Bad ‘Deep Throat’ Revenue Numbers Are Multiplying

As readers of the letters to the editor in last Sunday’s Los Angeles Times Business section may have noticed, the producers of a new documentary about the X-rated movie “Deep Throat” have thrown a tantrum over my recent column challenging their key contention about the movie’s success.

Their assertion is that “Deep Throat” has grossed $600 million, and therefore ranks as the most profitable movie in history. The technical term I employed was “baloney.”

In response, the producers of “Inside Deep Throat,” Fenton Bailey and Randy Barbato, sent us a lengthy memo explaining how they arrived at their figure. My original analysis exposed the implausibility of “Deep Throat’s” having earned anywhere near $600 million, given the realities of economics and the movie trade. Now that Bailey and Barbato have described their computational methodology, I can go further and state that it’s not only their conclusion but their computational methodology that’s absurd.

(We published about one-third of their memo as a Sunday missive; anyone thirsting for more can find their entire reasoning on their website, www.worldofwonder.net.)

The basic Bailey/Brancato method is to construct a seemingly solid box-office figure out of layers and layers of speculation piled upon a foundation of sand.

Typically they start with a number that was never substantiated to begin with, such as this: “Variety estimated Deep Throat grossing $4.6 million in 1973.” They then decide that Variety’s figure is incomplete, because they have another unauthenticated claim that at one point or another “Deep Throat” played in 300 theaters simultaneously. (This improbable assertion is based on a “search warrant” that “an FBI source referenced.”) They take this as justification for pumping up the original figure with a multiplier that they pick out of thin air: “It would be reasonable to multiply that by a factor of 10.” (Who sez it’s “reasonable”?)

Their memo is peppered with such magic asterisks. Having conjured up a “conservative” estimate of $100 million for the movie’s domestic box office (Who sez that’s “conservative”?), they observe that most of this money was collected in cash by mob henchmen, who probably pocketed their share of greenbacks along the way.

Therefore, they say, “let’s add another $10 million for skimming, shenanigans, and lapses of accounting,” and “let’s add 15% for ‘shrinkage’ ... $16.5 million.” (I love that decimal point in the “shrinkage” figure, by the way -- doesn’t it almost make you think Bailey and Barbato are using real numbers?)

The producers repeatedly rationalize their bloated estimates on the grounds that, while we don’t know how many people went to see “Deep Throat,” it must have been plenty. “People flocked to the theaters in droves,” they say.

Thinking that they had stumbled upon a useful new metric for box-office calculations, I turned to the literature of high finance to determine how many people it takes to make a “drove,” and whether it’s more or less than a bunch, a mob or a minyan. Strangely, none of my books provided a conversion rate. In any case, Bailey and Barbato don’t specify how many droves actually bought tickets to “Deep Throat.”

They also attach great significance to reports that the movie brought in so much money that its mob-connected backers couldn’t count it all, but weighed it in bags instead.

What this is supposed to prove escapes me. We don’t know how many bags there were, or their size, what denominations were inside, or indeed how much they weighed. We know only two things: That a bag of $1 bills weighs exactly the same as a bag of hundreds, and that each weighs less than a bag of horse manure, which is what I think is in the bags that Bailey and Barbato are selling.

Even the documents they cite aren’t exactly authoritative. For example, they base their claim of “swollen box-office numbers” on an FBI affidavit that they say “details the Perainos, the producers of the film, talking about two theaters that generated a gross of $100,000 per week.” When they showed me the affidavit, I noticed that it doesn’t say that at all. It merely reports that an unidentified FBI source “heard that” a Peraino was saying such things; it doesn’t say whether the source heard it directly from Mr. Peraino, or third-hand or tenth-hand. Nor does it say how many weeks these big grosses were supposed to have gone on -- 100 weeks? Ten? Two?

Their analysis makes it plain that Bailey and Barbato didn’t estimate “Deep Throat’s” gross by any responsible means of calculation; my guess is that they started with the $600-million figure, which has been floating around since 1980 as a kind of urban legend, and then kept piling up the sums until they reached the mark they wanted.

If you read their memo closely, you discover that there is barely a single figure in it that can be substantiated; almost everything is hearsay, an estimate, a “report” or flat-out conjecture.

They’ve played a game that has become all too common in business and politics: cooking the numbers. Their techniques are first cousins to those that have given us the assertion that Social Security will soon be “bankrupt” and that Krispy Kreme stock is a can’t-miss investment.

It all reminds me of the joke about the businessman who chose a new accountant by asking the candidates to tell him how much you get from adding two plus two. He rejected the ones who answered “four,” and hired the one who replied, “What do you have in mind?”

Golden State appears every Monday and Thursday. You

can reach Michael Hiltzik at [email protected] and read his previous columns at latimes.com/hiltzik.