1.   Direct-mail operators are accused of bypassing this three-tiered system and also of avoiding state taxes the distributors must pay.

2.   Foreign distributors must also pay hefty taxes -- the exact amount is a commercial secret -- advertising costs and other expenses.

3.   The distributors never paid for the merchandise, knowing that their accounts would later be credited for the amount that was owed.

4.   The movie distributors always pay healthy prices, one senior network sales executive said.