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2017-02-27 15:35:10
Oscars Mistake Threatens Reputation of PricewaterhouseCoopers

What went wrong?

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.

There are two identical sets of envelopes, handed out from either side of the stage.

The envelopes’ design was changed this year, to red paper with gold lettering, which may have made them harder to read.

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.

It all added up to a nightmarish several minutes for PricewaterhouseCoopers.

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 downtown Los Angeles, 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.

PricewaterhouseCoopers had given the presenters, Faye Dunaway and Warren Beatty, the wrong envelope.

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.

“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 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.

The envelope for best actress, the penultimate award of the night, came from one side of the stage.

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.

And Mr. Cullinan, who handed Mr. Beatty the envelope, clearly picked the wrong one.

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.

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.

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.

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.

PricewaterhouseCoopers declined to comment beyond the statement it put out early Monday morning accepting responsibility for the mix-up and apologizing to those involved.

“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.”

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.

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.”

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.

“They gave me the wrong envelope,” Mr. Davis said at the time. “Wait till the NAACP hears about this.”

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.”