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Oscars: PwC Has Deeper Relationship With Academy Than Just Awards Show

Variety logo Variety 3/2/2017 Brent Lang
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The historic Oscars best picture mix-up has raised questions about the relationship between the Academy of Motion Picture Arts & Sciences and PricewaterhouseCoopers, the accounting firm that tabulates votes. The association between the two organizations extends beyond the annual awards show, perhaps making it more difficult for the film organization to break with its long-time accountant.

PwC has taken responsibility for a mistake that saw presenters Warren Beatty and Faye Dunaway incorrectly announce that “La La Land” was the best picture winner. The organization made it clear Wednesday that, at the very least, Brian Cullinan and the other partner working the show, Martha Ruiz, will not be back in 2018. AMPAS president Cheryl Boone Isaacs told the Associated Press that the relationship with PwC “remains under review.”

Cullinan, a partner in the firm, handed Beatty the wrong envelope, and he opened it to see the name of best actress winner Emma Stone, for “La La Land.” “Moonlight” was the actual best picture winner. It was later revealed that Cullinan had been tweeting backstage minutes before the envelope gaffe.

But PwC’s suite of services to the Academy involves more than just counting and securing Oscar ballots. The company also oversees AMPAS’s elections, prepares its financial documents, and does its taxes. Because the Academy is a non-profit and in consideration of the tremendous promotional value from its Academy Awards role, PwC does not charge the organization its typical rate.

Tax files show that PwC charged the Academy $211,520 for accounting services in 2014, $125,284 in 2013, and $189,423 in 2012. It performed financial services for both the Academy foundation and its museum. A recent Marketwatch article estimated that accounting services related to a broadcast like the Oscars would cost half a million dollars.

In return for its work on the awards show, PwC is able to use its association with the Oscars  in its promotional materials. It also receives free publicity on the broadcast and red carpet coverage. That kind of exposure cuts both ways, raising the firm’s profile, but now also linking it in the minds of the public to the embarrassing Oscars gaffe.

“The broader consumer audience doesn’t know them that well and now what they know them for is this mistake,” said Katie Sprehe, director of corporate reputation and brand strategy at APCO Worldwide.

PwC did not respond to requests for comment, and the Academy declined to comment.

One person who understands the inner workings of the Academy said there is likely considerable ambivalence about how to treat PwC going forward. The accounting firm has done its job smoothly for more than 80 years and managed a transition as certain changes were made, for example in 2009 when the Academy switched to so-called “instant runoff voting” for Best Picture. That system asks voters to rank their selections for the award and means that second-place choices can end up impacting the final outcome.

So there may be some sentiment in the Academy’s upper ranks to keep PwC in the job, while instituting new procedures to prevent a repeated of Sunday’s flub. “Maybe then they decide to maintain the relationship,” said the source, who declined to be named.

“On the other hand, they are supposed to be the steady hand and there was this terrible mistake,” said the Academy ally. “It could be a fire-able mistake.”

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