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Fatal Subtraction - How Hollywood Really Does Business.

FATAL SUBTRACTION--How Hollywood Really Does Business by Pierce O'Donnell and Dennis McDougal (Doublelday, 576 p.) makes one wonder how anyone in the studio movie community can keep their sanity. This is an extraordinary, revelatory, briskly-written expose, surely among the most unusual ever penned about the wheelers and dealers in the film industry, and how they run their house of mirrors.

The basic situation has been widely reported, and it's really quite simple. Art Buchwald, the columnist, and Alain Bernheim, the agent and producer, pitched a story idea to Paramount. The studio in turn pitched it to Eddie Murphy who eventually starred in it under the title "Coming to America."

The deal was for Buchwald and Bernheim to get a fee plus a percentage of the profits. The picture was made. It grossed some $350 million worldwide, and Paramount declared it an $18 million loser. Buchwald and Bernheim sued--and both won and lost. It was a pyrrhic victory since they received peanuts at the end, but Paramount's (and the studios') accounting system got a thorough airing and its handling of creative talent involved in profit participation deals was exposed in a glare of anger and publicity.

O'Donnell and McDougal are both lawyers. O'Donnell handled the case for Buchwald and Bernheim, so he knew every legal wrinkle and subterfuge used to present both sides' arguments. Paramount's argument was simply that the Buchwald-Bernheim team had a contract which provided for a profit cut. Since there was no profit, it was an open and shut case.

For most of this book, O'Donnell proves that the studios, for three decades, have used an accounting system which, regardless of boxoffice success, simply doesn't allow for any public profits. He cites some of the outrageous large and small expenses figured in to create a loss situation.

"There are two sets of books, two sets of rules--one for winners, the other for losers," he writes. "Everyone in the motion picture business knew that net profits were not really profits. They were the leftovers after the studio got back all its costs, generously paid big-name talent and took out a hefty chunk for itself."

The Paramount lawyer, Charles Diamond, defined net profits as a "bonus" for participants who contribute to the success of a movie. But Murphy, the super-star, did a lot better. His end of the deal amounted to around $8 million in salary and 15 per cent of the gross, which ran up to a nice $13 million. In addition, he pocketed huge expenses, including the salary of a chauffeur and $3,792 for a motor home, not to speak of $235 breakfasts.

The most sympathetic figure in all these proceedings is Judge Harvey Schneider, a jurist with a very concise and logical mind, who phrased his questions so they went to the heart of the matter.

Apart from the profit participation issue--and the question of what constitutes a profit, and what does "based on an idea"--Fatal Subtraction provides priceless dialogue among the participants and a devastating inside look at major studio thinking and executives' personal vindictiveness. This book is not just about bookkeeping.

O'Donnell has a full grasp of the situation, and he writes with the necessary combination of drama, frustration, and sense of humor to generate audience interest, but he is still a lawyer, and some of the court-room dialogues are a little lengthy.

On the other hand, only through this phrasing and counter-phrasing, through the exposition of convoluted studio logic, which even some Paramount lawyers resented, could this whole issue really be covered in both its broad and detailed perspective. It was clearly O'Donnell's purpose to expose the studios' shady and selfserving practices while obtaining justice for his clients.

The result is something of a shocker--like lifting a rock and finding the little crawlies scurrying underneath. But money speaks and bends men's minds, whether they are lawyers or Martin S. Davis, the mighty man in the Paramount ivory tower.

It all boils down into an expected and yet unsuspected mess of greed and

meanness, which may fit the established pattern, but surely will provide a lot of thought for creative talent in Hollywood when it comes to writing future contracts.
COPYRIGHT 1992 TV Trade Media, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Hift, Fred
Publication:Video Age International
Article Type:Book Review
Date:Oct 1, 1992
Words:697
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