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Kansas firm sells candid Wal-Mart videos
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A Bloomberg article:
https://www.bloomberg.com/apps/news?pid=20601127&sid=aq0H_PQQF9aw&refer=law
Wal-Mart Refused to Pay $145 Million for Videos (Update2)
By Chris Burritt
April 11 (Bloomberg) — Wal-Mart Stores Inc., the world’s largest retailer, wouldn’t pay $145 million for almost three decades of videos of company meetings and events, said one of the producers of the films.
The decision to leave the movies in the hands of Flagler Productions Inc. may allow lawyers suing Wal-Mart for sex discrimination and other claims to more easily obtain evidence that supports their grievances.
Flagler offered to sell 15,000 tapes to Wal-Mart for $150 million last year. The Bentonville, Arkansas-based retailer responded with an offer of $500,000, prompting a counteroffer of $145 million from the video maker that was refused. Flagler is now selling access to the footage.
“In my opinion, Wal-Mart believed their culture and history had no value to anyone but them,” the producer, Gregory Pierce, said in an interview yesterday. “To this day, I don’t know whether they appreciate the value of what is there.”
About a dozen parties, half of them lawyers for plaintiffs, have bought clips, Pierce said. Another buyer was a labor union.
“We are focusing on the legal people who need help,” said Pierce. He said co-owner Mary Lyn Villanueva has received calls from more than 100 lawyers in the past 24 hours.
Wal-Mart is considering legal options to stop the sale of the tapes. The company won’t elaborate further, spokeswoman Daphne Davis Moore said.
Flagler, based in Lenexa, Kansas, was “well paid for many years to document our company for our use,” Moore said. “Clearly the videos were not produced with that aftermarket in mind.”
Possible Use
Brad Seligman, the lead attorney for plaintiffs in a discrimination case against Wal-Mart, said he’s negotiating with Flagler over possible use of video clips.
“It’s a little premature to say what we’d actually use,” Seligman said in an interview. “The videos are potentially very helpful.”
Pierce and Villanueva bought Flagler in March 2006, months before the retailer told them it was looking for a less expensive producer of its shareholder and employee meetings. That subsequently ended a relationship that began in the 1970s with a handshake between founder Mike Flagler and a Wal-Mart executive, according to David Sexton, a lawyer for Flagler.
Wal-Mart and Flagler never signed any agreements, blunting possible legal claims by Wal-Mart to the tapes, Sexton said.
“It was a handshake, all verbal,” the Gladstone, Missouri-based lawyer said in an interview. “Nobody ever discussed video rights.”
Video Discovery
Pierce said he and Villanueva didn’t consider selling access to the tapes until last year, when lawyer Diane Breneman discovered the videos as she pursued claims on behalf of a boy burned by gasoline in a plastic container sold by Wal-Mart.
According to a Wall Street Journal report this week, Flagler found videos of Wal-Mart managers that parodied testimonials raising concerns about the safety of the gas cans.
Wal-Mart rose 14 cents to $54.80 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have advanced 15 percent this year.
At its peak in 2006, Flagler took in about $10 million in annual revenue from Wal-Mart, which used the vendor to help produce and tape its annual shareholders meeting and two major employee meetings, Pierce said.
“Wal-Mart was about 95 percent of our revenue and 120 percent of our time,” Pierce, 49, said. After losing the work and repaying a bank loan, he and Villanueva dismissed 16 employees and sold their 20,000-square-foot production facility.
Flagler’s owners produced a high-definition documentary and are now developing Web sites, renting equipment and providing video and editing services.
Asking Price
Pierce said he and Villanueva met with Wal-Mart representatives in early 2007 and discussed a possible sale of the film library. The discussions led to Wal-Mart asking Flagler to name a price, Pierce said.
Villanueva and Pierce settled on $150 million after talking to producers in Hollywood and New York who suggested asking twice that much, Pierce said.
Pierce said $150 million was a “reasonable price for 30 years of corporate history and culture. It had all been well maintained and preserved for all of those years.”
Preserving the tapes saved Wal-Mart “millions of dollars” that otherwise would have been spent reshooting videos, as well as “preserved their history,” Sexton said. “It’s priceless. How do you replace something you can’t replace?”
Wal-Mart posted on its Web site yesterday an Oct. 26, 2007, letter from Sexton on reviewing Flagler’s asking price and Wal-Mart’s offer of $500,000. The letter said Flagler intended to try to sell the video library.
“The potential buyers range from a political bent, to legal, to national media,” the letter said. Sexton confirmed the letter is authentic.
The retailer posted the letter “to clarify the amount requested,” Wal-Mart’s Moore said.”
Randy
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[Steve Wargo] “the law the states that the copyright belongs to the “creator” of the work. It has always been ASSUMED that the photographer or shooter is the “creator”.”
Steve,
Whoever assumes that or anything else is just opening themselves to disapointment.
In the world of television, the series creator is certainly not the cameraman. Just try to tell Dick Wolf that the cameramen on Law and Order own his franchise and I think you’ll get a good hoot out of him.
If there’s just one hole in an assumption you can be assured that assumption is false. The only assumption I’d make is that if something is important to you, you’d best spell out the details in writing, otherwise a judge is going to be deciding the fate of your business.
David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Business & Marketing, and Indie Film & Documentary forums.
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Article from the Kansas City Star newspaper which is where Flagler Productions is located. It has pictures of the two current owners of Flagler Productions and a local perspective on the company.
https://www.kansascity.com/105/story/569277.html
Here’s a link to Flagler Productions YouTube page:
https://youtube.com/user/FlaglerSafety
which has 15 videos.
An article from the site Wal*Mart Watch:
Flagler Productions Co-owner Mary Lyn Villanueva’s Linkedin profile:
https://www.linkedin.com/in/flaglerproductions
Randy
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[Randy Wheeler] ”
Wal-Mart Refused to Pay $145 Million for Videos (Update2)”1 – If Flagler did the work….
2 – If Flagler invoiced Wal-Mart for that work…
3 – If that invoice included the raw tape stock….
4 – If Wal-Mart paid those invoices….
… Why are they entitled to additional money for these tapes?
… Why is it $145 million?
I honestly hope Wal-Mart wins some sort of a tremendous settlement against these morons. Thank you for making our industry look so bad.
Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.STOP STARING AND START GRADING WITH APPLE COLOR Apple Color Training DVD available now!
Read my Blog!
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[walter biscardi] “I honestly hope Wal-Mart wins some sort of a tremendous settlement against these morons.”
Well, that won’t ever happen. These guys certainly do not have deep pockets, so there’s nothing Wal-Mart can win other than perhaps getting their tapes back. Flagler’s only assets at this point are probably the Wal-Mart tapes and against that is their lawyer’s bill which will most likely account for the bulk of any settlement if there is one to be had.
David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Business & Marketing, and Indie Film & Documentary forums.
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[David Roth Weiss] “[walter biscardi] “I honestly hope Wal-Mart wins some sort of a tremendous settlement against these morons.”
Well, that won’t ever happen.”
Just to get this out of the way: I’m not defending Flagler.
Now forget that whole “Flagler is evil” issue for just a minute, take a deep breath, and try to step back and lose the production-studio perspective, because I think we’re so close to the situation that we may be missing the point. That narrow focus is natural on this forum, but imho, we should be using a much broader perspective than our own, even to understand how this relates to us as production people.
Flagler’s talk about the “historic value” of the archive seems like a fig leaf — imho it’s all about blackmail. The primary value is evidence that could be used (essentially for free) in class-action litigation against Walmart (for stakes that truly do represent a potentially “tremendous settlement”).
But the idea of Flagler holding up Walmart for blackmail is absurd. It can’t happen. Given any amount of sanity on the part of Walmart, it never could have happened, because trying to suppress evidence is illegal and exposes Walmart to even more liability. This footage only had value if it had been kept secret — and that was probably never possible. (To give one example of how difficult it is to keep recordings a secret: the exposure of the Nixon Tapes, we now know, was not an accident, but a carefully orchestrated and inevitable event.)
By law, it doesn’t matter who shot the footage — an internal crew or independent. As soon as a plaintiff becomes aware of the existence of relevant evidence, he or she has the absolute right to demand that footage. “Mr. Smith, were those training sessions videotaped?” “Yes sir.” “And who shot those videotapes?” “So and So Company [or] The Corporate Video Department.” BANG! off goes the subpoena for footage. The law doesn’t care what address the subpoena has on it.
No matter who possesses the videotapes, he/she/it must supply them. If Walmart had control and burned them, there is some legal principle which says “Jury — you may assume the WORST about this evidence which has been illegally destroyed. Let your imagination run wild.”
This thread has focussed on a lot of other issues, all of which have a point: Yes, the production company acted unethically. Yes, that hurts the overall production business. Yes, clients will probably bring a greater percentage of production in-house. Yes, contracts should be specific about what happens to footage.
But the important thing here has NOTHING to do with that.
Because it doesn’t matter WHO shot the footage, but only THAT the footage was shot. As soon as people find out about evidence, a plaintiff can require it to be supplied to them, for no more than reasonable costs of research and copying. It was never worth 150 million. If Walmart had paid 250 million, it wouldn’t have mattered. If Flagler had shipped it to Walmart for the cost of the UPS bill, it wouldn’t have mattered. Walmart would still have to supply it to their worst enemies.
So what is the takeaway about this episode, which is relevant to most of us?
Here is how I imagine some business website will be putting it: “Message to Corporate America — Don’t Videotape ANYTHING that you don’t want to see in a court of law, a tv special, or on YouTube. It will very likely get out. And jurors, customers, potential employees and business partners will see it, and judge you by it.”
It isn’t just Flagler v Walmart that is driving this message home. It’s “Macaca,” it’s every Michael Moore doc, it’s the flub on the presidential campaign trail that you see next week.
But it does have an impact on our business, and that impact is the phone call that goes like this: “Hi, Mr. Jones of Jones Productions, this is Mr. Big Client, and I’m calling to cancel that videotaping of the corporate conference next week.”
I agree with the posters in this thread who advocate handing footage to the clients ASAP. They are absolutely correct in advocating this policy, not just because of “morality,” but because corporations will only deal with suppliers whom they can trust.
But the biggest point is: corporations with anything at stake are going to be a lot more circumspect about videotaping than they have been.
There are genuine issues that this new “YouTube world” raises for production people. For example, are there instances when we should advise the client, “I think we need to stop filming?”
note to self: Those “blooper reels” may not go over as well with clients as they did in the past….
I’ll add this: “I may be wrong.” I am not a lawyer. So if any of the above is off the mark, my apologies for wasting your time.
This thread has been running wild, imho, with overwrought (and legally irrelevant) rantings about the character flaws of the production company. There have been some doozies in this thread, e.g. the one about putting out the fire. (I won’t try urging a little more civility — first time I did that I was accused of asking people to be saints. I’m not asking anyone to be a saint — I think sainthood requires you to die first, and I wouldn’t want anyone even to get sick over this.)
Speaking of being wrong, this case has made me realize that my automatic reaction was too black and white. At first I thought, “Definitely, the corporation has to be given the footage.” But there are cases where this wouldn’t be true. Take this hypothetical example. You’ve been working for years on a documentary about how evil XYZ Corp is, bankrolled by your own meager earnings, because you really believe it hurts Americans. This corporate footage, which dramatically proves some of the points you’ve been trying to make, lands in your lap. Do you use it? Michael Moore used footage from all sorts of sources (without permission) and most Americans said it was okay, because he had a higher purpose. Flagler clearly had no higher purpose, but what if you did? Would you be so noble as to ignore this footage? Oh, by the way: it’s now 1970, XYZ Corp is really a tobacco company, it’s still publicly denying that tobacco is bad for people, and the footage reveals that it has known for years that it was killing people. It would probably be immoral NOT to use it.
Bob C
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[Todd Terry] “I think this whole 1000-post thread would probably be a non issue if it hadn’t involved an “evil empire” like Wal-Mart, as there is aways some satisfaction with seeing the “bad guys” get what is coming to them. But of course this is NOT the right way to do that.”
I think it would exist, Todd, had any production company used their footage in a manner such as this — which many of us here see this as a blackmail attempt on a former client. It just wouldn’t likely have as far-reaching affect on the buyer side of this industry. That it is Wal-Mart, it is going to get big press in all the major newspaper, business journals, etc., and that is where the real backlash will come from.
While some would argue that this is the way things are, that the contract allowed it, etc., etc., doesn’t make it right.
The industry is getting a black eye from this and I do believe that this is going to leave a bad taste in the mouth of many corporations, companies that will start doing business different in the days ahead. Not everyone, but many.
Best always,
Ron Lindeboom
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[Gary Chvatal] “Thats why this discussion has been so interesting to me. My experience has always been that lacking a contract stating otherwise the footage belongs to the shooter. Ron and Steve’s position on ownership is contrary to my experience so I’m surprised to see it argued so vehemently…”
Personally I believe from reading about the way that Sam Walton *started* his company — I am NOT speaking about the way that it ended up — I am not surprised that there was no contract from when the project started over 30 years ago.
Why?
Take yourself back 30 years. Wal-Mart was not the center of the retail world. The internet did not exist. Cable TV was in its infancy. There was no real way for these tapes to be circulated and I have little doubt in my mind that Sam Walton and Mr. Flagler had a clear understanding that these tapes were the property of Wal-Mart.
I could go on and on and spell out a bunch of other reasons I think this, but it’s late and I am exhausted and I am heading for bed.
So, there is no vehemence left for today, but if I had any left I would gladly aim it at the management of Flagler, a company I have come to abhor as an example of everything that I hate about the dark side of business.
When they destroy the value of the name they had, I suggest that if they stay in this industry a change to something akin to Underbelly Productions might be fitting under the circumstances, in my opinion.
But you are free to think what you wish, Gary.
Ron Lindeboom
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[Gary Chvatal] “My experience has always been that lacking a contract stating otherwise the footage belongs to the shooter. Ron and Steve’s position on ownership is contrary to my experience so I’m surprised to see it argued so vehemently…”
Why would it belong to you if the client paid you to do the work AND they paid for the raw tape stock? I can’t think of any contract where it was specifically laid out in a production contract with a corporate client, but I always know that the footage and project belongs to the client.
They paid for the services, they own everything. This is a trust that the client has put in me to not only take care of their product but also to protect their privacy. Flagler has seriously violated any trust that anybody could ever put in them and is essentially blackmailing Wal-Mart.
This is not good for our industry in any way shape or form.
Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.STOP STARING AND START GRADING WITH APPLE COLOR Apple Color Training DVD available now!
Read my Blog!
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[robert reed] “he called and was given a pricetag of over $350 for what she could have got at the local drug store for about $40. “
I have worked as a professional photographer for many years. In many cases you never achieved a break even point after a portrait session. Extra income garnered from later sales were much needed income. This is different than the way commercial work is done where bigger budgets prevail. Enough profit can be realized at the end of the service and you walk away. I remember the frustration at having someone take a print that I spent 2 hours retouching a negative under a microscope on and then hand printing it till I got the perfect print (from maybe the 10th try) only to learn the customer then took that in for copies. The $40.00 job you get at a drug store does not equate to the $350.00 job you get from the artist although the drug store can nowadays make a really good $40.00 copy of the $350.00 work.
The reason photographers like to maintain ownership of negatives is because the print finishing process is also a dimension of their creative process. If you take a negative into a drug store for a machine print and then tell your friends “oh, ABC photo did our portraits” it would not reflect upon the photographers own quality standards as if he had hand printed it himself.
We used to beg for a little more time from our clients to make that magical image, do the best we could and these images we used to represent our work to other prospective clients and for print competitions. This is where we received respect from our peers, they’re kind of like Telly awards etc. Today when we hand over the film (CD) to the client after a shoot we are not begging for a little more time but thinking “if I can wrap this in the next 20 minutes I can still get 9 holes in this afternoon.”
“everything is broken” ……Bob Dylan
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