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Lawsuit Offers Rare Look Inside Hollywood Dealings : Television: A powerful producer butts heads in court with his former representatives.

March 25, 1994|JOHN LIPPMAN | TIMES STAFF WRITER

In the short-lived comedy series "The Famous Teddy Z," actor Jon Cryer played a neophyte talent agent learning the ropes in the back-stabbing world of behind-the-scenes Hollywood deal makers.

The show bombed, but a real-life version is now playing out in a Los Angeles court battle that pits powerful TV producer Matt Williams against his former representatives, Agency for the Performing Arts.

Williams, who is credited with creating both "Roseanne" and "Home Improvement," is suing APA over breach of contract and is seeking to cancel the lucrative commissions that his production company owes the agency.

APA denies the claims, and has filed a countersuit alleging that Williams and his partners purposefully sabotaged the relationship to avoid paying money owed APA.

The suit is unusual not only because it provides a rare glimpse into the eye-popping financial earnings of one of Hollywood's hottest TV executives, but also because it brings to light one of the industry's most obscure but controversial practices--paying so-called "package commissions" to agents for matching writers, producers and talent in TV shows.

Typically, agents used to earn a 10% commission if they placed their client on staff or in a role on a TV show. But in recent years individual commissions have been eclipsed by packaging commissions, where agents earn a much higher return, drawn from the show's budget.

The relationship between Williams and APA apparently went sour shortly after APA agent Rick Leed left the agency to become president of Williams' production company, Wind Dancer. Leed subsequently informed APA that Wind Dancer would not be renewing its representation agreement with the agency.

Leed had shepherded Williams' career from the time he was an obscure off-Broadway playwright in New York to his free-lancing days on "The Cosby Show" and through development and production of "Roseanne" and "Home Improvement."

During that seven-year period, APA estimates in court documents, Williams earned more than $30 million, including $18 million for his deal on "Roseanne." Williams spent only one year as executive producer of the show before a run-in with Roseanne Arnold.

Williams also has earned $10 million so far from "Home Improvement," according to the APA documents, which project that he could receive $100 million from the show over the next several years.

Williams is able to earn such enormous sums because he owns a percentage of the "back end" of both shows, which are hugely profitable in syndication. "Home Improvement" could become the second most profitable TV show in history, generating gross syndication revenue of $500 million to $750 million, depending on how long it stays on the air.

In their case, Williams and Wind Dancer say APA isn't owed commissions because it tried to thwart its former client by withholding services on "Home Improvement" after Leed served notice that Wind Dancer was not renewing its representation agreement.

Even though APA no longer represented Wind Dancer, the production company says it was still obligated to help furnish material, writers, directors and actors to the series. Williams and Wind Dancer say such "servicing" is the only way to justify the packaging commissions.

In a bitterly worded lawsuit, Williams and Wind Dancer claim that APA agents would show up on the "Home Improvement" set only to try and poach clients. Things apparently got out of hand when one APA agent allegedly annoyed star Tim Allen by hanging around his dressing room.

Not surprisingly, APA sees what happened quite differently. The agency says the lawsuit is simply a "coercive attempt" to force it to reduce "commission payments fully earned and vested years ago" for "Home Improvement."

According to APA, when negotiations failed, Leed tried to strong arm the agency by withholding $730,000 in commissions it is also owed for "Roseanne" based on a $7.3-million profit payment made to Wind Dancer last December. Furthermore, APA alleges that Wind Dancer interfered with its relationship with the Walt Disney Co. by leaning on the studio not to pay any further packaging commissions for "Home Improvement."

APA says that it is entitled to commissions for "Roseanne" and "Home Improvement." because they were developed during the term of the agreement between Williams and the agency and that all attempts to continue serving the shows were blocked by Williams.

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