WOW Report

March 05, 2005

'Throat' Gets Cut, Directors Perform Surgery

Ten days ago, Michael Hiltzik wrote a column in the LA Times Business section accusing Inside Deep Throat directors Fenton Bailey and Randy Barbato of deeply sketchy math in coming up with the figure of $600 million to estimate the eventual gross of the little culture-upheaving porno film Deep Throat. Actually, he came right out and called the claim "baloney." And then went on and on in great detail, as if the $600 million was the subject of the documentary.

Leaving aside that "Deep Throat" was financed by mobsters and that therefore any figures are suspect, logic and arithmetic alone are enough to tell you that its box-office gross could not remotely have approached $600 million.

We're talking about a movie that was released in 1972, banned in half the country and generally exhibited in one theater at a time even in the biggest cities, such as New York and Los Angeles. (Full story)

Today, in "Letters," the Times has printed Bailey and Barbato's response to Hiltzik's attack. We understand that the Times will edit the rebuttal, so we give you the complete story here.

Michael Hiltzik's reluctance to believe that this little film could generate $600 million is understandable.

But like the Deep Throat of Watergate said, "follow the money," and we did. Sadly we didn't find the $600 million stashed in bags anywhere, but what we did find - having spent more than two years speaking to hundreds of people, sifting through thousands of pages of trial transcripts, and rummaging through dozens of boxes of FBI files - is a wealth of evidence to suggest that this figure is about as close to the truth as we are likely to get.

Inexplicably, Mr. Hiltzik decides to leave aside the fact that the film was financed and controlled by mobsters, seeming to doubt that they could preside over a $600 million operation. Odd, because the mob's ability to generate and deal in vast - albeit shadowy - sums of cash is perhaps one of the most well-documented and oft-repeated things about it. If anything, the stated figures are likely to be the tip of the iceberg.

Starting with the tip of the iceberg, some things to consider:

DOMESTIC BOX OFFICE

While Mr. Hiltzik is correct to say that the film was ultimately banned in close to half of the states in the United States, that was not before it was shown in every single state with the exception of Mississippi (Sinema, by Kenneth Turan and Stephen F. Zito). And banning a film didn't mean that theaters didn't show it, or that people didn't go to see it. Quite the reverse; they flocked to the theaters in droves.

Mr. Hiltzik thinks we should compare this to Star Wars. But Deep Throat, less than an hour long, could pack in twice as many screenings as the intergalactic caper that was more than twice the length.

While punters going to see Star Wars paid the average ticket price of about $2, that wasn't the price of admission to see Deep Throat. Because it was banned, because it was a hot ticket, theater owners across the country (Denver, Houston, Milwaukee are just three examples) charged $5 - more than double the average ticket price (generously a theater in Chicago only charged $4 for a matinee). On special occasions, after a police raid in Atlanta, for example, ticket prices soared to $10.

The high-ticket prices were reflected in swollen box-office numbers; an FBI field report (obtained by us under the Freedom Of Information Act) details the Perainos, the producers of the film, talking about two theaters that generated a gross of $100,000 per week.

While Variety tracked Deep Throat's domestic grosses during the first few years of its release, the box office chart was determined by a sample of select theater markets. At any given time, no more than five theaters were listed. However, various sources, including the New York Times, claim that it played in more than 70 U.S. cities within six months of its release. The actual number is likely to be even higher; an FBI source referenced a search warrant that showed the film having played at more than 300 theaters simultaneously.

So while Variety estimated Deep Throat grossing $4.6 million in 1973, it would be reasonable to multiply that by a factor of 10. OK, so Deep Throat didn't earn $46 million every year in release until the Memphis trial in 1976, but this would put its domestic box office way beyond the $30-50 million that Mr. Hiltzik claims based on something called "the most commonly cited estimates of ticket sales."

So with twice the screenings, four times the ticket price, and at least 10 times the number of screens, we feel that $100 million is a conservative estimate of Deep Throat's domestic box office take since its release. This was the number quoted by one of the Peraino's attorneys, who wished to remain anonymous, in an LA Times article. He also said that it was a gross underestimate. He should know. So let's add $10 million, then - a modest adjustment.

But wait, there's more.

Unlike Star Wars, the number of Deep Throat prints in release was not tightly controlled. Even the mob themselves had a hard time controlling the number of bootleg prints that were in circulation.

So effectively was the film bootlegged in Florida by one brave guy that they made him the official distributor and fired the other guy, Arthur Sommer. In Hollywood, bootleg prints were so commonly available that even the judge in the Beverly Hills trial managed to procure his own copy when the jury wanted to take a second look at the film (and that's another thing: Mr. Hiltzik claims that more than the entire population of the United States would have had to have seen Deep Throat, though he doesn't take into account the number of people who saw it more than once - something not limited to juries).

But still there's more.

All the box-office takes were in cash, collected by a purpose-built manual distribution system of checkers and sweepers, and sent back to their Fort Lauderdale HQ.

This all-cash system was ingenious but also porous and subject to skimming at every stage; the guy in the box office would stuff money down his trousers, then the checker would peel off a few bills and finally the sweeper took his cut.

Finally the money arrived back at party central where they counted it, right? Wrong. They weighed it. There was too much money to count. Too much money even to get around the room. Bags of money went off to the Bahamas, bags of money went off to Hollywood to underwrite the Peraino's legitimate operation, Bryanston Pictures. You can be sure that bags of money fell off the truck en route as well.

So let's add 15% for "shrinkage." $16.5 million.

Overseas, our research showed that Deep Throat was licensed to at least 75 foreign territories for theatrical release. The grosses in these individual territories ranged from the high end of $5 million in Sweden to $4 million in Germany to $400,000, with most records leaning toward the higher number. Even if we were to take a conservative figure of just over $1 million per territory, that's $80 million.

Let's add another 15% or $12 million for skimming, shenanigans, and lapses of accounting. That's $218.5 million

VIDEO AND DVD

We know that by 1995 more than three million VHS cassettes of Deep Throat had been sold. Mr. Hiltzik is right that VHS players were very expensive in the late '70s and early '80s, but that didn't deter people from buying them. By the mid-'80s, 23 million homes had a VCR. By the mid-'90s, VCR penetration had reached nearly 80 percent.

And it wasn't just VCRs that were expensive, tapes were expensive too. When it was first released on video in 1977, the average price was around $180. Arrow Productions, the current distributor of the film, estimates that half the copies sold at this premium price (for a total of $270 million). If this seems excessive, there is evidence that cassettes of Deep Throat sold for as high as $350 a pop prior to 1978.

In 1979, Deep Throat videos were advertised for $99.50 (films like The Graduate sold for $59.95). Thereafter, the price drifted down to the $60 mark, which is the average retail price Arrow calculated for the sale of the other 1.5 million units (for a total of $90 million), creating total video revenues of $360 million until 1995.

So these numbers are high, but Deep Throat - along with the few other adult titles available on video in the late '70s - was initially the killer application for the VCR, selling, according to one retailer at the time, 50 times the number of tapes as any other pre-recorded tape.

Then we must also take into account rental income. Variety reported that by 1994, VHS rentals from Deep Throat had made $20 million.

So that's $380 million, counting nothing for the last 10 years in DVD/video sales and rentals. Currently, Arrow Productions sells on average about 15,000 Deep Throat DVD units a year, generating almost $5 million over the last 10 years.

So by adding our box office total of $218.5 million to our DVD and video sales of $385 million, we get a grand total of more than $600 million, a total that excludes all the hotel pay-per-view delivery that is currently the lifeblood of the adult business.

So it's quite possible that $600 million is indeed baloney because the true figure is even greater than that.

Certainly it's an estimation. The mob's accounting systems are rarely audited, and the shame of porn has meant that hard and fast figures - just as much today as then - are difficult to come by. Is the adult business today really the $11-billion monster everyone says it is?

And while we could argue about it till the cows come home, what can't be argued is the fact that, given its modest budget, Deep Throat is the most profitable movie of all time. Even if Star Wars outgrossed Deep Throat (and we clearly don't believe it did), its budget of $11 million was 440 times that of Deep Throat. And that's no exaggeration.