Animated Russia #17: Uncertain finances
Whilst concentrating on the animators and their work, I have sidestepped a crucial event in the history of Russian animation – but it’s time is now. I am of course referring to the collapse of the Soviet Union; a cataclysmic event which dramatically altered Russian culture, life, industry and everything else.
It is worth reiterating that under Communism, everything external to a person’s intimate possessions, activities and relationships were administered by the state. It provided (often rudimentary) jobs, food produce, housing, medical care, public amenities, transport, civil construction, plus the whole span of Russian industry and more. It also directly touched the personal lives of many in a multitude of other ways – but I digress.
Although the Soviet Union had been straining at its outer reaches since the late 1980’s, complete disintegration reached its core in the late summer of 1991. After a few fleeting months of terminal decline: the 75 year-old system of Soviet rule was abruptly and decisively over.
The effect of this ‘plug-pulling’ across all forms of industry was a combined explosion and implosion, as the artificially maintained ‘props’ and ‘brakes’ imposed by Communism disappeared in short order. Lucrative businesses in now open markets could soar stratospherically, whilst ventures that were kept afloat solely because someone, somewhere had decided that they should be there; were now simply abandoned to sink or swim with immediate effect.
Uncertainty hit the Russian animation industry as the fine-artist animator’s role changed to embrace abject commercialism for the sake of survival. Money could be found in commissions for adverts and in work for large studio productions based elsewhere in the now open global, market.
In the insane greed-explosion of the 1990’s, no capitalist excess was ‘too much’ in (paradoxically) this former Communist nation. The final insult perhaps to the dead Soviet system. Its children now danced on its still-fresh grave, although this act of desecration came as no surprise.
It was a long-established fact that alongside the facade of (supposedly) ordered, structured equality; the sheer epic scale of ‘favours’, grey/black economy wheeling/dealing and everyday, matter-of-fact bribery was staggering in its ubiquity. Even to the point of choice in official or semi-official encounters: here’s the long queue, or the mutually beneficial short cut, you decide. Now in the gold-rush, these ‘unofficial’ methods and practices could emerge from the shadows without even a token of denial – witness the ’90’s boom of the Russian mafia for instance.
Lucrative deals for personal gain were made by new execs at the renowned Soyuzmultfilm studios, over the now valuable distribution rights to the quality work within. This took place behind the backs of studio employees and shareholders alike. The once-creative atmosphere has been described during this period as “psychologically unbearable and impossible” by Russian animation historian Georgiy Borodin. Workers lockers and effects would be routinely rifled in the night by persons unknown, no doubt panning for gold or looking for the inside-track to a sweet deal.
This pre-empted the whole “Films By Jove” debacle that ran from 1992 to 2007, concerning the rights referred to above. Based in California USA, FBJ was established by former defected Russian actor Oleg Vidov and his American wife Joan Borsten.
An outwardly lucrative deal was established, such that the post-Soviet Soyuzmultfilm would receive 37% of net profits obtained through FBJ’s world distribution rights (outside the former Soviet Union) for a period of 10 years. Another version of the story refers to a $500,000 contract over 30 years. Such is the murk and obfuscation in the case.
In the former version: the crucial key term is of course: “net”, ie; after all expenses have been removed from the incoming gross. That’s everything from promotion and distribution costs down to business lunches, office stationery and postage stamps expended in the execution of the deal at hand. So, a recipient of such terms could find themselves owning a large percentage of absolutely nothing when the dust finally settles. It’s a trick that Hollywood accounting-magicians use to make tax disappear to this day. If there is no profit, then there is no tax.
In this instance, the incumbent Russian authorities and Soyuzmultfilm owners realised – in the face of absent profits – that 37% of zero is not very much at all. The $500,000 version of events sees a potential Russian under-valuation of the world market potential over three decades, with their claim that the deal was void after being signed without legitimate authority on Soyuzmultfilm’s behalf and therefore illegal. Prolonged legal wranglings ensued.
“Films By Jove” also considered themselves to be hard-done-by after giving the majority of the works back, plus having to restore others frame-by-frame before they could get ‘name’ actors in for English overdubs at further considerable expense. They also argued that it was through their efforts that these little-seen masterpieces increased their audience and subsequent financial value in any case. They fought their stance on a deal that had seen them invest over $4,000,000 and great personal effort. Unsurprisingly, after much inter-continental ‘to and fro’; the American courts ruled in favour of FBJ and the Russian courts ruled against. Russia then sought to overturn the USA’s 2001 ruling but it was essentially an impasse.
In September 2007, the deadlock was broken by Russian media (and metals) magnate Alisher Usmanov who bought the rights to the 1500+ title catalogue from FBJ and promptly handed them back to Russia, neatly solving the problem in a manner that avoided either principal party losing face, losing out or backing down. The final price was withheld, though negotiations started at $10,000,000.
Whether FBJ was looking for an ‘out’, had already made their money or perceived that demand had peaked is just speculation on my part. In any case, we as viewers are definite winners in the final act. Russian brilliance created these works, FBJ showed them to the world and we get to enjoy them. Some positive results at least.
(Photo of Lenin statue by Adam Jones; photo of Oleg Vidov – © Glenn Francis, www.PacificProDigital.com)
