K

Knowledge. Experience. Background. And relationships. These qualities and capacities make a world of difference for third-party profit participants who turn to experts to scrutinize the books of the entertainment industry to ensure everything adds up and they’re receiving their fair share, according to Steven Sills, an accountant, Southwestern Law School graduate, and partner and renowned motion picture and TV audit expert at Green Hasson Janks .

Sills, with more than three decades of entertainment accounting experience and having done myriad audits with studios and distributors, walked an audience at Southwestern Law school through his work as part of the “Conversation With” speaker series with Professor Steve Krone, director of the Biederman Institute.

Sills said audits can take years and involve he and his partners in detailed, proprietary-confidential discussions in which their knowledge, experience, background, and relationships in the industry get brought to bear to the benefit of their clients. They examine the full range of contracts in a movie or television deal in detail then see with a fine eye how costs and profits actually occur. Because studios and distributors know or know of him and have come to trust him, audits can be more business-like and less filled with conflict, said Sills, who noted he also gains more collegial cooperation from opposing lawyers when they learn he is a licensed but, as he emphasized, non-practicing attorney.

Expert testimony

For Sills, it is clear his clients’ interests are foremost, as he mentioned how he and his colleagues have gotten them big sums, for example, by learning in a contentious case to look at overseas taxes and how they are paid versus how they may appear as charges. He spoke briefly about his role as an expert witness for plaintiffs in Celador International v. The Walt Disney Company, which resulted in a $270 million verdict in connection with the Who Wants to Be a Millionaire television series; he did not touch on his part in Paul Haggis, Inc. vs. Persik Productions, Inc., which produced a $10 million verdict in connection with Best Picture winner Crash.

Among the issues Sills also touched on: why movie contracts commonly call for a fixed, standard royalty perecentage for videos, this even in a time when tapes (their origin) are dinosaur-like, DVD sales are struggling, and low- or no-cost to studios online streams are slowly taking hold; the fraught deal-making in  vertical integration in which subsidiaries of mega entertainment conglomerates negotiate and contract with each other–some times fairly and often with potential issues for profit participants; and the painful to client realities of auditing, in which the best counsel may be for them to forego the process because it may cost them more than the process will return.

Background

Sills also shared his personal story and views. He said his father also was an accountant and was comedy legend Jerry Lewis’ business manager. Sills said he never wanted to be in accounting, hoping, instead, for a career in rock’n’roll–it didn’t pan out and he became a bookkeeper earning, he said, $1.50 an hour, before he returned for an accounting degree that he earned at age 30.

He attended Southwestern at night after noticing that an accounting mentor was a lawyer who made many of his contacts at the Beverly Hills Bar Assn.; his accounting firm paid for his law school attendance in the Eighties, which he recalled might have cost around $300. At one point in his talk, Sills said that one of his major frustrations with the Entertainment industry is that it pays more attention to those with wealth than those with even elite talent.

The “Conversation With…” series showcases leaders in entertainment and media, including executives, attorneys and creative artists from the worlds of film, television, music, sports, interactive entertainment and other creative industries. The dialogue format allows the special guest to explore timely and vital issues confronting the entertainment and media industries in an informal setting. Audience members are invited to ask questions, and the conversation is followed by a reception.