In a decision that could have massive and widespread repercussions in the TV industry, FOX has been hit with a $178.7 million judgment by an arbitrator over its profit participation dispute with the producers on procedural series “Bones” reports THR.
The ruling, made three weeks ago but only made public today, slammed senior Fox executives saying they offered unconvincing and “incredulous” testimony. They also say the studio had a “cavalier attitude toward its wrongdoing” and the network engaged in “reprehensible conduct”.
Hulu is at the heart of the dispute, with accusations that Fox withheld revenues from “Bones” profit participants (like stars Emily Deschanel and David Boreanaz, producer Barry Josephson and author Cathy Reichs) when the series became available for streaming on the digital platform which Fox partly owns.
Essentially it’s a case of ‘self-dealing’ – when studios undercharge their corporate siblings for broadcast rights, meaning less profit on paper and thus less compensation for key talent and producers. In fact, the extensive report at THR Esq indicates the same Fox rep seemingly signed both sides of the Fox-Hulu agreement for the first season of the series.
The “Bones” award is among the largest of its kind in disputes over so-called ‘Hollywood accounting’. The ruling is also being felt at Walt Disney Co. which is closing its $71 billion deal to acquire Fox, a bigger share of Hulu, and will be getting two of the three Fox executives involved in the dispute.
21st Century Fox said Wednesday it was seeking to void the punitive damages of $128.5 million, arguing that the arbitrator exceeded his powers, but the studio said it wasn’t contesting the actual damages of $50.2 million. Even so, a source tells The L.A. Times this has all only gone public only because Fox has failed to pay the damages as yet.