Wednesday, March 30, 2005

My Letter to the CEO of Rainbow Media

Another scorcher today in Phnom Penh; the Mekong river coils lazily downstream, past boats that look a thousand years old, families tending crops on the far side of the bank.

Anyway, this is the letter I wrote to the CEO of Rainbow Media, Joshua Sapan. Rainbow Media Holdings owns HD Cinema 10, the company that unethically went back on their word during the recent "near"TV sale of BookWars, mentioned a blog ontry or two ago.

I thought I'd post it here for educational use--please note that neither Mr Sapan, nor Kelly Devine (the buyer from HD Cinema 10 who pulled the deal) nor anyone else from Rainbow Media or IFC or HD Cinema 10, did reply:

=====================

11/30/04

Rainbow Media Holdings, LLC
attn: Joshua Sapan
President and chief Executive Officer
200 Jericho Quadrangle
Jericho, NY 11753

Mr. Sapan,

Please allow me to introduce myself. My name is Jason
Rosette, I'm an independent filmmaker (please see
www.camerado.com) who had recently entered into a broadcast
deal with buyer Kelly Devine of the emerging HD 10 High
Definition Channel, operated by Rainbow Media.

I am greatly disappointed about an ethical situation that
involves that particular deal with the HD 10 channel, and
by extension, Rainbow Media. The situation is so striking
that it impinges, in my view, upon the very basis upon
which Rainbow's IFC unit is founded, specifically: that it
"is now the largest network dedicated to capturing the true
spirit of independent film, uncut and commercial-free, 24
hours a day, reaching audiences that are passionate about
films and filmmakers that take risks."

I highlight the relevant parts because I am an independent
filmmaker who takes risks--and as you'll soon see, I took a
risk with regards to a broadcast deal with HD10. But as a
result of these celebrated risks, I was significantly and
negatively destabilized, financially, as a result of
entering into a deal with the buyer from HD 10.

I'm referring in particular to recent deal that I had
entered into with Kelly Devine, who representing the HD 10
interests and title slate; this was a confirmed deal that
had been underway for some time regarding my title
"BookWars". In the end, however, the offer had been
arbitrarily withdrawn, through no fault of my own, despite
definite, explicit, and unqualified verbal confirmation
over the phone with Ms Devine which also specified that the
following "paper" was a formality to he deal terms we'd
agreed upon over the phone.

Now, while I'm no buyer or sales agent, I have had to act
as de facto sales agent for myself for ten other successful
deals for this picture, all of which went without a hitch,
including a deal with IFC's sister channel Metrochannels.
In no instance of these did the verbal agreement not
interface with the contractual paper component of the
agreement smoothly.

In this instance, I had made a definite agreement with
Kelly Devine to sell my title, "BookWars" to the HD 10
channel. There was no doubt or condition applied to the
done deal terminology expressed over the phone. The
discussions had been underway for several weeks, and then
when the final word and discussion came and we spoke, Kelly
told me we had a deal according to the terms set forth in
the deal memo.

"So it's definite?" I asked
"Yes. Definitely"

Then she asked me to send the W9 form, which I did, and the
digital master of my program, which I immediately did,
TRUSTING HD10 with my submaster, as I trusted that Kelly's
word was good, and reflected the good faith of HD10.

Incidentally, please also bear in mind that in Asian
countries where you may already do business (and where I
hope to be working soon in a media group) the verbal
agreement and handshake are, as you know, not at all just
social gestures which lead to the real deal via the
paper--the verbal agreement IS the deal, and the paperwork
is a mere formality. I'm aware of the differences here in
the States, but again, I've dealt with plenty of other
buyers from all over the world, inclduing the US, who
honored their agreement.

Anyway, going back to the deal with HD 10: Naturally after
the point where Kelly confirmed repeatedly that we had a
deal, that it was on, I then did outreach to various other
buyers and industry folks to announce that I'd made this
sale.

I was essentially taking the title off the market* (*later,
when the deadline came and when and there was no word from
Kelly, I informed her that I would be compelled to
field--but not accept--other offers if the deal were not
formalized, and that this would be a relevant item to take
into account if HD 10 continued to be non-responsive about
the paperwork and other areas of execution in the deal.

Also, and critically: I took a risk (a measured risk, I
thought, because I felt Kelly's word and HD10's word to be
good) and spent a couple thousand bucks--peanuts for
Rainbow, I'm sure, but not for me--to develop my next,
third feature. My second feature, incidentally, is
currently in post and should be complete this Spring/early
Summer.

Anyway, somewhere down the line, while I was out of the US
waiting for the paper elements to come through from HD10's
side, but significantly AFTER I'd supplied the requested W9
and Master in a timely fashion and in good faith, things
became muddy--the intial broadcast date of October 15 came
and went, and communications with Kelly became vague,
indefinite, and fuzzy.

Finally, at one point, without any instigation on my part,
and without prompting, I was told that the "deal could fall
through at any time." Later I would learn that this was
owable to the fact that HD 10 decided not to feature
documentaries such as mine after all. Not a technical
thing, not an E&O thing...an internal adjustment made after
the fact on HD10's side.

Then at last, when I inquired about the actual broadcast
dates, since I was not in New York where my E& O diligence
materials are stored, and I wanted to plan a trip to
retrieve them when necessary, but not if the deal was not
moving forward, I was told by Kelly, "don't you think we're
both very hesistant about this deal?"

I was astonished.

"No. I'm not hesitant at all. I sent you my master, W9,
we made a solid agreement, and we're waiting to paper it."

And in the meantime, banking on your/HD10's word, I spent
some very limited discretionary money on developing my next
project--a strategically wise move I thought, which would
dovetail with the PR generated by the HD 10 broadcast of my
first picture.

Anyway, bottom line: HD10 pulled the plug on the deal, and
I was screwed because I placed faith in the deal. In other
words, if I had never spoken to Kelly Devine at HD10, had
never placed faith in HD10's word and assumed that this
deal--as with my previous Metrochannels deal--was good and
solid, I would not have made any financial decisions that
might have destaibilized this independent filmmaker's
fragile revenue structure.

After all, again: I'm an independent filmmaker who takes
risks, a quality IFC celebrates in a mandate which
presumably adds value to the channel.

But from my experience to date, this mandate is a
questionable one. If the channel is changing its slate or
reducing its programming, these celebrated independent
filmmakers can be cut free, at the filmmaker's loss. In my
view, this is not right.

It's also not right to attempt to frame to dissolution of
this deal as any fault of the filmmaker/seller, especially
when the filmmaker/seller has moved forward in good faith
and in a timely fashion at every step of the way. Yet in
this instance Kelly explained initially that HD10's
withdrawal of the deal was due to my being "hesitant"!
(Then later said it was due to internal restructuring)

That's really the bottom line. I'm sure there are other
perspectives, and that Kelly might certify that she was
conditional all along about the status of the deal, but in
my view, based on the working of all other deals I've been
involved with, this deal was not proceeding in a solid
manner, on the up and up, from the HD10 side.

In short, the pulling of the HD10 deal, not for techical
reasons or E&O reasons, but for arbitrary or internal
reasons after a deal has been solidified, is just bad
business, period. I may be a small producer, an
independent filmmaker, but if the qualities of my craft are
those that IFC chooses to adopt in its branding strategy,
then there's something wrong about this.

Joshua, I'm writing this to you not to throw dirt at Kelly,
or to disparage your operation. But I felt it important to
go to the very top, in this instance to yourself, so that
you might be aware of the effect the workings of part of
your operation are having on some of your smaller
independent producers, indeed, the ones who supply IFC with
their label-brand which advocates "risk taking":

In the end, I'd still like HD10 to acquire my film, if for
no other reason than that I might be able to recoup some of
the money I've spent on other projects based on the good
word, or "credit", of HD 10 and Rainbow Media.

The specific amont I spent on developing that third script
(the time I took off, expenses, etc) is peanuts for
Rainbow, I'm sure: only $2500 bucks. For me it's a lot
though, and I 've been forced to turn off my cell in order
to preserve cash, so if there's any interest on your part
(which I hope there might be) to address this situation in
a constructive way, please contact me at
camerado@camerado.com

I'd still like to proceed with the deal, now that I've got
an interest in it; I believe the title is strong and worthy
of the new HD 10 channel. maybe we can work something out
where HD 10 can show it a few times just so I can recoup
the $2500, to at least reach a net zero loss from my
dealings with them. Even that would be preferably to the
feeling that I've been shafted.

I'd say that ethically at least it, would be honorable on
the part of Rainbow to attempt to move forward in good
faith as originally planned, and I would like to do the
same.

Thanks and all the Best,

Jason Rosette
INDEPENDENT FILMMAKER
camerado@camerado.com
www.camerado.com