Episode Transcript
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Speaker 1 (00:14):
Welcome to Daily Variety, your daily dose of news and
analysis for entertainment industry insiders. It's Thursday, September twenty fifth,
twenty twenty five. I'm your host, Cynthia Lyttleton. I am
co editor in chief of Variety alongside Ramin Setuda. I'm
in LA. He's in New York, and Variety has reporters
around the world covering the business of entertainment. In today's episode,
(00:35):
we'll talk with senior media reporter Gene Mattis about his
investigative report on Los Angeles Film School. The private business
is facing allegations of massive student loan fraud, and Variety's
gaming chief Jennifer mos gives us the scoop on Scopely,
you may not have heard of the company, but you've
likely played one of their mobile games. But before we
(00:56):
get to that, here are a few headlines just in
this morning that you need to no. The Jimmy Kimmel
news doesn't stop. A shareholder group sent Disney a letter
demanding information about the suspension of Kimmel. They want to
know whether political pressure contributed to that decision. The Mouse
House gets it from the left and right. Meanwhile, Jimmy
(01:17):
Kimmel Live's return on Tuesday delivered some six point three
million viewers. I had predicted four million on Tuesday morning.
On YouTube, that episode has been viewed nineteen point nine
million times and counting as of this recording. In non
Kimmel news, we really liked House of Guinness. The soapy
Netflix drama tells the story about the family behind what
(01:41):
might just be the best beer in the world. It's
from Peaky Blinder's creator, Stephen Knight. All of these stories
and so much more can be found on Variety dot
com right now. Now we turn to conversations with Variety
Journal about news and trends in show business. Gene Mattis
(02:03):
explains his story on the swirl of allegations surrounding Los
Angeles Film School. It's not the first time this private
education outfit has faced questions about its business practices. Gene Mattis,
thanks for joining me.
Speaker 2 (02:16):
Happy to do it.
Speaker 1 (02:18):
Gene, you filed a really detailed investigative story that you
did a lot of digging in data and legal documents
and all of the labor intensive, brain power intensive work
that goes into investigative reporting. And there is a lot
of stuff going on with Los Angeles Film School. First,
I want you to tell me what sparked your interest
(02:41):
in looking deeper into the Los Angeles Film School.
Speaker 2 (02:44):
Oh, it's probably about two three weeks ago that I
literally just stumbled on this lawsuit that had been filed
initially under seal in twenty twenty four and then unsealed
a few months ago, and it is a real bombshell
law suit.
Speaker 1 (03:00):
You were just doing your legal filing beat checks, where
you just look at the list of what's been filed
in a day, and you're hunting for a needle in
a haystack. Sometimes there's a lot.
Speaker 2 (03:09):
Of panting for goal there and the usually, you know,
you don't find it much of interest, but every once
in a while it pays off.
Speaker 1 (03:16):
What are the basic facts here in the basic allegations?
Speaker 2 (03:20):
So the basic allegation is Los Angeles Film School has
been taking federal money for you know, student loans and
grants through the GI Bill for its students for many years,
and it has been maintaining its accreditation, which it needs
to do to get that money. And in order to
(03:41):
maintain its accreditation, it needs to show that those students
are actually gainfully employed in the film industry and that
turns out to be a pretty difficult thing to do.
It's one thing to educate people, train them about how
the industry works. It's quite another for them to go
out in the world and get jobs. And so the
allegation is that they have been basically cooking the book
and creating fake jobs for their own graduates to show
(04:05):
their creditors and prospective students that their employment rate is
higher than it actually is.
Speaker 1 (04:12):
Dear listeners. The story on LA Film School you can
find it on Variety dot com right now. Some of
it gets pretty intricate, but what was shocking to me
is the elaborateness of the alleged scheme that was going
on here. The accusations that they paid companies to hire
people for a couple of days so that they could
(04:33):
report that they work the loss.
Speaker 2 (04:35):
It uses the term fake jobs, So people would show
up for two days, they'd sign a form saying yes,
I'm gainfully employed. They'd get a couple hundred bucks or
whatever for a couple of days work, and then that
would be it. And then they can turn around and
show their creditors that, hey, look, our graduates are actually
employed in the film industry and isn't that great. That's
the core of the allegation that they would pay outside
(04:58):
companies to come on to campus and do these productions
for quote unquote graduates. They had they had it in writing,
they had contractual agreements with these companies that you will
hire our people and in exchange, we will pay you
X amount of money. So obviously, if that's true, that
would be fraudulent to claim that these are legit jobs
when they're actually fixed.
Speaker 1 (05:17):
That's where this gets particularly dicey is where it involves
federal student loans. Can you unpack what was going on
with the student loans and just what that adds to
this whole case.
Speaker 2 (05:28):
So, the Los Angeles Film School, according to this lawsuit,
takes in about eighty million dollars a year from the
federal government, and that's about sixty million dollars in student loans,
and that's another fifteen seventeen million something like that in
you know GI built veterans education, which are grands. And
(05:48):
in order to get that money, obviously you have to
be a school in good standing with accreditation or the
government doesn't want to just send student loan money to
some you know, fly by night operation, and so they
are accredited, but the claim is that they've maintained that
accreditation fraudulently by goosing their employment numbers.
Speaker 1 (06:06):
This is a civil lawsuit, but do you have a
sense at this stage is there the potential for full
blown criminal charges.
Speaker 2 (06:13):
I wouldn't go that far necessarily. What we do know
is that the Education Department has looked into at least
some of this. In a period of twenty seventeen to
twenty twenty, the Education Department did an audit where they
looked at is this school being candid about its job
placement numbers or not? And there was a settlement. We
don't understand everything about what happened with that, but we
(06:34):
know at least that the Education Department looked into some
of this. But the claim in the lawsuit is that
stuff was hidden from the Education Department at that time.
It's styled as a whistleblower lawsuit from two former top
executives at the school who allege that there was this
scheme going on, that they were not fully candid with
(06:57):
the Education Department, and that therefore the US government was
defrauded out of many, many millions of dollars under this scheme.
And if they're successful they prevail, then they could get
a cut of any recovery. And there have been other
schools that have gone through something similar to this, the
University of Phoenix being the example that comes to mind
(07:17):
most prominently. But this is a thing in the for
profit education world where former employees, former executives will go
file these lawsuits on behalf of the United States government
and if there is a recovery, then they get a
piece of it as the whistleblower.
Speaker 1 (07:32):
The minute you involve federal dollars, the stakes just get
so much higher.
Speaker 2 (07:38):
Well, the number that jumps out to me from the
lawsuit is there is an agenda document internal to the
school that is quoted that says that most graduates earn
between zero and five thousand dollars in their field of study.
When we're talking about degrees that people are paying forty
thousand dollars for eighty thousand dollars for to end up
(08:01):
with a job or no job that pays less than
five thousand dollars at the end of the day. That
tells the story in terms of the student experience. You know,
if you think about nursing schools or engineering schools, like
the goal is to train people for a trade, and
when all these other schools are accredited, they want to
see that people who graduate from your school are actually working.
Otherwise it's not a successful school. The accreditation agencies want
(08:25):
to see that people are succeeding in the field that
they're studying for.
Speaker 1 (08:29):
This is still the early litigation stage, but it does
remind me there have been over the years many incidents
of disreputable talent agencies, people that claim just pay me
three hundred dollars for headshots and I'll get you meetings
with casting agents, and just that low level scam that
(08:50):
praise on people that just are desperate to be anywhere
near Hollywood. If you don't have connections, it's so hard
to break in to get that first foot in the door,
and there is just an unlimited number of people that
just exist to exploit that desire and just sort of
preying on people's dreams and hopes. Us this something you
(09:11):
think you're going to be following for a while now.
Speaker 2 (09:14):
Yeah, absolutely, people just started to reach out a little
bit in terms of their experience of the place and
that kind of thing, and certainly welcome hearing from people
the bad and the ugly about their experience there that
would be interesting to know about.
Speaker 1 (09:27):
Well, once again, it takes investigative reporters. Gene, thank you
for being ours.
Speaker 2 (09:32):
Thank you.
Speaker 1 (09:38):
Now, Jennifer Moz joins us for a quick tutorial on
mobile gaming and why it's so lucrative. Jennifer is out
here on the West Coast to take part in Variety's
Entertainment and Technology Summit today, where she's interviewing executives from Scopely.
Jennifer Moz, thank you for joining me. Thank you for
flying across the country to be part of Variety's and
(09:59):
in Tech com today. Yes, excited to do it. One
of the panels that you're going to do today is
a conversation with Scopely, which is a mobile gaming company.
Tell me what a unique about their position in gaming.
Speaker 3 (10:13):
They make some of the top mobile games. So you
might not know them by name, but you've heard of
Monopoly Go and you've heard of Pokemon Go. These are
giant games because everyone plays them. If you don't play them,
you know someone who does. They are the number one
mobile gaming company in the US. They have a huge
market share of the gaming industry in general. Because mobile
(10:34):
gaming is so big, it's giant compared to consoles compared
to PC games, because everyone has a phone in their
hands and everyone has the papability to be a mobile gamer,
whereas there are barriers for PC and console, and so
mobile has really opened up what a conversation is surrounding gamers,
and scope Lay is at the center of that because
(10:55):
they're the biggest player right now.
Speaker 1 (10:57):
It's the top of the funnel, right It is the
thing that brings a lot of people and gets them
familiar with gaming. What makes it so lucrative and what
are the capabilities that a company needs to really score
in mobile?
Speaker 3 (11:11):
The money comes from many micro transactions. It comes from
buying power ups, It comes from paying a little more
so you can get somewhere faster in a game, you
can advance in levels. There's some controversy surrounding the idea
of hay to play, but in particular scope Lay works
really hard and makes a message that that's not what
they're trying to do. They've said, we want to make
(11:34):
it you can get as far in this game without
paying any money as you could with paying money. It
just takes longer kind of thing. But there are certain
exclusive items that you can get in game if you
buy them and things like that that add into what
the revenue is. Mobile games get updates constantly. There's new
seasonal events, there's new tie ins. Monopoly Go has had tons.
Speaker 1 (11:57):
They do a lot of.
Speaker 3 (11:58):
Stuff with Marvel and so your in new characters that
can play in the game, and new accessories and things
that you can add into a game to make it
more exciting, more fun and keep you always playing, because
it's not like a console game where you sink twenty
hours into it. You have a great time, but you've
bought the game once you played it through and now
you're done.
Speaker 1 (12:18):
Am I right in thinking that in a mobile game
you have to continually have some new bells and whistles,
some new things to get people to pick it up again.
Speaker 3 (12:27):
Absolutely, especially if you've been playing Monopoly Go for a year.
What keeps you coming back all the time isn't playing
the same game every day. It's new additions to the game,
and I think that is what draws people in in
the first place. If you see that Star Wars characters
are going to be coming up Monopoly Go, you might
jump in. You could have already been playing and that'll
keep you there longer. But it could be something that
(12:48):
brings a Star Wars fan in who hadn't played Monopoly
Go before.
Speaker 1 (12:51):
Do you think that Scopely as a company is known
in the industry? Are they becoming known because they are
doing some more of these licensing deals for sure?
Speaker 3 (13:02):
And one thing that made them even bigger it was
the acquisition of Pokemon Go that came this past spring.
They purchased that game, and I think we've all heard
of Pokemon Go. And one thing that you will notice
is that that game will have more tie ins from
here on not as well, because a lot of the
people at Scopely, at the highest level, have those partner connections.
(13:23):
A chief revenue officer, Tim O'Brien's from Disney and he
has those Disney relationships and it really helps when you're
the revenue officer and you were striking those partnership deals
that you know everyone that you're talking to people at Paramount,
that you're talking to people at Warner Brothers who want
to get their stuff in those games.
Speaker 1 (13:39):
What where's the company based there? Are they a couple
hundred people, a couple thousand, so they're based in Los Angeles.
Speaker 3 (13:46):
I think they have a couple thousand employees, but they
also have offices all.
Speaker 1 (13:51):
Over the world. Jenny, thank you for once again illuminating
the gaming business. I'm very much looking forward to your
session later today. You can read all about it on
writay dot com. Thank Cynthia. As we close out today's episode,
I have to pay tribute to Bob Broder. He was
(14:14):
a lion in our industry. He died September twenty third
on Roshashana at the age of eighty five. He ran
the Broder Curland Literary Talent Agency for nearly thirty years
before it was bought by ICM in two thousand and six.
Bob represented some of the biggest showrunners and directors of
his time. He was an encyclopedia of the industry, and
(14:37):
he taught me a lot about how things work. He
had a strong sense of fairness. He was a quiet
but important voice on industry issues with organizations, including the
Association of Talent Agents. He did not court the spotlight.
He told me straight up the first time we had
lunch that the only time he ever wanted his name
(14:57):
in Variety would be for his obituary. I got him
to do a story or two over the years, including
one about the great training program that he set up
at ICM But the best Bob Broder story I have
is how he figured into the final episode of Cheers.
Bob represented the three creators, James Burrows and brothers Glen
(15:18):
and Les Charles. Bob's craggy profile was immortalized in shadow
in the closing moments of that final episode. In nineteen
ninety three, Ted Danson Sam Malone is closing up the
show's titular bar for the night. When a man walks
up to its distinctive wooden door hoping to get a drink.
Malone shouts, sorry, were closed. Wearing a classic Fedora, Bob's
(15:43):
profile is seen briefly as the spurn patron walks away.
That bit was an in joke nod to the fact
that Bob tried hard to squeeze a twelfth season out
of Cheers, but Danson was ready to move on. Bob
was a good man. Blessed be his memory. Thanks for listening.
This episode was written and reported by me Cynthia Littleton,
(16:05):
with contributions from Gene Mattis and Jennifer Miles. Stick Snicks
hick Picks. Please leave us a review at the podcast
platform of your choice, and please tune in Monday for
another episode of Daily Variety.