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Oscars Mistake Threatens Reputation of PricewaterhouseCoopers Oscars Mistake Casts Unwanted Spotlight on PwC
(about 4 hours later)
What went wrong? As the Oscar for best picture was being presented at the 89th Academy Awards on Sunday night, Tim Ryan, the United States chairman of PwC, was sitting in a plush seat in the Dolby Theater, watching with satisfaction.
Hollywood and movie lovers were reeling on Monday, trying to understand how PricewaterhouseCoopers, the accounting firm that oversees the voting, mistakenly allowed the Academy Award for best picture to go to “La La Land” Sunday night when “Moonlight” was the real winner. Details were still coming together on Monday, but several factors may have contributed to the error. PwC, a London-based accounting firm, has tabulated the votes for the Academy Awards for 83 years. And the Oscars, while not its most lucrative client, is perhaps its most important. The firm leans on its long history as Hollywood’s chief vote-counter to enhance its appeal in efforts like business development and recruiting.
There are two identical sets of envelopes, handed out from either side of the stage. So when “La La Land” was named the best-picture winner and the producers began delivering their acceptance speeches, it appeared Mr. Ryan’s work for the night was done.
The envelopes’ design was changed this year, to red paper with gold lettering, which may have made them harder to read. Then chaos erupted on the stage. A PwC partner had handed Warren Beatty, a presenter of the award, the wrong envelope. Faye Dunaway, presenting the award with Mr. Beatty, erroneously announced that “La La Land” had won. Moments later, after the two PwC partners who oversee the voting came onstage, the “La La Land” producers announced that “Moonlight” was in fact the winner.
And then there is simple human error, in the crucible of one of the most highly anticipated television moments of the year — the announcement of the best picture Oscar at the end of the ceremony. Mr. Ryan watched in horror as the bizarre scene played out before Hollywood’s biggest stars and tens of millions of people watching around the globe. In a dizzying turn of events, his firm, which normally occupies a back seat at the glamorous event, was suddenly at the center of one of the most sensational stories in Oscars history.
It all added up to a nightmarish several minutes for PricewaterhouseCoopers. “I knew something was up,” he said in a telephone interview on Monday, zeroing in on the discordant moment when he noticed two of his employees interrupting the best picture acceptance speeches. “It’s not their job to come out on stage.”
For 83 years, the company has performed this task without any major snafus. But in one of the most astonishing moments in Oscars history, chaos engulfed the stage of the Dolby Theater in Hollywood, after “La La Land” was named the top picture. As the film’s producers were making acceptances speeches, awards show staff rushed onstage and began searching for the envelopes. As the magnitude of the gaffe set in, Mr. Ryan went into crisis-management mode.
PricewaterhouseCoopers had given the presenters, Faye Dunaway and Warren Beatty, the wrong envelope. “What was going though my head at the time was, ‘We have to get to the bottom of this, and if we made a mistake, we’ll own up to it,’” Mr. Ryan said. “My philosophy in life is, bad news doesn’t age well.”
The stunning reversal instantly became the central theme of the Oscars, repeated endlessly on television and swamping social media. And just as quickly, PricewaterhouseCoopers, one of the so-called Big Four accounting firms, had a major brand crisis on its hands. Reaction to the mistake has been swift and harsh.
“Not since Janet Jackson and her wardrobe malfunction on the Super Bowl have we seen something quite as glaring as this snafu,” said Andrew D. Gilman, chief executive of the crisis communications firm CommCore Consulting Group. Although most of PricewaterhouseCoopers’s clients are aware that mistakes can happen, “the name of the firm has unfortunately been a little sullied,” he added. “The accountants have one job to do — that’s to give Warren Beatty the right envelope,” Leslie Moonves, the chief executive of CBS, said in a videotaped interview after the show, which was broadcast on ABC. “That’s what these people are paid a lot of money to do. If they were my accountant, I would fire them.”
The two identical sets of sealed envelopes are stationed on either side of the stage. The two PricewaterhouseCoopers partners who oversee the voting process, Martha L. Ruiz and Brian Cullinan, each have a briefcase with a complete set of the envelopes. On Monday, the hashtags #envelopegate and #Oscarfail were trending on Twitter, and PwC, a business that markets its services to other businesses, was newly on the tip of many consumers’ tongues in an unforgiving fashion.
The envelope for best actress, the penultimate award of the night, came from one side of the stage. “You had one job!” several people remarked, tagging the company’s username and the two partners who oversaw the ballots, who were the public faces of PwC’s efforts before and during the show. Some criticized PwC, formerly known as PricewaterhouseCoopers, on an unofficial Facebook page for the business, with one person remarking its acronym could stand for “probably wrong card.”
After Emma Stone accepted that honor, Ms. Dunaway and Mr. Beatty came out to present best picture award. But they were handed an envelope from the other side of the stage, where the other best actress envelope was still unopened. Just as quickly as the fortunes of “La La Land” and “Moonlight” changed, PwC, one of the so-called Big Four accounting firms, had a major brand crisis on its hands.
And Mr. Cullinan, who handed Mr. Beatty the envelope, clearly picked the wrong one. “Not since Janet Jackson and her wardrobe malfunction on the Super Bowl have we seen something quite as glaring as this snafu,” said Andrew D. Gilman, the chief executive of the crisis communications firm CommCore Consulting Group, referring to the 2004 episode. Although most of PwC’s clients are aware that mistakes can happen, “the name of the firm has unfortunately been a little sullied,” he added.
After Mr. Cullinan and Ms. Ruiz realized that the wrong winner had been announced, they notified the stage manager, which set in motion a chaotic scene watched by the celebrity crowd in attendance and tens of millions of viewers on television. PwC was quick to accept responsibility for the mistake.
Yet it still took more than two minutes between Ms. Dunaway announcing “La La Land” as best picture and an announcement from the “La La Land” producers that “Moonlight” was in fact the winner. According to Mr. Ryan and others briefed on the process, a PwC partner, Brian Cullinan, handed Mr. Beatty the wrong envelope.
Why the wrong envelope was handed off is not yet clear. But it could have to do with the design. The envelopes containing the winner’s names were redesigned this year, and they featured red paper with gold lettering that specifies the award. Last year’s envelopes featured gold paper and red lettering, which may have been more legible. The Academy of Motion Picture Arts and Sciences, not PricewaterhouseCoopers, is responsible for the design and procurement of the envelopes. Instead of the envelope containing the winner for best picture, Mr. Cullinan accidentally handed Mr. Beatty a duplicate of the envelope for best actress — an award Emma Stone had accepted for her role in “La La Land” just moments before.
Those details, provided by people familiar with the process who spoke on the condition of anonymity because the episode was still being investigated, helped clarify some of what happened onstage on Sunday night. For the Oscars, PwC uses two complete sets of the envelopes, with one placed on each side of the stage. Mr. Cullinan was handling one side, and the other partner overseeing the voting process, Martha L. Ruiz, was handling the other. It isn’t clear what led Mr. Cullinan to hand Mr. Beatty the wrong envelope.
PricewaterhouseCoopers declined to comment beyond the statement it put out early Monday morning accepting responsibility for the mix-up and apologizing to those involved. Mr. Cullinan posted on Twitter a photograph of Ms. Stone backstage shortly after she won the award for best actress, and minutes before the mix-up, according to The Wall Street Journal. The post, which has been deleted, said “Best Actress Emma Stone backstage! #PWC.”
“The presenters had mistakenly been given the wrong category envelope and when discovered, was immediately corrected,” the firm said in its statement. “We are currently investigating how this could have happened, and deeply regret that this occurred.” The design of the envelopes could have been a factor. The envelopes were redesigned this year to feature red paper with gold lettering that specified the award enclosed, rather than gold paper with dark lettering. That could have made the lettering harder to read. The Academy of Motion Picture Arts and Sciences, not PwC, is responsible for the design and procurement of the envelopes.
PricewaterhouseCoopers, a privately held company, reported sales of $36 billion during its last fiscal year, up seven percent from the previous year. Revenue from the entertainment and media sector account for just 4.2 percent of sales. Based in London, the firm employs more than 220,000 people and provides accounting, tax advisory and consulting services to most of the world’s largest corporations. Whatever the reason, PwC was left searching for answers. As celebrities and guests hit the town for celebrations, Mr. Ryan spent the hours after the awards show speaking with Mr. Cullinan, Ms. Ruiz, members of the Academy and the show’s producers.
“I spent the bulk of the night with Brian trying to understand what happened,” Mr. Ryan said. “There wasn’t much in terms of parties last night.”
Mr. Ryan and others at PwC were scrambling to contain the damage all night. The firm put released a statement early Monday apologizing and taking responsibility for the mistake. Later in the day, Mr. Ryan wrote an email to PwC employees.
It is too early to tell how the error will affect the PwC brand.
A privately held partnership, PwC provides accounting, tax advisory and consulting services to most of the world’s largest corporations. It reported sales of $36 billion during its last fiscal year, up 7 percent from the previous year. The entertainment and media sector accounted for just 4.2 percent of sales.
PwC would not comment on its financial arrangement with the Academy, and Mr. Ryan said that there had not been any discussions about whether its longstanding contract was in jeopardy.
PwC, which said earlier this month that it planned to hire an advertising agency to help promote some of its services, recently selected RG/A for those efforts. That marketing work will be separate from any ad campaign the company may plan in the wake of the Oscars mix-up.
The company promotes the firm’s longstanding relationship with the Academy Awards on its website.The company promotes the firm’s longstanding relationship with the Academy Awards on its website.
One video posted there, introducing the leaders who oversaw this year’s ballots, began with the line: “The reason we were even first asked to take on this role was because of the reputation PwC has in the marketplace for being a firm of integrity, of accuracy and confidentiality.” It went on to note that the relationship was “symbolic of how we’re thought of beyond this role and how our clients think of us.” One video posted there, introducing Mr. Cullinan and Ms. Ruiz, began with the line, “The reason we were even first asked to take on this role was because of the reputation PwC has in the marketplace for being a firm of integrity, of accuracy and confidentiality.” It went on to note that the relationship was “symbolic of how we’re thought of beyond this role and how our clients think of us.”
This is not the first time an incorrect winner has been announced at the Oscars. In 1964, Sammy Davis Jr. announced the wrong winner for the best music score. But he quickly realized his mistake, before an erroneous winner was giving an acceptance speech. But how clients think of PwC may change.
“They gave me the wrong envelope,” Mr. Davis said at the time. “Wait till the NAACP hears about this.” Mr. Gilman, the crisis communications specialist, said he was curious to see if PwC kept the Oscars contract. “They have branded themselves around this event saying, ‘We’re trusted’ — that’s the implication. Now I think that will take a hit.”
He soon had the correct envelope in hand and announced the correct winner. “I ain’t gonna make no mistake this time, baby,” he said.
But never before has PricewaterhouseCoopers made such an enormous mistake at such a pivotal moment during the Oscars.
“I’m sure there will be a logical explanation for what happened, but they’re going to be the butt of jokes for late-night TV for at least a week, there will be memes written, and I think it’ll be interesting to see if they hold on to their contract,” Mr. Gilman said. “They have branded themselves around this event saying, ‘We’re trusted’ — that’s the implication. Now, I think that will take a hit.”