TV and film producer Gavin Polone is suing several divisions of Warner Bros, its parent company Time Warner and the CW Network claiming he has been denied his fair share of the profits flowing from streaming the long-running Gilmore Girls series and its Netflix revival, Gilmore Girls: A Year In the Life.
The civil suit, filed Thursday in Los Angeles Superior Court, accuses several Warner Bros. units — including Warner Bros Television Production and WB Studio Enterprises — of engaging in dubious Hollywood accounting practices to deprive Polone and his professional services firm, Hofflund/Polone, of their cut of the successful show’s profits.
“This case is part of a long and troubling line of successful artists of all stripes being forced to seek recourse in court against a corporate producing partner that manipulates its back room accounting and distorts the interpretation of its contractual obligations,” Polone’s lawyers argue in the court filing (read it here). “The victims of this oppressive behavior are the artists who create the content those corporate producing partners exploit.”
The lawsuit accuses various Warner Bros units of erroneously deducting expenses for items that aren’t covered under the language of their agreements, such as video-on-demand distribution fees for the Netflix show, and of overstating production costs paid to affiliated companies to reduce the shows’ profitability, at least on paper.
When Polone sought to challenge these practices through an audit, the suit alleges Warner Bros “resorted to delay, avoidance and misdirection in an effort to conceal their misconduct.”
Polone, whose credits include such films as Panic Room, Zombie Land and A Dog’s Purpose, and the HBO television series Curb Your Enthusiasm, said that Warner Bros Television hired him in 2000 to serve as the show’s executive producer. The agreement entitled Polone to 11.25% of the show’s adjusted gross revenue.
Several disputes over payment have arisen since then.
In one 2007 disagreement over payments, a forensic audit found “numerous errors and omissions” in Warner Bros’ accounting that resulted in “significant sums” paid to Polone. Another audit, in 2014, found that Polone was owed more than $1 million because of under-reported income and improper deductions, according to the lawsuit.
Polone returned to court in 2016 because Warner Bros refused to compensate him for the series revival on Netflix.
This latest case deals with payments related to the online streaming of the shows. Polone argues that Warner Bros improperly applied a 10% distribution fee on the first run of Gilmore Girls: A Year in the Life, which reduced the show’s gross receipts by nearly $2 million. It did the same thing for streams of the original Gilmore Girls episodes, artificially reducing the show’s profitability, the suit alleges.
Polone’s suit also accuses Warner Bros of engaging in a practice called “straight-lining,” in which lucrative shows like Gilmore Girls are packaged with unprofitable series. By bundling TV series in this way, a studio can ascribe an equal share of the distribution fee — and avoid paying additional fees to the profit participants on successful titles, the suit alleges.
The producer’s suit alleges breach of contract, fraud and unfair business practices — among other allegations. Polone is asking the court for damages and unpaid profits, and a permanent injunction that would bar Warner Bros. from inaccurately reporting income and expenses on television shows and require it to co-operate with audits in a timely fashion.
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