Allegations of Prostitution, Substance Abuse and Spying: Inside Hollywood’s Nastiest Producer Feud (original) (raw)

The billionaire’s son, who spent the past decade charting his course in the film industry, could easily afford most of the things he desired for a high-status Hollywood life: a yacht during the Cannes Film Festival, partying with Leonardo DiCaprio’s posse, houses in the hills and on the coast. But money aside, he still didn’t have the IMDb page he felt he deserved.

So in August, John Powers Middleton, the 36-year-old scion of a tobacco magnate, sued former business partner Roy Lee, the veteran producer of The Lego Movie, The Grudge and It. Middleton alleges that Lee removed his credits on the film database for more than two dozen projects, including a pair of How to Train Your Dragon films and the upcoming Minecraft, in an act of retaliation at the end of their partnership. The suit, which claims fraud and breach of contract, seeks at least $7 million in damages plus restoration of the credits.

The suit, filed by high-profile entertainment attorney Marty Singer — a legal bulldog who charges as much as $1,200 an hour — is the type of industry spat normally settled behind closed doors by a mediator. But it has quickly escalated into the town’s most personal and sordid battle, involving allegations of substance abuse, prostitution and spying. Their grudge has highlighted a culture of lavish gifting to stars and executives as well as one side’s large contributions to right-wing causes. The feud also spotlights an eternal figure in the industry ecosystem: the wealthy outsider who eagerly buys his way in with an open checkbook but ultimately feels battered, bruised and used.

Middleton, speaking to The Hollywood Reporter through his legal and publicity firms, reasserts the claims made in his court filings — that Lee took him for a ride, unfairly leaning on him for everything from a never-reimbursed $200,000 loan for his child’s school tuition to exorbitant perks for Lee’s friends and associates: courtside seats, private jet trips, overnight stays at an oceanfront mansion. His filings contend that his former partner bullied him in deal renegotiations, upping demands for overhead and threatening to remove him from projects. His suit says that Lee or others acting on his behalf actually contacted IMDb to have dozens of executive producer credits scrubbed. “This is absurd,” says Lee, 51. “IMDb makes their own determinations of credits.”

For his part, Lee claims that by the time their 2016 partnership renegotiation came up, Middleton had shown his true colors — an entitled heir who had no real interest in the business beyond its superficial trappings — and Lee, buffeted by his recent blockbusters, no longer needed a problematic cash-infusing partner. “The fact of the matter is, I’m being sued because I didn’t want to continue working with Middleton,” says Lee. “Anyone who knows me knows that I’m not some pushover who would cave in to the demands of a son of a billionaire who is sad that he isn’t getting what he wants.”

Middleton grew up along the Main Line, Philadelphia’s old-money bastion, the son of John S. Middleton, an ambitious Harvard Business School graduate who transformed his family’s eponymous tobacco shop into the world’s third-largest cigar maker. In 2007, the company, best known for its Black & Mild brand, sold to Altria (the corporate parent of Philip Morris USA) for 2.9billion.Thefather,wholikehissonhasanaffinityforskiingandbaseball,isnowapart−ownerandpublicfaceofMLB’sPhiladelphiaPhillies.ForbespegsMiddletonsenior’swealthat2.9 billion. The father, who like his son has an affinity for skiing and baseball, is now a part-owner and public face of MLB’s Philadelphia Phillies. Forbes pegs Middleton senior’s wealth at 2.9billion.Thefather,wholikehissonhasanaffinityforskiingandbaseball,isnowapart−ownerandpublicfaceofMLB’sPhiladelphiaPhillies.ForbespegsMiddletonsenior’swealthat3.4 billion.

Middleton followed his father to the Haverford School, a local prep institute, then dropped out of both Duke and Penn before pursuing his Hollywood dream in his 20s, beginning with a series of internships at production companies, including those run by Nick Wechsler and Mark Cuban. His early advisers tell THR that he was bright, eager, inquisitive and low-key. Lee ended up as Middleton’s partner through a mutual connection, the late well-known talent manager J.C. Spink.

Lee’s a prolific producer of studio fare whose upcoming projects include Godzilla vs. Kong at Warner Bros., a limited series of The Stand at CBS All Access and Olivia Wilde’s buzzy psychological thriller Don’t Worry, Darling for New Line. The Maryland-raised, Korean American father of three made his name in 2002 with the blockbuster The Ring, which ignited an industry craze for remakes of Asian movies. (His most prestigious project, Martin Scorsese’s Oscar-winning The Departed, was an adaptation of the Hong Kong film Infernal Affairs.) “Roy’s very smart, calculating, methodical, transactional — a rights guy, no interest in development,” explains an admiring former employee.

By Lee’s account, he partnered with Middleton because the money was agreeable. According to their contract, viewable in court records, Middleton would pay half of overhead expenses at Lee’s production company, Vertigo Entertainment, in exchange for a cut of Lee’s producing fees on all new Warners projects — typically 20 percent. Middleton also would receive executive producer credit on their projects at the studio. Lee says he assumed he could mentor an upstart.

Middleton would go on to acquire a reputation among executives as an affable, earnest and, above all, generous figure. “A nice guy you never took seriously,” as one put it. Or, in the words of another: “You know when you talk to actors who nod their heads at the right times and you feel like they have no idea what you’re talking about? That’s how it was when the conversation would turn to structuring the MG [minimum guarantee] on an acquisition or the nuance of a two-step writing deal. It was much more important to him to know celebrities.”

Lee provided THR with communications (including hundreds of emails and texts) that involve his former partner. One from August 2011 displays the goodwill before the souring. “The year has been great, and really exceeded my expectations,” Middleton writes to Lee. “I can’t thank you enough for taking me under your wing and showing me the ropes the way you have.”

By both men’s accounts, a key point of deterioration in their relationship was over crediting and money on 2014’s The Lego Movie. In 2018, amid a heated text exchange, Lee told Middleton, “You liked getting credits and I liked giving [sports] tickets to people.” Middleton responded: “You used all of that stuff extensively with the Lego people over many, many years, with the understanding I was only doing it if I were involved in the movie.”

Middleton contends he spent $780,000 a year to rent a house on Malibu’s Broad Beach from 2012 to 2016 and that Lee “demanded use of the home” under the threat of losing credits, including allowing Christian Bale to stay there during one Labor Day weekend (Lee was allegedly wooing the star for a project) and using it as a writers room for The Lego Movie 2: The Second Part. “When asked to vacate by Roy, John would move his belongings into one closet in the house and temporarily move into a hotel,” says Middleton’s spokesperson, Sallie Hofmeister of Sitrick and Co. “John couldn’t use his own house … without seeking Roy’s authorization.”

Lee says this is revisionism, observing that Middleton, referred to as “Midds” by those close to him, treated his property as a perpetual come-one, come-all pleasure dome. “I’m having a party at my place Tuesday night through Thursday morning,” Middleton wrote Lee in June 2012. “Fully catered, DJ, promoters providing female people that get married male people in trouble,” adding: “If you’re interested and want to bring any kind of people feel free.” (Lee says that while the event occurred, neither he nor Middleton attended.)

Middleton’s turn as a fringe-benefits baron made him the recipient of effusive gratitude around town. “I took my brother, and we had an absolute blast,” actor Ed Helms wrote, thanking him for Dodgers tickets. “Those seats are just insane.”

By January 2013, Middleton appeared wary that he’d been taken advantage of by the industry. “While I think it’s a little crazy people just invite themselves on private planes and to Super Bowls, I’m fine with doing whatever,” he wrote Lee during one conversation. “I understand we’ve created an expectation of these things, and that it generally works to our advantage.”

One of Middleton’s key contentions against Lee is over the bungalow office suite they briefly shared on the Warners lot, first built for Frank Sinatra in 1963 and later used by Sidney Poitier, Barbra Streisand, Paul Newman and producer Joel Silver. The occupancy of the digs in April 2013 signaled they’d arrived. Middleton claims he spent 250,000tocompletetheofficerenovations,includingtheinstallationofa250,000 to complete the office renovations, including the installation of a 250,000tocompletetheofficerenovations,includingtheinstallationofa60,000 golf simulator purchased “to improve staff morale.” (Lee contends the $250,000 is an overstatement).

But fellow producer Brett Ratner, whose RatPac had a co-financing deal with Warner Bros., had a fixation on taking over the high-status space. Ratner’s own deep-pocketed partner, James Packer, worked out a $2.25 million transaction, in the form of a consulting deal, to get Vertigo to move out in 2014. Middleton complains in his lawsuit that he was kept in the dark about the true nature of the arrangement for the office move, told only that Warners wanted RatPac in.

Lee sees nothing wrong. “I was part of a real estate transaction where I earned a windfall,” he tells THR. “John Middleton’s producing deal with me did not include this type of real estate transaction and therefore he was not entitled to any of it.”

Middleton’s camp compares his relationship with Lee to a marriage, one in which he was cheated and abused, explaining that his own inexperience and good faith led him to persist through a contract renewal. “I remember talking to him in the lobby of a hotel years back and noticed the effects of negative relationships in this business,” says one of Middleton’s friends, a prominent TV host who declined to be named. Middleton and the friend both attend Churchome, the Hollywood-friendly Christian congregation whose other attendees have included Kourtney Kardashian and Justin Bieber. “I was able to introduce John to a new group of friends who didn’t want anything from him,” the TV host adds. “It’s been nice to see him thrive and grow as a person lately.” Likewise, Stephanie Popp, who dated and lived with Middleton from 2007 through 2011, recalled to THR her own mounting wariness as her then-boyfriend became increasingly anxious to please Lee: “John gives everyone the benefit of the doubt.”

A dealmaker who knows and likes both Middleton and Lee says: “There were a lot of perks that John brought to the table that presumably were not in the deal. Roy got used to making those perks part of how he did business. But also, come on, John benefited. It built him up as a figure in Hollywood. It’s what he wanted.”

Another man who has done business with each of the antagonists was more succinct. “The two of them were in it together,” he says. “It worked for years. But in the end, it’s going to be the non-Hollywood guy who gets hosed.”

Manager William Choi, a friend of Lee’s, was a recipient of the Middleton largesse. “Although John has been nothing but warm and generous to me, and I’m fond of both of them, the assertion that Roy had a Rasputin-like influence over John isn’t what I experienced,” he says. “John volunteered the gifting of the tickets and asked Roy to coordinate.” He says it’s “a responsibility that Roy found acutely stressful.”

Producer Chay Carter, who dated Middleton for two years during the Vertigo era (she met him through Lee), observes that the reality is that the perks provided by her then-boyfriend helped the pair’s firm, and “you can’t deny it helped Roy’s growth when he was the one dishing them out around town.” She adds, “I think John, being a genuinely generous person, to a fault sometimes — I’ve seen him being taken advantage of in the past — thought that if he held up his end that he would receive what was promised to him. Isn’t that business? Perhaps just not always the business of Hollywood.”

***

Lee, who began his career with a brief stint at a Washington, D.C., law firm, does not hide his zeal for retribution when he feels wronged. The New Yorker reported in 2003 that he got revenge on a high school bully by unscrewing the lug nuts in the tormentor’s car (no one was injured) and, later, during a tiff over credit for The Ring, threatened to circulate an adversary’s drunk driving mug shots. He told the magazine, “I get pleasure from seeing someone suffer if they’ve mistreated me.”

Lee filed a cross-complaint against Middleton. His May 11 filing for breach of contract and negligent misrepresentation claims that prior to their partnership, the latter was “a complete unknown in Hollywood with no industry experience or connections, aside from scattered internships at various production companies.” Lee’s suit paints Middleton as a troubled, status-seeking wastrel. He claims he thought he’d been paired with Middleton to provide mentorship, but it turned out “he had no intention of doing any actual work,” noting that by 2015, Middleton visited the office only twice, and in 2016 not at all. (Middleton asserts there was nothing in his contract calling for him to be in the office and that Lee created “a hostile environment.”)

Lee’s filing catalogs how Middleton’s alleged behavior during their time together “became increasingly detrimental” to their business. An episode aboard Middleton’s chartered yacht at the 2013 Cannes Film Festival is detailed: “Middleton returned to the yacht blackout drunk after a night out with a group of people he claimed were close friends of actor Leonardo DiCaprio. … Middleton stumbled through a glass door, breaking the door and cutting his hand on a broken shard.” The filing goes on to say that, in front of Lee’s business guests, “Middleton went into a hysterical fit and started crying. At some point during this outburst, he urinated in his pants.” Lee, it states, was worried Middleton had “lost all control of his bodily functions” and was in danger of falling off the boat.

Middleton’s friend Danny Abeckaser — an actor and nightlife promoter who was also partying with him and DiCaprio that evening — says it didn’t happen that way. “We went out one night and had a few drinks, but there was no scene when he returned to the boat — no busted door, no broken glass, or as much as a scratch on John’s arm or body,” he wrote to THR. (In response, Lee shared emails between himself and Middleton from the prior year, in which Lee turned down a production deal and other projects proposed by Abeckaser.)

After the incident, Lee emailed Middleton’s father to express his concern regarding his son’s drinking. “I truly think he needs to have a complete overhaul in the people in his life,” Lee wrote. “I got to see firsthand the types of people he considers his ‘friends’ and found it horrifying.” Lee stated he intended to terminate the partnership if Middleton failed to change his lifestyle.

Middleton’s father wrote back: “Absolutely. We are in Boston with him now, and he has met with his doctor this afternoon.” Says Middleton’s spokesperson Hofmeister, “In Boston, John met with his therapist in the therapist’s office and left shortly after and drove to New York.”

At the end of 2013, Lee reluctantly, he says, agreed to a three-year extension of their partnership on the promise from both Middletons that the son would get his act together. The film producer says it never came to pass. In court records pertaining to a separate legal matter against a former therapist, Middleton volunteered he’d “achieved sobriety” on June 23, 2016.

The Lee litigation also highlights Middleton’s use of private security firm Screen International — an established L.A.-based outfit whose clients have included Angelina Jolie, Tom Cruise and Will Smith — to spy on his then-girlfriend Molly Shaheen, daughter of Sen. Jeanne Shaheen (D-New Hampshire). Lee contends the spying “became common knowledge in Hollywood circles,” further damaging Vertigo’s reputation. Middleton’s camp claims “all the work that was done was legal.” Molly Shaheen didn’t respond to a request for comment.

Hofmeister says that Lee “delights in the sport of exacting ‘pain’ on his enemies” and is enacting a “character assassination” of Middleton out of desperation, observing that some of Lee’s most provocative assertions didn’t come to light until the third version of his cross-complaint was filed in May. “Hollywood has a history of overlooking the abusive or inappropriate behavior of people who are powerful,” says Hofmeister, who worked for Harvey Weinstein after his sexual predation was exposed, “until the person who has been wronged is willing to risk their career to confront the bully by, say, filing a lawsuit.”

Lee is unabashed. “Middleton and his crisis management team can act all shocked and bothered, but I’m just defending myself,” he says. “He should have known this would happen before suing me.”

On June 10, Middleton hit back at Lee in court, arguing to strike the “personal attacks” while at the same time stating that “hard-partying Lee indulges his penchant for drugs, prostitutes and pay-by-the-hour doumi [karaoke hostesses], regularly taking the narcotic Ecstasy and sharing it with business associates while frequenting overseas brothels and private karaoke lounges in Koreatown as part of ‘business meetings.’ ” Lee denies this in its entirety: “It wouldn’t surprise me if he accuses me of having started the coronavirus in his next filing.”

Shintaro Shimosawa, a longtime Lee collaborator and head of Bad Hombre Films (the two are working on the thriller 16 States for Lionsgate), says Middleton’s depiction of Lee is absurd. “This is a guy who’d rather be home at night watching his iPad. He’s known to obsess over places in Koreatown to eat,” he says. “It’s just a characterization that’s totally unbelievable to anyone who knows him in this business.”

Afterward, Lee provided THR with text messages that show Middleton himself inquiring about the services of a sex worker. (Lee was not on the chain, but THR confirmed that the texts were real with another person who was.) Through his spokesperson, Middleton denies that any such texts exist. “John would never use an escort service for ethical and moral reasons,” says Hofmeister. “Moreover, no one with any level of OCD would engage an escort for obvious reasons.”

Middleton long has struggled with OCD. According to Hofmeister, a close friend of Middleton’s has jokingly called him “Howard,” a reference to Howard Hughes, because of “his relationship with Leo [DiCaprio] and Leo’s introduction of John to his OCD adviser on The Aviator.” (DiCaprio, who has spoken about his own challenges with OCD, was Oscar-nominated for best actor for portraying the OCD-afflicted Hughes in the 2004 film.)

For treatment, Middleton saw Dr. Michael Jenike, founder of the Obsessive Compulsive Disorder Institute at Harvard’s McLean Hospital. In 2017, Middleton signed Horrible Bosses director Seth Gordon to helm Life in Rewind, about Jenike’s work with a young athlete. Then, two months before he sued Lee, Middleton initiated a separate legal action in Massachusetts against Jenike for billing him what he claims is an inflated $4 million for OCD treatments as well as sharing confidential information about him with others, including his parents. On May 8, Middleton sought a court order compelling a former personal assistant who also served as a sober coach to divulge any communications to him that might have exposed any efforts to place him under a guardianship, presumably by his parents. Middleton’s camp declined to comment other than to say, “John was never placed under a conservatorship/guardianship and was never a candidate for such.”

Middleton insists that the ongoing development of the film, which posits Jenike as a medical hero, remains unaffected by his litigation against his former doctor.

Multiple people close to Middleton attribute his idiosyncrasies — including his habit of buying designer clothing at volume so he doesn’t need to re-wear items — to his OCD. Additionally, several high-level industry associates posit that the condition may have played a role in his chronic tardiness and many missed meetings, a complaint also voiced by Lee in his filing. (OCD sufferers may be bound to ritualistic behavior that keeps them from obligations.)

Lee says it was an embarrassment for him and Vertigo. Middleton’s team says any tardiness or absences were “isolated incidents” and that “to say it was habitual is a gross overstatement.”

***

In addition to producing, Middleton has been involved in right-wing activism. In 2010, when he was 26 and a co-chair of the Republican National Committee’s Young Eagles program, which sought to cultivate junior donors, he held an event at a since-shuttered West Hollywood burlesque club called Voyeur that made the then-party chairman Michael Steele a mark for late night TV hosts. As news of the scandal was breaking, Middleton emailed several then-new Hollywood colleagues: “Do you guys use anyone for PR? Spokesperson? I may be in some hot water tomorrow.”

According to the Sunlight Foundation, which advocates for transparency in political spending, in 2016 Middleton was a key contributor to a Trump PAC formed by Roger Stone, the veteran GOP operative subsequently convicted on seven felony counts linked to the 2016 election. Sunlight Foundation records show Middleton ultimately donated $477,000 to Stone’s group, the Committee to Restore America’s Greatness. According to the Center for Responsive Politics, one of CRAG’s initiatives was to fund Stone’s Stop the Steal, an Election Day vote-monitoring project that Democrats sued for conspiracy to intimidate minority voters. Middleton’s camp says he had no knowledge of Stop the Steal’s actions, no say in how the Stone PAC funds were directed and “does not condone any activities of this sort.”

In 2017, the Center for Public Integrity, a watchdog group, revealed Middleton also donated $5,000 to President Donald Trump’s transition efforts, paid for by a production entity Middleton had set up three years earlier with actor Casey Affleck. The actor was not pleased. “I am appalled that a donation may have been made in my company’s name by someone I work with,” Affleck said at the time. “I had no knowledge of it, was never asked and never would have authorized it.” Affleck’s spokesperson tells THR, “When it was discovered that John donated to the Trump campaign in 2016, Casey ended the arrangement and made a production deal with Amazon.”

Separately, when Lee texted Middleton that Lego corporate executives were concerned about his Trump donations and were considering retracting his credits on sequels to avoid controversy, Middleton wrote that he was “actually trying to hide my donation via one of several SuperPACs vs a more mainstream SuperPACs, but you’re still required under federal/FEC law to disclose any and all contributions,” and responded: “Well as you said I can contribute the exact same amount to Hillary and just say I contributed to both sides.”

Former President Barack Obama’s onetime aide Reggie Love, who now works for the owner of the NBA’s Philadelphia 76ers, has been a friend of Middleton’s since their time at Duke. He says, “Though we have not always seen things exactly the same way, John has always been someone who is willing to have a conversation about those differences,” adding, “I think some of his political beliefs might be evolving over time as well.”

ABC announced in April that it had opened a writers room for a Middleton-produced project, Women of the Movement, an anthology series chronicling the civil rights struggle. The other producers include Will Smith and Jay-Z. Middleton took Women of the Movement with him when the Affleck endeavor ended. Middleton tells THR that he’s recently become a Democrat.

***

The Middleton Media Group recently laid off its staff, citing Hollywood’s pandemic-forced production stoppage, and moved on May 4 to Carson City, Nevada, a tax haven.

Those close to Middleton and Lee — including their allies as well as those who still think of them both as friends — wish things hadn’t gotten so out of hand. “It’s sad for me to see Roy and John’s relationship fall apart in this way,” says producer Dan Lin, whose Lego franchise is one of the properties at the core of their conflict.

Middleton and Lee each asked producer Steven Schneider, who had an office at Vertigo during the duo’s ride and is best known for Paranormal Activity, to speak on their behalf.

“By industry standards, as business partners, Roy and John got on well enough and seemed to have a mutually beneficial thing going for a nice run,” he tells THR. “But the relationship ran its course. It should have ended amicably, not painfully. Instead, after all of this very public mudslinging, the best Hollywood ending there can be is the private consolation of arbitration.”

This story first appeared in the June 24 issue of The Hollywood Reporter magazine. Click here to subscribe.

July 14, 1:50 pm PST A longer version of Middleton’s quote pertaining to SuperPAC donations has been added.