More Red Ink? Now DGA vs Weinstein Co.

EXCLUSIVE: Is this another wave of bad news? Now a prominent Hollywood film director just emailed me the following allegations about a heretofore unknown battle brewing between the Directors Guild and The Weinstein Co over residual payments for 20 to 30 films that may lead to arbitration or worse. (See below for the emails, which I condensed with his permission.) UPDATE: Tonight I spoke to Harvey Weinstein and his CFO Larry Madden, who both contend they know nothing about this and have not been personally contacted by the DGA2ND UPDATE: Harvey called again to say he’s “just discovered” that The Weinstein Co uses a third party service to calculate and pay residuals. “Whatever the problem is, we’re looking into it immediately.” (See his full statement below.)

First, here’s a condensed version of the director’s emails to me:

dga.jpg“As you know, directors and writers rely on their residuals to survive during hard times. Well, with the past WGA strike and the impending SAG strike, times are a little rocky. I personally have been expecting my Weinstein Co residual check for six figures now since February from when it was due for the 4th quarter 2007. I had the DGA get into it and what I was just told was shocking: For the first time in the history of the company, the Weinsteins haven’t paid ANY residuals for last quarter to any of the 20 to 30 films they owe on. The person I spoke to at the DGA thinks the Weinsteins may be having problems.

“The DGA has been chasing TWC for two months almost. And TWC have been stonewalling and not returning the DGA’s calls for over a week now. They have an employee at TWC who is either completely incompetent or more likely is feigning incompetence to stall for time. For example, two weeks ago when the DGA called on behalf of my film and 20 to 30 others, the TWC employees asked the DGA person if they had a phone number for Axium. Like what does this have to do with anything? Axium is a payroll company that very publicly went bankrupt last year. The TWC doesn’t know this? THEN when the DGA called again last week, the TWC company asked the DGA residual person if they had a list of the SAG actors in the TWC films that are in question. Why would the DGA be keeping track of SAG? Why would TWC ask this?

“The DGA has threatened to go to arbitration over this and will begin legal proceedings in approximately twenty days if TWC does not comply. This info comes from the DGA residuals department. I am extremely frustrated and I know other independent directors who are financially dying right now. Residuals are an essential ingredient to our survival. Please do NOT cite me or specifically point out my film. I don’t need to be blackballed by Harvey. I have another movie in development with him.”

And here’s what Harvey Weinstein, with Madden in agreement, told me tonight:

“If indeed this is true, we are going to make the payments to this director immediately. Maybe there’s one person, or a couple of people, where there may be a screw-up. We don’t know. Until you told us, we had no idea. And we never received a phone call from anybody saying we were late. We’ve been current since we started the company. We are very responsible for our bill. If there was a mistake made, we’ll fix it.

“This has never happpened before. Both of us have never been contacted by the DGA. Certainly you would call the CFO and certainly you would call Harvey Weinstein. This is the first I’m hearing about this. In 30 years, I’ve never had a complaint about residual payments. If anything is wrong and an executive screwed up, that executive won’t be working for us. And if anything is owed, that will be corrected, too. I find it ridiculous that anybody would write about it. If it weren’t Harvey Weinstein, it wouldn’t be written about.”

And Weinstein said this in a follow-up call tonight:

“I just found out we use a third party service to calculate and pay residuals. The Weinstein Co doesn’t do the residuals directly. Whatever the problem is, we’re looking into it immediately.”

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