Andrew Hayward. Transcripts. Perjury? Michael Jackson Ex. Branca V Irs
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UNITED STATES TAX COURT - TRIAL
ESTATE (OF MICHAEL J. JACKSON DECEASED) EXECUTORS: JOHN G. BRANCA. AND JOHN MCCLAIN V
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COMMISSIONER OF INTERNAL REVENUE (IRS) February 10th 2017 Presiding Judge Mark V. Holmes
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Jackson’s estate is represented by Avram Salkin, Charles Paul Rettig, Steven Richard Toscher, R obert S. Horwitz, Edward M. Robbins Jr., Sharyn M. Fisk and Lacey E. Strachan of Hochman Sa lkin Rettig Toscher & Perez PC, Paul Gordon Hoffman, Jeryll S. Cohen and Loretta Siciliano of Hoffman Sabban & Watenmaker and Howard L. Weitzman of Kinsella Weitzman Iser Kump & Aldisert LLP.
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The IRS is represented by its attorneys Donna F. Herbert, Malone Camp, Sebastian Voth, Jordan Mus en and Laura Mullin. -------------------------------------------ANDREW HEYWARD
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children's entertainment
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Mr. Toscher: Mr. Weitzman will be calling Andy Heyward, Your Honor.
Judge Holmes: Call him.
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Mr. Weitzman: That is correct.
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ANDREW HEYWARD sworn in.
Court Clerk: Please state your name and address for the record?
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A. Andy Heyward, …………………………..
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Judge Holmes: Go ahead, Mr. Weitzman.
DIRECT EXAMINATION
Mr. Weitzman:
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Q. Thank you, Your Honor. Mr. Heyward, what is your occupation?
Q. How long have you been in that business, just a rough guess?
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A. Approximately 35 years.
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A. I make children's entertainment.
Q. And the first company you worked with was named what?
A. Hanna-Barbera.
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Q. And after Hanna-Barbera, did you work in any particular programs we might be familiar with while at Hanna-Barbera?
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A. I was a writer and a director and a producer. I worked on Yogi Bear, The Smurfs, ScoobyDo, Huckleberry Hound, Flintstones, Jetsons among others.
Q. And then after Hanna-Barbera where did you go?
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A. After Hanna-Barbera I started my own company.
Q. What was the name of the company?
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A. It was called Deak Entertainment.
Q. And what was Deak Entertainment's business?
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A. Deak Entertainment produced, distributed and licensed animated cartoons and their consumer products.
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Q. And can you give us a list of cartoons .... did you create these cartoons as well?
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A. Most of them I created.
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Q. Could you give us a list of the cartoons created and/or produced by Deak?
A. Inspector Gadget, Dennis the Menace, Heathcliff, Ghostbusters, Super Mario Brothers, Sonic the Hedgehog, Alvin and the Chipmunks, Hello Kitty, Strawberry Shortcake, Care Bears, Rainbow Bright, Captain Planet, G.I. Joe, Where's Waldo among others.
Q. And those are just the ones you had on the air. At one point you had a block of programming, was it at CBS?
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A. I've had a block of programming at different places at different times. We did ....
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Q. What does that mean?
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A. Well, the broadcast, over the air broadcast stations are required to run three hours a week of children's programming that meets educational and informational needs of kids as defined by the Children's Television Act, and we produced those for various broadcasters. You mentioned CBS and that was one of them that we were their exclusive provider of children's content on, so did it for ABC. And of course produced for all of the networks at one time or another, ABC, CBS, NBC, Fox, Nickelodeon, Cartoon Network, Disney Channel, HBO, all of the first run syndicated independent TV stations.
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Q. And as part of your business, did you also get involved in creating merchandise, consumer products?
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A. Yes. Most children's content spawns consumer products that comes from the shows. The kids see the characters and they want to engage in the play patterns. So that means toys, video games, electronics, apparel, music, publishing, backpacks, sleepwear, soft goods, stationery, school supplies, confection. It goes on and on.
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Q. And in that regard, did you have occasion to deal with name and likeness issues for people whose image you wanted to use during the programming phase or otherwise?
A. Yes, of course. Yes.
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Q. Okay. Can you give us a couple of the names you dealt with?
A. Well, they've ranged over the years from celebrities, musical acts.
Q. Such as?
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A. Sports figures. Warren Buffet, Michael Jordan.
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Q. Warren Buffet. Can you I just stop you for a moment. Wait, wait, wait. What do you do with Warren Buffet?
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A. We make a children's series with Warren Buffet called the Secret Millionaire's Club. The premise of this is to tell stories promote lessons in financial literacy, obviously done through good storytelling, conflict, crisis, jeopardy, stakes, hijinks, all of that. But we use Warren, his image and he does his own voices. He actually participated in not only doing the voices in every aspect of the cartoon, but recruited a number of people to be in the cartoon with him, whose name and image we used as well, who did their own voices as well such as Bill Gates, Shaquille O'Neal, a number of parties.
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Q. And in the sports world putting Shaquille apart, is there anyone whose name and likeness you use or any number of stars, sports stars you've used in any of the animation series?
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A. I have.
Q. Who?
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A. Michael Jordan, Wayne Gretsky, Bo Jackson. I'm sure there have been others.
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Q. All right. Did you have occasion ....
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A. Magic Johnson.
Q. In the music area, are there any names we would recognize whose name and likeness you've used that are a talent in the music business?
A. Yes. We've used the New Kids on the Block, M.C. Hammer.
Q. All right. Did you at some point early on in the business meet with Michael Jackson about a possible animation program?
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A. I did.
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Q. When was that? Again, not the exact date, just kind of the time period.
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A. No. I don't know the exact date, but it was in the 80's.
Q. And did you begin to create an animation program involving Michael Jackson?
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A. We did.
Q. And was Michael Jackson going to be one of the characters in that programming?
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A. He was.
Q. And did that program ever air?
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A. No.
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Q. What happened?
Q. And who did you receive a call from?
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A. Ken Ziffren.
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A. Well, we had a number of meetings with Michael. I was partnered at the time with Dick Clark to develop it and he had worked with Michael over the years and knew him well, and we developed a cartoon series with Michael, and we had a commitment from CBS to do the cartoon and I actually remember this quite vividly, because it was a very disappointing moment. We were literally walking into CBS to close the deal and finalize terms with them for a Saturday morning cartoon when I received a call from one of Michael's attorney, that said Michael has changed his mind. He feels he's overexposed and he really doesn't want to do a cartoon right now.
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Q. Okay. So did you continue to see or speak with Michael over the years after that experience? I'm not talking about for projects, but just on a social or personal level, at all run into him?
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A. No, no.
Q. Okay. So when was the next time you thought about doing anything Michael Jacksonrelated, related?
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A. Well that was many years later. It was probably, you know.
Q. By the way, had you been approached to do name and likeness for animation programs with any particular high profile celebrities and decided it would not be in your best interest to do that?
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Mr. Voth: Objection, leading.
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Judge Holmes: Sustained.
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Mr. Weitzman: I'm sorry?
Judge Holmes: Sustained. Try again.
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Mr. Weitzman:
Q. Were there any programs that you decided not to do with celebrities or using their name and likeness?
A. I'm sure there were.
A. Yeah.
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Q. Can't remember, that's okay.
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Q. Sports stars, musicians, actors, actresses? By the way, if you can't, that's okay.
A. I'm sure there were. I'd have to reach a moment and try and recall.
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Q. Were you asked to do an animated program, children's programs with any baseball players, football players, basketball players?
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A. Well Michael Jordan of course.
Q. And did you include Mr. Jordan in some of your animations?
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A. Yes.
Q. Anyone else that you were asked to do programs with that you didn't do?
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A. We were asked to a program with Kobe Bryant. We didn't do that.
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Q. Why?
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A. Well, I think the association of Kobe Bryant with his personal matters were just not appropriate for children's content.
Q. All right. So let's fast forward. You said several years later, that is between the 80's and before Michael Jackson died, you did have some contact with Michael Jackson-related projects. Could you explain to us what you were involved with?
A. Yes.
A series of meetings?
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A. Yes.
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Q.
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A. friend of mine contacted me and said that Michael was interested in doing a cartoon series and a line of merchandise around Thriller, and would I be interested, and I said I would be interested and that led to us having a series of meetings.
Q. And who did you have the meetings with?
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A. Well, the meetings were with Michael always, and they were with his then representative Dr. Tohme Tohme.
Q. You know Dr. Tohme is not a doctor, don't you?
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A. I've subsequently learned that. I was introduced to him as Dr. Tohme Tohme.
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Mr. Voth: Objection.
Judge Holmes: They're fighting about it.
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Mr. Weitzman:
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Mr. Weitzman: I'm sorry, was there an objection?
Q. Who else did you talk to about the project besides Michael Jackson and Tohme Tohme?
A. You mean in Michael's universe?
Q. No, I don't mean in Michael's universe. I mean in total. Let me back up. Was this a project involving the Thriller concept in some fashion?
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A. Yes, it was.
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Q. Okay. Who did you talk to when you began to work on the project, whether or not it could happen?
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A. Yeah, yeah. I talked to John Landis.
Q. And who's John Landis?
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A. John Landis was the producer, director and he had many different roles in it, but he made the video, the celebrated Thriller video.
Q. Okay, and what did you do to move forward on the project in the early stages?
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A. By the way, I didn't complete the question, the previous question.
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Q. Sorry.
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A. You asked me who I talked to. I talked to John Landis and I also talked to the composer and owner of the song, Rod Temperton.
A. I did.
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Q. And did you go to London and meet with Mr. Temperton?
Q. And what was the concept that you had in mind for this program?
A. And I also spoke to a lawyer who represented Michael at the time.
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Q. Do you remember who that was?
A. I do. Peter Lopez.
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Q. Okay. So what was the concept you were working on? By the way, do you remember the year this was taking place?
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A. It was approximately 2008 or '09.
Q. So could you explain this, what the concept was?
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A. The concept was a children's animated cartoon series based on the Thriller video, and creating the .... turning it into an animated series with characters that we would create using several of the signatures from the video.
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Q. And when you say "using several of the signatures from the video," could you explain to us what that means?
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A. Well, it would mean all of the ghouls and the zombies and all of those, you know, the creatures, you know, that come to life and all that stuff inside the video. It would mean the
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music. The music was the signature song. We had done Ghostbusters and the music of Ghostbusters was very similar in that regard, very, very fundamental to the success of the Ghostbusters cartoon, and the motifs.
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Q. And were you going to create new characters, your own characters, or basically take the characters right from the short film?
A. We were going to create new characters and in fact we did create new characters.
Q. And was Michael Jackson going to be one of the characters in that animation?
A. No, he was not.
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Q. Why not? I understand this may be hard, but just if you could tell us, I'd appreciate it.
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A. Yeah, of course. I'm trying to present this in an elegant, tasteful way. Michael was a lovely person and I enjoyed spending time with him and getting to know him, and I have nothing but kind references to speak of him about. At the same time, his reputation couldn't be ignored, and anything to do with using his name and his image in children's entertainment was candidly toxic. So we didn't want to have anything of him associated with Thriller. We wanted to take the movie, all of the spooky stuff and fun stuff there. We could create stories with scary and hijinks and what-not, and separate that from the use of Michael. You know, it was a little bit of Scooby-Do, which I was a writer on, a little bit of Ghostbusters, which I produced, which were scary stories and things of that sort. But we didn't want to have Michael personally involved in it.
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Q. And did you .... did you .... did you talk to Michael and/or Tohme about making some type of, for lack of a better phrase, deal with them?
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A. Yes.
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Q. Did you believe you needed to make a deal with Michael Jackson to do this cartoon?
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A. No, I don't think we needed to do a deal per se. We were, you know, comfortable that working with John and his creativity, John Landis, and working with Rod Temperton who wrote the music, and who coincidentally had never met each other and they met through me.
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Q. John Landis and Rod Temperton had never met each other?
A. No, they never knew each other. So we brought John to London to meet with Rod, and I wanted to get their creativity engaged. We didn't think that we needed Michael, but at the same time I wanted to be respectful and have him a friendly party.
Q. And what do you mean like a friendly party? Like that's how people become executive producers on films?
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Mr. Voth: Objection, leading.
(Estate lawyers all Laugh)
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Judge Holmes: Well that one's overruled.
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A. Well, as I'm sure you know, Mr. Weitzman, because you are very celebrated in the film industry yourself, many people who become executive producers don't do anything. Their names are used there as a courtesy and as a token for them to participate financially.
Mr. Weitzman:
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Q. And was that the deal you had in mind for Michael Jackson?
A. Yes.
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Q. And did you .... by the way. You weren't negotiating to use the master recording of Thriller in which Michael's voice was on it, were you?
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A. No, no, no. It might be .... it was very similar to what I did with Ghostbusters and there are probably parallels that would be useful to explore.
Q. What are the parallels?
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A. Well, when I made the Ghostbusters cartoon, we did not use the master. We reproduced our own song, but it was the Ghostbusters song, our version of it. So we didn't have to go license that song per se, and also we didn't use the likenesses of the actors that played in the Ghostbuster movie. We just designed different characters.
Q. But with respect to this show, there was, as I understand it, a reason why you didn't want to use Michael's character, which you told us about?
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A. Yes.
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A. Yes, we did.
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Q. In the agreement that you reached .... well pardon me, did you reach an agreement with Michael Jackson, at least a draft agreement?
Q. And did the draft agreement was reduced to writing?
A. Yes, it was.
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Q. Your Honor, I'd like to mark next in order an agreement that has the title "
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A. Squared Entertainment, LLC" at the top, marked next in order. I don't remember what that number is, so I'm going to rely on the Clerk.
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Court Clerk: Exhibit 641-P is marked for identification
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Mr. Weitzman: And could we ask that .... has the government reviewed a copy?
Mr. Toscher: Yeah. Did you give them a copy? ST I gave them a copy.
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Judge Holmes: Where's the copy that I have 641.
Court Clerk: Sorry, that's my mistake.
Judge Holmes: Never mind.
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Mr. Weitzman: And could I have the first page of the document on the reader? Are you familiar with it? Mr. Voth, are you all familiar with that? You want to take a moment?
Mr. Voth: Please.
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Mr. Weitzman: Okay.
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Ms. Herbert: Yes, we'd like to take a moment.
Mr. Weitzman:
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Q. Mr. Heyward, while they're reviewing the document, the first page is also on the screen in front of you.
A. Do you want me to review this?
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Mr. Voth: I'm doing reviewing the document. Thank you, Mr. Weitzman.
Mr. Weitzman: Okay. Now I can ask questions?
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Mr. Voth: Yes.
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Mr. Weitzman:
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Q. Thanks. Mr. Heyward, the document in front of you with the letterhead A Squared Entertainment, is that the draft document of the agreement with Mr. Jackson and MJJ Productions?
A. It would appear to be, yeah. I haven't read it and it's been a number of years, so but it certainly ....
Q. Well, I would ask you to read if you would, the first paragraph, "Licensed Property" and specifically subparagraph three in that paragraph. That's the line I'm going to ask you questions about.
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A. Yes, okay. Let me just take a moment.
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A. I'm sorry. It needs to be blown up. It went back to, it reverted. Thank you.
Mr. Weitzman: Can you blow up or highlight subparagraph three?
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Mr. Voth: I'll blow it up more.
Mr. Weitzman:
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Q. Okay. Do you see the highlighted portion?
A. Yep, yep, yep.
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Q. I want to read that into the record if I might please, subparagraph three, and the first paragraph, Your Honor, titled "Licensed Property," and also the higher up .... the higher highlighted reads "For purposes of clarification, the property shall not include, nor is any license granted hereunder to ASE for or with respect to." Then I go to subparagraph three, "any right or ability to use Jackson's name, likeness, image, voice, identity, character, biographical material or any other reproduction or derivation of the foregoing." Did I read that correctly?
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A. Yes sir.
A. Yes.
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Q. Yes? Did you or you instruct whoever drafted this for you include that in the agreement?
Q. That was not something requested by Mr. Jackson or his counsel?
A. I don't know that.
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Q. Why was it included in the agreement?
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A. Well, we didn't think that we .... we didn't want any of those rights. They were not necessary to produce what we wanted to produce.
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Q. So were there continuing negotiations after this document was drafted with Mr. Jackson or his representatives?
A. I don't believe there were negotiations. There were creative meetings.
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Q. And correct me if I'm wrong, but you did tell us you didn't want to use the name, likeness or the voice; is that correct?
A. Right.
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Q. Why didn't you want to use the voice?
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A. Michael's voice is very recognized, very known as Michael, and we didn't want to have any signature which would associate him with this brand. It would have been a negative for the brand.
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A. Well, the project stopped going forward with Michael's death.
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Q. So at some point then did the project stop going forward?
Q. All right. Had you decided prior to Michael's death if you wanted to continue to go forward with the project?
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A. We just were really increasingly uncomfortable with the association with Michael, and candidly were not certain that we could even not using his name and likeness and voice and signatures, distance ourselves enough from them. I mentioned the Warren Buffet, we do the show with Warren Buffet and we still do, and I think I can say comfortably that Warren, we have a one paragraph agreement with Warren, and in that agreement he assigns to us the use of his name, likeness, voice and right to merchandise consumer products based on that in our series we do together worldwide in perpetuity. The reason I say this is because that's not something that comes easily. This is a man who very, very much values reputation, and Warren has a wonderful quote which we use in our series, the Secret Millionaires Club. It says "It takes 25 years to build a reputation. You can ruin it in five minutes." So ....
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Q. Whose reputation were you concerned about ruining if you were to use Michael Jackson's name, likeness or voice?
A. Ourselves, the people making the cartoon. At that time, my wife, myself and others who have worked with us.
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Q. All right. You've over the years told us you licensed and created consumer product merchandise. How did you feel Michael Jackson's opportunities for exploiting his name and likeness were?
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A. I felt that they really didn't exist. Let me share that in the course of developing our cartoons and the consumer product programs which go hand in hand with them, we regularly visit retailers and we take the temperature from retailers of how they like a property or not. In many cases, that's a proxy for whether the consumer marketplace will respond. We just, after doing that, we knew that anything that connected Michael to Thriller was not going to be welcome in the marketplace.
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A. Yes.
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Q. And you used the term "toxic." Is that what you meant?
Mr. Weitzman: Okay. May I have the document, this is the last document, marked next in order? It's an email from Andy at a Square Entertainment to T. Tohme at MJJ Productions.
Court Clerk: Exhibit 642-P is marked for identification
Mr. Weitzman: And Mr. Voth, do you have a copy of that?
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Mr. Voth: I do. Thank you.
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Mr. Weitzman: Do you want to review it before I ask any questions?
Mr. Voth: No, I'm familiar with it.
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Mr. Weitzman:
Q. Mr. Heyward, do you recognize that email?
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A. Let me just read it once quickly again.
Q. Sure.
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A. Yes.
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Mr. Weitzman:
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Q. Do you recall sending this document on or about June 6, 2009 to Mr. Tohme? I mean if you don't recall, it's seven years, you can just tell us.
Q. It does make sense did you say?
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A. Yeah. I mean it's yeah, it's almost eight years ago and, you know, I probably do 200 emails a day. So I don't recall specifically this, but it's I'm sure it's what I said, because it does make sense.
A. It's consistent with how we viewed the property at that moment.
Q. And this was sent about three weeks before Michael's death?
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A. Yes.
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Q. Now did you have an interview with Mr. Voth from the Internal Revenue Service about your dealings with Michael Jackson before this trial began?
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A. Yes, I did.
Q. And did you tell Mr. Voth in some and substance what you've told us today?
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A. I believe I did.
Q. And did he indicate to you you wouldn't be called as a witness?
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Mr. Voth: Objection, calls for hearsay.
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A. I'm not ....
Judge Holmes: Overruled.
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A. I don't recall if he said that or not.
Mr. Weitzman:
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Q. Did you receive a subpoena from the government to testify in this proceeding?
A. No, I did not. No, no I didn't.
Mr. Weitzman: I have nothing further.
Judge Holmes: Cross Mr. Voth.
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Mr. Weitzman: Oh Your Honor, sorry. I would like to move the two documents, whose numbers I don't remember, into evidence, the two I showed Mr. Heyward with the Court's permission.
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Mr. Weitzman: Is that ....
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Mr. Voth: Respondent objects to the document identified as 642-P in hearsay grounds, Your Honor. It's an out of court statement.
Judge Holmes: It's his own statement.
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Mr. Voth: It's his own statement out of court.
Judge Holmes: About his reasoning. That's overruled. That's admitted. 642 is admitted.
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Mr. Weitzman: Nothing further, Your Honor.
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Judge Holmes: Cross, Mr. Voth.
Mr. Voth:
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Q. Good morning, Mr. Heyward.
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CROSS EXAMINATION
A. Good morning.
Q. Let's go back to 2009. Back in 2009, your company was closely associated with kids; correct?
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A. With kids?
Q. With kids entertainment?
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A. Yes.
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Q. May we have a moment, Your Honor? Mr. Weitzman needs to retrieve some of his notes that I should have assumed ....
Mr. Weitzman: I just left my notes.
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Mr. Toscher: I didn't want you asking his questions.
(Estate lawyers all Laugh)
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Mr. Voth:
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Q. All right. During the time that you were somewhat associated with Michael Jackson, you sought his creative input; correct? Yes or no.
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A. I don't know if I would say we sought his creative input. We shared with him directions that we wanted to go and yeah, yeah, and we sought his input to that, yeah.
Q. Now the kids entertainment business is highly susceptible to any scandal; correct?
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A. I don't know if it's highly susceptible to any scandal or not.
Q. You mentioned the Kobe Bryant case; correct?
A. Yeah. I mean you know, Kobe Bryant, for example, had a number of endorsements, McDonald's and I believe he had something with General Mills and one of their cereals and they all disappeared. So I think ....
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Q. But I'm asking you specifically about your entertainment business, not about others.
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A. Yeah.
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Q. So the answer is yes to that question?
A. The question .... sorry. The question was the kids entertainment business is susceptible to scandal?
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Q. Correct. It can have an impact as to whether you'll actually end up producing an animated series based, you know, for kids for example?
A. Yes.
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Q. Now at one point you wanted to create an animated series called the Governator; correct?
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A. Correct.
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Q. It was going to be based on ....
Judge Holmes: Governator?
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A. The Governator, yes.
Mr. Voth:
Q. It was going to be based on a fictionalized Schwarzenegger, right?
A. Correct.
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Q. Schwarzenegger was going to step down from his role as Governor of California to become a superhero; correct?
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A. Correct.
A. Correct.
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Q. But this show was then immediately halted because of Mr. Schwarzenegger's infidelity scandal; correct?
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Q. You got calls from Disney the minute the news came out about that scandal?
A. Correct.
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Q. Now if I understand you correctly, you testified that you didn't believe you needed to enter into an actual deal with Michael Jackson; correct, with respect to the Thriller animated series?
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A. We didn't think we needed to. We wanted to. We felt that it was something that was probably the best, most prudent route before going forward with the property.
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Q. Okay. So you didn't need .... you didn't think you needed to, but you decided to do so anyway; correct?
A. Yes.
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Q. Now Mr. Weitzman referenced a .... what was previously marked as document 642-P, that email back in June of 2009, where you had some concern about being associated, because of the people that were associated with Michael Jackson, right?
A. Well, the people. I think everything, you know, going on.
Q. The people surrounding Michael Jackson caused you concern; correct?
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A. Amongst other things.
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Q. So the answer to my specific question is yes?
mM
A. Well, the answer is amongst other things.
Q. So that was in June of 2009, but you continued with this possibility of this project, even all the way up to the point of his death; correct?
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A. We continued .... what was the date of his death?
Q. June 25, 2009.
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A. June 25. So I don't believe from that date we had further contact with Michael. We had a meeting that had been scheduled to occur with Michael on the day of his death, and had planned to fulfill that meeting.
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Q. Okay. So that meeting would have taken place after you had expressed some concern about being associated, about the people associated with Michael Jackson?
A. Yes.
Q. You know John Branca; correct?
A. I do.
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A. Yes, yes.
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Q. Among other concerns as you clarified; correct?
Q. You personally have season tickets at UCLA basketball games; correct?
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A. I do. I was there last night.
A. Yes.
mM
Q. You said sometimes you sit near John Branca during the games?
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Q. Now let's talk a little bit about "Thriller." Thriller is a song recorded by Michael Jackson?
A. Is that a question?
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Q. Yes.
A. Yes.
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Q. Thriller also includes a video showing Michael Jackson performing in it?
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A. Yes.
A. Yes.
Q. When did you have that agreement in place?
A. With Warren?
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Q. Right.
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Q. Now you mentioned that Warren Buffet agreement was a simple paragraph you mentioned; correct?
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A. I'm going to guess the paragraph document, I've been working with Warren for 25 years. The paragraph agreement that we have I believe has been five or six years, something like that. That was more or less memorializing something that had already been in place.
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Q. Can you give us an estimate of what year that took place?
A. I'm guessing five years ago, but it could be longer. It's something I can readily check. If you want I can ....
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Q. Okay. So there's an agreement that's been memorialized after Michael Jackson's death then, after 2009?
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A. I believe so. But again ....
Q. There were some principles in place before Michael Jackson ....
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Mr. Weitzman: I'm sorry. Could he just let the witness try to get an answer out?
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Judge Holmes: Fair enough. Let him answer, Mr. Voth.
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A. I'm not certain of those dates, so I don't want to state a date that I don't know to be accurate. But I can .... it's framed, sitting on the wall of my office. I can find it out in six seconds if you want.
Mr. Voth:
Q. So with respect to your knowledge of the statements from Warren Buffet, they were in place before you became somewhat associated with Michael Jackson?
A. I don't know that.
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Q. Remind us again when you became associated with Warren Buffet?
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A. Okay. I sold my company and continued to manage it to Cap Cities ABC approximately in late 1993. Warren Buffet was the largest shareholder of Cap Cities ABC, and my boss inside Cap Cities at that time shared with me that their largest shareholder had a charity that he was engaged with, which was the Children's Theater of Omaha, and since I seem to have some expertise in telling children's stories and they needed some help with that, would I be willing to get involved with them. Which I did, and that led to me getting to know Mr. Buffet, and eventually being asked to produce a little animated short that opened the annual Berkshire-Hathaway shareholders meeting, which I've done for 20 years starring Warren and Charlie Munger and all of the people of his universe. And through that comfort level of working with one another, evolved the idea of doing a children's program that promoted financial literacy with kids in the context of telling engaging stories with all of the tools that I have acquired over my career.
Q. You mentioned being concerned about your reputation. Is that something that you've always been concerned about?
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A. Well, I would say something that I consider important and that which I seek to be protective of, yes.
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Q. Yet you were still willing to be somewhat associated with Michael Jackson in 2008 and 2009; correct? I understand what we've clarified.
A. Yes, subject to the clarifications.
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Q. Subject to the clarifications.
A. Yes.
Q. You were somewhat being associated with Michael Jackson; correct?
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A. Yes, yes, yeah.
A. I believe so, yes.
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Q. Okay, and had the Thriller animated series actually taken place, Michael Jackson would have been listed as a co-executive producer; correct?
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Mr. Voth: No further questions, Your Honor.
Judge Holmes: Any redirect?
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REDIRECT EXAMINATION
Mr. Weitzman:
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Q. I really only have one question. You mentioned in response to a question by Mr. Voth that as you put in your email of June 6th, 2009, you were you were concerned, you didn't use that word, but you were concerned about the unusual personalities in his life. So you also responded you were concerned about the people, amongst other things. Do you remember that just a few moments ago?
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A. Uh-huh. Yes sir.
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Q. You seemed a little reluctant to say what "amongst other things" were. Are you comfortable enough if I asked you directly what were you referring to when you said "amongst other things"? Would you be willing to answer?
A. Yeah.
Q. If not ....
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A. You know, in the times that I have spent with Michael, there were .... he was always a very, very kind and gentle and respectful and professional individual, and I never had any conflicts or issues or anything that I would find distasteful in my personal dealings with him. Having said that, there were a lot of people around him that made me very uncomfortable every time we got together, and those associations alongside the sort of .... the only word I can say is "weirdness" of the lifestyle that I saw made me, you know, uncomfortable.
Mr. Weitzman: I don't have anything further.
A. Yes sir.
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Judge Holmes: Could somebody put up 641-P for me? Could you blow up first paragraph "Licensed Property"? Do you see that, Mr. Heyward?
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Judge Holmes: It's all the things that weren't going to be in this agreement that I recognize was never consummated. What was included then, to produce Thriller. Wouldn't you need sound or something?
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A. Yeah. That's a very good question, and frankly when you take all this stuff out, really what we were seeking was Michael's good will, and not to have him seek to be obstructive, to show him the respect and dignity of the person who was so fundamental to Thriller existing.
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Judge Holmes: How could you have made any cartoon using the name Thriller without some of those rights?
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A. Well, let me give you by way of example. We made a cartoon called Ghostbusters, which was based on the movie "Ghostbusters." It was very successful. It spawned not .... I don't even know the number, but a tremendous amount of revenue for all kinds of products and everything that you could imagine that kids would use.
Judge Holmes: It must have been the old Ghostbusters then right?
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A. As opposed to .... the original Ghostbusters movie, yeah. No, the new Ghostbusters movie was a failure, and we did not use the likenesses of Dan Akroyd or Bill Murray or Harold Ramus or any of those personalities. We created absolutely new characters, new models, etcetera. At the same time, we wanted to have the song because the song was so material to the success of that film. But the master of that song was not something that we believed we needed, and we hired somebody to produce us a new version of that song and we took a license from the composer to do that.
Judge Holmes: Oh I see, I see. Okay. Any follow-up questions Mr. Weitzman?
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Mr. Weitzman: No, Your Honor.
Judge Holmes: Any follow-up questions, Mr. Voth?
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Mr. Voth: No, Your Honor.
Judge Holmes: Thanks for explaining that, Mr. Heyward. Is he free to go? You're not going to call him, are you?
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Mr. Voth: No, we're not.
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Judge Holmes: Okay. You're free to go, Mr. Heyward.
Judge Holmes: Thank you very much.
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Judge Holmes: Next up Mr. Toscher or Mr. Weitzman?
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A. Thank you.
===================================================
Judge Holmes: Okay. You're free to go, Mr. Heyward.
Judge Holmes: Thank you very much.
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A. Thank you.
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Judge Holmes: Next up Mr. Toscher or Mr. Weitzman?
Mr. Toscher: It would be Mr. Dahl, Your Honor.
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Mr. Dahl: Good morning, Your Honor.
Judge Holmes: Good morning again. With that, Mr. Toscher can ask you questions.
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OWEN DAHL recalled sworn in.
DIRECT EXAMINATION
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Mr. Toscher:
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Q. Good morning, Mr. Dahl. We're recalling you as a fact witness today. Your Honor, I'm just going to go briefly through some preliminary very quickly, because we didn't do it with him as an expert because it's in his report. So could you give your name and address for the record sir?
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A. Yes. Owen Dahl, D- A-H-L. My home address ………..
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Mr. Toscher: Okay. Your Honor, I was just informed that Mr. Heyward had something he wanted to add to his testimony .... oh. Okay before we go on, Mr. Heyward just informed counsel that he wanted to add something. Can he ....
Judge Holmes: To correct an untruth or something like that, to clarify an answer?
Mr. Toscher: Nothing like that. I don't know what it was. I just had the ....
Judge Holmes: How odd. Well, bring him back in.
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Mr. Toscher: If Mr. Heyward wants to come back in, the Judge will allow it. Thank you, Your Honor.
Judge Holmes: Well now you've got me curious. Mr. Dahl, can you step to one side for just a second?
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Mr. Voth: Respondent objects to this, Your Honor. We don't know if Petitioner's counsel spoke to Mr. Heyward. I think it's inappropriate to add something else.
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Mr. Weitzman: I'm going to explain exactly what happened, and then you can make a decision.
Judge Holmes: Okay, explain.
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Mr. Weitzman: When we got in the hallway outside and thanked Mr. Heyward for coming, he said to me you know, I forgot to say one thing in response to your question, and I want to explain it. I said time out. We'll see if you can testify again. What is involved? Sure. I said what does it involve? He said Walmart. He said there's already a witness on the stand and I'll see if we can interrupt for you to for me to ask that question so you can respond to the question.
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Judge Holmes: Yeah, yeah. Mr. Heyward can go. That's fine.
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Mr. Voth: Respondent objects.
Mr. Weitzman: Really? For a mere 30 seconds?
Judge Holmes: I don't want to have him commit perjury or something if he remembered something about facts. But elaborating a question, ehh. I don't like surprises. You can go, Mr. Heyward. It's fine.
Mr. Weitzman: Did you say he had perjured? I don't understand.
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Judge Holmes: No, no. If he had said something that was untrue upon further reflection.
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Mr. Toscher: No. That's not the case, Your Honor.
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Judge Holmes: Sometimes witnesses .... yeah, sometimes witnesses ....
Mr. Toscher: I think the record's clear. It's the he had an incident regarding Walmart that if the Court ....
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Judge Holmes: It would be an additional story or something, right?
Mr. Weitzman: I'm sorry. He was going to just relate to the Court the meeting he had with Walmart about this project.
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Judge Holmes: Yeah. It was an additional story or an elaboration of his existing testimony. So it's not self-protective. It's fine. We got his story. Go ahead, Mr. Toscher. Where's Mr. Dahl again?
UNITED STATES TAX COURT - TRIAL
ESTATE (OF MICHAEL J. JACKSON DECEASED) EXECUTORS: JOHN G. BRANCA. AND JOHN MCCLAIN V
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COMMISSIONER OF INTERNAL REVENUE (IRS) February 10th 2017 Presiding Judge Mark V. Holmes
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Jackson’s estate is represented by Avram Salkin, Charles Paul Rettig, Steven Richard Toscher, R obert S. Horwitz, Edward M. Robbins Jr., Sharyn M. Fisk and Lacey E. Strachan of Hochman Sa lkin Rettig Toscher & Perez PC, Paul Gordon Hoffman, Jeryll S. Cohen and Loretta Siciliano of Hoffman Sabban & Watenmaker and Howard L. Weitzman of Kinsella Weitzman Iser Kump & Aldisert LLP.
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The IRS is represented by its attorneys Donna F. Herbert, Malone Camp, Sebastian Voth, Jordan Mus en and Laura Mullin. -------------------------------------------ANDREW HEYWARD
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children's entertainment
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Mr. Toscher: Mr. Weitzman will be calling Andy Heyward, Your Honor.
Judge Holmes: Call him.
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Mr. Weitzman: That is correct.
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ANDREW HEYWARD sworn in.
Court Clerk: Please state your name and address for the record?
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A. Andy Heyward, …………………………..
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Judge Holmes: Go ahead, Mr. Weitzman.
DIRECT EXAMINATION
Mr. Weitzman:
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Q. Thank you, Your Honor. Mr. Heyward, what is your occupation?
Q. How long have you been in that business, just a rough guess?
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A. Approximately 35 years.
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A. I make children's entertainment.
Q. And the first company you worked with was named what?
A. Hanna-Barbera.
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Q. And after Hanna-Barbera, did you work in any particular programs we might be familiar with while at Hanna-Barbera?
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A. I was a writer and a director and a producer. I worked on Yogi Bear, The Smurfs, ScoobyDo, Huckleberry Hound, Flintstones, Jetsons among others.
Q. And then after Hanna-Barbera where did you go?
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A. After Hanna-Barbera I started my own company.
Q. What was the name of the company?
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A. It was called Deak Entertainment.
Q. And what was Deak Entertainment's business?
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A. Deak Entertainment produced, distributed and licensed animated cartoons and their consumer products.
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Q. And can you give us a list of cartoons .... did you create these cartoons as well?
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A. Most of them I created.
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Q. Could you give us a list of the cartoons created and/or produced by Deak?
A. Inspector Gadget, Dennis the Menace, Heathcliff, Ghostbusters, Super Mario Brothers, Sonic the Hedgehog, Alvin and the Chipmunks, Hello Kitty, Strawberry Shortcake, Care Bears, Rainbow Bright, Captain Planet, G.I. Joe, Where's Waldo among others.
Q. And those are just the ones you had on the air. At one point you had a block of programming, was it at CBS?
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A. I've had a block of programming at different places at different times. We did ....
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Q. What does that mean?
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A. Well, the broadcast, over the air broadcast stations are required to run three hours a week of children's programming that meets educational and informational needs of kids as defined by the Children's Television Act, and we produced those for various broadcasters. You mentioned CBS and that was one of them that we were their exclusive provider of children's content on, so did it for ABC. And of course produced for all of the networks at one time or another, ABC, CBS, NBC, Fox, Nickelodeon, Cartoon Network, Disney Channel, HBO, all of the first run syndicated independent TV stations.
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Q. And as part of your business, did you also get involved in creating merchandise, consumer products?
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A. Yes. Most children's content spawns consumer products that comes from the shows. The kids see the characters and they want to engage in the play patterns. So that means toys, video games, electronics, apparel, music, publishing, backpacks, sleepwear, soft goods, stationery, school supplies, confection. It goes on and on.
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Q. And in that regard, did you have occasion to deal with name and likeness issues for people whose image you wanted to use during the programming phase or otherwise?
A. Yes, of course. Yes.
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Q. Okay. Can you give us a couple of the names you dealt with?
A. Well, they've ranged over the years from celebrities, musical acts.
Q. Such as?
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A. Sports figures. Warren Buffet, Michael Jordan.
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Q. Warren Buffet. Can you I just stop you for a moment. Wait, wait, wait. What do you do with Warren Buffet?
mM
A. We make a children's series with Warren Buffet called the Secret Millionaire's Club. The premise of this is to tell stories promote lessons in financial literacy, obviously done through good storytelling, conflict, crisis, jeopardy, stakes, hijinks, all of that. But we use Warren, his image and he does his own voices. He actually participated in not only doing the voices in every aspect of the cartoon, but recruited a number of people to be in the cartoon with him, whose name and image we used as well, who did their own voices as well such as Bill Gates, Shaquille O'Neal, a number of parties.
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Q. And in the sports world putting Shaquille apart, is there anyone whose name and likeness you use or any number of stars, sports stars you've used in any of the animation series?
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A. I have.
Q. Who?
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A. Michael Jordan, Wayne Gretsky, Bo Jackson. I'm sure there have been others.
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Q. All right. Did you have occasion ....
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A. Magic Johnson.
Q. In the music area, are there any names we would recognize whose name and likeness you've used that are a talent in the music business?
A. Yes. We've used the New Kids on the Block, M.C. Hammer.
Q. All right. Did you at some point early on in the business meet with Michael Jackson about a possible animation program?
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A. I did.
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Q. When was that? Again, not the exact date, just kind of the time period.
mM
A. No. I don't know the exact date, but it was in the 80's.
Q. And did you begin to create an animation program involving Michael Jackson?
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A. We did.
Q. And was Michael Jackson going to be one of the characters in that programming?
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A. He was.
Q. And did that program ever air?
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A. No.
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Q. What happened?
Q. And who did you receive a call from?
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A. Ken Ziffren.
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A. Well, we had a number of meetings with Michael. I was partnered at the time with Dick Clark to develop it and he had worked with Michael over the years and knew him well, and we developed a cartoon series with Michael, and we had a commitment from CBS to do the cartoon and I actually remember this quite vividly, because it was a very disappointing moment. We were literally walking into CBS to close the deal and finalize terms with them for a Saturday morning cartoon when I received a call from one of Michael's attorney, that said Michael has changed his mind. He feels he's overexposed and he really doesn't want to do a cartoon right now.
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Q. Okay. So did you continue to see or speak with Michael over the years after that experience? I'm not talking about for projects, but just on a social or personal level, at all run into him?
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A. No, no.
Q. Okay. So when was the next time you thought about doing anything Michael Jacksonrelated, related?
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A. Well that was many years later. It was probably, you know.
Q. By the way, had you been approached to do name and likeness for animation programs with any particular high profile celebrities and decided it would not be in your best interest to do that?
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Mr. Voth: Objection, leading.
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Judge Holmes: Sustained.
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Mr. Weitzman: I'm sorry?
Judge Holmes: Sustained. Try again.
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Mr. Weitzman:
Q. Were there any programs that you decided not to do with celebrities or using their name and likeness?
A. I'm sure there were.
A. Yeah.
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Q. Can't remember, that's okay.
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Q. Sports stars, musicians, actors, actresses? By the way, if you can't, that's okay.
A. I'm sure there were. I'd have to reach a moment and try and recall.
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Q. Were you asked to do an animated program, children's programs with any baseball players, football players, basketball players?
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A. Well Michael Jordan of course.
Q. And did you include Mr. Jordan in some of your animations?
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A. Yes.
Q. Anyone else that you were asked to do programs with that you didn't do?
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A. We were asked to a program with Kobe Bryant. We didn't do that.
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Q. Why?
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A. Well, I think the association of Kobe Bryant with his personal matters were just not appropriate for children's content.
Q. All right. So let's fast forward. You said several years later, that is between the 80's and before Michael Jackson died, you did have some contact with Michael Jackson-related projects. Could you explain to us what you were involved with?
A. Yes.
A series of meetings?
mM
A. Yes.
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Q.
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A. friend of mine contacted me and said that Michael was interested in doing a cartoon series and a line of merchandise around Thriller, and would I be interested, and I said I would be interested and that led to us having a series of meetings.
Q. And who did you have the meetings with?
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A. Well, the meetings were with Michael always, and they were with his then representative Dr. Tohme Tohme.
Q. You know Dr. Tohme is not a doctor, don't you?
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A. I've subsequently learned that. I was introduced to him as Dr. Tohme Tohme.
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Mr. Voth: Objection.
Judge Holmes: They're fighting about it.
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Mr. Weitzman:
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Mr. Weitzman: I'm sorry, was there an objection?
Q. Who else did you talk to about the project besides Michael Jackson and Tohme Tohme?
A. You mean in Michael's universe?
Q. No, I don't mean in Michael's universe. I mean in total. Let me back up. Was this a project involving the Thriller concept in some fashion?
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A. Yes, it was.
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Q. Okay. Who did you talk to when you began to work on the project, whether or not it could happen?
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A. Yeah, yeah. I talked to John Landis.
Q. And who's John Landis?
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A. John Landis was the producer, director and he had many different roles in it, but he made the video, the celebrated Thriller video.
Q. Okay, and what did you do to move forward on the project in the early stages?
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A. By the way, I didn't complete the question, the previous question.
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Q. Sorry.
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A. You asked me who I talked to. I talked to John Landis and I also talked to the composer and owner of the song, Rod Temperton.
A. I did.
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Q. And did you go to London and meet with Mr. Temperton?
Q. And what was the concept that you had in mind for this program?
A. And I also spoke to a lawyer who represented Michael at the time.
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Q. Do you remember who that was?
A. I do. Peter Lopez.
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Q. Okay. So what was the concept you were working on? By the way, do you remember the year this was taking place?
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A. It was approximately 2008 or '09.
Q. So could you explain this, what the concept was?
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A. The concept was a children's animated cartoon series based on the Thriller video, and creating the .... turning it into an animated series with characters that we would create using several of the signatures from the video.
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Q. And when you say "using several of the signatures from the video," could you explain to us what that means?
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A. Well, it would mean all of the ghouls and the zombies and all of those, you know, the creatures, you know, that come to life and all that stuff inside the video. It would mean the
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music. The music was the signature song. We had done Ghostbusters and the music of Ghostbusters was very similar in that regard, very, very fundamental to the success of the Ghostbusters cartoon, and the motifs.
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Q. And were you going to create new characters, your own characters, or basically take the characters right from the short film?
A. We were going to create new characters and in fact we did create new characters.
Q. And was Michael Jackson going to be one of the characters in that animation?
A. No, he was not.
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Q. Why not? I understand this may be hard, but just if you could tell us, I'd appreciate it.
mM
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A. Yeah, of course. I'm trying to present this in an elegant, tasteful way. Michael was a lovely person and I enjoyed spending time with him and getting to know him, and I have nothing but kind references to speak of him about. At the same time, his reputation couldn't be ignored, and anything to do with using his name and his image in children's entertainment was candidly toxic. So we didn't want to have anything of him associated with Thriller. We wanted to take the movie, all of the spooky stuff and fun stuff there. We could create stories with scary and hijinks and what-not, and separate that from the use of Michael. You know, it was a little bit of Scooby-Do, which I was a writer on, a little bit of Ghostbusters, which I produced, which were scary stories and things of that sort. But we didn't want to have Michael personally involved in it.
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Q. And did you .... did you .... did you talk to Michael and/or Tohme about making some type of, for lack of a better phrase, deal with them?
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A. Yes.
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Q. Did you believe you needed to make a deal with Michael Jackson to do this cartoon?
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A. No, I don't think we needed to do a deal per se. We were, you know, comfortable that working with John and his creativity, John Landis, and working with Rod Temperton who wrote the music, and who coincidentally had never met each other and they met through me.
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Q. John Landis and Rod Temperton had never met each other?
A. No, they never knew each other. So we brought John to London to meet with Rod, and I wanted to get their creativity engaged. We didn't think that we needed Michael, but at the same time I wanted to be respectful and have him a friendly party.
Q. And what do you mean like a friendly party? Like that's how people become executive producers on films?
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Mr. Voth: Objection, leading.
(Estate lawyers all Laugh)
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Judge Holmes: Well that one's overruled.
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A. Well, as I'm sure you know, Mr. Weitzman, because you are very celebrated in the film industry yourself, many people who become executive producers don't do anything. Their names are used there as a courtesy and as a token for them to participate financially.
Mr. Weitzman:
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Q. And was that the deal you had in mind for Michael Jackson?
A. Yes.
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Q. And did you .... by the way. You weren't negotiating to use the master recording of Thriller in which Michael's voice was on it, were you?
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A. No, no, no. It might be .... it was very similar to what I did with Ghostbusters and there are probably parallels that would be useful to explore.
Q. What are the parallels?
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A. Well, when I made the Ghostbusters cartoon, we did not use the master. We reproduced our own song, but it was the Ghostbusters song, our version of it. So we didn't have to go license that song per se, and also we didn't use the likenesses of the actors that played in the Ghostbuster movie. We just designed different characters.
Q. But with respect to this show, there was, as I understand it, a reason why you didn't want to use Michael's character, which you told us about?
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A. Yes.
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A. Yes, we did.
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Q. In the agreement that you reached .... well pardon me, did you reach an agreement with Michael Jackson, at least a draft agreement?
Q. And did the draft agreement was reduced to writing?
A. Yes, it was.
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Q. Your Honor, I'd like to mark next in order an agreement that has the title "
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A. Squared Entertainment, LLC" at the top, marked next in order. I don't remember what that number is, so I'm going to rely on the Clerk.
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Court Clerk: Exhibit 641-P is marked for identification
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Mr. Weitzman: And could we ask that .... has the government reviewed a copy?
Mr. Toscher: Yeah. Did you give them a copy? ST I gave them a copy.
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Judge Holmes: Where's the copy that I have 641.
Court Clerk: Sorry, that's my mistake.
Judge Holmes: Never mind.
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Mr. Weitzman: And could I have the first page of the document on the reader? Are you familiar with it? Mr. Voth, are you all familiar with that? You want to take a moment?
Mr. Voth: Please.
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Mr. Weitzman: Okay.
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Ms. Herbert: Yes, we'd like to take a moment.
Mr. Weitzman:
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Q. Mr. Heyward, while they're reviewing the document, the first page is also on the screen in front of you.
A. Do you want me to review this?
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Mr. Voth: I'm doing reviewing the document. Thank you, Mr. Weitzman.
Mr. Weitzman: Okay. Now I can ask questions?
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Mr. Voth: Yes.
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Mr. Weitzman:
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Q. Thanks. Mr. Heyward, the document in front of you with the letterhead A Squared Entertainment, is that the draft document of the agreement with Mr. Jackson and MJJ Productions?
A. It would appear to be, yeah. I haven't read it and it's been a number of years, so but it certainly ....
Q. Well, I would ask you to read if you would, the first paragraph, "Licensed Property" and specifically subparagraph three in that paragraph. That's the line I'm going to ask you questions about.
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A. Yes, okay. Let me just take a moment.
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A. I'm sorry. It needs to be blown up. It went back to, it reverted. Thank you.
Mr. Weitzman: Can you blow up or highlight subparagraph three?
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Mr. Voth: I'll blow it up more.
Mr. Weitzman:
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Q. Okay. Do you see the highlighted portion?
A. Yep, yep, yep.
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Q. I want to read that into the record if I might please, subparagraph three, and the first paragraph, Your Honor, titled "Licensed Property," and also the higher up .... the higher highlighted reads "For purposes of clarification, the property shall not include, nor is any license granted hereunder to ASE for or with respect to." Then I go to subparagraph three, "any right or ability to use Jackson's name, likeness, image, voice, identity, character, biographical material or any other reproduction or derivation of the foregoing." Did I read that correctly?
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A. Yes sir.
A. Yes.
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Q. Yes? Did you or you instruct whoever drafted this for you include that in the agreement?
Q. That was not something requested by Mr. Jackson or his counsel?
A. I don't know that.
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Q. Why was it included in the agreement?
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A. Well, we didn't think that we .... we didn't want any of those rights. They were not necessary to produce what we wanted to produce.
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Q. So were there continuing negotiations after this document was drafted with Mr. Jackson or his representatives?
A. I don't believe there were negotiations. There were creative meetings.
Te a
Q. And correct me if I'm wrong, but you did tell us you didn't want to use the name, likeness or the voice; is that correct?
A. Right.
w.
Q. Why didn't you want to use the voice?
ww
A. Michael's voice is very recognized, very known as Michael, and we didn't want to have any signature which would associate him with this brand. It would have been a negative for the brand.
lJa ck so
A. Well, the project stopped going forward with Michael's death.
n.c om
Q. So at some point then did the project stop going forward?
Q. All right. Had you decided prior to Michael's death if you wanted to continue to go forward with the project?
ich
ae
A. We just were really increasingly uncomfortable with the association with Michael, and candidly were not certain that we could even not using his name and likeness and voice and signatures, distance ourselves enough from them. I mentioned the Warren Buffet, we do the show with Warren Buffet and we still do, and I think I can say comfortably that Warren, we have a one paragraph agreement with Warren, and in that agreement he assigns to us the use of his name, likeness, voice and right to merchandise consumer products based on that in our series we do together worldwide in perpetuity. The reason I say this is because that's not something that comes easily. This is a man who very, very much values reputation, and Warren has a wonderful quote which we use in our series, the Secret Millionaires Club. It says "It takes 25 years to build a reputation. You can ruin it in five minutes." So ....
mM
Q. Whose reputation were you concerned about ruining if you were to use Michael Jackson's name, likeness or voice?
A. Ourselves, the people making the cartoon. At that time, my wife, myself and others who have worked with us.
Te a
Q. All right. You've over the years told us you licensed and created consumer product merchandise. How did you feel Michael Jackson's opportunities for exploiting his name and likeness were?
ww
w.
A. I felt that they really didn't exist. Let me share that in the course of developing our cartoons and the consumer product programs which go hand in hand with them, we regularly visit retailers and we take the temperature from retailers of how they like a property or not. In many cases, that's a proxy for whether the consumer marketplace will respond. We just, after doing that, we knew that anything that connected Michael to Thriller was not going to be welcome in the marketplace.
lJa ck so
A. Yes.
n.c om
Q. And you used the term "toxic." Is that what you meant?
Mr. Weitzman: Okay. May I have the document, this is the last document, marked next in order? It's an email from Andy at a Square Entertainment to T. Tohme at MJJ Productions.
Court Clerk: Exhibit 642-P is marked for identification
Mr. Weitzman: And Mr. Voth, do you have a copy of that?
ae
Mr. Voth: I do. Thank you.
ich
Mr. Weitzman: Do you want to review it before I ask any questions?
Mr. Voth: No, I'm familiar with it.
mM
Mr. Weitzman:
Q. Mr. Heyward, do you recognize that email?
Te a
A. Let me just read it once quickly again.
Q. Sure.
w.
A. Yes.
ww
Mr. Weitzman:
n.c om
Q. Do you recall sending this document on or about June 6, 2009 to Mr. Tohme? I mean if you don't recall, it's seven years, you can just tell us.
Q. It does make sense did you say?
lJa ck so
A. Yeah. I mean it's yeah, it's almost eight years ago and, you know, I probably do 200 emails a day. So I don't recall specifically this, but it's I'm sure it's what I said, because it does make sense.
A. It's consistent with how we viewed the property at that moment.
Q. And this was sent about three weeks before Michael's death?
ae
A. Yes.
ich
Q. Now did you have an interview with Mr. Voth from the Internal Revenue Service about your dealings with Michael Jackson before this trial began?
mM
A. Yes, I did.
Q. And did you tell Mr. Voth in some and substance what you've told us today?
Te a
A. I believe I did.
Q. And did he indicate to you you wouldn't be called as a witness?
w.
Mr. Voth: Objection, calls for hearsay.
ww
A. I'm not ....
Judge Holmes: Overruled.
n.c om
A. I don't recall if he said that or not.
Mr. Weitzman:
lJa ck so
Q. Did you receive a subpoena from the government to testify in this proceeding?
A. No, I did not. No, no I didn't.
Mr. Weitzman: I have nothing further.
Judge Holmes: Cross Mr. Voth.
ae
Mr. Weitzman: Oh Your Honor, sorry. I would like to move the two documents, whose numbers I don't remember, into evidence, the two I showed Mr. Heyward with the Court's permission.
mM
Mr. Weitzman: Is that ....
ich
Mr. Voth: Respondent objects to the document identified as 642-P in hearsay grounds, Your Honor. It's an out of court statement.
Judge Holmes: It's his own statement.
Te a
Mr. Voth: It's his own statement out of court.
Judge Holmes: About his reasoning. That's overruled. That's admitted. 642 is admitted.
w.
Mr. Weitzman: Nothing further, Your Honor.
ww
Judge Holmes: Cross, Mr. Voth.
Mr. Voth:
lJa ck so
Q. Good morning, Mr. Heyward.
n.c om
CROSS EXAMINATION
A. Good morning.
Q. Let's go back to 2009. Back in 2009, your company was closely associated with kids; correct?
ae
A. With kids?
Q. With kids entertainment?
ich
A. Yes.
mM
Q. May we have a moment, Your Honor? Mr. Weitzman needs to retrieve some of his notes that I should have assumed ....
Mr. Weitzman: I just left my notes.
Te a
Mr. Toscher: I didn't want you asking his questions.
(Estate lawyers all Laugh)
w.
Mr. Voth:
ww
Q. All right. During the time that you were somewhat associated with Michael Jackson, you sought his creative input; correct? Yes or no.
n.c om
A. I don't know if I would say we sought his creative input. We shared with him directions that we wanted to go and yeah, yeah, and we sought his input to that, yeah.
Q. Now the kids entertainment business is highly susceptible to any scandal; correct?
lJa ck so
A. I don't know if it's highly susceptible to any scandal or not.
Q. You mentioned the Kobe Bryant case; correct?
A. Yeah. I mean you know, Kobe Bryant, for example, had a number of endorsements, McDonald's and I believe he had something with General Mills and one of their cereals and they all disappeared. So I think ....
ae
Q. But I'm asking you specifically about your entertainment business, not about others.
ich
A. Yeah.
mM
Q. So the answer is yes to that question?
A. The question .... sorry. The question was the kids entertainment business is susceptible to scandal?
Te a
Q. Correct. It can have an impact as to whether you'll actually end up producing an animated series based, you know, for kids for example?
A. Yes.
w.
Q. Now at one point you wanted to create an animated series called the Governator; correct?
ww
A. Correct.
n.c om
Q. It was going to be based on ....
Judge Holmes: Governator?
lJa ck so
A. The Governator, yes.
Mr. Voth:
Q. It was going to be based on a fictionalized Schwarzenegger, right?
A. Correct.
ae
Q. Schwarzenegger was going to step down from his role as Governor of California to become a superhero; correct?
ich
A. Correct.
A. Correct.
mM
Q. But this show was then immediately halted because of Mr. Schwarzenegger's infidelity scandal; correct?
Te a
Q. You got calls from Disney the minute the news came out about that scandal?
A. Correct.
w.
Q. Now if I understand you correctly, you testified that you didn't believe you needed to enter into an actual deal with Michael Jackson; correct, with respect to the Thriller animated series?
ww
A. We didn't think we needed to. We wanted to. We felt that it was something that was probably the best, most prudent route before going forward with the property.
n.c om
Q. Okay. So you didn't need .... you didn't think you needed to, but you decided to do so anyway; correct?
A. Yes.
lJa ck so
Q. Now Mr. Weitzman referenced a .... what was previously marked as document 642-P, that email back in June of 2009, where you had some concern about being associated, because of the people that were associated with Michael Jackson, right?
A. Well, the people. I think everything, you know, going on.
Q. The people surrounding Michael Jackson caused you concern; correct?
ae
A. Amongst other things.
ich
Q. So the answer to my specific question is yes?
mM
A. Well, the answer is amongst other things.
Q. So that was in June of 2009, but you continued with this possibility of this project, even all the way up to the point of his death; correct?
Te a
A. We continued .... what was the date of his death?
Q. June 25, 2009.
ww
w.
A. June 25. So I don't believe from that date we had further contact with Michael. We had a meeting that had been scheduled to occur with Michael on the day of his death, and had planned to fulfill that meeting.
n.c om
Q. Okay. So that meeting would have taken place after you had expressed some concern about being associated, about the people associated with Michael Jackson?
A. Yes.
Q. You know John Branca; correct?
A. I do.
ae
A. Yes, yes.
lJa ck so
Q. Among other concerns as you clarified; correct?
Q. You personally have season tickets at UCLA basketball games; correct?
ich
A. I do. I was there last night.
A. Yes.
mM
Q. You said sometimes you sit near John Branca during the games?
Te a
Q. Now let's talk a little bit about "Thriller." Thriller is a song recorded by Michael Jackson?
A. Is that a question?
w.
Q. Yes.
A. Yes.
ww
Q. Thriller also includes a video showing Michael Jackson performing in it?
n.c om
A. Yes.
A. Yes.
Q. When did you have that agreement in place?
A. With Warren?
ae
Q. Right.
lJa ck so
Q. Now you mentioned that Warren Buffet agreement was a simple paragraph you mentioned; correct?
ich
A. I'm going to guess the paragraph document, I've been working with Warren for 25 years. The paragraph agreement that we have I believe has been five or six years, something like that. That was more or less memorializing something that had already been in place.
mM
Q. Can you give us an estimate of what year that took place?
A. I'm guessing five years ago, but it could be longer. It's something I can readily check. If you want I can ....
Te a
Q. Okay. So there's an agreement that's been memorialized after Michael Jackson's death then, after 2009?
w.
A. I believe so. But again ....
Q. There were some principles in place before Michael Jackson ....
ww
Mr. Weitzman: I'm sorry. Could he just let the witness try to get an answer out?
n.c om
Judge Holmes: Fair enough. Let him answer, Mr. Voth.
lJa ck so
A. I'm not certain of those dates, so I don't want to state a date that I don't know to be accurate. But I can .... it's framed, sitting on the wall of my office. I can find it out in six seconds if you want.
Mr. Voth:
Q. So with respect to your knowledge of the statements from Warren Buffet, they were in place before you became somewhat associated with Michael Jackson?
A. I don't know that.
ae
Q. Remind us again when you became associated with Warren Buffet?
Te a
mM
ich
A. Okay. I sold my company and continued to manage it to Cap Cities ABC approximately in late 1993. Warren Buffet was the largest shareholder of Cap Cities ABC, and my boss inside Cap Cities at that time shared with me that their largest shareholder had a charity that he was engaged with, which was the Children's Theater of Omaha, and since I seem to have some expertise in telling children's stories and they needed some help with that, would I be willing to get involved with them. Which I did, and that led to me getting to know Mr. Buffet, and eventually being asked to produce a little animated short that opened the annual Berkshire-Hathaway shareholders meeting, which I've done for 20 years starring Warren and Charlie Munger and all of the people of his universe. And through that comfort level of working with one another, evolved the idea of doing a children's program that promoted financial literacy with kids in the context of telling engaging stories with all of the tools that I have acquired over my career.
Q. You mentioned being concerned about your reputation. Is that something that you've always been concerned about?
ww
w.
A. Well, I would say something that I consider important and that which I seek to be protective of, yes.
n.c om
Q. Yet you were still willing to be somewhat associated with Michael Jackson in 2008 and 2009; correct? I understand what we've clarified.
A. Yes, subject to the clarifications.
lJa ck so
Q. Subject to the clarifications.
A. Yes.
Q. You were somewhat being associated with Michael Jackson; correct?
ae
A. Yes, yes, yeah.
A. I believe so, yes.
ich
Q. Okay, and had the Thriller animated series actually taken place, Michael Jackson would have been listed as a co-executive producer; correct?
mM
Mr. Voth: No further questions, Your Honor.
Judge Holmes: Any redirect?
Te a
REDIRECT EXAMINATION
Mr. Weitzman:
ww
w.
Q. I really only have one question. You mentioned in response to a question by Mr. Voth that as you put in your email of June 6th, 2009, you were you were concerned, you didn't use that word, but you were concerned about the unusual personalities in his life. So you also responded you were concerned about the people, amongst other things. Do you remember that just a few moments ago?
n.c om
A. Uh-huh. Yes sir.
lJa ck so
Q. You seemed a little reluctant to say what "amongst other things" were. Are you comfortable enough if I asked you directly what were you referring to when you said "amongst other things"? Would you be willing to answer?
A. Yeah.
Q. If not ....
ich
ae
A. You know, in the times that I have spent with Michael, there were .... he was always a very, very kind and gentle and respectful and professional individual, and I never had any conflicts or issues or anything that I would find distasteful in my personal dealings with him. Having said that, there were a lot of people around him that made me very uncomfortable every time we got together, and those associations alongside the sort of .... the only word I can say is "weirdness" of the lifestyle that I saw made me, you know, uncomfortable.
Mr. Weitzman: I don't have anything further.
A. Yes sir.
mM
Judge Holmes: Could somebody put up 641-P for me? Could you blow up first paragraph "Licensed Property"? Do you see that, Mr. Heyward?
Te a
Judge Holmes: It's all the things that weren't going to be in this agreement that I recognize was never consummated. What was included then, to produce Thriller. Wouldn't you need sound or something?
ww
w.
A. Yeah. That's a very good question, and frankly when you take all this stuff out, really what we were seeking was Michael's good will, and not to have him seek to be obstructive, to show him the respect and dignity of the person who was so fundamental to Thriller existing.
n.c om
Judge Holmes: How could you have made any cartoon using the name Thriller without some of those rights?
lJa ck so
A. Well, let me give you by way of example. We made a cartoon called Ghostbusters, which was based on the movie "Ghostbusters." It was very successful. It spawned not .... I don't even know the number, but a tremendous amount of revenue for all kinds of products and everything that you could imagine that kids would use.
Judge Holmes: It must have been the old Ghostbusters then right?
ich
ae
A. As opposed to .... the original Ghostbusters movie, yeah. No, the new Ghostbusters movie was a failure, and we did not use the likenesses of Dan Akroyd or Bill Murray or Harold Ramus or any of those personalities. We created absolutely new characters, new models, etcetera. At the same time, we wanted to have the song because the song was so material to the success of that film. But the master of that song was not something that we believed we needed, and we hired somebody to produce us a new version of that song and we took a license from the composer to do that.
Judge Holmes: Oh I see, I see. Okay. Any follow-up questions Mr. Weitzman?
mM
Mr. Weitzman: No, Your Honor.
Judge Holmes: Any follow-up questions, Mr. Voth?
Te a
Mr. Voth: No, Your Honor.
Judge Holmes: Thanks for explaining that, Mr. Heyward. Is he free to go? You're not going to call him, are you?
w.
Mr. Voth: No, we're not.
ww
Judge Holmes: Okay. You're free to go, Mr. Heyward.
Judge Holmes: Thank you very much.
lJa ck so
Judge Holmes: Next up Mr. Toscher or Mr. Weitzman?
n.c om
A. Thank you.
===================================================
Judge Holmes: Okay. You're free to go, Mr. Heyward.
Judge Holmes: Thank you very much.
ae
A. Thank you.
ich
Judge Holmes: Next up Mr. Toscher or Mr. Weitzman?
Mr. Toscher: It would be Mr. Dahl, Your Honor.
mM
Mr. Dahl: Good morning, Your Honor.
Judge Holmes: Good morning again. With that, Mr. Toscher can ask you questions.
Te a
OWEN DAHL recalled sworn in.
DIRECT EXAMINATION
w.
Mr. Toscher:
ww
Q. Good morning, Mr. Dahl. We're recalling you as a fact witness today. Your Honor, I'm just going to go briefly through some preliminary very quickly, because we didn't do it with him as an expert because it's in his report. So could you give your name and address for the record sir?
n.c om
A. Yes. Owen Dahl, D- A-H-L. My home address ………..
lJa ck so
Mr. Toscher: Okay. Your Honor, I was just informed that Mr. Heyward had something he wanted to add to his testimony .... oh. Okay before we go on, Mr. Heyward just informed counsel that he wanted to add something. Can he ....
Judge Holmes: To correct an untruth or something like that, to clarify an answer?
Mr. Toscher: Nothing like that. I don't know what it was. I just had the ....
Judge Holmes: How odd. Well, bring him back in.
ich
ae
Mr. Toscher: If Mr. Heyward wants to come back in, the Judge will allow it. Thank you, Your Honor.
Judge Holmes: Well now you've got me curious. Mr. Dahl, can you step to one side for just a second?
mM
Mr. Voth: Respondent objects to this, Your Honor. We don't know if Petitioner's counsel spoke to Mr. Heyward. I think it's inappropriate to add something else.
Te a
Mr. Weitzman: I'm going to explain exactly what happened, and then you can make a decision.
Judge Holmes: Okay, explain.
ww
w.
Mr. Weitzman: When we got in the hallway outside and thanked Mr. Heyward for coming, he said to me you know, I forgot to say one thing in response to your question, and I want to explain it. I said time out. We'll see if you can testify again. What is involved? Sure. I said what does it involve? He said Walmart. He said there's already a witness on the stand and I'll see if we can interrupt for you to for me to ask that question so you can respond to the question.
lJa ck so
Judge Holmes: Yeah, yeah. Mr. Heyward can go. That's fine.
n.c om
Mr. Voth: Respondent objects.
Mr. Weitzman: Really? For a mere 30 seconds?
Judge Holmes: I don't want to have him commit perjury or something if he remembered something about facts. But elaborating a question, ehh. I don't like surprises. You can go, Mr. Heyward. It's fine.
Mr. Weitzman: Did you say he had perjured? I don't understand.
ae
Judge Holmes: No, no. If he had said something that was untrue upon further reflection.
ich
Mr. Toscher: No. That's not the case, Your Honor.
mM
Judge Holmes: Sometimes witnesses .... yeah, sometimes witnesses ....
Mr. Toscher: I think the record's clear. It's the he had an incident regarding Walmart that if the Court ....
Te a
Judge Holmes: It would be an additional story or something, right?
Mr. Weitzman: I'm sorry. He was going to just relate to the Court the meeting he had with Walmart about this project.
ww
w.
Judge Holmes: Yeah. It was an additional story or an elaboration of his existing testimony. So it's not self-protective. It's fine. We got his story. Go ahead, Mr. Toscher. Where's Mr. Dahl again?
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