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The reason for the convoluted accounting is the networks' refusal to pay full production costs of the shows they buy. A program like Charlie's Angels, which is really a display case for three beautiful detectives wearing as little as possible, costs $623,000 a segment. But ABC pays Spelling-Goldberg Productions only $583,000, leaving a deficit of between $800,000 and $900,000 a season. It is generally not until a series is sold for syndication that the deficit is erased and the big profits begin. Until then, producers borrow, worry about cost overruns and beg the networks for more money.
Spelling and Goldberg are among the most successful of that struggling class. Spelling is a kind of Texas-style Woody Allen who put himself through Southern Methodist University, winning every drama award available before going to Hollywood. Goldberg grew up in Brooklyn and graduated from the University of Pennsylvania's Wharton School. He was chief of production for Screen Gems before forming the partnership with Spelling in 1972.
Despite their success, neither man is in business to lose money, and both were appalled at their problems with Starsky and Hutch, a shoot-'em-up centered on two offbeat policemen. Their lawyer, William Hayes, 59, repeatedly asked ABC to help them out. ABC made additional payments, and then refused to give another dollar. According to the D.A.'s report, Hayes says that former ABC Vice President George Reeves told him: "No, I can't help you. Don't even come ask me, because everybody here has had it up to their ears with Starsky and Hutch!" Finally Hayes suggested that some of the extra cash that was supposed to go to Charlie's Angels be diverted to Starsky and Hutch instead. Reeves replied: "If you want to allocate it that way, it's up to you. Just write me a letter and tell me what you're going to do so we can put it on our records."
Spelling and Goldberg say the money diverted to Starsky and Hutch was supposed to be returned to Charlie's Angels when S&H was canceled. And that, apparently, is what has been happening. All transactions were duly recorded, Van De Kamp notes, and there was none of the secrecy—"the badges of fraud"—that usually indicates criminality. Yet a few questions remained. Nowhere does the report explain, for example, Sunderland's statement that the exclusivity gimmick was a device to cheat the Wagners.
For their part, the Wagners, who stand to make several million dollars from Charlie's Angels, were happy with the out come of the case. They will settle for the payment indicated by the D.A.'s audit.
The two writers involved, who together have 12½% of the profits, were less pleased. Ben Roberts said the decision not to prosecute was "shady" and added that he and Ivan Goff may file a civil suit to get all the money owed them by Spelling and Goldberg. Nor can ABC totally relax.
Lawyer Martin is asking $6 million for, among other things, the damage done to her reputation when she was fired. There is also the prospect that action might be brought by the Securities and Exchange Commission, which is examining the possibility that ABC has violated obligations to its stockholders with its casual accounting procedures.
Whatever the courts decide, the case raised some touchy issues.