‘Bones’ Producer & Writer Sue Fox for Millions

LOS ANGELES (CN) - Twentieth Century Fox used Hollywood accounting to deprive "Bones" TV show executive producer Barry Josephson and the writer of the book on which the show is based of tens of millions in shared profits, they claim in court.

In a Nov. 27 complaint in Superior Court, Josephson claims the Fox Entertainment Group "reaped hundreds of millions of dollars in advertising, syndication, foreign sales, streaming, and other revenues from 'Bones,'" but are "systematically depriving him of compensation" through "Hollywood accounting." Josephon's lawsuit was the Top Download on Monday for Courthouse News.

"So-called 'Hollywood accounting' in the entertainment industry - whereby studios keep nearly all profits for themselves through creative accounting practices while recording 'losses' to profit participants on long-running and highly profitable series - is so commonplace as to be cliché," Josephson says in the 30-page complaint.

"Bones," in its 11th season on Fox, is the network's longest-running on-hour drama, with more than 200 episodes broadcast since 2005, when, Josephson says, he created the program based on a book by Kathy Reichs.

Reichs and others sued Fox separately on Monday, in a similar complaint in the same court. She and her co-plaintiff loanout company, Temperance Brennan, say in their lawsuit that Fox and its predecessors are notorious for its bogus accounting. "In 1979, for example, Fox produced the movie 'Alien' that, on information and belief, cost it between $9 and $11 million to make and by spring of 1980 had generated more than $100 million at the box office alone. Yet, when it came time to pay the film's profit participant - the small, independent producer who had contracted for a share of Fox's profits - Fox claimed that the film had somehow lost money and that no profits were due."

The producer sued Fox and won, Reichs says in her complaint, but Fox continued to juggle the books and lose lawsuits involving profits from its hit TV shows, including "M*A*S*H," "The X-Files," "N.Y.P.D, Blue," and "Cops."

In his lawsuit, Josephson says that as executive producer, he is entitled to guaranteed and "backend" profits, but Fox cheated him by using "dense, nearly impenetrable contractual 'definitions' that often approach 50 pages."

"Such opaque profits definitions are used to manipulate and artificially depress participants' reported 'profits' while keeping the majority - if not all - of the profits for the studio," Josephson says.

An audit is needed, Josephson says, because the "one- or two-page accounting statements issued by the studio, with generic line entries for revenues and expenses, reveal next to nothing about how the studio is actually calculating the revenues and expenses from a television series."

But to conduct an audit, Josephson says, he has to hire an accounting firm approved by the studio, which can see the books only at a time and place chosen by the studio and without making any copies.

To challenge the studio's accounting, Josephson says, he must submit a formal objection: a "farcical" step the studio requires, claiming that its financial are "'incontestable' and therefore unauditable, unless an audit is commences within a specified timeframe."

Josephson says an audit can cost more than $100,000 and take more than a year, and the studio will contest any findings.

"If the participant is particularly lucky, the studio may offer a nominal sum to settle all the claims in the audit report," Josephson says. He claims Fox offered him a "negligible" amount on one of his many claims after an audit uncovered tens of millions of dollars in missing profit sharing payments from the studio.

Josephson seeks a court-supervised accounting, restitution, rescission of a release limiting him to "unfairly low" licensing fees, and punitive damages for fraudulent inducement, bad faith, breach of contract, interference with contract, and unfair competition.

The Fox publicity department did not return a phone call seeking comment on Monday.

Josephson's attorney, Dale F. Kinsella, with Kinsella Weitzman Iser Kump & Aldisert, was not available for comment by telephone Monday.

Reichs too seeks an accounting and punitive damages, for breach of contract, breach of faith, fraudulent inducement, fraudulent concealment and intentional interference with contract. She is represented by John Berlinski, with Kasowitz Benson Torres & Friedman.

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