I began my career with the investment banking firm JP Morgan, beating the thousands of applicants for a coveted slot and a life of three-piece suits and the dreaded power tie. One plus one equals two, it’s not that hard. When someone offers to double your salary, you take the bait and jump ship. From JP I joined up with an old school brokerage house, soon to be gobbled up by a financial services firm looking to emulate Sandy Weill and Citigroup. I watched the banking industry consolidate, followed by the brokerage industry and, later in my career, the advertising agencies and then the cable stations. But I’m getting a little ahead of myself.
In the retail end of financial services, the rule of the game was two plus two equals five, in our favor. As I got the highest marks on the New York State Accounting Regents in 50 years, this form of fuzzy math didn’t compute. So I bolted. Soon after, 40 plus employees got busted for embezzlement and fraud. Being trained at JP in fraud protection, I notified my boss and then his boss of my suspicions, neither of whom pursued it. Wonder why not? Oh, they were among the employees taken down by the Feds after I left. C’est la vie.
On Wall Street you meet all types from the respectable — like JP Morgan (under Jaime Dimon not so much anymore) and like Brown Brothers Harriman, where one of my sisters worked — to the boiler room operators made famous by Martin Scorsese’s The Wolf Of Wall Street. For a young guy, the Stratton Oakmont-style parties were lots more fun, decadent and filled with hot girls looking to have a good time. Alas, my JP training kept me on the straight and narrow. But being Irish and German, I wasn’t one for passing up free booze. From one of these bottom-feeders I learned one key mantra: If you want to get ahead in the grey waters of high finance, never ask someone where they got their first million. Remember, the key word here is “got,” not “earned.”
Unbeknownst to me the siren call of the arts stirred inside. The same siren had called generations of my relatives. Eight of my mother’s 12 aunts were Flora Dora Girls, and my aunt danced on Broadway with Rita Moreno and a young boy who became Christopher Walken. She even did a stint as an Ed Sullivan Show dancer. Family from both sides of the aisle worked on stage, in vaudeville, in burlesque and in motion pictures, starting at the Paramount Studios in Astoria.
I transitioned into the entertainment business when I got involved in the launch of Satellite News Channel (a competitor to CNN that Ted Turner got hustled into buying when the joint partners were planning to fold the tent; he folded us anyway) and The Nashville Network, which became The National Network, then The New TNN and today known as the home of UFC, Spike TV.
The entertainment industry was what I was looking for, the ability to tell good stories, earn an income and not do any “real work”. As I tell my nieces, if you don’t like your job, don’t do it – you should be happy with what you do in life. The JP Morgan mantra of “protect the capital, speculate on part of the interest” was to be my guide through the cesspool of narcissistic, money grubbing malcontents whose only goal was to have their name in the credits bigger than the others’. God forbid they’d strive to create a piece of content that was well written, well shot, well acted, well directed and well edited, and of course be successful in the marketplace. Alas, dreamy hustlers and charlatans rule the day. Many of the individuals I’ve had to deal with are tri-polar – manic, depressive and fucking crazy.
Bailing out of Group Wonderful was a godsend. And why not? My VP report was a shifty asshole with a bigger boss who was a scumbag and spoke out of both sides of his mouth. (Neither side was factual.) The top honcho who I had some dealings with instilled one business mantra that I follow to this day: If you sign a contract, you must abide by it. If not, don’t sign it. Years later he fired some staffers at the new company he ran when I fortuitously ran into him at the 50th Anniversary celebration of Spain’s RTVE. He asked me what I was doing, and when I told him we represented his company in marketing their older content that had been buried on the shelf for years, he said, “If you have any problems, give me a call.” I looked at him and replied, “What’s your schedule like tomorrow?”
I spent a Summer in front of a darkened screen almost 12 hours every day, giving myself an intensive film history education. New York at that time had an abundance of revival houses and alternative cinemas ranging from the Thalia, Theatre 80 St. Marks and MOMA to the Film Forum, Collective for Living Cinema and the 8th St. Playhouse. Film Noir, silents, Nouvelle Vague and American Independents kept me occupied for three months, as did Kurosawa, von Stroheim, Powell & Pressburger and beyond. Not even my massive vinyl collection or seeing live bands could compete.
It was time to finally finish college, which I had been attending at night for years. Being number four of eight children, surprisingly I was the first to graduate with two out of four degrees. Although the university wanted me to stay another semester to take two more classes and get four B.A.s (Majors: Media Communications, Film Production Minors: English, Urban Studies) it wasn’t for me. The encouragement to attend graduate school, get an MBA or Law Degree was not where my head was at. Making films was.
I had met a number of the hot independent film directors working in New York by this time — Woody, Demme, Scorsese, Sayles et al. PA work, which I had done in college, lousy wages if any, but “getting experience” was the way I thought to go. Paying my own way through life with no parental pipeline made me hustle to pay the rent. On the second day of the month came a knock on my front door. It was the landlord, looking for the rent check. I told him, “I’m working with a really hot filmmaker who’s going to be really big some day.” (He was at one point.) The reply? “I don’t care, where’s the rent?” Ed Saxon offered me a job. He had just produced Something Wild, which we had a benefit for at the Collective for Living Cinema. But I turned him down — it was an unpaid internship. In my company we pay our interns. I tell them that I don’t work for free and neither should they. Years ago there was a sales agent firm that ran their entire company on interns, and they still went under. I wonder what the exec paid himself.
I volunteered for a few years with the Independent Feature Project on their Independent Feature Film Market during the Sam Kitt generation. This was ground zero for the American Independents, the marketplace where all the young filmmakers came to place their offering on the altarpiece of distribution and pray to the gods for a deal. They came in droves: Cinecom; Island; Film Dallas; Alive; the classics divisions of UA; Orion (Michael Barker told me someone had to die before I could come on board). The list went on. Most of these firms crashed and burned along the way when the rise of Harvey got everyone to have delusions of grandeur and launch production arms with their hard-earned profits eked out of the handful of theaters willing to show non-studio product and then the gravy train of VHS. Distribution was what got my attention. You can get a regular paycheck while getting all those good films you see in front of the masses who were now going to the burgeoning multiplexes or staying home to watch the pay cable channels. Anyone remember Starion – owned by Amway at one point? Or Bala Cynwyd-based Prism? Or that mecca of cinema, Z Channel?
To learn the ropes of distribution, I took a job as Director of Acquisitions at a schlock company with a dicey reputation, whose exec was after me for a year because of my IFFM connection. (He wanted access to the producer contact list first. As a former JP guy, I had the Chinese Firewall ingrained in my brain). I showed up at the office for my “interview” in a suit and tie. I don’t think anyone there ever saw one before, unless it was on an auditor, of which they had many, like their books. As I had an inside track – the bookkeeper told me what everyone got paid (bupkis) — I negotiated a salary that was the highest in the company next to the two owners. The company’s business model was to acquire anything not nailed down, no matter how bad, as long as we paid no advances and requested a delivery package that could never be fulfilled and therefore didn’t obligate us to pay until such time. If god forbid we had to put money on the table, we were to offer the filmmaker ten grand for the negative.
Today with Mumblecore, $10K would probably turn a profit for the filmmaker. In those days it was Super16 and if you cut every corner under the sun, you could turn out a halfway decent feature for $35K. Shooting on three-quarters inch was not yet the short cut. One inch only worked if you shot on a soundstage, and who wants to pay that rental fee? I came across a great genre film by a very prolific filmmaker who has since made nearly 150 films and who back then was hard up for cash and asked for a $20K buyout. I showed the film to our entire team – theatrical, home video, tv/cable, syndication and foreign. Everyone thought it was a grand slam. I put together an ad campaign and with my entourage of co-workers, we walked into the office of the powers that be and demanded they watch the film right then. Ten minutes in, after fast forwarding to the “good parts” – naked ladies and dead bodies — the big macher asked us what our thoughts were. The foreign sales guy said, “We’ll make $1MM easy at MIFED.” The reply? “Offer $10K for the negative.” As expected, we lost the film to someone who wasn’t a cheap bastard. Years later I heard they grossed a nice mid-seven figures on the title.
Fate came calling when an old time syndicator who got his start with Charlie King tipped off the founding programmer of HBO and MTV that there was a kid working at the firm he was consulting for who didn’t belong there and that they should hire him. (Selling the company’s schlock in syndication took a miracle and he pulled one out of a hat.) So this person approached me at an elevator bank during that year’s IFFM and said, “Bob M. wants us to talk.” (You can see my hand shaking theirs in the documentary To Heck With Hollywood!) I set up a meeting the next week and spent a few days calling people from my cable days to get a read on the person I was meeting. The comments were, “Oh, I know…” After twisting enough arms, I discovered that as a practicing attorney this person nailed all these guys to a wall and in turn they were afraid of them. This was the person I definitely wanted to work with.
I was out of schlock land like a shot. The new pay still sucked, but I was now aligned with a super-smart lawyer who put the fear of god into all these entertainment industry big wigs who normally ate their minions for lunch. I was taught a handful of basic tenets about contracts. Write the contract in English. (If you read some of the contracts I’ve negotiated over the years, you’d think they were from Mars.) The more pages in a contract, the more questions you should have. If you want to fuck someone over, leave out all of the punctuation. Never allow anyone, especially a lawyer, to rewrite your contract. And lastly, if it’s not in the contract you’re not getting it.
I’ve dealt with scumbags my entire career. On Wall St. they come in $4,000 suits, most likely belonged to a frat, definitely played some type of team sport and buy their affection and/or loyalty with the monies they’ve been entrusted with to “invest wisely.” 2/20 deals rule the day. I almost fell into this pit once when I was approached by Ivan Boesky’s people to work for the Messiah. I was game, but going to school at night and having a life (Punk and New Wave were my thing), I refused to work 100 hours per week no matter how lucrative the pay was. Look what happened to Jesus in Brioni.
The film business is even more creative (or crass depending on how you look at it) when it comes to the hustle. Attending the American Film Market is a good start. There when you shake someone’s hand, make sure to count your fingers when you’re done. In the late ‘80s we wanted to rent a suite at the Loews Santa Monica. AFM regulations are that you must submit a letter of recommendation from three members. My lawyer boss retorted, “I don’t want to be in the same room with three of your members.” Looking back on those halcyon days, I remember meeting a number of the (nowadays) “respectable” sales agents who were slogging soft and not-so-soft porn, a man with a gun and a well-endowed babe on his arm who loses her top in five minutes. And that’s to say nothing of the horrible horror films (like what played on Forty Deuce during my squandered youth) or action films where ammo is bought by the trainload and it’s all shot off in Act One.
My career in distribution for nearly 30 years has been one of specializing in quality fare, arts programming and documentaries with “pay-the-rent” titles thrown into the mix. Everything hummed along nicely, until it didn’t. Under Bill Clinton the FinSyn rules got tossed and hurt all the indies. Now the broadcasters can license everything from themselves and keep all the profits. (Here’s looking at you Discovery and A&E…) I used to sarcastically say that the history of the television business goes back to color tv and “The Brady Bunch.” I now say “The Simpsons.” Maybe I should update that to “Jersey Shore.” I’ve always been known as The Patron Saint Of Difficult Films (to filmmakers), The Patron Saint Of Unsellable Films (to fellow sales agents) or, when I talk to buyers, The Patron Saint Of The Best Damn Films You’ve Ever Seen. One thing I do know is how to market, especially when it comes to the niches.
Arts Programming, who’s left to buy? A&E doesn’t want you to know what the “A” stands for. Bravo went gay and reality. PBS now wants you to pay for the privilege to get on the air — unless you’re Ken Burns, in which case a bank or car company will foot your tab. With everyone else, after the E&O is paid (thanks indie filmmakers who think if they own the record they don’t have to pay for it), the license fee doesn’t leave anything to divvy up with the starving filmmaker. There may be 500 channels on your cable system, but they are mainly all owned by the same conglomerates. It used to be that each station had multiple programmers who developed a specialty – features, docs, kids, series, specials, sports. Now, with all the mergers, there may be one programmer per station, usually someone out of college with crap pay as they cut the really great programmers (all hail Paul Gratton, the best tv programmer in the world, now programming a film festival). Even worse, you’ll have one individual in charge of multiple stations. That’s 61,320 hours of programming per station per year. It’s no more curation, but shoveling out the 800-pound gorilla libraries that belong to…
Nowadays I’m looking at diving headfirst into original productions. That’s because I keep running into many of the broadcast and studio execs I’ve known for years and who are forever asking me when I am going to submit a project. My stock answer has always been, “When something really good comes my way.” Now, after what I see on air and in the marketplace, I’m all game to take an Executive Producer fee and start shoveling like the rest. I’ve negotiated pre-buys in the past from international broadcasters. Occasionally I’ve helped negotiate investments for low-budget films from money guys who are looking to chase tail on their client’s dime. I’ve batted a thousand, given that every film I’ve done this for has paid back their investors. If I return an investor’s money and a profit, they’ll invest in anything I ask them to. If I return an investor’s money and no profit, they’ll talk to me. If I lose an investor’s money, they won’t take my call. Thankfully everyone still calls me back (even if the project isn’t for them).
One Sunday a few weeks ago I was invited to a screening of Alec Baldwin’s re-launch of “Match Game.” I thought it was an ABC-hosted event, where I would be able to mingle with the network execs I didn’t chat with at the Upfronts and have a drink on Mickey Mouse’s dime. Alas, it was a cash bar. And it wasn’t an ABC sponsored event.
I dragged along a financial industry friend to catch up and drink on someone else’s tab. The tab it turned out (and there wasn’t one) belonged to a Donald Trump Super PAC. My finance guy knew a large number of people in the room, so he went to mingle. I in turn caught up with a music industry friend who was the odd man out (not that he was in the music biz but because he wasn’t melanin-challenged like the rest). Eventually the host of the event was brought over for an introduction: Steven Hoffenberg, CEO of the Trump Super PAC “GetOurJobsBackInc.com” and, as I was to later find out, the former fallen “Ponzi King” –made-new-in-Christ. Get out your tambourines…
The following is an almost complete transcription of our conversation:
Steven Hoffenberg (SH): “I heard you’re in the film business.”
Peter M. Hargrove (PMH): “Yes.”
SH: “You do faith films?”
SH: “Why not?”
PMH: “Shitty scripts, bad directing and even worse acting.”
SH: “Like what?”
I proceeded to rattle off the dozen or so faith films I have watched in movie theatres over the last few years with audiences.
SH: “Okay, I give you that. But, we’ve made lots of money on them.”
Take the top four Christian films out of the list, The Passion Of The Christ and The Chronicles Of Narnia trilogy, and you have mind-blowing returns based on a small amount of investment. Or take: Heaven Is For Real (BO: $91.4MM), War Room (BO: $67.8MM), Miracles From Heaven (BO: $61.7MM), God’s Not Dead ($60.7MM), Son Of God ($59.7MM). You have films costing under $1MM returning over $10MM.
SH: “Here’s what I’ll do. You bring me five scripts that you like and I’ll finance them all. When can me meet this week?”
Remember, I’ve just met the guy and I wasn’t hitting him up for financing. It was a typical cocktail party conversation up to this point.
PH: “We can’t.”
SH: “Why not?”
PMH: “I have to find good projects first. When I do I’ll be in touch.”
End of Act I
The next day I sent out an email blast to producers I know who I think may have a Holy Roller project on their desk. Shaking the trees, I wanted to see what will come into my inbox. Like Noah and the flood, the projects come rolling over the transom. Lots of crap, but surprisingly some good scripts, including many with cast already attached and a legitimate top sheet budget. He asked for five; I’ve got 10. One project even had half the $3MM budget in place with a top-notch crew committed, who together had bagged more than a dozen Academy Award wins and nominations.
After separating the wheat from the chaff, I had a tight team of film professionals who would be able to backstop each other if necessary. In addition to my gold man team above, I’ve got an ex-agent turned screenwriter/script doctor who wrote/produced a film released in 140 US markets and 150 territories worldwide. Plus there’s a casting director/producer with a roster of name talent they have used many times and are super close to (some of them have even acted in the faith films that are so popular) and a producer/post-production operation whose head honcho is the former Executive-in-charge of Post Production for one of the studios with primo credits to their name. What low budget films can put all this on the table? And, the budgets on these films range from $500K to $3MM.
It’s two weeks since the supposed money fairy paid me an unexpected visit. I’ve busted my ass to bring together a package of original productions that would look good to any financier, faith films or not. I remind each production team to remember that there are no guarantees in life and that I never promised them a thing, just that I would make the submission. They all confirmed that and told me that I’m the first money guy they’ve dealt with who kept them in the loop and did exactly what he said he would, not promising anything I couldn’t deliver. I email Mr. Money Guy the package, in a short while he responds and asks me to call his cell. Why not his office? And why did he respond from a Gmail account? We’ll see…
End of Act II
I still had some work to do before returning the call. In the finance industry it’s called Due Diligence. I emailed finance professionals I respect to get a read on Mr. Hoffenberg who at this point (from the email he sent me) is the CEO of TowersInvestors.com, affiliated with PublicSpeakingWallStreet.com and, a surprise to me, former CEO of NY Post Publishing Inc. before Murdoch took the reins.
The next day I make the phone call to Hoffenberg’s cell (Pennsylvania area code – north Philly, Bucks & Montgomery Counties). All the while I was multitasking and checking emails, looking specifically for emails from the financial professionals I emailed the day before. My sources came through all along the lines of, “Run”, “Do Not Sign ANYTHING!” and “I thought we trained you better.” (They did, which was why I was doing Due Diligence.) Not to spoil anything, let’s now see how this conversation went.
SH: “Who’s this?”
PMH: “Steven it’s Peter Hargrove. I’m following up on the email I sent you per our conversation regarding faith films.”
SH: “First off, we don’t invest in films. We’ve lost too much money.”
PMH: “Excuse me? But…”
SH: “We have this company that does digital marketing to pre-sell movie tickets. You have any films we can back?”
PMH: “That’s not what I’m calling about.”
SH: “Harvey Weinstein’s the only one who understands.”
PMH: “But Harvey is on the verge of filing Chapter 11. They sold Mandy Moore’s 47 Meters Down to Freestyle…”
SH: “That’s not true.”
Read the trades, Steven, and you’ll see I am accurate. At this point the conversation has gone off track, but I’m willing to hear him out about this “cutting edge marketing concept.”
PMH: “So, what’s the hustle with this digital marketing?”
SH: “Why are you calling it a hustle?”
PMH: “I’ve been around the block way too often, I’ve seen this a number of times already.”
SH: “What do you know? You’re a pissant distributor.”
PMH: “I’ve run my company for 28 years, longer than most boutique distributors have been in business.”
SH: “I run a $5B fund with 4,000 employees.”
An aside, his HQ is in the Vanderbilt Building on East 40th in a “Penthouse.” I don’t think 4,000 people can fit in that building, let alone the “Penthouse.”
SH: “How much do you make? How many employees do you have?”
While this is conversation is going on, I’m skimming the emails I received and am putting Google into overdrive. According to the New York Times (April 21, 1995 – “Hoffenberg Confesses To Ponzi Scheme”), the illustrious born-again Christian Steven Hoffenberg with 4,000 employees pleaded guilty to “criminal conspiracy and fraud charges in connection with a $460MM scheme that was described by prosecutors as one of the largest financial swindles in history.” His flagship company, “The Towers Financial Corporation” – remember, hustlers always like to use similar titled companies for confusion purposes or for the fond memories the name reminds them of — was the anchor of one of the largest Ponzi schemes on record and used a portion of the monies stolen to run the New York Post briefly until he was forced into a partnership with Abe Hirschfeld before it was sold to Rupert Murdoch. According to one of my financial contacts, he today brags about being the King of the Ponzis and claims he spent more than a decade in prison (I’ve been told it was 18 years). How is he allowed anywhere near even a checkbook let alone a piggybank?
According to Politico, this past June Hoffenberg filed a report with the Federal Election Commission declaring that his Super PAC was going to conduct a $50MM digital-media marketing campaign on behalf of Donald Trump. He set up the PAC in April. The digital marketing firm Statware Inc., of Centerbrook, Connecticut, is supposedly making an in-kind donation of services worth $50MM. The best part of the Politico article (June 14, 2016 – “Convicted Ponzi Schemer: I’ll Conduct $50 Million Marketing Campaign For Trump”) is when the Politico reporter pointed out to Hoffenberg that it was a federal crime to knowingly report false information on an FEC form. Hoffenberg of course threatened to sue. Whose tactics is he emulating here?
PMH: “I’m privately held so that’s none of your business. Have you ever Googled yourself Steven?”
SH: “Why would you Google me?”
PMH: “Fraud, $460MM worth…”
SH: “What’s that to you?”
PMH: “Steven, you lied to me. Do you even remember what you said to me when we met? I didn’t approach you, you approached me.”
SH: “You can’t talk to me like that. I run Tower Financial, a $5B fund. Blah, blah, blah…”
PMH: “Steven you wasted my time. You’re a scumbag, so fuck you.”
At this point I did what I should have done at the start of the phone conversation. I hung up the phone.
Now, I’ve got 10 really good faith film packages sitting on my desk looking for financing. I’ve also got some really good horror/thriller projects that are franchisable. Jason Blum? Screen Gems? Lionsgate? New Line? Where is Bob Shaye when you need him?