were known as T.I. or targeted individuals.
Tactics of predatory gang stalking include highly-coordinated surveillance , hidden cameras, conversation bugging in private as well as public, harassment, and psychological, psychosocial, financial, and sometimes physical assaults on an individual by a large group of people who are often strangers to the targeted individual.
A massive expansion of an online community battling “gang stalking” has occurred in recent years, with the spread of thousands of websites, videos and organized events for followers of the movement. Those who believe “gang stalkers” exist publicly and brazenly express their concerns that there is a systematic form of electronic and physical pursuit of “targeted individuals” being conducted by government and corporate entities.

The National Security Agency leaks from Edward Snowden sparked hundreds of gang stalking bloggers and websites, touting their accuracy and knowledge of the pervasive government spying and in some cases electronic harassment.
This harassment includes electronic mind/body attacks, using technology to beam voices into the head, street harassment skits, destruction of family and other relationships and destruction of careers.
Most targeted individuals of gang-stalking claim that people are not only physically following them, but also that there are “psycho-electronic” mind control tactics being used.
A KMIR News report found a group of men in Palm Springs, California who all believed that “corrupt business officials” and “rogue government officials” were sponsoring “synthetic telepathy” and other forms of “electronic harassment” that allowed them voice-to-skull manipulation of the men’s minds.
The ongoing NSA revelations about surveillance and harassment have given nuggets of truth for wide-ranging theories across the online gang-stalking community. There are also patents that are found that also indicate that this technology is already in use by the military, various alphabet agencies and businesses in the private sector.
Organized Stalking is a form of terrorism used against an individual in a malicious attempt to reduce the quality of a person’s life so they will: have a nervous break-down, become incarcerated, institutionalized, experience constant mental, emotional, or physical pain, become homeless, and in some cases commit suicide.
It is quite literally a form of “electronic gaslighting.”
The CIA’s MK ULTRA hearings, which were held in the 70’s, revealed the existence of secret mind control experimentation programs being conducted by the government. After the hearings, the CIA officially abandoned these programs. However, many people are now reporting a variety of effects and abuses consistent with multiple reports of unwarranted surveillance and privacy abuses conducted by the CIA, FBI and the NSA.
Because of the secrecy, new telephone wire tapping, surveillance laws and lack of congressional oversight during the intervening decades, the research and development of mind control and surveillance technology have advanced far beyond what most Americans would imagine.
Until recently, people who believe the government is beaming voices into their heads have been isolated cases. But now, many have discovered hundreds, possibly thousands, of others just like them all over the world.
Meanwhile military applications are proving to be successful.
In military strategies the process is called “Synthetic Telepathy.” It is a term that is specified in studies on how to conduct futuristic warfare that include microwave attacks on human targets and computers that respond to fighter pilots sight and brain functions where synthetic or artificial telepathy can be used to fire weapons at a target.
The pilot simply taps, thinks and reacts. These methods are listed in the National Defense Industrial Associations paper about “Future Strategic Issues.”
What was once science fiction is now science fact.
Extremely low frequencies and microwaves can cause agitation in humans and frequencies have been known to cause sickness and eventual deaths are a matter of record.
Mind control through sounds wave technology would be the ultimate non-lethal weapon.
We have seen the reaction in people when a microphone or guitar has feedback. Imagine a sustained feedback wine that pulsates for nearly an hour in your skull.
Imagine the idea of a cell phone that rings in your head and it answers itself. Imagine the voices that are coming from it, asking you to perform certain tasks, or threatens you with death or some other terrible coercion.
There are many times where we hear things that keep us awake at night – a loud cricket chirping or a barking dog. Those are little annoyances that often plague us. However, can you imagine an intentional bombardment of microwaves pulsing and being aimed directly at you?
There are now many people who have at one time experienced this phenomenon and have asked themselves if they are crazy.
In the end, it all seems to point to the idea that in order to prevent the silent voices in the head there needs to be a louder voice from the people —the acceptance of such claims may only happen when the technology is no longer a secret.