When a package of movies is licensed, a frequent issue is how to allocate the license fee among the pictures in the package. If all the pictures are of the same commercial worth, a simple division among the films would appear to be fair. But movies are not fungible commodities like jelly beans, and their value can vary greatly. Moreover, the worth of a movie can be subjective.
Producer Alan Ladd claimed that Warner Brothers undervalued and underpaid the license fees attributable to Blade Runner, Body Heat, Night Shift, Tequila Sunrise, Outland, Chariots of Fire, and the Police Academy franchise, consisting of the original and sequels 2, 3, 4, 5 and 6. Ladd was entitled to profit participation from the films.
Warner licensed packages of movies to broadcast television and cable networks. In a practice known as "straight-lining," Warner allocated the same share of the licensing fee to every movie in a package, regardless of its value to the licensee. The gravamen of Ladd's action against Warner is that by allocating the same portion of the licensing fee to every movie in a package without regard to the true value of each movie, Warner deprived Ladd of a fair allocation of the licensing fees to which Ladd was entitled as a profit participant. The complaint included causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud and negligent misrepresentation.
Ladd's expert testified that in treating every movie as though it had the same value, "the studio was not doing its expert work, as a provider or distributor of content, in weighing the value of each of these titles." Ladd was entitled to 5 percent of gross revenues on all films once Warner recouped its costs, except for Chariots of Fire, on which he was entitled to 2.5 percent. Thus, on the $97 million in under allocated licensing fees, Ladd's profit participation should have been $3,190,625.
In its opinion the California Court of Appeals held that Warner owed a duty to allocate license fees fairly to Ladd's movies. It mentioned that every contract in California contains an implied covenant of good faith and fair dealing that "neither party will do anything which will injure the right of the other to receive the benefits of the agreement." (Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 400.) The implied covenant "finds particular application in situations where one party is invested with a discretionary power affecting the rights of another. Such power must be exercised in good faith." (Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 372.)
In evaluating its movies, Warner internally assigned each movie a grade of A, B or C. All of Ladd's films were rated either A or B. The problem was that Warner allocated the same proportion of the license fee to each title in the package, irrespective of the letter grade.
The court noted that movies rated C were filler material, which is why they are bundled in a package together with A and B movies. Leslie Cohen, director of film acquisitions at HBO, testified that in one licensing deal, Warner added a group of old Tarzan movies to a licensing package at no cost. Warner then allocated a license fee of $40,000 to each of the Tarzan movies, thereby reducing other movies' allocations in the package.
Ladd's expert also testified that in non-straight lined film packages, movies that were less valuable than Ladd's received greater value. For example, there were times when Daffy Duck and Bugs Bunny animated films were allocated double the money that was allocated to Chariots of Fire, a valuable feature film which won multiple Academy Awards, including Best Picture. Those animated films were wholly owned by Warner, which means Warner kept every dollar generated by licensing fees on those films. Ladd's expert determined that Warner was over allocating license fees to movies that were studio owned or that did not have profit participants.
Warner Bros had appealed a judgment on a jury verdict awarding plaintiffs $3,190,625 in damages. Most aspects of the judgment were affirmed and Ladd was granted recovery of costs on the appeal. Ladd v. Warner Bros. Entertainment, Inc. B204015. Court of Appeals of California, Second District, Division Three. Filed May 25, 2010.
Thursday, May 27, 2010
Monday, April 05, 2010
Self Defense Checklist
Here is a summary of some of the most important ways film¬makers can protect their interests:
1. OBTAIN ALL PROMISES IN WRITING. Don’t accept oral assurances from a producer or studio executive. If they promise to spend $50,000 to promote your film, put that promise in writing. If there is not enough time to draft a long-form contract, insist on a letter agreement spelling out the essential terms.
2. REGISTER ALL WORKS WITH THE COPYRIGHT OFFICE. Before you pitch a story, write it out and register it with the U.S. Copyright Office for maximum protection.
3. OBTAIN AN ARBITRATION CLAUSE: Make sure contractual disputes are subject to binding arbitration where the prevailing party is entitled to reimbursement of legal fees and costs. Arbitration is less costly than litigation, and going to court is not much of a remedy if you can’t afford it.
4. WATER DOWN THE WARRANTIES: Warranties are promises. For example, when you sell a script, the buyer will want you to promise that you have not plagiarized another writer’s work or defamed someone. If you make an absolute warranty, you will be liable, even if you made a good-faith mistake and honestly believed that you had secured all the rights. Therefore, it is best to make your warranties “to the best of your knowledge and belief,” rather than making them absolute.
5. RETAIN POSSESSION OF YOUR MASTER ELEMENTS: Independent filmmakers should not relinquish possession of their master materials. Instead, give the distributor a lab access letter permitting it to order copies of your originals held in your lab under your name. This way, if the distributor ever breaches your contract or goes bankrupt, at least it will not possess your masters. You should also retain control of your original still photos and any artwork.
6. OBTAIN INSURANCE COVERAGE: Typically the producer purchases insurance, including Errors and Omissions (E&O) insurance, which protects the producer if he inadvertently infringes another’s rights (e.g., defames somebody, infringes their copyrighted material). It is best to purchase the E&O policy early so that coverage begins during preproduction. If you be¬gin production and a claim is made, insurance companies may decline to issue a policy or insist that the policy exclude the pre-existing claim. E&O insurance will pay (minus a deductible) for your defense and any damages that may arise from liability for inadvertently defaming someone or infringing their rights.
7. CHECK REFERENCES: The most airtight contract in the world offers limited protection against a scoundrel who ignores its terms. Carefully investigate any party with whom you contemplate do¬ing business. For distributors, confer with other filmmakers who have had dealings with a distributor over the course of several years. Check with the Filmmaker’s Clearinghouse on my website (www.marklitwak.com) to see how indie filmmakers rate various distributors. Usually, people who have lousy reputations have earned them.
8. TERMINATION CLAUSE: If the other party defaults, it is best if you have the right to terminate the contract and regain all rights to your film in addition to monetary damages. Writers should insist on a reversion clause so that if a script is bought and not produced within a reasonable amount of time (e.g., five years), all rights revert to the writer.
9. INVESTOR MONEY: Never make any “offers” to investors or accept any investor money without fully complying with all ap¬plicable state and federal securities laws. These laws apply when you offer investments to “passive” investors, which are investors who provide financing but are not actively involved in making the movie. Have an entertainment attorney with experience in securities prepare appropriate disclosure documents (e.g., a Private Placement Memorandum).
10. SAVE COPIES: Retain copies of all correspondence, contracts, and drafts of your screenplay. When you make a story sugges¬tion or enter into an oral agreement, follow up with a letter documenting the extent of your contribution.
11. DEFINE ADVERTISING EXPENSES: Distribution contracts should specify in writing the minimum amount the distributor will spend to advertise and promote a film. It is wise to cap ex¬penses as well. Obtain a detailed definition of which advertising, promotional, and marketing expenses are recoupable, thereby precluding the distributor from reimbursing itself for overhead and any inappropriate or undocumented expenses.
12. INDEMNITY: The filmmaker should be indemnified (reimbursed) for any losses incurred as a result of the distributor’s breach of contract, and for any liability arising from material added to the script/film by the distributor.
13. RIGHT TO INSPECT BOOKS AND RECORDS: The distributor should be required to maintain complete books and records with regard to all sales and rentals of the motion picture. The film¬maker should receive quarterly producer reports with a detailed accounting statement along with any payment due. In the event the filmmaker wants to examine the distributor’s books and records, he should be permitted to do so with reasonable notice. If an audit discloses a significant underpayment (e.g., $5,000), the distributor should reimburse the filmmaker the cost of the audit.
14. LATE PAYMENTS/LIENS: All monies due and payable to the filmmaker should be held in trust by the distributor. In addition, the filmmaker should have a lien on the filmmaker’s share of the gross receipts derived from the film. The distributor should be required to pay the filmmaker interest on any late payments.
15. REMEDIES: A filmmaker should be given at least three years from receipt of a financial statement, or from discovery of an accounting error, to object.
16. ASSIGNMENT: No assignment (transfer) of rights by the distributor should relieve it of its contractual obligations to the filmmaker unless the filmmaker consents to the assignment.
17. FILMMAKER DEFAULT: A distributor should give the filmmaker at least 10 days’ written notice of any alleged filmmaker default (breach of agreement) before taking any action to enforce its rights.
1. OBTAIN ALL PROMISES IN WRITING. Don’t accept oral assurances from a producer or studio executive. If they promise to spend $50,000 to promote your film, put that promise in writing. If there is not enough time to draft a long-form contract, insist on a letter agreement spelling out the essential terms.
2. REGISTER ALL WORKS WITH THE COPYRIGHT OFFICE. Before you pitch a story, write it out and register it with the U.S. Copyright Office for maximum protection.
3. OBTAIN AN ARBITRATION CLAUSE: Make sure contractual disputes are subject to binding arbitration where the prevailing party is entitled to reimbursement of legal fees and costs. Arbitration is less costly than litigation, and going to court is not much of a remedy if you can’t afford it.
4. WATER DOWN THE WARRANTIES: Warranties are promises. For example, when you sell a script, the buyer will want you to promise that you have not plagiarized another writer’s work or defamed someone. If you make an absolute warranty, you will be liable, even if you made a good-faith mistake and honestly believed that you had secured all the rights. Therefore, it is best to make your warranties “to the best of your knowledge and belief,” rather than making them absolute.
5. RETAIN POSSESSION OF YOUR MASTER ELEMENTS: Independent filmmakers should not relinquish possession of their master materials. Instead, give the distributor a lab access letter permitting it to order copies of your originals held in your lab under your name. This way, if the distributor ever breaches your contract or goes bankrupt, at least it will not possess your masters. You should also retain control of your original still photos and any artwork.
6. OBTAIN INSURANCE COVERAGE: Typically the producer purchases insurance, including Errors and Omissions (E&O) insurance, which protects the producer if he inadvertently infringes another’s rights (e.g., defames somebody, infringes their copyrighted material). It is best to purchase the E&O policy early so that coverage begins during preproduction. If you be¬gin production and a claim is made, insurance companies may decline to issue a policy or insist that the policy exclude the pre-existing claim. E&O insurance will pay (minus a deductible) for your defense and any damages that may arise from liability for inadvertently defaming someone or infringing their rights.
7. CHECK REFERENCES: The most airtight contract in the world offers limited protection against a scoundrel who ignores its terms. Carefully investigate any party with whom you contemplate do¬ing business. For distributors, confer with other filmmakers who have had dealings with a distributor over the course of several years. Check with the Filmmaker’s Clearinghouse on my website (www.marklitwak.com) to see how indie filmmakers rate various distributors. Usually, people who have lousy reputations have earned them.
8. TERMINATION CLAUSE: If the other party defaults, it is best if you have the right to terminate the contract and regain all rights to your film in addition to monetary damages. Writers should insist on a reversion clause so that if a script is bought and not produced within a reasonable amount of time (e.g., five years), all rights revert to the writer.
9. INVESTOR MONEY: Never make any “offers” to investors or accept any investor money without fully complying with all ap¬plicable state and federal securities laws. These laws apply when you offer investments to “passive” investors, which are investors who provide financing but are not actively involved in making the movie. Have an entertainment attorney with experience in securities prepare appropriate disclosure documents (e.g., a Private Placement Memorandum).
10. SAVE COPIES: Retain copies of all correspondence, contracts, and drafts of your screenplay. When you make a story sugges¬tion or enter into an oral agreement, follow up with a letter documenting the extent of your contribution.
11. DEFINE ADVERTISING EXPENSES: Distribution contracts should specify in writing the minimum amount the distributor will spend to advertise and promote a film. It is wise to cap ex¬penses as well. Obtain a detailed definition of which advertising, promotional, and marketing expenses are recoupable, thereby precluding the distributor from reimbursing itself for overhead and any inappropriate or undocumented expenses.
12. INDEMNITY: The filmmaker should be indemnified (reimbursed) for any losses incurred as a result of the distributor’s breach of contract, and for any liability arising from material added to the script/film by the distributor.
13. RIGHT TO INSPECT BOOKS AND RECORDS: The distributor should be required to maintain complete books and records with regard to all sales and rentals of the motion picture. The film¬maker should receive quarterly producer reports with a detailed accounting statement along with any payment due. In the event the filmmaker wants to examine the distributor’s books and records, he should be permitted to do so with reasonable notice. If an audit discloses a significant underpayment (e.g., $5,000), the distributor should reimburse the filmmaker the cost of the audit.
14. LATE PAYMENTS/LIENS: All monies due and payable to the filmmaker should be held in trust by the distributor. In addition, the filmmaker should have a lien on the filmmaker’s share of the gross receipts derived from the film. The distributor should be required to pay the filmmaker interest on any late payments.
15. REMEDIES: A filmmaker should be given at least three years from receipt of a financial statement, or from discovery of an accounting error, to object.
16. ASSIGNMENT: No assignment (transfer) of rights by the distributor should relieve it of its contractual obligations to the filmmaker unless the filmmaker consents to the assignment.
17. FILMMAKER DEFAULT: A distributor should give the filmmaker at least 10 days’ written notice of any alleged filmmaker default (breach of agreement) before taking any action to enforce its rights.
Saturday, February 13, 2010
Distributing Your Indie Film
Filmmakers expend so much effort to produce their film that they often don’t give much thought to distribution until the movie is complete. Many filmmakers believe that if they just make a good film, distribution will take care of itself. However, securing distribution is often more challenging than raising financing and producing the movie.
One’s leverage in negotiating a distribution deal depends on whether distributors perceive the film as desirable. Of course, films cannot be appraised like real estate, as every picture is unique and there are no sure-fire criteria to determine a film’s commercial worth. I don’t know of a single industry executive who could have predicted the success of Slumdog Millionaire or Precious. The major studios, despite all their market research and expertise, frequently release big budget flops. While no one can accurately predict the commercial worth of a film, there are techniques and strategies that can be employed to improve one’s prospects. Even filmmakers with low-budget pictures with limited commercial appeal can usually improve upon the initial offer if they are savvy. An experienced negotiator can obtain many concessions just by knowing what to ask for.
In a typical deal, the distributor secures the right to distribute the movie in one or more media (e.g., theatrical, home video, television). The distributor pays for all distribution, advertising and marketing costs. Both parties share revenue derived from the film.
Competition improves terms. Giving one distributor an early peek at your film is usually a bad idea. If the distributor passes on the film, word gets around and other acquisition executives may not bother to view your film. On the other hand, if the distributor likes the film, a pre-emptive bid is likely, and you may only have a day or two to decide whether to accept the offer. If you decline, you may be rejecting the best deal you will ever receive. If you accept, you foreclose the possibility of a better deal tomorrow. Thus, you will be forced to make a decision without knowing where you stand in the marketplace and what other companies might offer. That is why it is important to orchestrate the release of your film to potential buyers so as to create maximum competition and enhance your leverage. Here are some guidelines:
1) NO SNEAK PREVIEWS: It is best not to screen your film for distributors until it is complete. Executives may beg to see a rough cut. They may assure you, "Don’t worry. We are professionals. We can imagine what the film will look like with sound and titles." Don’t believe them. Most people cannot extrapolate. They will view your unfinished film and perceive it as amateurish. First impressions last.
2) SCREEN IT BEFORE A CROWD: It is usually better to invite executives to a screening than to send them DVD. If you send a DVD to a busy executive, he will pop it in his machine and hit the pause button as soon as the phone rings. Then he will watch another few minutes until his secretary interrupts. After numerous distractions, he passes on your film because it is "too choppy."
You want an executive to view your film in a dark room, away from distractions, surrounded by a live audience--hopefully one that loves your film. So rent a screening room at a convenient location, invite all the acquisition executives you think appropriate, and pack the rest of the theater with your friends and relatives, especially Uncle Bob with his infectious laugh. Perhaps the best venue for exhibiting a picture is at a film festival. If the film is warmly received, your bargaining position will be strengthened. If an executive views your film surrounded by an appreciative audience, it may affect his perception of the film.
Moreover, festivals can generate favorable publicity. Most publications only review films about to be released theatrically in their community. Thus films seeking distribution are not reviewed. But entertainment trade papers and selected publications will review pictures exhibited at major festivals.
When arranging a screening, book a theater large enough to hold everyone expected to attend but not so spacious that your viewers are sitting in a sea of empty seats. Filling out the audience with cast, crew and friends may be a good idea as these people are likely to respond positively. At the screening, have someone at the door collecting business cards or taking names of those attending. That way you can determine which companies have seen the film and which have not.
3) DO NOT GIVE AWAY YOUR FESTIVAL PREMIERE LIGHTLY: Carefully plan a festival strategy. I have seen filmmakers give their premiere to minor festivals and thereby disqualify themselves from participating in more significant ones. You can participate in lesser festivals later. If you are turned down by an important festival, the worse that happens is that you incur a small delay in seeking distribution. No one knows which festivals passed on your film unless you tell them.
4) TIMING IS EVERYTHING: You should sell your film when buyers are hungry for product. Distributors that acquire films for international distribution plan their activities around a market calendar. The major film markets are 1) AFM in the fall in Santa Monica, California, 2) Berlin in February in Germany, 3) Cannes in May in Cannes, France. There are also television markets including NATPE in the U.S.A., and MIP and MIP-COM in France.
Distributors are hungriest for product when a market is rapidly approaching and they do not have enough fresh inventory. A distributor may spend $90,000 or more to attend Cannes, and if it appears the company will have nothing new to sell, the executives panic. This is the best time to approach a distributor. Give your distributor enough time to include your film in their marketing efforts. A movie acquired at the last moment will often receive rushed and slipshod treatment. As a result, the film may sell poorly at the first market, which is the most critical market for a picture. At subsequent markets, the film is no longer new product. The best time to approach a distributor is 60-90 days before a market. Assuming a distributor wants to acquire rights to your film, it may take a month or longer to negotiate a deal.
One’s leverage in negotiating a distribution deal depends on whether distributors perceive the film as desirable. Of course, films cannot be appraised like real estate, as every picture is unique and there are no sure-fire criteria to determine a film’s commercial worth. I don’t know of a single industry executive who could have predicted the success of Slumdog Millionaire or Precious. The major studios, despite all their market research and expertise, frequently release big budget flops. While no one can accurately predict the commercial worth of a film, there are techniques and strategies that can be employed to improve one’s prospects. Even filmmakers with low-budget pictures with limited commercial appeal can usually improve upon the initial offer if they are savvy. An experienced negotiator can obtain many concessions just by knowing what to ask for.
In a typical deal, the distributor secures the right to distribute the movie in one or more media (e.g., theatrical, home video, television). The distributor pays for all distribution, advertising and marketing costs. Both parties share revenue derived from the film.
Competition improves terms. Giving one distributor an early peek at your film is usually a bad idea. If the distributor passes on the film, word gets around and other acquisition executives may not bother to view your film. On the other hand, if the distributor likes the film, a pre-emptive bid is likely, and you may only have a day or two to decide whether to accept the offer. If you decline, you may be rejecting the best deal you will ever receive. If you accept, you foreclose the possibility of a better deal tomorrow. Thus, you will be forced to make a decision without knowing where you stand in the marketplace and what other companies might offer. That is why it is important to orchestrate the release of your film to potential buyers so as to create maximum competition and enhance your leverage. Here are some guidelines:
1) NO SNEAK PREVIEWS: It is best not to screen your film for distributors until it is complete. Executives may beg to see a rough cut. They may assure you, "Don’t worry. We are professionals. We can imagine what the film will look like with sound and titles." Don’t believe them. Most people cannot extrapolate. They will view your unfinished film and perceive it as amateurish. First impressions last.
2) SCREEN IT BEFORE A CROWD: It is usually better to invite executives to a screening than to send them DVD. If you send a DVD to a busy executive, he will pop it in his machine and hit the pause button as soon as the phone rings. Then he will watch another few minutes until his secretary interrupts. After numerous distractions, he passes on your film because it is "too choppy."
You want an executive to view your film in a dark room, away from distractions, surrounded by a live audience--hopefully one that loves your film. So rent a screening room at a convenient location, invite all the acquisition executives you think appropriate, and pack the rest of the theater with your friends and relatives, especially Uncle Bob with his infectious laugh. Perhaps the best venue for exhibiting a picture is at a film festival. If the film is warmly received, your bargaining position will be strengthened. If an executive views your film surrounded by an appreciative audience, it may affect his perception of the film.
Moreover, festivals can generate favorable publicity. Most publications only review films about to be released theatrically in their community. Thus films seeking distribution are not reviewed. But entertainment trade papers and selected publications will review pictures exhibited at major festivals.
When arranging a screening, book a theater large enough to hold everyone expected to attend but not so spacious that your viewers are sitting in a sea of empty seats. Filling out the audience with cast, crew and friends may be a good idea as these people are likely to respond positively. At the screening, have someone at the door collecting business cards or taking names of those attending. That way you can determine which companies have seen the film and which have not.
3) DO NOT GIVE AWAY YOUR FESTIVAL PREMIERE LIGHTLY: Carefully plan a festival strategy. I have seen filmmakers give their premiere to minor festivals and thereby disqualify themselves from participating in more significant ones. You can participate in lesser festivals later. If you are turned down by an important festival, the worse that happens is that you incur a small delay in seeking distribution. No one knows which festivals passed on your film unless you tell them.
4) TIMING IS EVERYTHING: You should sell your film when buyers are hungry for product. Distributors that acquire films for international distribution plan their activities around a market calendar. The major film markets are 1) AFM in the fall in Santa Monica, California, 2) Berlin in February in Germany, 3) Cannes in May in Cannes, France. There are also television markets including NATPE in the U.S.A., and MIP and MIP-COM in France.
Distributors are hungriest for product when a market is rapidly approaching and they do not have enough fresh inventory. A distributor may spend $90,000 or more to attend Cannes, and if it appears the company will have nothing new to sell, the executives panic. This is the best time to approach a distributor. Give your distributor enough time to include your film in their marketing efforts. A movie acquired at the last moment will often receive rushed and slipshod treatment. As a result, the film may sell poorly at the first market, which is the most critical market for a picture. At subsequent markets, the film is no longer new product. The best time to approach a distributor is 60-90 days before a market. Assuming a distributor wants to acquire rights to your film, it may take a month or longer to negotiate a deal.
Monday, December 28, 2009
Purchasing Life Story Rights
Before you decide to purchase the rights to a person’s life story, it is worth considering what you are buying. When you buy the rights to portray someone in film or television, you are buying a bundle of rights. These rights include protection from suits based on defamation, invasion of privacy and the right to publicity. You may also be buying the cooperation of the subject and his family or heirs. Perhaps you want access to diaries and letters that are not otherwise available to you.
If the subject of the life story is deceased, much of the rationale for buying these rights disappears, since defamation and invasion of privacy actions protect personal rights that do not descend to the estate. In other words, people can spread lies and falsehoods about the dead, reveal their innermost secrets, and their heirs cannot sue for defamation or invasion of privacy on behalf of the deceased person. A writer could publish a revisionist history of George Washington, portraying our first President as a child molester and a thief, and his heirs would have no remedy. So when a subject is deceased, a producer has less need for a depiction release. The right of publicity may or may not descend to one’s heirs, depending on state law.
It is also important to consider whether the subject of your film is a private individual or a public official or public figure. Public officials and figures have opened more of their lives to public scrutiny, and consequently more of their lives can be portrayed without invading their privacy. Moreover, public officials and figures must meet a much higher burden of proof in order to establish defamation or invasion of privacy. They must prove that a defamer intentionally spread a falsehood or acted with reckless disregard of the truth.
One should also consider the possibility of fictionalizing a true story. If you change the names of the individuals involved, change the location and make other alterations so that the real-life people are not recognizable to the public, you could avoid the necessity of a depiction release.
Keep in mind, however, that the story’s appeal may be predicated on the fact that it is a true story. In such a case, fictionalization is not a good alternative. Suppose you wanted to do the Jessica McClure story, describing how a Texas community rallied to the rescue of a young girl who fell down a well-hole. Here you would want to bill the movie as The Jessica McClure Story. That is why viewers would tune in.
Terms of the Agreement
In negotiating for life-story rights, there are a number of important issues that need to be resolved. At the outset, the parties must determine the extent of the rights granted. Does the grant include remakes, sequels, television series, merchandising, novelization, live-stage rights and radio rights? Are the rights worldwide? Buyers will usually want as broad a grant as possible. The seller may insist on retaining certain rights.
The buyer must also consider other releases that may be needed. What about the subject’s spouse, children, friends and relatives? Will these people consent to be portrayed? Will the subject ask his friends and relatives to cooperate? Can these secondary characters be fictionalized? If the producer is planning an ensemble piece about a basketball team, it makes no sense to sign up players one by one, hoping to get them all. A smart producer will gather the team in a room and purchase all of the rights or none.
Another issue is whether the rights can be assigned to a studio or production company. If the buyer is a producer, she will often need to assign such rights to a studio or network later as part of a financing/distribution agreement.
The purchase of life-story rights can be structured as either an option/purchase deal or as an outright sale, often with a reversion clause. A reversion clause provides that in the event the rights are not exploited within a certain number of years (i.e., the movie is not made), then all rights would revert to the subject. This provision protects the subject if he has sold rights to his life story to a producer who never uses them, and some time later another producer is interested in making such a film.
The agreement should recite the consideration exchanged. Consideration is a legal term of art. Consideration is that which is given in exchange for a benefit received. It is a necessary element for the existence of a contract. A contract is only binding with consideration. It is what distinguishes a contract from a gift, which may be revocable.
Consideration is usually money, but it can be anything of value. As a general principle, courts do not review the adequacy of consideration. In other words, should you be foolish enough to agree to sell your brand-new car, worth $15,000, for only $5,000, don’t expect a judge to rescue you from the results of your poor judgment. Unless there was some sort of fraud or duress involved, the contract will be enforced, although it may be unfair to one party.
To ensure that a contract is binding, agreements often recite: “For ten dollars and other valuable consideration.” This clause establishes that there has been an exchange of value, even if it is nominal consideration. Make sure the consideration is actually paid. It is wise to pay by check so that you will have the cancelled check as proof of payment.
Mutually exchanged promises can be adequate consideration. For example, a producer’s efforts to develop a project could be deemed adequate consideration for an option. But to be sure their contracts are enforceable; producers may want to pay some money for the option. There are some exceptional circumstances when courts will throw out a contract if the terms of the contract are unconscionable.
There are other ways to compensate a subject of a life story besides a flat fixed fee. You could give the subject points (percentage of net profits), consulting fees and/or bonuses to be paid when the film is exploited in ancillary markets.
An important part of any depiction agreement is the “Warranties and Representations” clause. A warranty is a promise. The buyer will want the seller to promise never to sue for an invasion of his rights of publicity and privacy, or for defamation, even if the buyer takes some creative liberties in telling the story. The warranties must cover all conceivable situations. No one wants to buy a lawsuit.
There will also be a provision that gives the buyer the right to embellish, fictionalize, dramatize and adapt the life story in any way he chooses. This is a frequent sticking point in negotiations. The subject is delighted to be asked to have her story told on the silver screen, but when you present her with a depiction release, she becomes concerned. She asks, “This document says you can change my story any way you like and I can’t sue for defamation. How do I know you won’t portray me as a monster?”
A producer may reply: “Trust me, trust me.” Sometimes that will work. But the subject may respond: “I have no intention of trusting any of you charming Hollywood types. I want script approval. Write your script, and if I like it, I’ll sign the release.”
Can a producer give a subject script approval? No sane producer would. No producer is going to expend a lot of time and money developing a script only to find that the subject has changed her mind or is unreasonably withholding approval.
If the subject refuses to give the producer carte blanche, are any compromises possible? Yes. The subject could have approval over the treatment or selection of the writer. Perhaps the subject will figure that if she approves only a classy writer, her portrayal will be acceptable.
Alternatively, the producer could offer to make the subject a creative or technical consultant to the production. “You’ll be right there by the director’s side,” says the producer, “giving him advice and suggestions to ensure that everything is authentic.” The producer may not mention that the director doesn’t want the subject on the set and is not required to accept her suggestions.
Another possible compromise could limit the subject matter and period portrayed. Perhaps the subject is primarily concerned that an embarrassing incident in her life not be re-enacted in Panavision. The release could say that certain incidents (e.g., a divorce) are not included in the release. Or the release could cover limited periods of the subject’s life (e.g., only those incidents that occurred before 1947).
Finally, the subject might have the right to determine screen notice. She could decide if the film will be billed as a true story or a dramatized account. Alternatively, she could decide whether real names are used for the characters.
Excerpt from Dealmaking in the Film and Television Industry, 3rd Edition, by Mark Litwak.
If the subject of the life story is deceased, much of the rationale for buying these rights disappears, since defamation and invasion of privacy actions protect personal rights that do not descend to the estate. In other words, people can spread lies and falsehoods about the dead, reveal their innermost secrets, and their heirs cannot sue for defamation or invasion of privacy on behalf of the deceased person. A writer could publish a revisionist history of George Washington, portraying our first President as a child molester and a thief, and his heirs would have no remedy. So when a subject is deceased, a producer has less need for a depiction release. The right of publicity may or may not descend to one’s heirs, depending on state law.
It is also important to consider whether the subject of your film is a private individual or a public official or public figure. Public officials and figures have opened more of their lives to public scrutiny, and consequently more of their lives can be portrayed without invading their privacy. Moreover, public officials and figures must meet a much higher burden of proof in order to establish defamation or invasion of privacy. They must prove that a defamer intentionally spread a falsehood or acted with reckless disregard of the truth.
One should also consider the possibility of fictionalizing a true story. If you change the names of the individuals involved, change the location and make other alterations so that the real-life people are not recognizable to the public, you could avoid the necessity of a depiction release.
Keep in mind, however, that the story’s appeal may be predicated on the fact that it is a true story. In such a case, fictionalization is not a good alternative. Suppose you wanted to do the Jessica McClure story, describing how a Texas community rallied to the rescue of a young girl who fell down a well-hole. Here you would want to bill the movie as The Jessica McClure Story. That is why viewers would tune in.
Terms of the Agreement
In negotiating for life-story rights, there are a number of important issues that need to be resolved. At the outset, the parties must determine the extent of the rights granted. Does the grant include remakes, sequels, television series, merchandising, novelization, live-stage rights and radio rights? Are the rights worldwide? Buyers will usually want as broad a grant as possible. The seller may insist on retaining certain rights.
The buyer must also consider other releases that may be needed. What about the subject’s spouse, children, friends and relatives? Will these people consent to be portrayed? Will the subject ask his friends and relatives to cooperate? Can these secondary characters be fictionalized? If the producer is planning an ensemble piece about a basketball team, it makes no sense to sign up players one by one, hoping to get them all. A smart producer will gather the team in a room and purchase all of the rights or none.
Another issue is whether the rights can be assigned to a studio or production company. If the buyer is a producer, she will often need to assign such rights to a studio or network later as part of a financing/distribution agreement.
The purchase of life-story rights can be structured as either an option/purchase deal or as an outright sale, often with a reversion clause. A reversion clause provides that in the event the rights are not exploited within a certain number of years (i.e., the movie is not made), then all rights would revert to the subject. This provision protects the subject if he has sold rights to his life story to a producer who never uses them, and some time later another producer is interested in making such a film.
The agreement should recite the consideration exchanged. Consideration is a legal term of art. Consideration is that which is given in exchange for a benefit received. It is a necessary element for the existence of a contract. A contract is only binding with consideration. It is what distinguishes a contract from a gift, which may be revocable.
Consideration is usually money, but it can be anything of value. As a general principle, courts do not review the adequacy of consideration. In other words, should you be foolish enough to agree to sell your brand-new car, worth $15,000, for only $5,000, don’t expect a judge to rescue you from the results of your poor judgment. Unless there was some sort of fraud or duress involved, the contract will be enforced, although it may be unfair to one party.
To ensure that a contract is binding, agreements often recite: “For ten dollars and other valuable consideration.” This clause establishes that there has been an exchange of value, even if it is nominal consideration. Make sure the consideration is actually paid. It is wise to pay by check so that you will have the cancelled check as proof of payment.
Mutually exchanged promises can be adequate consideration. For example, a producer’s efforts to develop a project could be deemed adequate consideration for an option. But to be sure their contracts are enforceable; producers may want to pay some money for the option. There are some exceptional circumstances when courts will throw out a contract if the terms of the contract are unconscionable.
There are other ways to compensate a subject of a life story besides a flat fixed fee. You could give the subject points (percentage of net profits), consulting fees and/or bonuses to be paid when the film is exploited in ancillary markets.
An important part of any depiction agreement is the “Warranties and Representations” clause. A warranty is a promise. The buyer will want the seller to promise never to sue for an invasion of his rights of publicity and privacy, or for defamation, even if the buyer takes some creative liberties in telling the story. The warranties must cover all conceivable situations. No one wants to buy a lawsuit.
There will also be a provision that gives the buyer the right to embellish, fictionalize, dramatize and adapt the life story in any way he chooses. This is a frequent sticking point in negotiations. The subject is delighted to be asked to have her story told on the silver screen, but when you present her with a depiction release, she becomes concerned. She asks, “This document says you can change my story any way you like and I can’t sue for defamation. How do I know you won’t portray me as a monster?”
A producer may reply: “Trust me, trust me.” Sometimes that will work. But the subject may respond: “I have no intention of trusting any of you charming Hollywood types. I want script approval. Write your script, and if I like it, I’ll sign the release.”
Can a producer give a subject script approval? No sane producer would. No producer is going to expend a lot of time and money developing a script only to find that the subject has changed her mind or is unreasonably withholding approval.
If the subject refuses to give the producer carte blanche, are any compromises possible? Yes. The subject could have approval over the treatment or selection of the writer. Perhaps the subject will figure that if she approves only a classy writer, her portrayal will be acceptable.
Alternatively, the producer could offer to make the subject a creative or technical consultant to the production. “You’ll be right there by the director’s side,” says the producer, “giving him advice and suggestions to ensure that everything is authentic.” The producer may not mention that the director doesn’t want the subject on the set and is not required to accept her suggestions.
Another possible compromise could limit the subject matter and period portrayed. Perhaps the subject is primarily concerned that an embarrassing incident in her life not be re-enacted in Panavision. The release could say that certain incidents (e.g., a divorce) are not included in the release. Or the release could cover limited periods of the subject’s life (e.g., only those incidents that occurred before 1947).
Finally, the subject might have the right to determine screen notice. She could decide if the film will be billed as a true story or a dramatized account. Alternatively, she could decide whether real names are used for the characters.
Excerpt from Dealmaking in the Film and Television Industry, 3rd Edition, by Mark Litwak.
Monday, November 23, 2009
IFTA Posts Summaries of Arbitration Awards
Many industry disputes involving independent film or international sales are resolved under IFTA (formerly AFMA) arbitration. IFTA now posts summaries of their awards which can be interesting reading. The summaries are available at: http://www.ifta-online.org/IndustryServices/RecentAwards.aspx
The summaries name the parties to the disputes and briefly describe which party prevailed.
According to IFTA, it has administered the resolution of disputes in more than 1700 cases involving more than US$500 million in claims. IFTA Arbitration may be used for a wide variety of domestic and international entertainment disputes, such as those arising out of production agreements, motion picture, television and multimedia licensing agreements, financing agreements, film exhibition agreements, and sales agency agreements, to name a few.
METHOD FEST
The 12th annual The Method Fest independent film festival is currently accepting entries for the 2010 festival, March 25 April 1, in Calabasas, California. Method Fest is dedicated to showcasing breakout acting performances in story and character-driven independent feature and short films. The Method Fest provides a great opportunity to receive Los Angeles reviews and to have films seen by distributors based in Los Angeles. The submission deadlines are:
Early Deadline - December 1, 2009;
Late Entry Deadline February 1, 2010.
You can print / download the entry form for the 12th annual Method Fest on the festival web site, www.methodfest.com. Filmmakers can also submit via www.withoutabox.com.
Over the past 11 years The Method fest has launched over 120 feature films into the marketplace (theatrical releases, DVD/video distribution, TV deals), and has brought to attention actors like Naomi Watts, Jeremy Sisto, Hunter Parrish, Michael Angarano, Jena Malone, Tamara Hope, Hill Harper, Navid Negahban and Eugene Byrd, to name just a few.
Full disclosure: I am an advisor to the festival.
If you have any questions, you can email don@methodfest.com or call (310) 535-9230.
TAX INCENTIVE UPDATE
Hawaii has laid off its film commissioner Donne Dawson and reduced staff in order to economize. Incentives under Acts 215 and 221 (which provide a 100% tax credit for 5 years, dropping to 80% for 2009/2010) sunsets at the end of 2010, but the 15-20% refundable credit remains in place.
Additional info at:
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2009/11/state-budget-cuts-hit-hawaii-film-office.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+newsandbuzz+(News+%26+Buzz)
The new tax incentive guide put out by The Incentives Office is available for free at:
http://fs6.formsite.com/jeff5000/
The regional film commissions (Big Island, Honolulu, Kauai and Maui) are still operational.
THE DIFFERENCE BETWEEN MARKETS & FESTIVALS
Some filmmakers are confused about the difference between a film festival and a film market. Markets are only open to the trade: A member of the public cannot buy a ticket to see a film at a market or participate in it. At markets, films are screened for buyers. Actually, it would be more accurate to call these buyers “licensees” since they usually do not buy films outright but license distribution rights for a term in a territory. One buyer might be a German broadcaster interested in acquiring films to distribute by cable television in Germany. Another buyer might be a Turkish theatre-chain owner who wants to acquire theatrical rights for Turkey. Some buyers want all media rights (theatrical, television, and home video) in a territory, and may sub-license rights to other distributors.
Markets are an opportunity for buyers worldwide to converge at one location to meet with sellers of film rights. In the course of a market, a buyer can talk to many sellers and view multiple films. Deals may be signed during the market or afterwards. The market is also an opportunity for sellers and buyers to socialize, and to meet people with whom they transact business long-distance.
Festivals, on the other hand, are open to the public. Anyone can buy a ticket to a screening, although at the most popular festivals, there may not be enough tickets to go around. Festivals can provide a test of audience appeal. A festival screening may be the first opportunity for the filmmaker to see how moviegoers react to his work. Of course, festival-goers tend to be better-educated, wealthier, and more avid moviegoers than the average moviegoer. Nevertheless, a festival screening does provide some good feedback.
Festivals serve two important functions. First, they expose films to distributors. Acceptance at a top festival will induce many acquisition executives to take a look at your film, either at the festival or by asking to screen it outside the festival. Winning a top festival may make your film highly desirable in the eyes of distributors, and may lead to a furious bidding war.
Second, festivals can be used to generate publicity for a film and draw the public’s attention to it. Thus, once distribution has been secured, the distributor may want the film in a festival to build awareness. If the timing of the festival is near the release date for the film, participation in the festival may further publicize the pic¬ture. On the other hand, if the film is not going to be released for another six months, publicity now may not be helpful, and can be harmful. That is because when the film is released, the prior coverage will have been forgotten by the public, and the news media will consider the film old news. The media may not review the film again or write articles about it.
Except from Risky Business, 2nd Edition by Mark Litwak.
The summaries name the parties to the disputes and briefly describe which party prevailed.
According to IFTA, it has administered the resolution of disputes in more than 1700 cases involving more than US$500 million in claims. IFTA Arbitration may be used for a wide variety of domestic and international entertainment disputes, such as those arising out of production agreements, motion picture, television and multimedia licensing agreements, financing agreements, film exhibition agreements, and sales agency agreements, to name a few.
METHOD FEST
The 12th annual The Method Fest independent film festival is currently accepting entries for the 2010 festival, March 25 April 1, in Calabasas, California. Method Fest is dedicated to showcasing breakout acting performances in story and character-driven independent feature and short films. The Method Fest provides a great opportunity to receive Los Angeles reviews and to have films seen by distributors based in Los Angeles. The submission deadlines are:
Early Deadline - December 1, 2009;
Late Entry Deadline February 1, 2010.
You can print / download the entry form for the 12th annual Method Fest on the festival web site, www.methodfest.com. Filmmakers can also submit via www.withoutabox.com.
Over the past 11 years The Method fest has launched over 120 feature films into the marketplace (theatrical releases, DVD/video distribution, TV deals), and has brought to attention actors like Naomi Watts, Jeremy Sisto, Hunter Parrish, Michael Angarano, Jena Malone, Tamara Hope, Hill Harper, Navid Negahban and Eugene Byrd, to name just a few.
Full disclosure: I am an advisor to the festival.
If you have any questions, you can email don@methodfest.com or call (310) 535-9230.
TAX INCENTIVE UPDATE
Hawaii has laid off its film commissioner Donne Dawson and reduced staff in order to economize. Incentives under Acts 215 and 221 (which provide a 100% tax credit for 5 years, dropping to 80% for 2009/2010) sunsets at the end of 2010, but the 15-20% refundable credit remains in place.
Additional info at:
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2009/11/state-budget-cuts-hit-hawaii-film-office.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+newsandbuzz+(News+%26+Buzz)
The new tax incentive guide put out by The Incentives Office is available for free at:
http://fs6.formsite.com/jeff5000/
The regional film commissions (Big Island, Honolulu, Kauai and Maui) are still operational.
THE DIFFERENCE BETWEEN MARKETS & FESTIVALS
Some filmmakers are confused about the difference between a film festival and a film market. Markets are only open to the trade: A member of the public cannot buy a ticket to see a film at a market or participate in it. At markets, films are screened for buyers. Actually, it would be more accurate to call these buyers “licensees” since they usually do not buy films outright but license distribution rights for a term in a territory. One buyer might be a German broadcaster interested in acquiring films to distribute by cable television in Germany. Another buyer might be a Turkish theatre-chain owner who wants to acquire theatrical rights for Turkey. Some buyers want all media rights (theatrical, television, and home video) in a territory, and may sub-license rights to other distributors.
Markets are an opportunity for buyers worldwide to converge at one location to meet with sellers of film rights. In the course of a market, a buyer can talk to many sellers and view multiple films. Deals may be signed during the market or afterwards. The market is also an opportunity for sellers and buyers to socialize, and to meet people with whom they transact business long-distance.
Festivals, on the other hand, are open to the public. Anyone can buy a ticket to a screening, although at the most popular festivals, there may not be enough tickets to go around. Festivals can provide a test of audience appeal. A festival screening may be the first opportunity for the filmmaker to see how moviegoers react to his work. Of course, festival-goers tend to be better-educated, wealthier, and more avid moviegoers than the average moviegoer. Nevertheless, a festival screening does provide some good feedback.
Festivals serve two important functions. First, they expose films to distributors. Acceptance at a top festival will induce many acquisition executives to take a look at your film, either at the festival or by asking to screen it outside the festival. Winning a top festival may make your film highly desirable in the eyes of distributors, and may lead to a furious bidding war.
Second, festivals can be used to generate publicity for a film and draw the public’s attention to it. Thus, once distribution has been secured, the distributor may want the film in a festival to build awareness. If the timing of the festival is near the release date for the film, participation in the festival may further publicize the pic¬ture. On the other hand, if the film is not going to be released for another six months, publicity now may not be helpful, and can be harmful. That is because when the film is released, the prior coverage will have been forgotten by the public, and the news media will consider the film old news. The media may not review the film again or write articles about it.
Except from Risky Business, 2nd Edition by Mark Litwak.
Tuesday, November 03, 2009
JUST PUBLISHED! 2ND EDITION RISKY BUSINESS
UPDATED AND REVISED
$26.95
CONTENTS
FILMMAKER SELF-DEFENSE CHECKLIST
1. ORGANIZING YOUR COMPANY
Choice of Business Entity
Sole Proprietorship
General Partnership
Limited Partnership
Corporation
Limited Liability Company (LLC)
2. COLLABORATIONS AND CO-PRODUCTIONS
International Co-Productions
Production Incentives
Contract: Co-Production Agreement
Contract: Distributor Sales Agency Agreement
3. FINANCING INDEPENDENT FILMS
Loans
Contract: Promissory Note
Contract: Promissory Note with Guarantee
Borrowing Against Pre-sale Agreements
Investor Financing
Registration and Exemptions
504 Offering
505 Offering
506 Offering
Intrastate Offering Exemption
Accredited Investor Exemption
California Limited Offering Exemption
Anti-Fraud Provisions
Distributor Supplied Financing
Finders
Contract: Finder Agreement
Contract: International Distribution License
Agreement
4. ATTRACTING INVESTORS
Checklist for Film Investors
5. TACTICS AND STRATEGY IN ARRANGING
.DISTRIBUTION
How Much Is My Film Worth?
How Distributors Evaluate a Film
Sources of Revenue
Increasing Your Leverage
Film Festivals
Working the Festival Circuit
Balancing Risks and Rewards
The Acquisition/Distribution Agreement
Investigate the Distributor
6. THE DISTRIBUTION AGREEMENT
Principle Terms of a Distribution Agreement
Territory
Media
Term
Distribution Fee
Distribution and Marketing Expenses
Advances and Guarantees
Consultation Rights
Warranties and Representations
Accounting
Arbitration
Insurance
Termination
Allocation of Package Revenue
Governing Law
Territorial Minimums
Access to Master Materials
Return of Materials
Delivery
Contract: Lab Access Letter
Contract: International Distribution Agreement
(Filmmaker-friendly version)
7. WHEN A DISTRIBUTOR DEFAULTS
Selecting a Distributor
Creative Accounting
Conducting an Audit
How Revenue Is Divided
Creative Accounting Pitfalls
Accounting Terms
Defensive Tactics
A Filmmaker's Bill of Rights
8. LOOKING FORWARD
APPENDIX A - DISTRIBUTION
Delivery Checklist
Certificate of Origin
Statement of Prior Distribution
Statement of Distribution Restrictions and Obligations
Major Deal Points: Acquisition/Distribution Agreement
Copyright Security Agreement
GLOSSARY OF TERMS
INDEX
CONTRACTS AND FORMS*
Co-Production Agreement
Promissory Note
Promissory Note with Guarantee
IFTA International Schedule of Definitions
Finder Agreement
International Distribution License Agreement
Lab Access Letter
IFTA Rider to International Distribution Agreement
International Distribution Agreement
(Filmmaker-friendly version)
COPIES AVAILABLE FOR IMMEDIATE SHIPMENT. GO TO WWW.http://www.marklitwak.com/store/ to order or call (310) 859 9595 and speak to Katrina.
Friday, October 23, 2009
Craigslist Wins Motion for Judgment on the Pleadings
Federal Judge John F. Grady in Illinois has granted Craigslist's motion for a judgment on the pleadings in a suit over the website's "erotic services" internet classified listings.
Thomas Dart, the sheriff of Cook County, Illinois, alleged that Craigslist facilitated prostitution and constituted a public nuisance. The Sheriff claimed that Craigslist knowingly arranges meetings for the purpose of prostitution and directs people to places of prostitution. Dart asked for an injunction prohibiting Craigslist from publishing erotic services listings, and sought to recover the money that his office spent investigating prostitution on the site. The Sheriff claims to have arrested over 200 people through Craigslist since January of 2007.
The court held that Craigslist was shielded from liability by Section 230 of the Communications Decency Act.
.
http://blogs.findlaw.com/courtside/2009/10/craiglist-sure-to-be-pleased-by-judges-ruling-in-erotic-services-lawsuit.html
U.S. to Extradite Polanksi
The United States has formally requested that Switzerland extradite film director Roman Polanski, 76, who fled California in 1977 before sentencing for sexually assaulted a 13-year-old girl.
Swiss authorities said that director Roman Polanski could spend up to two years in prison if he was extradited back to the United States for sentencing in a sexual assault case. Los Angeles County prosecutors have declined to reveal what kind of sentence they would seek if he is returned to Los Angeles.
The extradition process is complex and could delay Polanski’s return if he challenges the request. A Swiss court recently rejected a bid by Polanski for release on bail, saying the risk that he would flee was too great.
Production Incentive Update
According to Entertainment Partners http://www.productionincentives.com/ Iowa has suspended its incentive program and Connecticut recently passed budget bill changes the existing motion picture and digital animation production and infrastructure project expense tax credits, applicable for income years commencing on or after January 1, 2010.
Changes to the motion picture and digital animation tax credits include: (1) a minimum spend of $100,000 for a 10% credit, a minimum spend of $501,000 for a 15% credit, and a minimum spend in excess of $1,000,000 for a 30% credit; (2) a minimum local principal photography requirement of 50% for the film credit; (3) an aggregate project cap on star talent compensation subject to local income tax of $20,000,000 (in addition to the per person cap of $15,000,000); (4) exclusion of costs for the independent certification; (5) exclusion of all costs incurred outside the state, but used within; (6) infomercials have been excluded from eligible formats; and (7) the independent audit must be completed by an approved firm.
The digital media and motion picture infrastructure project credit has also been changed to require a minimum qualifying spend of $3,000,000 to be eligible for a 20% credit.
Thomas Dart, the sheriff of Cook County, Illinois, alleged that Craigslist facilitated prostitution and constituted a public nuisance. The Sheriff claimed that Craigslist knowingly arranges meetings for the purpose of prostitution and directs people to places of prostitution. Dart asked for an injunction prohibiting Craigslist from publishing erotic services listings, and sought to recover the money that his office spent investigating prostitution on the site. The Sheriff claims to have arrested over 200 people through Craigslist since January of 2007.
The court held that Craigslist was shielded from liability by Section 230 of the Communications Decency Act.
.
http://blogs.findlaw.com/courtside/2009/10/craiglist-sure-to-be-pleased-by-judges-ruling-in-erotic-services-lawsuit.html
U.S. to Extradite Polanksi
The United States has formally requested that Switzerland extradite film director Roman Polanski, 76, who fled California in 1977 before sentencing for sexually assaulted a 13-year-old girl.
Swiss authorities said that director Roman Polanski could spend up to two years in prison if he was extradited back to the United States for sentencing in a sexual assault case. Los Angeles County prosecutors have declined to reveal what kind of sentence they would seek if he is returned to Los Angeles.
The extradition process is complex and could delay Polanski’s return if he challenges the request. A Swiss court recently rejected a bid by Polanski for release on bail, saying the risk that he would flee was too great.
Production Incentive Update
According to Entertainment Partners http://www.productionincentives.com/ Iowa has suspended its incentive program and Connecticut recently passed budget bill changes the existing motion picture and digital animation production and infrastructure project expense tax credits, applicable for income years commencing on or after January 1, 2010.
Changes to the motion picture and digital animation tax credits include: (1) a minimum spend of $100,000 for a 10% credit, a minimum spend of $501,000 for a 15% credit, and a minimum spend in excess of $1,000,000 for a 30% credit; (2) a minimum local principal photography requirement of 50% for the film credit; (3) an aggregate project cap on star talent compensation subject to local income tax of $20,000,000 (in addition to the per person cap of $15,000,000); (4) exclusion of costs for the independent certification; (5) exclusion of all costs incurred outside the state, but used within; (6) infomercials have been excluded from eligible formats; and (7) the independent audit must be completed by an approved firm.
The digital media and motion picture infrastructure project credit has also been changed to require a minimum qualifying spend of $3,000,000 to be eligible for a 20% credit.
Friday, September 25, 2009
Risky Business at UCLA February 20, 2010
Mark will present his "Risky Business: Financing & Distributing Independent Films" seminar at at UCLA on February 20. Those who attend this comprehensive one-day seminar will learn how independent films are financed and distributed. Topics include organizing your company, raising financing via pre-sales, debt and limited partnerships, negotiating tactics, principal terms of the acquisition/distribution agreement, cross-collateralization and creative accounting. Particular attention is paid to how producers and filmmakers can protect their interests by watering down warranties, getting added to the E& O policy, using lab access letter to retain possession of the negative, and utilizing termination and arbitration clauses.
The seminar is all day Saturday. Limited Enrollment.
Registration number: V4464B. Attorneys receive 7 hours of MCLE credit.
more info at:
An extensive handout accompanies the course. The handout covers:
SELF DEFENSE CHECKLIST
ORGANIZING YOUR COMPANY
Choice of Business Entity
Sole Proprietorship
General Partnership
Limited Partnership
Corporation
Company Formation Checklist
Limited Liability Company
Comparison of Entities
COLLABORATIONS AND CO-PRODUCTIONS
International Co-Productions
Co-Production Checklist
RAISING MONEY
Loans
Pre-sale Agreements
Contract: IFTA International Schedule of Definitions
Entertainment Finance Companies
Equity Investments
Finders
TACTICS AND STRATEGY IN ARRANGING DISTRIBUTION
How Much is My Film Worth?
How Distributors Evaluate a Film
Sources of Revenue
Increasing Your Leverage
Film Festivals
Working the Festival Circuit
Balancing Risks and Rewards
The Acquisition/Distribution Agreement
Tactics and Strategy
Markets and Festivals
Investigate the Distributor
PRINCIPAL TERMS OF THE DISTRIBUTION AGREEMENT
Territory
Media ¬
Term
Distribution Fee
Distribution and Marketing Expenses
Advances and Guarantees
Consultation Rights
Warranties and Representations
Accounting
Arbitration
Insurance
Termination
Assignment
Allocation of Package Revenue
Security Interest
Governing Law
Territorial Minimums
Retain Your Masters
Return of Materials
Delivery
Contract: Lab Access Letter
Contract: IFTA Rider to International Distribution Agreement
WHEN A DISTRIBUTOR DEFAULTS
Selecting a Distributor
Creative Accounting
Conducting an Audit
How Revenue is divided
Creative Accounting Pitfalls
Accounting Terms
Defensive Tactics
Tax Incentives Revisted
The Los Angeles Times published an article on September 22, 2009 entitled "Filmmaking incentives losing glamour in cash-strapped states. The article stated that while more than 40 states offer tax breaks or rebates for film and television production, some states were re-considering the wisdom of such programs in light of their budget difficulties.
Wisconsin quashed its state's tax program this summer after a report by the state Department of Commerce raised questions about money the state paid for "Public Enemies," the Universal Pictures gangster movie starring Johnny Depp. The governor replaced its program providing a 25% tax credit with no cap -- with a $500,000-a-year grant designed to bolster Wisconsin-based film production companies. That's much less than the $6.1 million the state awarded in tax credits in the last year.
2010 CineVegas Film Festival Cancelled
Organizers are canceling the CineVegas Film Festival in Las Vegas next year because of the economy.
President Robin Greenspun and Artistic Director Trevor Groth announced today that the CineVegas Film Festival will not be held in 2010
Festival President Robin Greenspun issued a Friday statement citing "the current economic climate and the pressures it created."
Greenspun says organizers didn't want to let the economy affect the festival's quality, so they put the event on hold.
Artistic Director Trevor Goth says he hopes to relaunch CineVegas after the economy recovers.
The 11th CineVegas Film Festival was held June 10 - 15, 2009 at the Palms Casino Resort and Brenden Theatres in Las Vegas.
The seminar is all day Saturday. Limited Enrollment.
Registration number: V4464B. Attorneys receive 7 hours of MCLE credit.
more info at:
An extensive handout accompanies the course. The handout covers:
SELF DEFENSE CHECKLIST
ORGANIZING YOUR COMPANY
Choice of Business Entity
Sole Proprietorship
General Partnership
Limited Partnership
Corporation
Company Formation Checklist
Limited Liability Company
Comparison of Entities
COLLABORATIONS AND CO-PRODUCTIONS
International Co-Productions
Co-Production Checklist
RAISING MONEY
Loans
Pre-sale Agreements
Contract: IFTA International Schedule of Definitions
Entertainment Finance Companies
Equity Investments
Finders
TACTICS AND STRATEGY IN ARRANGING DISTRIBUTION
How Much is My Film Worth?
How Distributors Evaluate a Film
Sources of Revenue
Increasing Your Leverage
Film Festivals
Working the Festival Circuit
Balancing Risks and Rewards
The Acquisition/Distribution Agreement
Tactics and Strategy
Markets and Festivals
Investigate the Distributor
PRINCIPAL TERMS OF THE DISTRIBUTION AGREEMENT
Territory
Media ¬
Term
Distribution Fee
Distribution and Marketing Expenses
Advances and Guarantees
Consultation Rights
Warranties and Representations
Accounting
Arbitration
Insurance
Termination
Assignment
Allocation of Package Revenue
Security Interest
Governing Law
Territorial Minimums
Retain Your Masters
Return of Materials
Delivery
Contract: Lab Access Letter
Contract: IFTA Rider to International Distribution Agreement
WHEN A DISTRIBUTOR DEFAULTS
Selecting a Distributor
Creative Accounting
Conducting an Audit
How Revenue is divided
Creative Accounting Pitfalls
Accounting Terms
Defensive Tactics
Tax Incentives Revisted
The Los Angeles Times published an article on September 22, 2009 entitled "Filmmaking incentives losing glamour in cash-strapped states. The article stated that while more than 40 states offer tax breaks or rebates for film and television production, some states were re-considering the wisdom of such programs in light of their budget difficulties.
Wisconsin quashed its state's tax program this summer after a report by the state Department of Commerce raised questions about money the state paid for "Public Enemies," the Universal Pictures gangster movie starring Johnny Depp. The governor replaced its program providing a 25% tax credit with no cap -- with a $500,000-a-year grant designed to bolster Wisconsin-based film production companies. That's much less than the $6.1 million the state awarded in tax credits in the last year.
2010 CineVegas Film Festival Cancelled
Organizers are canceling the CineVegas Film Festival in Las Vegas next year because of the economy.
President Robin Greenspun and Artistic Director Trevor Groth announced today that the CineVegas Film Festival will not be held in 2010
Festival President Robin Greenspun issued a Friday statement citing "the current economic climate and the pressures it created."
Greenspun says organizers didn't want to let the economy affect the festival's quality, so they put the event on hold.
Artistic Director Trevor Goth says he hopes to relaunch CineVegas after the economy recovers.
The 11th CineVegas Film Festival was held June 10 - 15, 2009 at the Palms Casino Resort and Brenden Theatres in Las Vegas.
Tuesday, July 07, 2009
INTERNET RADIO DEAL CONCLUDED WITH MUSIC LABELS
After several years of debate, webcasting radio stations have at last reached a deal with copyright holders regarding royalty rates. The non-profit SoundExchange a performance rights organization designated by the U.S. Copyright Office to collect royalties from digital playback of music announced a deal with Internet radio services on new royalty terms. Online radio has become increasingly popular because it has the ability to target music to niche audiences.
Before 1995, Sound Recording Copyright Owners in the United States did not have a performance right. The Digital Performance in Sound Recordings Act of 1995 and the Digital Millennium Copyright Act of 1998 altered that by granting a performance right in sound recordings. Consequently, the law now requires that users of music pay the copyright owner of the sound recording for the public performance of that music via certain digital transmissions.
A controversy arose in 2007, when the Copyright Royalty Board (CRB) issued royalty rates for Internet radio that many stations complained would put them out of business. The fees were going to increase next year to 0.19 cents a song each time they streamed a song.
Both sides negotiated for several years, eventually agreeing to legislation that let Internet radio and copyright holders work out a deal on their own. If they reached an agreement, the CRB's rates would be vacated. The Webcasters Settlement Act of 2008, and a second bill, the Webcasters Settlement Act of 2009, extended that deadline for another month after President Obama signed it on July 2.
The agreement treats sites according to their size and business model. Under the deal Internet radio stations are divided into three categories: large pureplay webcasters; small pureplay webcasters (i.e. those that earn $1.25 million or less in total revenues and have a cap on the amount of music streamed); and pureplay webcasters that provide bundled, syndicated, or subscription services.
Large pureplay stations will pay a pay-per-performance rate or 25 percent of their revenue, whichever is greater. They are required to report to SoundExchange on the music they stream to listeners. These rates are in place until 2015. Small stations will pay either a percentage of their revenue or a percentage of their expenses. They have the option of less rigorous reporting requirements if they pay a proxy fee. These rates are in place until 2014. Pureplay webcasters pay an annual fee of $25,000.
SoundExchange represents more than 3,500 record labels and 31,000 artists and whose members include both signed and unsigned recording artists as well as independent and major label record companies. The agreement applies exclusively to "pureplay" webcasters -- those that simply play music, frequently supported by advertisements. Those sites usually have minimal revenues. Websites that stream music and sell other products won't find the terms as tempting because they must pay a percentage of all their revenue.
Before 1995, Sound Recording Copyright Owners in the United States did not have a performance right. The Digital Performance in Sound Recordings Act of 1995 and the Digital Millennium Copyright Act of 1998 altered that by granting a performance right in sound recordings. Consequently, the law now requires that users of music pay the copyright owner of the sound recording for the public performance of that music via certain digital transmissions.
A controversy arose in 2007, when the Copyright Royalty Board (CRB) issued royalty rates for Internet radio that many stations complained would put them out of business. The fees were going to increase next year to 0.19 cents a song each time they streamed a song.
Both sides negotiated for several years, eventually agreeing to legislation that let Internet radio and copyright holders work out a deal on their own. If they reached an agreement, the CRB's rates would be vacated. The Webcasters Settlement Act of 2008, and a second bill, the Webcasters Settlement Act of 2009, extended that deadline for another month after President Obama signed it on July 2.
The agreement treats sites according to their size and business model. Under the deal Internet radio stations are divided into three categories: large pureplay webcasters; small pureplay webcasters (i.e. those that earn $1.25 million or less in total revenues and have a cap on the amount of music streamed); and pureplay webcasters that provide bundled, syndicated, or subscription services.
Large pureplay stations will pay a pay-per-performance rate or 25 percent of their revenue, whichever is greater. They are required to report to SoundExchange on the music they stream to listeners. These rates are in place until 2015. Small stations will pay either a percentage of their revenue or a percentage of their expenses. They have the option of less rigorous reporting requirements if they pay a proxy fee. These rates are in place until 2014. Pureplay webcasters pay an annual fee of $25,000.
SoundExchange represents more than 3,500 record labels and 31,000 artists and whose members include both signed and unsigned recording artists as well as independent and major label record companies. The agreement applies exclusively to "pureplay" webcasters -- those that simply play music, frequently supported by advertisements. Those sites usually have minimal revenues. Websites that stream music and sell other products won't find the terms as tempting because they must pay a percentage of all their revenue.
Thursday, June 25, 2009
J. D. SALINGER SUES TO PREVENT PUBLICATION OF BOOK
Lawyers for acclaimed author J. D. Salinger, who wrote “The Catcher in the Rye,” have filed suit to enjoin circulation of Fredrik Colting’s new novel, “60 Years Later: Coming Through the Rye,” claiming that it infringes Salinger’s copyright.
Defendant Colting’s novel has already been released in Europe and was scheduled for a September release in the U.S. Colting claims his novel is legally protected commentary and a parody of "The Catcher in the Rye." Colting, writing under the pen name John David (J.D.) California, introduces “Mr. C.” in his book as the 76-year-old Holden Caulfield who escapes from a nursing home and pontificates on his experiences while meandering New York City. The novel, which is Colting’s first novel to be published, also features a character named "J.D. Salinger."
Salinger’s lawyers contend that the right to create a sequel to “The Catcher in the Rye” or to use the character “Holden Caulfield” belongs only to Salinger, who has never permitted his work to be filmed, staged or otherwise adapted. The suit further argues that sales of Colting’s unauthorized book would siphon off profits due Salinger. Catcher has been a highly successful book that has been translated into dozens of languages and has sold more than 35 million copies worldwide
Colting’s lawyers contend that 60 Years is a commentary on Catcher, Salinger and the Holden character. They contend that the work shows the battle between Salinger and a 76 year-old “Mr. C” as Salinger struggles to kill off his famous character. They further argue that Colting has only taken as much of Catcher as needed to make his points, and there is no literal copying of any expression in Catcher other than a few catch-phrases such as “phony” and “goddam.” Only three of the 80 or so characters in Catcher appear in 60 Years, and they are considerably older than their younger counterparts in Catcher. In Catcher, Holden is 16 years old.
While characters can be protected under copyright, most decisions involve protection of characters from cartoons, films and other visual medium, rather than literary characters described only in words.
Colting’s lawyers further argue that many elements of “The Catcher in the Rye” are generic to numerous works of fiction and are hence not protectable, and that, even if protectable, their manifestations in the two books are insufficiently similar. Salinger’s lawyers, on the other hand, enumerate specific parallels between what they contend are idiosyncratic elements of “The Catcher in the Rye,” and elements of Colting’s book.
Even if the court finds Colting’s work to be substantially similar to protectable aspects of Salinger’s work, Colting may prevail on a fair use defense. Courts have tended to consider parodies that do not detract commercially from the copied work to be fair uses of the work. In filed declarations, Colting and academicians describe Colting’s novel as a parody exploring the unresolved relationship between Salinger, who emerges as a character in the book, and his autobiographical creation, Holden Caulfield.
Salinger’s lawyers, alternatively, characterize Colting’s book as merely an imitative knock-off, or sequel to the original. They contend the work is not a parody and it has no claim to fair use because it does not poke fun, ridicule, comment upon, criticize, or otherwise transform “The Catcher in the Rye.”
J.D. SALINGER v. John DOE, writing under the name John David California; Windupbird Publishing Ltd.; Nicotext A.B.; and ABP, Inc. d/b/a SCB Distributors Inc., No. 09 Civ. 5095 DAB (June 1, 2009).Complaint available at Westlaw, 2009 WL 1615819 (S.D.N.Y).
FORMER BEAUTY QUEEN SUES ICM FOR SEXUAL ASSAULT
A former Canadian beauty queen has filed a class-action lawsuit accusing ICM of a conspiracy to sexually assault and exploit young actresses. ICM denied any wrongdoing.
Claire Robinson, a past Miss British Columbia (2004), claims ICM agent Jack Gilardi and his friend John Rockwell ran a scam in which they “hip-pocketed” actresses in attempt to take sexual advantage of them. A “Hip-pocket” client is one that is represented on the side by an agent while not officially being represented by the agency at large. At many mid and large-sized agencies, the partners have to approve acceptance for all new clients of the firm.
The complaint alleges that Robinson, 23, met Rockwell in March 2007 when she moved from Vancouver, Canada, to Los Angeles, California to become an actress.
Robinson claims that Gilardi and his assistants sent her on several “mock auditions.” During one such audition a producer allegedly asked her to perform bedroom scenes and a lewd act. On another audition Robinson met a producer who held Robinson's hand, touched her body and attempted to plan a vacation with her, according to the lawsuit.
Robinson further alleges that Rockwell made sexual advances during a trip to the Cannes Film Festival under the ruse that the trip would help her career. Robinson claims that Rockwell became “increasingly aggressive and controlling” when she rejected his advances. One year after the trip to Cannes, Rockwell forced himself into Robinson's apartment and raped her, according to the suit.
Robinson filed a class-action because she believes other women have been “ensnared” in the ICM scheme in the past. Robinson seeks $10 million in punitive damages or ten percent of ICM's annual gross earnings.
The lawsuit alleges fraud, negligent supervision and sexual battery. It also seeks to designate the hip-pocketing scheme as an ongoing criminal enterprise under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c).
Robinson v. International Creative Management Inc. et al., No. BC414002, complaint filed (Cal. Super. Ct., L.A. County May 19, 2009). 21 No. 5 ANENTILR 2. 2009 WL 1468113
Defendant Colting’s novel has already been released in Europe and was scheduled for a September release in the U.S. Colting claims his novel is legally protected commentary and a parody of "The Catcher in the Rye." Colting, writing under the pen name John David (J.D.) California, introduces “Mr. C.” in his book as the 76-year-old Holden Caulfield who escapes from a nursing home and pontificates on his experiences while meandering New York City. The novel, which is Colting’s first novel to be published, also features a character named "J.D. Salinger."
Salinger’s lawyers contend that the right to create a sequel to “The Catcher in the Rye” or to use the character “Holden Caulfield” belongs only to Salinger, who has never permitted his work to be filmed, staged or otherwise adapted. The suit further argues that sales of Colting’s unauthorized book would siphon off profits due Salinger. Catcher has been a highly successful book that has been translated into dozens of languages and has sold more than 35 million copies worldwide
Colting’s lawyers contend that 60 Years is a commentary on Catcher, Salinger and the Holden character. They contend that the work shows the battle between Salinger and a 76 year-old “Mr. C” as Salinger struggles to kill off his famous character. They further argue that Colting has only taken as much of Catcher as needed to make his points, and there is no literal copying of any expression in Catcher other than a few catch-phrases such as “phony” and “goddam.” Only three of the 80 or so characters in Catcher appear in 60 Years, and they are considerably older than their younger counterparts in Catcher. In Catcher, Holden is 16 years old.
While characters can be protected under copyright, most decisions involve protection of characters from cartoons, films and other visual medium, rather than literary characters described only in words.
Colting’s lawyers further argue that many elements of “The Catcher in the Rye” are generic to numerous works of fiction and are hence not protectable, and that, even if protectable, their manifestations in the two books are insufficiently similar. Salinger’s lawyers, on the other hand, enumerate specific parallels between what they contend are idiosyncratic elements of “The Catcher in the Rye,” and elements of Colting’s book.
Even if the court finds Colting’s work to be substantially similar to protectable aspects of Salinger’s work, Colting may prevail on a fair use defense. Courts have tended to consider parodies that do not detract commercially from the copied work to be fair uses of the work. In filed declarations, Colting and academicians describe Colting’s novel as a parody exploring the unresolved relationship between Salinger, who emerges as a character in the book, and his autobiographical creation, Holden Caulfield.
Salinger’s lawyers, alternatively, characterize Colting’s book as merely an imitative knock-off, or sequel to the original. They contend the work is not a parody and it has no claim to fair use because it does not poke fun, ridicule, comment upon, criticize, or otherwise transform “The Catcher in the Rye.”
J.D. SALINGER v. John DOE, writing under the name John David California; Windupbird Publishing Ltd.; Nicotext A.B.; and ABP, Inc. d/b/a SCB Distributors Inc., No. 09 Civ. 5095 DAB (June 1, 2009).Complaint available at Westlaw, 2009 WL 1615819 (S.D.N.Y).
FORMER BEAUTY QUEEN SUES ICM FOR SEXUAL ASSAULT
A former Canadian beauty queen has filed a class-action lawsuit accusing ICM of a conspiracy to sexually assault and exploit young actresses. ICM denied any wrongdoing.
Claire Robinson, a past Miss British Columbia (2004), claims ICM agent Jack Gilardi and his friend John Rockwell ran a scam in which they “hip-pocketed” actresses in attempt to take sexual advantage of them. A “Hip-pocket” client is one that is represented on the side by an agent while not officially being represented by the agency at large. At many mid and large-sized agencies, the partners have to approve acceptance for all new clients of the firm.
The complaint alleges that Robinson, 23, met Rockwell in March 2007 when she moved from Vancouver, Canada, to Los Angeles, California to become an actress.
Robinson claims that Gilardi and his assistants sent her on several “mock auditions.” During one such audition a producer allegedly asked her to perform bedroom scenes and a lewd act. On another audition Robinson met a producer who held Robinson's hand, touched her body and attempted to plan a vacation with her, according to the lawsuit.
Robinson further alleges that Rockwell made sexual advances during a trip to the Cannes Film Festival under the ruse that the trip would help her career. Robinson claims that Rockwell became “increasingly aggressive and controlling” when she rejected his advances. One year after the trip to Cannes, Rockwell forced himself into Robinson's apartment and raped her, according to the suit.
Robinson filed a class-action because she believes other women have been “ensnared” in the ICM scheme in the past. Robinson seeks $10 million in punitive damages or ten percent of ICM's annual gross earnings.
The lawsuit alleges fraud, negligent supervision and sexual battery. It also seeks to designate the hip-pocketing scheme as an ongoing criminal enterprise under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c).
Robinson v. International Creative Management Inc. et al., No. BC414002, complaint filed (Cal. Super. Ct., L.A. County May 19, 2009). 21 No. 5 ANENTILR 2. 2009 WL 1468113
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