Videoage International May 2018

40 May 2018 V I D E O A G E Anthony D. Friscia: The “Ultimate” Studio Warrior Int’ l TV Distribut ion Hal l of Fame T he “ultimates,” a peculiar U.S. studio accounting procedure required since the 1980s by thenon-profit Financial Accounting Standards Board (FASB) — which was established in 1973 to regulate accounting practices in the U.S. — almost got Anthony (Tony) Douglas Friscia killed. Here’s how Friscia recalled it: “In 1987, I started working at Lorimar-Telepictures Corporation as vice president, Financial Planning, Home Video Division, reporting to the company’s CFO. As an expert on the ‘ultimates,’ I was asked to prepare a financial report on current and future sales of the company’s content rights. Just looking at Lorimar’s exploitation rights spreadsheet, I immediately sensed that they were all wrong. Of all their home video programs, the only one that was making money was Jane Fonda’s Workout tape. I showed the huge losses I discovered to my CFO who, in turn, reported [them] to Jerry Gottlieb, the division’s CEO.” He continued: “I was seated at my desk with my back facing the door when I felt someone trying to strangle me. It was Gottlieb! [He] wanted to kill me for putting the company in such a dire predicament.” Friscia further explained that “at that time, the company was going through a scandal with the resignation of some of its top-level executives. It couldn’t afford another setback.” According to the Los Angeles Times , the losses amounted to some $254 million. “News of the huge losses reached Lorimar’s co-founder, Merv Adelson, who in 1988 approached his friend, Warner Communications’ CEO Steve Ross,” and simply said: “Buy us out,” recalled Friscia. “In January 1989, Lorimar-Telepictures became part of Warner Bros.” The stock transaction was valued at $1.21 billion, which included $660 million in Warner’s shares and the assumption of $550 million in Lorimar debt. But this wasn’t the only “close call” for Friscia, for whom the “ultimates” became his ultimate challenge. “Everywhere I went their ‘ultimates’ were a mess,” he said in a telephone interview from his base in Oak Park, California. Through his unique ability to dissect films and TV shows into tiny fragments, only to then assign them dollar values, Friscia helped the studios and producers maximize sales for their shows. The “ultimates,” are also where complex (and fairly abstract) U.S. studio production contracts began to take real form that translated into actual dollars. After completing his MBA at New York’s St. John’s University in 1975 at the age of 27, Friscia was quickly snapped up by Viacom in his native New York City. But it wasn’t until he left Viacom in 1978 and joined 20th Century Fox in Los Angeles that he first came “face-to-face” with the “ultimates.” His final “confrontation” with the “ultimates” was in 1998 when he left his position as vice president, International Finance at Orion Pictures to become VP of Free Television Contract Administration at Warner Bros. International Television. In 2002, while still at Warner Bros., he took the time to acquire his dual U.S.-Italian citizenship, leveraging the fact that hisgrandfather, Antonino, was born in Sicily, and only emigrated to the U.S. in 1912. Friscia’s mother was also European, having been born in Scotland. It is interesting to note that while Friscia is considered the “Father of the ultimates,” an earlier Italian, Luca Pacioli (1447-1517) from Tuscany, is recognized as the “Father of accounting.” Later, Friscia’s two children, Lauren and Ryan, also acquired dual citizenship, and went to Italy for their MBA degrees at the Rome campus of St. John’s University. Lauren, now 35, is director, Marketing at Tapjoy, an Internet marketing service in San Francisco. Ryan, now 32, is VP, Finance and Operations at Bloom Media, a film production, sales, and financing company in Beverly Hills. Since 2005, Friscia has been running his own consulting company, assisting U.S. and international entertainment companies. Throughout his career in the entertainment industry, Friscia worked for a total of eight U.S. studios — including two stints for 20th Century Fox. The first was from 1978 to 1985. The second was from 1992 to 1996. The first time the “ultimates” took Friscia to task was during his initial tour at Fox. At the time, he reported to Burt Morrison, who was directly under Alan Ladd Jr., president, Fox Theatrical. Herb Lazarus, who worked at Fox until 1971, recalled Morrison as a “great guy,” a conscientious fellow who would question every expense report from salespeople. However, Lazarus acknowledged that at Fox (and later, at Columbia), there was little contact between sales and accounting. “Our sales contracts went to legal, and they dealt with accounting,” he explained. Friscia further clarified that international sales executives were only concerned with library shows (which were not reviewed in the “ultimates”) because they could trigger payments to various guilds (or unions) that would exceed the license fees. In certain instances, residuals or participation fees could make a show unsellable. The “ultimates” only covered new content, and projected finances for TV shows for 12 to 14 years, and for theatrical movies, for up to four years. In 1981, Marvin Davis (in partnership with financier Marc Rich) took control of 20th Century Fox by buying shares on the stock market for $722 million. He borrowed heavily, taking out a $550 million loan from the Continental Illinois National Bank, putting in only $55 million of his own money. In 1984, after Rich had become a fugitive from justice for failing to pay $48 million By Dom Serafini (Continued on Page 42) Holding one of Orion’s Best Picture Oscars Group photo at Fox in 1980. Below Friscia (at left) is Laurie Younger, who went on to serve as president of Buena Vista (Disney) Worldwide Television from 2003 to 2007 With son Ryan and Rosario Ponzio, then the head of WB Italy, in Rome in 2001