Question:

We have been following your Q&A for some time. You were recommended to us a few years back and basically have not even considered anyone else for legal service.

We have a writer who wrote a screenplay in 2007, based on his life, it is WGA registered only. In 2014 this writer became legally blind. He asks a friend to help him polish and embellish the script. This friend is not a WGA writer nor a professional writer. This friend was unprofessional, difficult to work with and rewrote the script with content that the original writer disapproved of. This friend also drew up a writer’s agreement, based on the basic WGA contract, it was full of errors, but the blind writer signed and agreed. After 9 months, they parted ways. The friend then took it upon himself to re-title and copyright the unfinished script in his own name, even though it was not complete nor approved by the original writer.

Are there any repercussions to the writer going back to the original script and title to file a copyright? Also, since the script was based on actual events and people, can the friend in anyway sell the unapproved script without having the 'rights' to the original writer’s story? Thank you.

Answer by Brandon Blake, Entertainment Lawyer:

Thank you for the kind words. Always hate to hear about writing disputes of this kind, and especially when it sounds as though the writer in this case was taken advantage of at a particularly difficult time in his life. I will go through several ideas based on the issues above.

Regarding the lack of a copyright filing, there is no legal requirement to file a copyright with the United States Copyright Office for a screenplay in order to have copyright protection for the work. Although filing a copyright is relatively easy now that the filing is online (www.copyright.gov/eco/), many writers still prefer not to file because of concerns about choosing the correct form, uncertainty about how to deal with source material, and sometimes privacy concerns since U.S. copyright filings are public record. All that being said, the writer is still protected by copyright law despite not having filed. However, there is an evidentiary question now regarding the differences between the 2007 version and the 2014 version.

I continue to be critical of the WGA for only maintaining scripts on file for five years, since so many writers do opt for WGA registration rather than a copyright filing. As the WGA states here (www.wgawregistry.org/regfaqs.html#quest3):

“What does the registration fee cover? The registration fee provides five years of legal evidence for your material. It also helps maintain the overhead for the department, including the maintenance of the confidential facility where the material is stored for its five-year term.”

Five years is a blink of an eye in the life of many screenplays, so unless the writer is re-registering the material regularly, that evidence is going to be lost. However, that does not mean the content of the original script cannot be proved by other evidence, but it is more difficult.

Regarding the WGA contract signed, if the writer was tricked into signing the contract or literally did not know what he was signing because of his disability, then there may be contract and tort remedies available. Short of that, the WGA contract will be controlling regarding the rights that the friend now has in the screenplay. In January of this year I answered questions about a WGA Collaboration Agreement (www.filmtvlaw.com/blog/2016/1/19/wga-writers-collaboration-agreement). Rather than discussing those points again, please feel free to read this previous article where I go into more detail about WGA Collaboration Agreements and which rights are typically transferred.

Regarding filing a copyright for the original version of the script, that idea probably makes sense, but make sure that this is done truthfully and accurately. There are substantial penalties for knowingly making fraudulent representations on copyright filings. Additionally, if the contract signed transferred the underlying rights to the two screenwriters jointly, then filing a copyright now under just the name of the original writer could be a misstatement. During the online registration process with the US Copyright Office the application will ask if there are any other claimants to the copyright.

Regarding the life story rights, it sounds like this point will be solidly in favor of the original writer. Again, provided that the agreement signed did not transfer any rights to the underlying property or the life rights, the friend is not going to be able to sell or develop this new script. Moreover, there is not a production company or distributor of any size that I know of that would even consider getting involved in a true life story without seeing the paperwork for the underlying rights.

As with any entertainment matter, please do not make a decision about complex matters without consulting an experienced entertainment lawyer first. I have been representing feature film projects, television series, and recording artists for more than 16 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

Question:

Hello. I would like to know the ways of working with an agency legally. How can I work with them and make sure I am not ripped off? How do I know if they are actual and legitimate and not con artists?

Answer by Brandon Blake, Entertainment Lawyer:

Many of my clients have talent agents and talent managers, and each can be indispensable for helping to advance a career in film, television and music. So knowing how to check out a prospective agent or manager is valuable knowledge that can save a lot of time in the long run.

First off, it is important to know that there is a difference between agents and managers. Many states, including California and New York, have statutes to regulate talent agencies, including the maximum commission rate a licensed talent agent can take, as well as requirements that the talent agent post a bond and maintain a license with the state.

Talent managers, on the other hand, are not directly regulated by the state, and therefore can charge a higher commission and are not as limited in the type of business arrangements that can be entered into with clients. There are also business managers that might be primarily involved with the management of successful client’s businesses, including maintaining investment portfolios, maximizing profits from libraries of properties, and making sure royalties are paid and accounted for by distributors and publishers.

In many states talent managers are prohibited from directly “soliciting employment” for clients. That does not mean a talent manager cannot help find work for a client, but it does mean that either the client will be asked to also have a licensed talent agent, or otherwise the offers for employment must be handled as introductions to projects and producers. For this reason, talent managers generally are more involved in long-term career building, rather than day-to-day submission for roles or writing jobs.

Deciding on the type of representation that is best to work with really depends upon where you are in your career. Many young writers and actors will opt for a talent manager, because, first, there are more of them and talent managers are sometimes more willing to take a risk on young talent, and second, the talent manager might spend more time with a new client than an agent.

If you have an established career with some solid experience, a talent agency might be able to push your career to the next level. Talent agents generally need to see existing, commissionable work before signing, since talent agents in most states are prohibited from taking part directly in film, television, and music projects with clients. Generally, the larger the talent agency, the bigger the projects the agent can find for a client, but beware of getting on the bottom of the list of a big agency, as you might get very few calls if bigger clients are keeping your agent busy.

Finally, every client would like to be in the position to also have a business manager, to help oversee a library of properties and maintain the revenue stream coming in from royalties and residuals. However, many business managers have a monthly maintenance fee, and for many younger artists that minimum might be larger than the total revenue coming in each month. So make sure you ask about fees and minimums upfront.

When it comes to verifying that someone is a licensed talent agent in California, that is relatively straightforward. The State of California maintains this website that can be searched for licensed talent agents: www.dir.ca.gov/databases/dlselr/talag.html.

In the State of New York, search the following database: https://a858-elpaca.nyc.gov/CitizenAccess/. Other states also maintain databases of licensed talent agencies.

Remember that no such databases exist for talent managers or business managers, because no special license is required in most states.

Before signing a representation contract with a talent agent or talent manager, you should have the contract reviewed by an entertainment law firm like ours. The best way to make sure that you are going to be fairly represented, and are signing a good deal, is to have the agreement reviewed, and since we work with many talent agencies and management companies, we can also provide our own feedback about the reputation of the agency.

As with any entertainment matter, please do not make a decision about complex matters without consulting an experienced entertainment lawyer first. I have been representing feature film projects, television series, and recording artists for more than 16 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

Question:

In simple non-specific terms, if an investor contractually agrees to provide funding for a movie in exchange for certain profit participation, and subsequently reneges upon that agreement by failing to deliver said finance, thus leaving the film only able to finish by seeking alternative funding, what rights to the finished film will the reneging investor retain if any? Does a breach of contract provide entitlement to the filmmakers to seek reparation in the form of damages?   

Answer by Brandon Blake, Entertainment Lawyer:

There is no more important issue facing independent producers than how to successfully arrange investor financing for a film or television project and the renewed IRC Section 181 tax deduction for film and television productions is bringing fresh interest from private equity investors. Not only was Section 181 extended again through December 2016, but for the first time live theatrical productions are also covered by the IRC Section 181 tax deduction.

I am not sure what structure you are using to raise the investor financing, so I will discuss a few different options for what can happen when investors renege on investor financing. There are two main questions above: First, what rights will the investor keep in the project if the investor does not deliver financing, and second, what damages can the producers pursue against the investor.

The investment structure will determine what happens to the rights in the project if an investor leaves, and what liability the investor will face. The following structures would each have different consequences on these two questions.

Development or Production Offering: If a producer has set up a development or production offering with the intent of relying on the Section 181 tax deduction, the producer should file for exemption from registration with the SEC and each of the states where investors reside. If the offering paperwork is set up correctly, the investors will not get any interest in the underlying rights to the film, and the investors failure to provide the funds will be a straight-forward matter of cancelling the subscription agreements. No rights will transfer to the investors.

Moreover, there really should not be a problem with investors reneging, because the offering cannot close until the producers raise the minimum. The investors will not be granted any interests until the check or wire transfer has cleared. There would be no liability for the investors either, because only by signing the subscription agreements and sending payment can the investor make a binding pledge of funds to the film or television series. Most states allow a 5-day period after that to cancel the subscription, after which time the investment becomes irrevocable.

Co-Production: In a co-production situation where both companies are in the film or television business, it will depend entirely on the terms of the co-production agreement. In general, if the financing was one of the conditions of the co-production agreement then if the financing is not raised, the rights will simply transfer back to the producer. Regarding investor liability, that liability should be specified in the contract, and if the contract is breached, then both compensatory and punitive damages may be available to the producer.

Investment Contract: The investment contract can be problematic in this situation for a couple of reasons. If the investor is a private individual and not a company that is in the business of financing feature films, then the investor is owed the SEC and State disclosure statements. The SEC also requires certain financial statements and informational filings about the issuer, and the state where the investor resides will also usually separately require much of this same information.

When an investor is only provided an investment contract, the investor typically has the right under federal and state securities laws to renege on the investment. So in this case, there might not be any liability at all for the investor breach. The investor can easily raise the issue of insufficient disclosures, or even make a claim against the producer for securities fraud, in order to get out of the investor’s commitment.

Investment LLC or Partnership: Once the investor becomes a member of the LLC or partnership that investor will have an interest in the rights of the film, regardless of whether or not the investment funds have been transferred. There should be some way specified in the operating agreement for removing members, although such action might require a majority or unanimous vote of the members.

Much like the investment contract mentioned above, when the producer sets up an LLC or partnership with the intention of raising investment money for a film or television show, the investor often does not receive the required SEC and state disclosures. So for private investors, there may be no liability at all for reneging on the investment. In many ways this is the worst way to set up a film or television investment.

There can be reasons to set up an arrangement like this, and sometimes when both parties are sophisticated investors it makes sense, but there is nothing in the basic structure of the LLC that will protect the producer from an investor who does not deliver on the promised funds.

The renewed IRC Section 181 tax deduction has given a huge gift to producers who missed out in 2014 on starting a fully tax deductible production. If producers set up a compliant offering and shoot at least 1 day of principal photography this year, the deductibility of the production can continue on into 2017 or longer, provided the photography continues in the ordinary course of production. A development or minimum/ maximum offering will allow the initial funds raised to start production, thereby locking in IRC Section 181. The best way to avoid issues like the ones discussed above is to set up an offering, protecting both the investors and the producer.

As with any entertainment matter, please do not make a decision about complex matters without consulting an experienced entertainment lawyer first. I have been representing feature film projects and television series for more than 16 years. Please feel free to contact my office about a quote.

- by Brandon Blake, Entertainment Lawyer

Question:

I have a multi-part question:

1) Am I legally able to write a spec script on an existing work (book) to gain producer interest with the goal of the producer liking the script so much that the producer purchases the available rights to the existing work?

2) What is the difference between a work ‘inspired by’ and ‘based on’ an existing work?

3) I would also love to know if your firm can represent a writer (who does not have an agent) to a producer whose acquisitions specialty has expressed an interest in looking at my project as long as it is presented to them by an agent?

Answer by Brandon Blake, Entertainment Lawyer:

 A couple of important rights questions that I get a lot of comments about from clients. Every film and television project starts with a written work so I try to provide as much assistance as possible for writers, whether they are hired to write projects or are writer-directors or writer-producers. Let me answer your questions in order:

1. Spec Adaptations

When it comes to spec scripts to existing works, there are a number of considerations to keep in mind before starting. I will point out that the question here does not deal with selling the spec script to the author or owner of the property, but doing so for the purpose of facilitating a sale of the underlying work to a third party. This is a different approach than the typical spec project where the writer wants to contact the original owner with the new adaptation. I still do not think this is a great approach, for a number of legal and strategic reasons that I will detail below.

First, with respect to the legal considerations, most adaptations of existing works will end up being infringing works under US copyright law, as well as in any country that is part of the Berne Convention, which includes Europe and most of Asia, 170 countries in total around the world.

While it is possible to create an adaptation so tangential from the original as to not constitute a copyright infringement, another consideration would be trademark law. Many of the famous characters in animation and publishing also have trademarks that protect use, so it is possible for an adaptation to not constitute a copyright infringement, but still be a trademark violation.

Finally, in this case, you are essentially “publishing” your adaptation to at least one other person besides the owner, and this would increase the possibility that the work would be an infringement.

Second, writers should consider the strategic position that writing an unauthorized adaptation of a work puts the writer. In this case, the producer does not yet own the underlying rights, so the writer is not in as bad a situation as usual, because the producer would have to hire another writer to avoid acquiring the writer’s adaptation. So from a strategic position it is not as poor an idea as when approaching the original owner, but would still be a tough place to negotiate from.

Third, it goes against industry custom to adapt a work that the writer does not have authorization to write. If a writer approaches agents or producers with the idea to write a spec adaptation, most of them will not want to discuss it. The exception of course, and this is a big exception, is if a producer or author has asked the writer to write a spec script, but without a formal agreement being signed. This can certainly happen, and some producers are very informal, but given that there was a request made for the work, that separates the situation in my mind from the purely spec situation. Also in this case, presumably even if the producer asked the writer to prepare the adaptation, the producer does not actually have the rights either.

2. ‘Inspired By’ versus ‘Based On’

There is not a legal difference between stories that are ‘inspired by’ versus ‘based on’ some other material. Also in reference to the above question, a writer is not free to write a work ‘inspired by’ another work of fiction such as a book or movie. Generally, when a film uses the ‘inspired by’ phrasing in its marketing and promotion, it is trying to create a marketing link to some popular real life story or event. It often indicates that the rights to that story have been fictionalized and that no first-hand works or life-stories have been acquired.

‘Based on’ generally means that the producers or production company did acquire the rights to the real life story, and suggests the work is in some way authorized by some of the participants in the events. However, there is not a legal distinction between the two phrases, and using the phrase ‘inspired by’ does not relieve the writer from needing to consider acquiring the rights to the story.

3. Representation of Projects

One of the things that a law firm like ours can do is to serve as representation for a project, so that it can be submitted to a production company or studio. I have published a number of articles about the various legal reason why producers, production companies and studios do require the script, story or treatment to be represented by an agent or entertainment attorney, so I will not go through those again. Feel free to visit http://filmtvlaw.com/blog/2015/12/30/agent-and-lawyer-submissions where I have a fairly detailed explanation of the situation.

When we represent a project, we do so as part of a package of services, which allows us to review the material, help with any needed legal issues, and also submit the project to production companies and studios that might be interested in the work. We do not provide one-off type of assistance such as sending one letter for a client, as that would mean that the project was not really represented by our firm.

As with any entertainment matter, please do not make a decision about complex matters without consulting an experienced entertainment lawyer first. I have been representing feature film projects and television series for more than 16 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer  

Question:

I have used many google images (photos of mass shooters and serial killers) in my documentary. How do I get permission to use them? Is this FAIR USE?

Answer by Brandon Blake, Entertainment Lawyer:

A great question about images sourced from the Internet, and from Google in particular. Having worked with many documentary filmmakers over the years, I know that one of the most problematic issues is often images and videos sourced from Google and other search engines that are perfect for the project but are of unknown and sometimes unknowable ownership.

Over the years a number of advances have been made in terms of royalty free and flat fee image and video houses, most of which are pay or subscription based. However, most of these do not have the massive volume and variety of images available that search engines can provide.

However, a lot of producers do not realize that Google can now be used to search for free-to-use images.  Google will filter for images with a Creative Commons license, public domain material, and images with a GNU Free Documentation license. This feature can be used as part of an “Advanced Search” or “Advanced Image Search.” While the licenses sometimes take a little research to find because you must click through to the actual website (the license is not listed by Google), it is less work than going to multiple stock image sites and searching for the royalty free images on each site.

As Google makes clear, online licenses are not 100% certain, since an image might be a collage or composite of multiple images, and it might occur that the artist or webmaster did not license the underlying rights to the work. Moreover, it is possible that a webmaster might make mistakes or that certain images might be filed under a free license by someone without actual authorization to clear the image. However, this is a big step in the right direction and even stock image and footage houses have problems with chain-of-title for images in their libraries.

Youtube also includes a user license that permits re-use of content when the material is not downloaded but simply linked on a website. In this case the key is that the footage cannot be downloaded, but must be linked to in whole, and there cannot be custom code used that blocks cookies or advertising from the linked content. This is useful for website use, although paid commercial use is restricted.

In principle, stock footage can be searched on Google in the same way as discussed above for images, which would include the right to modify the content and download it. However, because most of the video on Google is from Youtube, the same restrictions on downloading and reuse apply that are discussed above. Alternatively, archive.org, Flickr, and Vimeo all provide license based searching of video archives. Again, the same restrictions and limitations would apply regarding the chain-of-title and reliability of the licensing information included.

When preparing a commercial project, it would be advisable to do all of the following:

First, download and print to pdf the licenses. Do not rely on the fact the images and footage were found in a free-to-use image search. Go the extra step of actually saving the documentation for each of the images used.

Second, try to verify public domain claims by actually searching the image source materials or the author with the United States Copyright Office. The largest source of confusion surrounding image and footage licenses involves mistaken claims of “public domain” status. There is no one date before which a copyrighted work must have been made to be in the public domain. There are films from the 1970s that have fallen into the public domain due to errors with the copyright registrations, while other movies from the 1930s are still firmly copyrighted and aggressively protected by studios and distributors.

Third, if you are preparing a work intended for studio or network distribution, have a law firm such as ours provide a clearance letter for the material. As part of the final delivery requirements by any major television or feature film distributor, a clearance letter from a law firm will be required by both the distributor and also by the E&O insurance company. Filmmakers can save a lot of time by first, saving the licenses to all materials used, so that additional research does not need to be done later, and second, by clearing key images and footage early on with a law firm, so that the content does not need to be removed later. The costly part of licensing mistakes is usually the editing time required to remove images and footage that turn out not being available. Contrary to some wishful thinking, in 16 years I have never worked with a distributor or network that licensed the content of a finished project on behalf of the filmmaker as part of the distribution or acquisition agreement. Licensing is always the producer’s obligation.

As with any entertainment matter, please do not make a decision about complex matters without consulting an experienced entertainment lawyer first. I have been representing feature film projects and television series for more than 16 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

Question:

I have written a dramatized musical on the story of the lives of the founders of a well-known organization (now run by a foundation). There are four founders in the story – one is still alive and three are deceased. There are also three children in the story who are still alive. I have the following questions about life story rights:

1) I have been told that if a person is, ‘famous’ or ‘a public figure’, I can tell their story as long as I do not defame them in any way, shape or form. I have been told that in this circumstance their life stories are public and therefore no rights are needed to tell their story. Is this correct and if so how do I determine if a person is famous?

2) If I need to get Life Story rights for the deceased founders, do I have to get them from the foundation or their surviving children (all eight of them) and must it be individually or on one document?

3) Do I still have to get life story rights for the children who appear in the story?

4) As the writer do I have to get all of the above arranged prior to getting a Producer on board or will a Producer take care of it?

Answer by Brandon Blake, Entertainment Lawyer:

Thank you for some great questions about life rights and when life rights need to be obtained. Probably more than ever, studios, networks and publishers are seeking out dramatic, real life stories as the foundation for new movies, television series and books, so the acquisition of those rights is becoming increasingly important. Having represented both sides, working both for the rights holders and at other times producers looking to acquire the rights, I have a great perspective on the legal and negotiation issues involved. Because this is a multi-part question, I will answer each question in order.

1) Public Figures and Defamation: Nothing causes more confusion among writers and producers than laws regarding defamation. The United States Supreme Court created special rules regarding how “public figures” can bring defamation suits against media defendants. While these court decisions are somewhat complex, the relevance to the entertainment industry is limited.

The limitation comes from the fact that these rules only deal with defamation, and there is a lot more at stake in life rights than merely releases from defamation claims. Life rights are a collection of federal, state and common law rights that the life rights holder owns or controls, including defamation, false light, invasion of privacy, right of publicity, copyright and even trademark. Of all those rights, the constitutional rules regarding defamation only apply to one set of rights held by the rights holder. It is also not true that public figures have no protection from defamation, although there is a much higher standard to be met by the public figure plaintiff than by an ordinary citizen.

However, for the public figure, there is much more likelihood that such a person will hold a right of publicity to his or her likeness and biography rights. For a media production about the public figure, these rights of publicity would need to be acquired, regardless of whether or not the work was defamatory.  This issue is not merely academic either. The estates for deceased celebrities like Elvis Presley, Marilyn Monroe, and even Mark Twain are out there actively protecting the publicity rights of thousands of noteworthy individuals of the past.

2) Where to Acquire Life Rights: Generally, the estates for celebrities will maintain the life rights and be the principle source for licensing the rights for entertainment projects. However, the estate is not necessarily the only source, and the children, family, and even friends of the individuals might be sources of rights. When dealing with sources other than the estate, care must be taken that the party being negotiated with really has the rights needed for the story. There might be a need to exclude or fictionalize certain characters and parts of the story when the rights holder does not have all the rights to the story a producer wants to tell.

3) Rights From Celebrity Children: Celebrity children are treated like any other person. If the child is going to be part of the story, then their story rights must be acquired. It all depends on the story and whether or not those rights are necessary for telling the larger story of the work.

4) The Writer’s Responsibilities: This is more of a business question than a legal question. I will say that the most successful writers I have worked with do take on the task of acquiring the underlying rights themselves, because that is where a lot of the power of the story comes from actually. Letting a producer go out and acquire the life story rights might put the writer in the position of being kicked out of the project by a thorough re-write, while if the writer has acquired the life rights, the writer becomes absolute controller of the project.

As with any entertainment matter, please do not make a decision about complex matters without consulting an experienced entertainment lawyer first. I have been representing feature film projects and television series for more than 16 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

Question: 

First of all I have ideas for projects that are Disney related. How can I present them to Disney and other filmmakers and writers who have worked with Disney? Mind you I have experience in filmmaking. I ask because I would like to know if you do know of any agents that will represent me? Especially if I would like to work with Disney.

Answer by Brandon Blake, Entertainment Lawyer:

First off thanks to all the contributors last week. With so many responses it is hard to know where to start but I am trying to answer the most representative questions first.

I have had the good fortune of working with Disney on a number of recent projects, and actually represented the estate responsible for such classics as “Dumbo” and “101 Dalmatians”. In answer to your question, let’s first talk about the way agencies and studios work with each other to get feature film and television projects produced.

Major agencies supply a constant stream of scripts and stories to studios, production companies and networks, and often package those projects first before presenting the scripts. Packaging means getting an A-list performer, director, or other celebrity with broad name recognition and an existing fan base interested in a script or story. Agencies typically shop the project internally first, in order to find current clients who would be interested in attaching to the project.

Once the agency feels that it has enough interest from talent attached to the script, the agency will then present the project to studios, focusing on producers at the studios who are known to be looking for particular stories for production. If there is interest at the studio in the script, a similar kind of internal shopping process begins, where a producer or acquisitions executive will approach others at the studio and try to build up interest in the project at the studio. Eventually the President and CEO of the studio will get involved, deciding to green light projects that have been internally developed.

So the question is how to become a part of this process, when so much of the development and shopping work is being done internally at major agencies and studios, and television networks. There are a couple of solutions for independent producers who want to bring scripts into the Hollywood system.

The first way is to work on packaging the project during development, and make attaching cast, director, or other celebrities the first step in getting the project made. In one project I represented that later was picked up by a major agency, my client and I worked to create substantial publicity around the story during the development phase, which attracted Keanu Reeves and David Ayer to the project.

At that point a major agency got involved, which began shopping the project to studios. Basically we saved the agency a lot of time, because not only was there a story with an existing audience, but talent already attached. Agencies can find out about projects indirectly, based on clients who are cast members, writers, or directors on the project, or the filmmakers might plan a promotional strategy that indirectly lets the agencies know about the project.

The second approach for agency representation is the more traditional way. Clients with an established track record of commercial projects can be shopped directly to the agencies. In this situation the agency is looking for a client, not a script or package, because the agency is looking to represent a writer or director’s whole career. The agency, in this case, will try to find the client work on existing projects at studios and production companies.

Regarding advice for how to get projects seen by agencies, I would offer the following specific ideas:

1) Produce great promotional materials. The look book/ pitch book, website, poster and one-sheet should be the highest possible quality. After 16 years in the entertainment business, I can spot projects that will get agency and studio attention from the poster alone. It really is that important. I get a lot of questions about trailers, demo reels, sizzle reels, and pilots, and my answer is always the same; if the material is broadcast quality and exactly reproduces your intention for the series or movie, then yes, the more material the better. But anything where you are asking the agent or studio executive to “imagine” what you can do with a bigger budget, do not include it. For various reasons, television and studio executives do not have very good imaginations. Show them what you can do right now or do not include it.

2) Consider hiring a publicist. Never underestimate the power of some well-placed news articles about the project. There are a myriad of ways to build a story around a prospective film or television project. If your story rights are not strong enough to get a publicist interested, then chances are the story will not impress the agents or studios either. Work on ways to make the story newsworthy.

3) Package the project. Most producers, after spending a few years in the entertainment business, will have at least one or two celebrity contacts to approach about the project. Do not save those for “the next project.” Put everything you have into the project that is ready to develop.

I have helped numerous clients package and develop projects for film and television. Please feel free to contact me about your project and I would be happy to discuss ideas.

As with any entertainment matter, please do not make a decision about complex matters without consulting an experienced entertainment lawyer first. I have been representing feature film projects and television series for more than 16 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

Question: 

I have written a true story screenplay based on my life. WGA registered only. I brought in a co-writer to help polish. He wants to use a WGA Writer's Collaboration Agreement. Neither of us are WGA members. If there is a resulting dispute, will the WGA mediate? If the other writer buys me out of the 50/50 agreement, will he still have to purchase my life story rights? Thank you.

Answer by Brandon Blake, Entertainment Lawyer:

Thanks for contacting us. A couple of great questions here about the WGA Writer's Collaboration Agreement, rights in screenplays, and life story rights.

First of all, I will briefly respond to the issue of WGA registration. Unless you are a WGA member, registration with the WGA is not required, and in fact unless you renew regularly it expires after a period of years. I do not find the WGA application any easier than the United State copyright application, and it always surprises me how often writers opt for WGA registration when it is also possible to file a copyright online.

I do not discourage the WGA registration, and any evidence regarding the creation and ownership of a screenplay is valuable, but WGA registration does not allow for statutory damages and before any litigation, the US copyright registration will need to be completed. Given that the registration lasts for the life of the copyright, it makes a lot of sense to invest the time in a real copyright filing.

Regarding WGA arbitration, the production would need to be subject to the WGA Theatrical and Television Basic Agreement (MBA) in order for WGA arbitration to apply. If the production company is a signatory with the WGA, then WGA arbitration would apply, and if either writers are WGA members then the production company would have to become a signatory with WGA.

Regarding a buyout under the WGA Writer's Collaboration Agreement, the terms of such a buyout would be determined entirely by the way that the agreement was amended and completed before signing. If the underlying life story rights were made part of the WGA Writer's Collaboration Agreement, then it is conceivable that any buyout could deal with both the underlying rights and also the screenplay rights.

However, typically a WGA Writer's Collaboration Agreement would not deal with all of the rights and approval issues that come up in a life story license. Life story rights are generally dealt with like any other underlying rights to a project, meaning that they are kept separate from the rights of the screenplay and are acquired directly from the underlying rights holder. From a producer’s standpoint, it would not be advisable to rely on the typical rights acquisition language in a WGA Writer's Collaboration Agreement to also acquire life rights.

As with any legal matter, please do not make a decision about complex matters without consulting an experienced entertainment lawyer first. I have been representing feature film projects and television series for more than 16 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

Question:

Just finished my first feature film and got it picked up for world DVD distribution. When it was sold to the UK the distributors released it with an incorrectly transferred music track causing it to sound like a jumping dirty CD throughout the entire movie. Many customers have complained about this and returned the disc. The UK distributor has warned me not to bring up the problem publicly and refused to fix it. Being a first time director what can I do? It's now affecting my second feature as my film's quality is now being called into question.

Answer by Brandon Blake, Entertainment Lawyer:  

Great question. Having worked with feature film distributors for more than 16 years, representing filmmakers and working to get the best deal possible for both independent and studio projects, this is certainly not the first time I have heard of similar problems with distributors. Once the distribution agreement has been signed there is not much that can be done unless there is some provision in the contract that guarantees some level of performance from the distributor. In order to fully address this question, I will go through some ways to prevent this type of problem from occurring and then I will discuss some ideas for how to address it after the contract is signed.

Although it seems obvious, the easiest way to deal with a problem like this is to work with a reputable film distributor. Most distributors do not like returns any more than the filmmaker and will work to make sure that the sound and video quality are as good as possible before release. In fact, I often have clients complain about having to remaster their audio tracks as part of the delivery requirements, which ends up being quite expensive. One of the things that a good entertainment lawyer should do for a client is to know the reputation of a distributor before starting negotiations. I have worked with most of the film distributors worldwide so I can generally warn a client about problems like these before even beginning to negotiate the deal.

The second thing that can be done is to make sure that the distributor duties are specified in the distribution agreement. Often at first there is little or nothing in the agreement that specifies that the distributor must do anything other than pay royalties. I worked with a major studio last year that did not even specify they had a duty to release the film! Fortunately I pointed out the issue to the business affairs person and he was happy to correct the problem, but I wonder whether he ever changed the template or just our deal. I have found that distributors are generally very amenable to making changes to agreements, but only if the problems are brought up before the deal is signed. After signing it is typically hard to get anyone to even return a call.

Finally, once the contract has been signed and the film has been released, go over the agreement carefully and see whether there are any provisions dealing with distributor duties. There should at least be an obligation to distribute the film, and you may have negotiated for the distributor to complete certain delivery items. What you will not find is any right to stop the distribution of the film, because in any commercial distribution agreement one of the most important provisions from the distributor side is what is called a “waiver of equitable relief,” meaning the filmmaker is waiving any right to get an “injunction” or to stop the distribution of the film for any reason.

Please consider retaining our firm to review the agreement and find out your legal rights. BLAKE & WANG P.A. (www.blakewang.com) has a number of package rates that can help make our services affordable even on independent film budgets.

Question:

For a fiction feature film: How identifiable do people on the street (not in the cast) have to be to require signed releases?

Answer by Brandon Blake, Entertainment Lawyer: 

Over the years I have gotten more questions about releases than almost any other type of contract. Often among student filmmakers or first-time independent producers the release becomes one of the only documents on set. So in responding to questions about releases first I like to discuss how to define a release, second, where the legal basis for a release comes from, and third, I will comment on when a release of some kind is usually used.

At the most basic level all contracts are the same. A contract is an agreement between two parties where both want something out of the relationship. There is the concept of “consideration”, meaning both sides are getting something of value out of the arrangement. Generally courts hold there must be consideration on both sides to enforce an agreement. 

So what is the releasing party getting out of the release? Theoretically, the party signing the release is getting the privilege of being in a film or TV show as some kind of background player. But to the surprise of some producers not everyone wants to appear in a movie or television show. So that is where the legal basis for releases begins. 

The legal requirement for releases comes from a number of different laws. Most basically is the right of privacy. The right of privacy may be codified, as it is in California or New York, or it may be a common law principle. California Civil Code, Section 3344 addresses the rights of privacy and publicity in commercial film and television productions in California.

The right of privacy, as it relates to film and television, states that a person has the right to not have their name, voice or likeness used commercially. In addition to the right of privacy, the torts of defamation and false light are both applicable. When someone is recorded there may be certain facts implied by the production. For example, if a person was filmed outside of a demonstration, that might imply he or she was part of the protest. Finally, the right of publicity disallows use of someone’s name or likeness as an endorsement or ad without consent.

So when is a release required? States like California and New York have made it fairly clear that for commercial film and television productions, a person cannot appear recognizably without prior consent. Other states rely on common law standards, so the laws will vary by state and use. But in general, it is by far the standard that everyone appearing recognizably in a feature film should have signed a release or otherwise clearly expressed consent to being recorded. 

The definition of terms like “commercial” and “recognizable” are unfortunately subject to dispute, and even in states with well-defined Codes, the application to any particular production is difficult. But producers hoping to get their project commercially distributed, and therefore requiring E&O insurance, should error on the side of more documentation and try to get signed releases from just about anyone possible.

As an entertainment law firm, our firm offers a number of packages that can help make it affordable to get the contract and legal help needed on any size of film or television production. Feel free to contact BLAKE & WANG P.A. (www.blakewang.com) about how we can help make sure your project has the legal documentation required by distributors and E&O insurance companies.

Question:

Why do television networks and film studios require film producers and television producers to submit projects through either agents or an entertainment lawyer?

Answer by Brandon Blake, Entertainment Lawyer: 

There are a number of different rationales for why entertainment companies of all kinds require film producers and television producers to submit new projects through an agent or entertainment lawyer, which range from the practical to the obstructionist.

For practical purposes, entertainment companies have a legitimate concern about liability. Copyright infringement suits are common, and once an entertainment company has received a pitch for a television series or film production it is going to be potentially more liable for a copyright infringement lawsuit. In order to reduce this risk, entertainment companies want a trusted third-party to have documented the pitch. If the film producer or television producer has a well-known agency or an entertainment lawyer submit the project, there is going to be a record of exactly what was submitted, by whom, and when. If a lawsuit ever materializes, there will be a third-party with evidence as to what happened. That is also beneficial for the film producer or television producer.

From a convenience stand point, television networks and film studios have another motive. This rationale is based on understanding what it is like to receive 10 to 20 thousand submissions per year from film producers or television producers, looking to get an entertainment project made.  It is a daunting task to review so much material, so television networks and film studios want the agent or entertainment lawyer to do some of the work for them. By requiring submission through an agent or entertainment lawyer, the television network or film studio is making the producer do part of the work, having an experienced entertainment representative review the material and quite probably make suggestions and changes before the materials is submitted.

Finally, the requirement to submit through an agent or entertainment lawyer creates another hurdle to surmount before the material gets reviewed. This reduces the number of submissions as some percentage of television producers and film producers will lack the time and financial resources to obtain an entertainment representative to submit the project.

Rightly or wrongly, agent or entertainment lawyer representation has become a necessity when dealing with the large, bureaucratic media companies today.

Question: 

I am wondering if you can comment on this: Let's say I had some "great idea" for a story (film, TV, whatever) and I worked on it for months, perhaps a year even. I developed it and got it to a point I liked. Then, after all that, I learn about a project that was done more than 30 years ago that has a lot of the same elements. It's not exact, but the basis is extremely similar.

Now, to be clear, I had no idea this other project existed at all - and it's only by happenstance that I stumbled across it. So, LEGALLY - what do I need to do to protect the fact that I really did have the idea on my own?

Answer by Brandon Blake, Entertainment Lawyer:  

At one time I would sit and answer legal questions for hours in the evenings as legal advisor to IFP/West. Eventually my practice got too busy to keep helping in this way, but this question about independent development of an existing project came up fairly often.

I am going to run through several different ways to look at the question based on different areas of the law that apply. Some of these might seem obvious, but I do this because you did not provide the name of the property. Years ago I spent about a half hour explaining these same points to an eager young filmmaker who took a lot of notes. At the end of his half hour I finally asked him what property he was talking about, since he did not offer it earlier. His answer: Superman!

The first area of the law that you should consider is trademark. While copyright is an important and relevant question, many filmmakers do not know that trademarks apply to many different well-known characters. So many famous characters, whether they are from comic books, cartoons, or even live-action films can and are trademarked. Trademark law does not deal at all with authorship or ideas versus tangible expression. The sole question is whether a trademark or servicemark is a source identifier and whether the infringing work would create consumer confusion. So a man in tights with an “S” on his chest is going to be a problem, no matter what.

The second area of the law that is relevant would be the right of privacy and the right of publicity. If this work unintentionally copies or repeats elements of a real life story there may be a problem, even if there is no copyright infringement. That is the reason why clients will perform a script clearance on a project after the script has been finished. If a film that is absolutely fictional accidentally uses names or characters that are the same or similar to real life people and their stories, there can still be liability, even if the work was truly fictional. Now during trial it might be proved that you never had any relationship or knowledge of the real people involved, but by the time you have reached trial you or the distributor may have already spent hundreds-of-thousands of dollars defending what could be a frivolous suit. So filmmakers and distributors do what they can to avoid any unintentional copying of real life stories, too.

Finally, copyright will of course also be an important consideration. Again, during a copyright infringement trial, access to the infringed work is one of the elements of the test for copyright infringement. However, the access test would typically be applied after the film was released to the general public and a lawsuit had been brought. By that point, by your own admission, you would have had access to the work. Moreover, because proving or disproving real access is difficult (Can you show you just came out of a cryogenic freezer? And if so, for how long were you in?) courts generally look at whether the defendant could have theoretically accessed the work. For an unpublished work with a claim of infringement, that means showing that this unpublished work had somehow been submitted to or otherwise obtained by the producer. I once had a would-be client suggest that a producer mounted hidden cameras throughout his house. Needless to say, I did not take the case.

But when it comes to a published work, such as a feature film that has been distributed, a court would generally assume that access was possible and would not stay up late at night considering whether you had bought a ticket for this film or perhaps a different one on the weekend in question.

So the practical answer is that a work that was independently developed but ends up being similar to an existing, published work is probably going to be a candidate for litigation, and the technicalities of the Copyright Act will not protect the producer. That might seem unfair, and I happen to personally agree that copyright law is overbearing and shrinking or killing parts of the American film and entertainment industry, but producers need to know the law first. Then maybe you can join with others to help make changes. 

I have been representing film and television producers for over 16 years with the law firm of BLAKE & WANG P.A. (www.blakewang.com). Feel free to contact us for a quote.

Question:

What does it mean to "package" a project? Do big studios only look at packaged projects?

Answer by Brandon Blake, Entertainment Lawyer:  

Most simply put a packaged project is a feature film project or a television series in development that has one or more well-known performs attached to the project and possibly also a famous director. A packaged project is in between the script stage and the pre-production stage. As an entertainment lawyer I have been helping filmmakers and producers package projects for many years.

While many screenwriters feel that a really great script will sell itself to a production company or studio, the truth is that the vast majority of projects that a studio or major production company will look at are already packaged projects. This is done for multiple reasons on the studio side, some of which actually make a lot of business sense.

Studios and television networks realize that getting a-list performers attached to a project takes time. Actors and actresses are looking for different things in projects. In general a-list performers want to play heroic parts, or at least parts that the audience will empathize with in the story. They usually want to be portrayed as attractive and they want a good story. If there is little money in the role, such as with an independent film, the actor or actress will want to be associated with a film that has potential for good reviews and a strong festival run. Then there are idiosyncratic traits. I once submitted a project to an actor that had recently decided he only wanted to star in a western. The agent loved our project but there was no convincing the actor otherwise.

Studios and television networks also often want to see that somebody "important" likes the script or concept before they get involved. A studio development executive might be nervous about bringing a script to his or her boss, because maybe the studio president will not like the idea. So if an a-list actor or major director is attached nobody can be blamed if the project fails.

The documentation of the attachment will vary depending on whether you are producing a feature film or television series. When it comes to television development, especially reality television, the attachment of the performer or celebrity host is even more important and is often the most important single factor. Therefore a contract may need to be signed with the host to protect the producer's place in the television development process before going to the network.

While agents and managers are often blamed for getting in the way of the development of scripts and television series, I have found in my own practice that the opposite is true. Often agents and managers are quite excited about a variety of projects, and it is actually the talent who really makes the decisions.

When approaching agencies and management companies, most will require that the producer be represented by an agent or an entertainment lawyer, and our firm has represented many producers who have successfully packaged film and television projects. Feel free to contact BLAKE & WANG P.A. (www.blakewang.com) for a quote for affordable, high quality legal service.

Question:

For an unpublished screenplay writer what should one expect as a rule of thumb if a major studio wants to option the screenplay and the total cost of the film, if produced, might exceed $20 million?

Answer by Brandon Blake, Entertainment Lawyer:  

The question of the proper screenplay writers' fee or screenwriter salary is always difficult because it varies so much from project to project. The question above was very specific about the budget level of the project so I will respond regarding a high budget project. I have had more than 16 years of experience negotiating on behalf of screenwriters and producers so I have seen just about every offer that can be made.

One of my clients worked with a well-known production company that will go nameless here. That production company pays first-time screenwriters $50,000.00, regardless of the budget of the intended film. It was the producer's opinion that packaging the director and actors was where the value was added to the project, so he stubbornly refused to pay any more. You will find that sometimes the larger the production company and the more famous the producers and directors working for that company, the less they will pay, at least for first-time screenwriters. And by "first-time" I mean a screenwriter who has never had a screenplay produced by a studio.

Fortunately, there are a few rules of thumb that can help when negotiating with a production company. The first common one is that a screenplay should be sold for 2% to 3% of the budget. Of course this is referring to a "spec script sale" and usually writers are hired to write bigger budget scripts and assigned the material, rather than bringing in a finished script. In actually negotiating this percentage you might find a number of problems. The first being that nobody can agree on or even knows what the budget is going to be before a feature film is shot. I even had a producer suggest that no writer fee would be paid until the end of principal photography because that was when the final budget would be known. Typically there will also be a floor and ceiling with this method.

Alternatively, it often makes sense to refer to the Writers Guild of America minimums in order to figure out how much a writer should be paid. The WGA Basic Agreement is only binding on WGA signatory production companies and eligible writers, but if the budget is $20 million then most likely the production company is a WGA signatory.

As of the date of this article the WGA minimum for an original screenplay on a high budget project would be $89,417.00. However, the WGA actually discourages "spec script sales" and the real substance of the negotiations typically involve what else the writer may be providing, or might have provided before. Is there a treatment or a first draft? Are there going to be subsequent drafts, rewrites, revisions or polishes? Will the writer stay involved with script consulting or get a producer credit? These all bring in different fee structures. And of course this is a minimum, meaning that writers will try to be paid more than these figures.

From the producer's perspective, always miles away from the writer's point of view, there is the "no-money option." As the name suggests, this is about $89,000 less than the WGA minimum. Producers tend to desire to option projects, versus purchasing them, for little or no money for the purpose of attaching a director and A-list talent. Clearly before entering into this relationship you want to know the experience level of the Producer and you should still negotiate the purchase price before starting work with the Producer.

Finally, any writer or producer will benefit from having an experienced entertainment lawyer help to negotiate their side of the deal. I have been personally negotiating both independent and studio writing deals for more than 16 years and have seen just about every different offer that can be made. With experienced counsel, a writer or producer can get a good deal, regardless of whether this is your first or tenth feature film. Feel free to contact BLAKE & WANG P.A. (www.blakewang.com) for a quote for affordable, high quality legal service.

Question:

How do I set up a record label? How do I sell my music?

Answer by Brandon Blake, Entertainment Lawyer: 

I represent a lot of record labels as an entertainment lawyer and this is one of the most common questions I get when helping to organize a record label for clients. This is a multi-part question, but I will start with what an entertainment lawyer does in setting up a record label company, and then address music representation and sales.

Over the past few years the dominance of music delivered over the Internet, versus through retail stores or music clubs, has opened up access to the music business to both recording artists and clients seeking to start their own record labels. Most simply a record label signs recording artists who record music, which the record label then sells.

Sounds easy. But looking at it from a business standpoint the first thing that makes a record label is a record label company, which might be filed as a music corporation or music LLC (limited liability company). Besides hiring an entertainment lawyer to set up the company, the record label should consider whether music investors are going to be a potential. Many of my record label clients are organized to raise a certain amount of investor money, and there are many music investors looking for opportunities to get involved in a record label. So when the entertainment lawyer sets up the record label company, consider the possibilities for music investors.

Once the record label company has been filed, it is time to consider contracts with the people that are going to make music with the record label. The different parties involved will be music producers, the music studio, sound engineers, recording artists, musicians, as well as songwriters and others. Each of these parties will need a different contract prepared by the entertainment lawyer. If these parties want to participate in the sales of the album or tracks then a music royalty or music percentage will need to be worked out as well.

The most critical music contract will be the recording artist contract. This deal might take on several different shapes. A "360 Deal" is when a record label decides to manage all parts of a recording artist's career. A 360 Deal would include music management, music publishing and recording, allowing the record label to position the recording artist's career for success. However, that is also a tremendous amount of work for the record label and the record label should remember not to stretch its manpower to thin.

Once the music has been recorded and mastered it is time for the record label to address music sales and marketing. While many record labels want to sign artists to major labels, it is now mandatory to show verifiable sales of a substantial level before approaching major labels. There are many music distributors available to work with record labels to get music out both online and also into retail stores. Of course sales and marketing online is critical and working with the right partners will ensure the success of the label and the career of the recording artist. Finally an entertainment lawyer can represent a record label and help set up the necessary connections. Feel free to contact BLAKE & WANG P.A. (www.blakewang.com) for a quote for affordable, high quality legal service.

Question:

I would like to get angel investors for my television pilot. Can I set up a non-profit for donations? What kind of a return can I promise if the show makes money?

Answer by Brandon Blake, Entertainment Lawyer: 

Non-profit financing has become increasingly popular for television, documentary and feature film development. Often it is the concept or script that hooks investor interest, rather than a promise of big financial returns. So it makes sense that the tax deductibility of financing is interesting to many potential angel “investors.”

The good news is that with a properly organized tax-exempt organization it is possible to collect tax-exempt donations for a project that is otherwise a “for-profit” venture, provided that the content of the project, whether that is a film, television or music project, fits within the mission statement of the tax-exempt organization and that the finances and control of the non-profit and for-profit entities are kept separate.

However, it is not possible to mix tax-deductibility and a future interest in profits in the same transaction. Tax deductibility and profit are like oil and water, they just do not mix. I have reviewed a number of structures by clients hoping to be able to convert a donation into an investment at a later date, thereby getting the best of both worlds. The problem with this concept is that if the “donation” were re-characterized at a later point, then the deductibility of that donation would retroactively be taken away, creating a true mess for the investor’s accountant. Moreover, in the IRS’ zeal to eliminate tax shelters, any arrangement with a contractual right to profits later would most likely be characterized up front as an investment, not a donation.

Yet our firm has successfully set up many 501(c)(3) tax-exempt organizations that participate in the financing of documentaries, television, and feature film projects. And those projects have gone on to be commercially distributed. The key to the proper use of the non-profit in entertainment finance is to understand that donations can be used to finance any project but that profits cannot flow to the donors.

A proper structure can take several different shapes, including the use of a conduit organization to receive the donations or the creation of a viable non-profit that might assist in the development of feature film, documentary or television projects.

Other options exist as well, including the use of crowd funding websites. However, it is important to note that crowd funding websites neither provide for tax deductibility, nor do they allow for any return on profits to the investor/donors. In many ways crowd funding is currently the worst of both worlds in terms of tax treatment. The donors are required to record the funds provided as non-deductible gifts, which then reduces the donor’s lifetime limit on other such gifts to family, and at the same are blocked by the SEC from participating in any future profits from the venture.

However, there are a number of creative ways to try to create benefit for donors while still utilizing the benefits of crowd funding. One such technique is to use crowd funding in conjunction with forming a non-profit organization. 

I have been working with non-profit organizations ranging in size from public universities to galleries, theater groups and documentary production companies for more than 16 years with the law firm of BLAKE & WANG P.A. (www.blakewang.com). We can assist clients in organizing solid, broad based tax-exempt 501(c)(3) organizations that gain the broadest tax-deductibility for the donors. Properly organized, a tax-exempt organization is an ideal way to unlock capital for projects that have an appeal based on the message and cause promoted, rather than the potential box office returns.

Question: 

In a recent email, the answer states that: "Entertainment companies of all kinds require film producers and television producers to submit new projects through an agent or entertainment lawyer" Most recently, Mr. Blake responded to a question I submitted about pitching a screenplay idea with the answer: "The minimum would be that it was written as a script. There are not going to be any producers out there that will get involved before a screenwriter has prepared the script".

My question: Is the answer regarding a "project" referring to a project with a completed screenplay, or a proposed project that is starting with simply an idea or treatment?

Answer by Brandon Blake, Entertainment Lawyer:  

Thank you for the very thorough question. I think it is a great question because it does get to the heart of many issues that I am asked about how to protect projects and ideas, and how to submit film and television projects. Having worked with most of the major studios and television networks, I have gained a good perspective on what development executives are looking for and how to get a project noticed. While the question here involves a feature film project, the answer is going to be equally applicable to network television as well. 

When it comes to feature film development, the key is to have the project as well developed as possible. That means that it is better to have a script than a treatment. It is better to have a polished script than a rough draft script. It is even better to have prepared pitch materials like posters and websites, than to have just a script, etc. Finally, the best position to be in with a studio is to also have a-list performers attached to the project, because that will tend to get the attention of development executives. If studios know that performers, and their agents and managers like the project, then it means the executives are taking less of a chance on choosing the material over the tens-of-thousands of other scripts submitted every year.

But what about the situation where there is a great concept but it has not been written in script format, much less packaged? I have had clients in this position before and it generally revolves around true-life stories and events. There are times when a concept is so good that it can speak for itself. In such a situation the producer needs to make sure that all of the underlying rights to the project are secured before pitching it. Additionally, these are often the situations where well-known actors and actresses get involved, because the performers can see how the concept can be developed around them as the lead.

However, no matter how good the concept, there are some reasons why a producer might want to further develop the project before approaching a studio. The primary reason is copyright law. The copyright law is set up to protect “tangible forms of expression,” and right or wrong, the courts have interpreted that as meaning that mere ideas are not copyrightable. Where an idea ends and a treatment begins is a source of controversy, but no producer wants to be in court arguing why the idea pitched was more than an idea.

This copyright issue is also why most studios will not accept the submission of ideas in the first place. From their perspective, another “teen romance” or “space cowboy” idea is not going to be so unique as to differentiate it from thousands of other produced films or projects in development, but could get the studio in a lot of legal trouble if someone later claims their concept was stolen.

For network television the same rule applies, the more developed the better. But rather than a feature length script, networks are typically looking for well-developed pitch materials as well as recognizable performers or celebrity attachments. While not everyone can afford to produce a pilot, having a broadcast quality sizzle reel can also be a great addition to the pitch materials.

I have been working with studios and networks for more than 16 years with the law firm of BLAKE & WANG P.A. (www.blakewang.com). During that period I have learned a few things about the types of materials that studios and networks are looking for from producers. The key is top quality material, whether it is a treatment, screenplay, series pitch, pilot or trailer. Never ask the development executives to imagine how good the project will be with their help. Demonstrate the ability to finish the job, which will go a long way to getting the financing and assistance needed.

Question:

How do I set up a film PPM? What is the JOBS Act? Can I raise investment money from crowdfunding sites?

Answer by Brandon Blake, Entertainment Lawyer:  

There is no doubt that private equity investment is a major source of financing for independent feature films. In fact, investors in Rule 506 offerings invested $895 billion dollars last year alone. Yes, almost a trillion dollars was raised last year under Rule 506 for all different investment types. That is more than five times the $169.9 billion that was raised in IPOs globally for that year. So the money is out there, the question is how to bring that funding to feature film budgets.

Our law firm has been setting up Rule 506 offerings, as well as other offering types, for feature film producers for more than 16 years. We expect the next 12 months to be the best period we have ever seen for producers raising private equity financing.

The Jumpstart Our Business Startups (JOBS) Act was passed in April of 2012, and is being implemented by the SEC. The JOBS Act was designed to make raising money easier for small businesses, including feature film producers. The best feature of the JOBS Act is Title II, which will allow startups and film producers to advertise their investments to the general public for the first time, provided the offering only allows "accredited investors" to invest.

This new provision will overcome the only real disadvantage to exempt offerings, which was the restriction on general advertising. By providing for general advertising of film investment opportunities, the SEC is going to exponentially increase the success rate of private investor financing, unlocking groups of investors who have probably never been approached about feature film investing.

While the SEC seems to be doing everything right on the JOBS Act, Title II, it has disappointed many micro-financing entrepreneurs with the failure to fully implement the JOBS Act, Title III, which was supposed to allow for crowdfunding sites like Kickstarter.com and others to raise investor money, not just donations.

The SEC has greatly complicated that process, among other things requiring any crowdfunding website to be a member of FINRA, the same securities regulator that major brokerages and investment banks have to join. The regulatory and reporting requirements are so steep that there would be no way to profit from running a crowdfunding site in the United States. The SEC has also stepped up enforcement of crowdfunding sites, making them risky for both the owners and the users.

So the SEC is both giving and taking this Holiday season, but there is a good chance that with the new JOBS Act Title II in effect in the coming months, startups and film producers could more than double last years haul from Rule 506 offerings, which will make a great Holiday gift for the film industry. Feel free to contact BLAKE & WANG P.A. (www.blakewang.com) for a quote for affordable, high quality legal service.

Question:

As a feature film editor my wife has the option of working as a loan out company. There are several confusing aspects in making a decision. Such as, can she collect unemployment when not working? Are pension benefits accrued under her name or does she give them up? Are there other welfare benefits she would give up by working as a loan out company?

Answer by Brandon Blake, Entertainment Lawyer: 

Loan-out companies are a great way to reduce tax exposure and to avoid the pitfalls of the alternative minimum tax and self-employment taxes. Generally the only reason that people working in the entertainment field do not form loan-out companies is when the hiring company does not allow them. Before electing to work as a loan-out, you will need to have an entertainment law firm like ours organize the loan-out company.

In this question the studio has already provided the option of working as a loan-out. Although particular facts vary from case to case, and there is not going to be a way to provide one answer to every different situation, I would say that in almost every case I have reviewed it has been substantially to the benefit of the client to choose loan-out status rather than employment status.

The primary reason comes down to taxation, and more specifically the issue of business expenses. When you are an employee you do not have the option of taking business expenses out of your calculation of income. The amount reported on your W-2 is your income and the only way to reduce your tax bill is through deductions. There are various deductions for business expenses, such as the home office deduction, and others. But the problem is that these deductions are only partial, allowing you to take a portion of the expenditure off of your tax bill, but not allowing you to reduce the size of the income figure itself. Moreover, higher income individuals will reach the alternative minimum tax, in which case most of the business deductions are then eliminated, meaning that money spent on things like vehicles, business supplies, inventories, and office space is being paid for with after tax money. Essentially you are being taxed on your revenue, not on your profit.

The loan-out company allows the individual to run in the same way that a company runs, which means the costs of doing business are taken out and the company only pays tax on the profits. This makes sense because no one expects a major corporation to be paying income tax on money it is paying out for office space or for the raw materials it uses in the course of business. So why should an individual be forced to pay tax on the materials that he/or she must purchase in the course of business?

When I counsel clients who have always worked as employees on the differences between loan-out and employment status, it often takes a while for the client to get his or her head around just what a big difference it will make to the tax bill.  Then once the client gets it, there is often regret at not having switched years earlier.

I have spent a lot of time talking about the upside, but there are a few downsides too. One of those is unemployment insurance. In order to maintain unemployment insurance, you will need to pay yourself a fair salary. That means a portion of the money that flows into your loan-out will need to be paid to yourself, with the traditional withholdings and deductions.

Regarding the other questions, pension benefits will depend entirely on your guild rules so check with the Pension Health and Welfare people. Regarding other types of welfare benefits, generally those are tied to showing previous employment, which would still be possible with a loan-out. 

I have been setting up loan-out companies for clients for over 16 years with the law firm of BLAKE & WANG P.A. (www.blakewang.com). The reason to have a loan-out set up by an entertainment law firm like ours is that we can make sure you can take advantage of every possible tax benefit, and also ensure that your entertainment business is in compliance with federal and state tax law, saving you tax penalties and accounting fees in the long run. Feel free to contact us for a quote.

Question:

Dear Sir, I have a completed feature film and I would like to know what I need before I attend a film market?

Answer by Brandon Blake, Entertainment Lawyer:  

Having worked with feature filmmakers for more than 16 years, I know that perhaps the busiest time is during post-production as a producer begins to think about the successful distribution of the project. 

Typically the producer and director will be focused on getting the picture editing just right while the audio is second, the legal contracts are somewhere in the back of the producer’s mind, and the promotional materials end up only lightly considered. So I want to bring up a range of things that filmmakers should consider as they are completing the film, which touch on both legal issues and also film sales issues.

Most producers have a general idea about the need for contracts, copyrights and trademarks. I will not cover this ground too much in this article, although anyone interested in additional articles about film contracts as well as the film distribution agreement can visit my firm’s website at www.blakewang.com.

Entertainment legal should be handled during the production, since it is much easier to get actors and writers to sign off on agreements before they start work. At some point everyone that participates in the production will need to sign a contract, if the project is going to get a commercial release. That is because distributors require E&O insurance (errors and omissions insurance), and before the insurance company will agree to cover a film the insurer will require that all production legal has been completed.

When it comes to film sales, I routinely attend film markets around the world, including the Cannes Film Festival, AFM, Sundance, Hong Kong FilmArt and this October I will also attend the Busan International Film Festival (formerly Pusan), the largest film market in Asia. When I represent finished feature films, I am often surprised how many experienced producers spend a tremendous amount of time editing the images, without as much attention to either audio or marketing and promotions. The good news is that every film can get attention from buyers if the following materials are put together before the markets.

In my experience, more films get passes because of deficient audio than almost any other technical problem. Sound editing, sound design and audio mastering are all critical to successfully distributing a film. Moreover, often the sound elements are what cause needless additional distribution expenses if it is left to the distributor to fix.

The promotional materials are also key. Trailers are important, although many distributors will want to create their own, but the website, stills and yes, the poster are all crucial. The fact is that without an excellent website and poster, distributors will pass on the project without even reviewing it. The initial sell of a feature film comes from the poster and one-sheet, with the website and trailer being the tools to get the buyer interested enough to invest 90 minutes in the film.

With the right promotional materials and of course the proper legal paperwork and documentation for the chain-of-title, every film can get noticed by buyers. I have been representing feature films for over 16 years with the law firm of BLAKE & WANG P.A. (www.blakewang.com). Feel free to contact us for a quote.