Hollywood’s Gay Rape Scandal: A Classic Agency Problem

Hollywood has an Agency Problem. Briefly defined, it means the people who run Hollywood don’t own it, as in the days of Louis B. Mayer (owned MGM) or the Warner Brothers. Instead they run publicly traded companies run by a variety of (mostly institutional) shareholders. Who have neither the ability or means to insure that the company is being run to maximize profits. Instead of maximizing opportunities and wealth for the management running the company.

Thus, the main thing wrong with Hollywood is the network of gays, what Michael Ovitz famously called the “Gay Mafia,” running things.

Which includes raping teen age and younger boys. The only difference between the Catholic Church gay rape scandals and Hollywood is that Hollywood has a much better image among women. But that may change according to the plaintiff lawyer filing against X-Men Director Bryan Singer.

Michael Egan accused “X-Men” director Bryan Singer in a federal lawsuit, filed in Hawaii, of drugging and sexually assaulting him in the late 1990s. Three other Hollywood executives — Garth Ancier, David Neuman and Gary Goddard — were also named in three subsequent complaints that accused them of abusing Egan. 

The lawsuits against Singer and the other men claim that Egan was forced into a “sordid sex ring” in the entertainment industry in which underage boys were supplied alcohol and drugs. Egan alleges that the assaults took place at parties in California and Hawaii when he was 17.
The allegations have caused anxiety in Hollywood that others might be named in civil lawsuits. Herman said the individuals he’s investigating include agents, scouts, producers, directors and other entertainment executives.

“They’re everywhere,” he said. “From what I’m hearing from victims, this runs very, very deep and that there have been many predators in Hollywood for years who have sexually exploited kids.”

Much of the alleged abuse took place at the California estate of the co-founders of Digital Entertainment Network, or DEN, a Web video company that collapsed in 2000. Egan was on the payroll of the company. DEN founder Marc Collins-Rector in 2004 pleaded guilty to charges of transporting five underage boys across state lines to commit illegal sex acts.

Egan was one of three plaintiffs who in 2000 sued three DEN executives, including Collins-Rector, for sexual abuse.

Hollywood has for the past several decades pushed the myth that gays are mostly nice, middle class White guys who get married, maybe hold hands, and don’t hurt a fly. Because, well because they’re gay, gosh darn it! And represent every woman’s dream for non-sexy guys: fabulous best friends who would never, ever hit on her! Thus Modern Family, or Will and Grace, showing gays at their imaginary fabulous best.

The reality is, gays are powerful people with fairly deviant sex drives who use their power in Hollywood to rape teen age and younger boys. The Hollywood gays are more Jerry Sandusky than the characters on Modern Family.

So why are these scandals coming out now?

Simply, Hollywood is running out of money.

If Bryan Singer had enough money, he would have shoveled payoff money like Michael Jackson, or other in-trouble Hollywood celebrities have done, and the problem would never have hit the court system. A few headlines in the tabloids, maybe, quickly forgotten.

But Hollywood is running out of money. Even to pay off the victims years ago of directors, executives, and others abusing teen age and younger boys. As the Coreys, Feldman and the late Haim, alleged.

Already, stories abound of execs and directors selling off houses they can no longer support, scaling back child support and alimony for multiple households after multiple divorces. In 1989, Jack Nicholson got around $35 million for his role in “Batman” (directed by Tim Burton, starring Michael Keaton). For his role in “Avengers,” Robert Downey Jr. got about the same. For the starring role, essentially, not a supporting villain role. And inflation-adjusted, that same role would by worth $67 million today.

What happened?

Essentially, the agency problem.

Back when old-line Jews like Louis B. Mayer or Jack Warner ran Hollywood, they owned it. So they did not treat their studios, movies, stars, and so on like a rental car with an insurance agreement. Instead it was their own and they acted, ruthlessly, to maximize their profits. No courting critics approval at the price of mainstream success and money. Because it was their money. No “edgy and hip” stuff to create a web of mutual obligation by actors seeking critical acclaim for their resume and next job. Instead you had a relentless focus on the mass-market. MGM and Warners made different kind of movies, MGM being known for musicals and Warners for gritty gangster movies, but both made money by making movies that lots of people paid money to see. Revolutionary I know.

Today, movies that make money do so by being massive, 2 hour or longer commercials for toys, games, bedsheets, lunchboxes, and other stuff. Case in point, “Captain America: Winter Soldier.” Which makes a lot of box office, most of which is shared with theater owners. And the real money being in merchandise.

This points to the massive failure of Hollywood’s Agency Problem. William Goldman is famous for saying that in Hollywood, nobody knows anything. But that’s not true, at least not during the Golden Age, when the studio moguls, mostly obnoxious and fairly cruel human beings, did know what would work and what would not. They had their flops, but not many and never threatening enough to wreck a studio. Year after year, they made money by selling tickets to their movies. A simple model but highly effective.

Indeed, at a Moneyball age where nearly every professional sport has some element of statistical measurement for continuous improvement, from Baseball to Football to Basketball to Soccer (and almost certainly this movement started in racing); Hollywood is unique in not employing statistical analysis to separate loser movies from winners.

And the answer of course is ownership. Owners of racing teams want to win. Winning means money, and often for corporate racing teams, massive prestige by winning various championships, be it Formula One or NASCAR or IMSA (Sports Car racing). The same is true for NFL, NBA, MLB, NHL, and MLS team owners. Winning brings them more money. More money in sponsorships, TV deals, season tickets, corporate suites. Losing brings less. So in owner dominated professional sports, the team managers and execs are on a short leash. The owners demand winning and fire eventually those who don’t produce wins. Hence the continuous desire for any edge, the Moneyball revolution.

Hollywood is not run by owners. The various institutions that own, say Time-Warner, or Comcast-UniversalNBC, or Sony, or Viacom/Paramount, are too diverse, don’t know enough about the business, and can’t agree among themselves to act to hold the management accountable. That is why you had gays spread like wildfire through Hollywood.

Hollywood being female-oriented, is basically repulsive to most non-gay men. TV, which forms the lion’s share of revenue, for studios, caters almost exclusively to women. Because women do about 85% of consumer purchases. Advertisers want to reach women not men, on television. Hence nearly all of Hollywood is not oriented towards reaching men, but rather women, dancing to TV’s daily tune rather than intermittent, big money making, once a year mega-movies designed to sell teen and younger boys games, bedsheets, lunchboxes etc. around comic book characters.

Television Makes You Gay

Why have gays proliferated in Hollywood, particularly since the 1980’s? Simple: Television. Television since the late 1970’s has steadily inclined to ever more female oriented, as I noted back in 2010. TV got girly around the late 1970’s, and has never looked back.

This matters because the career path for Hollywood is through TV. Not just actors like John Travolta and Nick Nolte started in TV, but directors (Steven Spielberg) and producers and writers and executives. A studio might make a few hours of films a year but hundreds of TV hours of production. Year after year, since the 1960’s, TV has been the big money maker, providing the bulk of revenues and profits.

And what sort of man can and will work in a female-oriented Television environment? Why a gay man of course. Hollywood is gay for the same reason that fashion is gay. It caters to women, in a female dominated environment. And the gender difference, men even gay men having more drive, more fear, more urgency, on average out-compete women. No matter a few talented women in fashion or Hollywood, the feminine orientation makes it inevitable that its dominated by gays.

It is useful to note that the old-line, men only, Saville Row tailors making exclusive, fit to order, tailored suits for big time movers and shakers, are dominated by old line STRAIGHT White guys. Apparently even gender bending guys like David Bowie and Mick Jagger prefer their clothes to be “classic” rather than fabulous.

Hollywood is gay because TV is the main driver, and TV is gay. TV is gay because it is female dominated and the only people with real drive are gays, not women. Yes, TV makes you gay.

Hollywood has been like this since the late 1980’s at least. In the beginning of course, Hollywood targeted both women: MGM’s musicals, and men: Warner’s gritty gangster movies. People saw the movies in theaters and paid the ticket price. Then TV hit, the Federal government forced the moguls to sell their theaters, and things changed. The moguls sold out, retired, and management (that Agency Problem again) went full on hipster in the late 1960s and 1970’s. Films like Midnight Cowboy, Dog Day Afternoon, the Conversation, Night Moves, might have been artfully done and filled with hipster nihilism and despair, winning critical award after critical award. But paying customers were few and far between and only the constant TV money from things like “Starsky and Hutch,” and “the Love Boat,” provided money to keep Hollywood afloat.

Until movies like “Towering Inferno,” “The Sting,” “Earthquake,” “Jaws,” “Star Wars,” and “Raiders of the Lost Ark” convinced Hollywood that they could still make money by making movies that people would pay to see. And were still artful enough to give them the hipster credibility and critical acclaim they wanted more than box office (since the people making the movies never saw the money anyway, it all went to the various expenses charged to the execs running the studios).

The video tape money, people paying for old movies on Video tape, and then the DVD money, kept Hollywood afloat for a while. Until Netflix, Youtube, Hulu, and Pirate Bay put an end to the easy, cheap, effortless stream of cash flooding into Hollywood and keeping the Agents of Stupidity afloat.

Now, Hollywood faces a big challenge. The payoff money to various victims of abuse, gay and otherwise (I’m sure) is no longer there. So, lawsuits.

What ought to concern various investors and owners is piercing the corporate veil. Is say, CW as successor to WB, or Fox, liable for the actions of Garth Ancier when he was head of programming there?


It is hard to argue that behavior so flagrantly decadent and in your face, was not known to corporate HQ. And tolerated. Because Ancier and people like him were connected. Part of the social network of the Agency Problem, the managers acting in their own interests.

I don’t think this abuse issue will go away. The number of victims is likely very large, payoffs likely very small, and anger very high. The media will of course, bury it but the tabloids love this stuff and it drives web traffic. Money left on the table by US outlets will be picked up by the Daily Mail in the UK. There are already boycott efforts against the latest Singer-directed X-Men movie. The number of people likely to file lawsuits is large, and this behavior did not take place in a vacuum any more than Jerry Sandusky’s did.

And you know what, this scandal could not happen to a more deserving target.

About whiskeysplace

Conservative blogger focusing on culture, business, technology, and how they intersect.
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16 Responses to Hollywood’s Gay Rape Scandal: A Classic Agency Problem

  1. Ras Al Ghul says:

    Women do 85% of the purchasing for now.

    Japan is starting to see the shift away from women as the herbivore men spend the money on themselves and eschew the women completely.

    And men there sell the “goods” women want: the attentive orbiting beta. There are guys there that makes millions each year doing just that.

    Listening to the women.

    So things are shifting, as they must, as they will. And while history tends to repeat the same themes, this time, it is going to be something more.

    The gays have hit their zenith and they think it is going to continue to move in their direction, but they’re already losing the ground beneath their feet.

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  3. oogenhand says:

    Reblogged this on oogenhand and commented:
    Good points on Hollywood declining.

  4. I don’t know if this was “common knowledge”, or if I just listened to the right birdie, but I heard these rumors about Bryan Singer’s drug-fueled underage gay orgies years ago. –And by “heard”, I mean I saw them browsing one night on some Hollywood “blind gossip” website.

    As a sidenote about Hollywood’s profit margins: Singer’s Superman reboot made 4 or 5-hundred million at the box office, but the studio was sufficiently underwhelmed as to scrap Singer’s projected sequel and– reboot a few years anyway. Whimsical or hardheaded or foolish, I can’t tell. Feel sorry for the one-term Superman incumbent tho.

    Whiskey, your comment at isteve vis-à-vis this NBA golddigger imbroglio was brilliant. Deserves an essay here of its own. The whole topic, I guess, is a sort of locus classicus of many of your most famous themes.

  5. It is sad to see that so many times this article generalizes about “gays.” We are just like straight people. No one should be surprised that there are criminals within the gay community just as there are in the straight community. Or should I take it that when Charles Manson’s murder spree was gong on, all straight people were in on it because he was straight? Should I condemn all straight people for the “casting couch” habits of the straight people too? Are you in denial about that? There are incidents of child sexual abuse by straight people in the news weekly. Do you condone that? I doubt it. Why would I lump you into that group? I wouldn’t. But you are fine with include me in the scandals of a few. There are winners and losers in every group. Don’t group me in with these losers. It isn’t fair and you know it.

    • Gays are NOT just like straight people. Straight people don’t molest little boys. That’s a gay thing, like molesting teen girls is a straight guy thing. Previously to gay domination of Hollywood, the casting couch was a danger for girls. Unprotected by family and managers, predatory guys after girls were the danger. Society needs to be aware of the danger of gay men towards boys. Boys deserve protection from gays just like girls deserve protection from straight guys (who would if they could, have sex with them to the girls detriment).

      There should be no gay-exemption. Gay guys should “take one for the team” like straight guys have been doing since, oh I dunno 1964.

  6. Hizzle says:

    I usually don’t accuse Whiskey of being a “gatekeeper” but how could the guy not mention that the antisemites are right (at least as a matter of proportion) about these sexual scandals in Hollywood? Singer, Polanski, Roland Emmerich (a completely amoral man whose art collection is a veritable cesspool), Joel Schumacher (the target of the “Coreys'” allegations) are all you-know-who. I should add the caveat that no, I don’t view everything as a Jewish conspiracy, but the omission is glaring here.

    Also, I am aware that Singer’s war chest is not as deep as MJs, but neither is the queue of alleged victims. Singer has $70 million, which is more than adequate to settle rather than spar. Perhaps he is guilty; perhaps not. But I would wait a few months before making a conclusion.

    • Oh yes, Jewish producers dominate Hollywood. But not completely in executive suites, as far as I know Ancier is not Jewish nor is Singer. I could be wrong though.

  7. Clarence says:

    This is just dumb.
    It takes SUSPICIOUSLY TIMED allegations from over a decade ago as proven fact.
    I’m not sure if it’s Whiskey grasping at straws because he still hopes to ‘save’ the television/movie industries from gays or because he hates gays.
    But short of some of his half-insane (and proven totally incorrect) hysterical Obama’s gonna cancel the election columns, this is easily the dumbest and least fair.

    • It is not just one allegation. It is many, another lawsuit is pending and the Corey’s allegations and various others sub-rosa are about as clear an indication as an assistant coach coming upon Jerry Sandusky raping that ten year old in the shower. Which surprised by the way, no one in College Football where it was an open secret.

  8. anonymous2 says:


    Even Wikipedia uses Hollywood as an example of horizontal integration displacing the old school vertical integration. Cynical leftist elites probably had it planned decades earlier.

    But, there is a simpler reason for gays seizing the industry, that Whiskey sort of mentioned before: cars. LA is car dependent, and thus it has very low social capital compared to Eastern cities, and only the gays like living in real neighborhoods (and can afford to do so!). First for the sex, then for the business. Add diversity Balkanization, and the atomization process is complete. Ghettos lead to endless suburbs lead to low social capital lead to gayification, the history of the last 50 years.

    Hollywood culture would be like something from another dimension, if the state had stepped in to prevent Edison from sandbagging it and allowing lawless border Californians to run the country’s media. Sleazy Hollywood media beats “respectable” Eastern media and education in the long run, even (especially?) now. Gays now tell everyone what to think, especially individualist conservative outer party proles (like Paula Deen), except for a few notable urban groups like ultra-orthodox Jews. Or jihadists, for Europeans. The next inevitable turn of the pendulum looks to be fueled by either fundamentalist demographics or peak oil. The former looks more likely; there is a lot of frivolous consumption the weaker sex can cut back on before finally giving up cheap transportation.

  9. YIH says:

    Which makes a lot of box office, most of which is shared with theater owners.
    Do you know why I make fun of you Whiskey? Your clueless bullshit, time and again.
    Theater owners don’t make shit on the films! Zip, zero, nada! The tiny profit they might get in the difference between ticket receipts and the film rental fee on a hit film gets eaten by the small loss between ticket receipts and film rental on a shit film.
    IOW, the little money they made on ”Captain America: Winter Soldier” covered what they lost on ”Mr. Peabody & Sherman”.
    Whiskey: OK, hotshot, so where does the movie theater make it’s money?
    YIH: Duh, the concession stand. That’s the only purpose of the films in the first place – bring the people into the theater. It’s those snacks and drinks that pay ALL the bills. ”Hollywood” gets 95%-105% of the total ticket revenue per film.
    It’s also why the ‘multiplex’ starting appearing in the 70’s, when you have 6,8,12 or more screens sharing a common lobby (and that profitable concession counter) you can ‘hedge’ the shit films against the hit films.
    BTW, how long did you wander around downtown Orlando looking for Disney World?

    • zenocosini says:

      How do you get “105%” of something? Anyway, it’s true that concession stands are the main source of revenue for theaters, just as merchandising is the main source of profit for Hollywood: http://entertainment.howstuffworks.com/movie-distribution2.htm

      It’s weird, but now movies are mostly just big ads to sell something else. Of course, the movie has to be popular in itself to sell other products, which explains why so many remakes of super hero movies, the popular characters are already there, you don’t need to create a new brand from zero.

    • I don’t disagree that theaters make most of their money on concessions. But the fact remains that studios do NOT get the full gross. They get: about 75% depending on the deal and film, of the first weekend gross. Thereafter, generally 45-50% of the gross. For foreign rights, it is different. Often films will be “bundled” for a flat fee, upfront, and sales of foreign rights helps fund lots of films. Meaning the studio gets nothing in foreign grosses. Typically this is arty type films expected to do generally little in foreign box office.

      For films expected to make a lot of money like the latest Captain America movie, foreign rights are shared on a deal by deal basis. Generally for big films like superhero movies, the studio gets 45% or so. That was the cut I believe off Avatar according the to 10-K filing by then News, now Fox Corp.

      Theaters are in trouble, even the give-aways of theatrical box office for after the first weekend by the studios has not been enough to help out. Ticket prices have risen astronomically, but attendance has fallen, making deep cuts into concession sales. The real money anyway is in ancillary items connected to movies: toys, games, etc. Which drives the few movies that make money — superhero and kid animated movies that sell merchandise to kids globally.

      I have never been to Florida. I count myself lucky.

  10. YIH says:

    Then TV hit, the Federal government forced the moguls to sell their theaters, and things changed.
    WHIFF! Swing and a miss! Good thing you don’t play for the Angels Whiskey!
    The reality is the other way around, while there was some TV in 1948 it was still small-scale and experimental. At that time they were still trying to figure out what to do about ”Channel 1”. http://en.wikipedia.org/wiki/Channel_1_%28North_American_TV%29
    Meanwhile folks like Howard Hughes (of the most famous example) were trying to break the stranglehold companies like Paramount, MGM and Fox had on distribution and showing of films in theaters: http://en.wikipedia.org/wiki/United_States_v._Paramount_Pictures,_Inc.
    The newsreels died altogether, and cartoons shifted to TV starting in the late 50’s.
    Whiskey, you are to blogging and blog comments what the movie is in ”Mystery Science Theater 3000”. Keep up the good work!

    • I don’t disagree with your timeline, but the twin problems of the losing the monopoly in distribution and competition from television (losing the monopoly in anti-trust came first) were a killer to the old Golden Age studio system.

      TV production helped, but the system there was quite different. Writers who stayed on to run the show, not directors, ruled the roost. And the money just wasn’t as big, as it had to be shared with the networks.

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