Representative Entertainment Industry Engagements
Television Profit Participation — Defendant. Mr. Neches testified as an expert in an A.A.A. arbitration on behalf of Respondents Mudville and Donut City in this breach of contract matter. Chathamscape was a loan-out corporation owned by David Angell, one of three executive producers of the successful television series Frasier. Based on its interpretation of a partnership agreement among the three parties, the estate of Mr. Angell (who was killed in the 9/11/2001 terrorist attack) claimed Chathamscape was entitled to a one-third share of executive producer fees earned by Respondents (loan-out corporations for two other executive producers of Frasier) for the last two seasons of the show (which aired in 2003 and 2004). Mr. Neches testified regarding his analysis of income tax returns and financial statements of the parties, which showed that Claimant’s claim was inconsistent with the manner in which executive producer fees had been distributed among the parties throughout the life of the partnership. Result: the Arbitrator ruled in favor of Respondents.
Music Production and Distribution — Business Valuation. In various litigations, Mr. Neches has valued: Vince Neal’s partnership share of the rock group Motley Crue, Marcos Curiel’s partnership share of the rock group POD, and the value of future royalty streams of selected music compositions of the rock group Grand Funk Railroad.
Music Production and Distribution — Defendant. Rap/hip-hop artist Christina Milian recorded and performed the single Dip It Low and included it in her album, It’s About Time, which was produced by Island Def Jam and distributed by Universal Music Video. Plaintiffs claimed defendants infringed their copyrights on the musical compositions and sound recordings by copying portions and looping them throughout Dip It Low. Plaintiffs claimed unjust enrichment and reasonable royalties in excess of $10,000,000. Mr. Neches analyzed and rebutted the damages claim prepared by plaintiff’s expert. Result: plaintiffs settled out of court for a confidential amount.
Hard Rock Band — Defendant. The hard rock band Guns N’ Roses expelled its drummer, Steven Adler, due to his heroin addiction. Adler sued the band and its managers, claiming he was denied his share of the band’s value. Adler valued his share of the band’s goodwill at $4,000,000 and unfinished and future business at $5,900,000. Thomas Neches testified in Superior Court (Los Angeles County) on behalf of the band that value of the band’s goodwill was less than $1,000,000 and that Adler’s claims for unfinished and future business were overstated. Result: Guns N’ Roses settled out of court for $2,500,000 a few hours before the case would have gone to the jury. (In a subsequent, unrelated engagement, Mr. Neches performed a similar analysis on behalf of the rock band Motley Crue to help resolve a dispute between the band and its lead singer, Vince Neal.)
Motion Picture Production — Plaintiff. From 1962 until 1991, Albert “Cubby” Broccoli, through his production company, Danjaq, Inc., released a James Bond film every other year. In 1992 Danjaq sued MGM and Kirk Kerkorian, alleging fraud by MGM related to MGM’s distribution of the James Bond movies. Mr. Neches was retained by Danjaq to determine the lost profit participation on the unmade James Bond movie scheduled for release in 1991. Damages also included lost participation on undersold television distribution agreements, improperly charged MGM distribution fees, and out of pocket expenses. Mr. Neches testified at deposition regarding damages. The analysis included a projection of gross receipts for the lost James Bond movie based on an analysis of receipts of the sixteen prior Bond films. Result: Danjaq settled with all parties for amount reported in Daily Variety to be in excess of $13,500,000.
Television Profit Participation — Defendant. The producer of Let’s Scramble, a fledgling children’s television series, sued its film distribution company for alleged breach of contract, claiming Let’s Scramble failed because the distribution company did not use its best efforts to market and distribute the program. Mr. Neches analyzed the producer’s financial records and Nielsen Ratings achieved by Let’s Scramble. He testified at deposition that the program failed due to its inherent lack of viewer appeal and the producer’s lack of funds to support the program. Result: The case settled on terms favorable to the defendant.
Commercial Theaters — Petitioner. Orion Pictures opposed a proposed merger of a motion picture production and a distribution company. On behalf of Orion Mr. Neches analyzed revenue and market share of commercial first-run theaters in Manhattan and Los Angeles and calculated vertical and horizontal restraint indices based on Department of Justice guidelines. Result: The analysis was used in public hearings regarding the merger.
Video Distribution — Consulting. In a consulting engagement on behalf of Warner Home Video, Mr. Neches performed a statistical analysis of Warner Home Video’s video cassette inventory and distribution operations. Result: Mr. Neches’ recommended changes in Warner Home Video’s inventory policy resulted in operating savings in excess of $1,000,000.
Artist and License Agreements — Consulting. In a consulting engagement on behalf of Lorimar Telepictures, Mr. Neches developed a records management system to assist Lorimar’s legal department track distribution contracts, license agreements and profit participation agreements. Result: Lorimar adopted the proposed system.