While Winston & Strawn attorney Erin Ranahan has media outlets — and, she hopes, a judge — jumping through hoops trying to compare Mr. Spock to Nosferatu, a much bigger question looms. A question that seems to get bigger and bigger as both sides rack up legal costs, and the thought of there being a fan-film called “Star Trek: Axanar” becomes more and more unrealistic.
Where has all the money gone?
Just before CBS Corp. and Paramount Pictures filed its copyright infringement suit against Axanar Productions and its leader, Alec Peters, last December, Peters himself released what he called Axanar’s financial report. Peters called this report an effort to demonstrate how transparent Axanar is. And indeed it does. As Carlos Pedraza points out on his Axanar informational site, AxaMonitor, Peters and his crew are so transparent, we really have little clue to where any of this more than $1.1 million raised through crowdfunding went.
And I’m sorry, but the thousands of fans who gave money, no matter how big or how small, deserve full transparency — which means it’s time for Axanar to go through a complete and independent audit.
This spreadsheet Axanar provided is not transparent. First, even if it had complete information (Pedraza says it doesn’t), we still need to trust that nothing in this report has been misrepresented. And maybe it hasn’t — we don’t know. Because once again, we’re forced to go by the accounting of Peters, who from what I understand, is not a trained and experienced accountant.
While Peters and company can cry foul that the lawsuit from CBS/Paramount could really kill this fan-film, it looks like the fan-film was dead already — at least without a major influx of cash. And that’s pretty amazing right there: Why would they need more money? They already raised $1.1 million, which is more than any other Star Trek fan-film raised ever. Most others can create a full-length episode for less than $100,000.
Now many of those donors are still waiting for promised perks, and waiting for the promised product. And that’s hurting other fan-films who have not been sued by CBS and Paramount, and who have solid track records in producing timely episodes or movies. One group that might be feeling the pain is “Star Trek Continues,” which has raised an amazing $93,000 over the past month for its current fundraising campaign, but is only at a quarter of its goal with just a month remaining. And from what I understand, if “Continues” falls short, it would be the first time ever for producer Vic Mignogna and his fan-film team.
I can’t say for certain what might have slowed down fundraising, but I find it difficult to not make some kind of connection to what’s happening with Axanar. Peters and his crew raised more money than someone living on an island and avoiding blindsides for 39 days on “Survivor.” Yet, there is nothing to show for it except half-built sets in space that costs well over $100,000 a year, no casting contracts or scheduling, and (according to Ranahan) an unfinished screenplay.
This “transparent” financial report? It doesn’t help, either.
Pedraza, in his breakdown of the financial report, said one of the biggest problems came in the reporting of salaries.
“Few job positions are specified, some employees’ wages are bundled together with non-personnel costs, expenses are sometimes vaguely described, requiring additional research to discover they were actually personnel-related,” Pedraza said. “Also, it’s not clear whether other personnel were inappropriately paid as independent contractors instead of employees, a common problem among independent film productions.”
In fact, more than half of the $122,000 Axanar reported as salary expense is “unaccounted for in terms of personnel names, services or tax liability,” Pedraza said.
Even Axanar spokesman Mike Bawden couldn’t spin how utterly useless this financial report was. He told Pedraza that the report was a “valiant attempt at transparency (that) falls short of providing meaningful financial data.”
And Bawden, to his credit, didn’t stop there: “Then there’s the fact that the report was prepared by management … rather than an accredited CPA,” he said, referring to a certified public accountant. “I’m sure (Peters) was just trying to save some money, but the appearance of a conflict of interest is as bad as a real one. And the things that were missed, in my opinion, are symptomatic of someone trying to check his own work before publishing it.”
Yet, Bawden still hasn’t offered an independent audit on behalf of Peters and Axanar. And I doubt we’ll see one until the court in the copyright infringement case orders one.
But why is this audit so important?
Although Axanar is nowhere near a non-profit entity, the National Council of Nonprofits says that such audits are important to determine whether financial statements “fairly present the financial position of the organization, without any inaccuracies or material misrepresentations.” To do that, of course, you need someone who is not part of your team, who does not draw a paycheck from you. That’s an outside accountant.
While there is a lot of technical information that goes into a report, primarily what everyday people like you and me are looking for is what type of report is issued. The nonprofits council says there are four:
• Unqualified Opinion: The kind organizations want, because it means your books are sound.
• Qualified Opinion: The books are pretty good with no material misstatements, but there are a couple of trouble areas the organization needs to address.
• Adverse Opinion: This would indicate that the organization has made material misstatements, and overall, are not following generally accepted accounting principles.
• Disclaimer of Opinion: The accounting here is so bad or there are obstacles so significant in preventing him from forming an opinion, the accountant refuses to do so.
The cost for such an audit, at least for smaller non-profits, could run as high as $10,000, although having an accountant work remotely could reduce those costs.
But what is $10,000 compared to $1.1 million? So small that the amount of money you would still be able to boast about after paying for the audit would be $1.1 million.
This isn’t the first time in my life that I have demanded a group of Star Trek fans to undergo an independent audit. I did it a decade ago to the people who were running the TrekUnited campaign — a group that took more than $100,000 (if I remember right, it was actually double that) from fans, with claims they were going to fund a fifth season of “Star Trek: Enterprise.” The moment I asked for an independent audit, I became TrekUnited’s Enemy No. 1.
And you know what? In my more than 22 years as a journalist, and covering not just entertainment but courts, businesses and government, if the response to me demanding independent review is to declare me an enemy combatant, then I’m sorry, that pops up so many red flags, that organization should be worried about attracting a herd of bulls. It’s not pretty.
So Axanar, even your own public relations guy — the person you have to spin all your nonsense into gold — says you’ve fallen short. You have donors who say you have fallen short. And who knows what you might face in the legal realm once the copyright infringement case is over. Maybe it’s time to at least solve one of those issues by actually finding a way to actually be transparent, and do the independent audit, and release it publicly.
Maybe then some of the other fan-films that are obviously suffering from this mess might be able to start the healing process, and this small segment of fandom can once again find some normalcy.
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