Question for FilmTVLaw.com:

Thanks for the amazing articles Brandon! Hey, I want to get out there with my series but I’m nervous about the big production halt. Is it a good time to try to set up a series?

Answer by Brandon Blake, Entertainment Lawyer:

Thanks for the positive words! Our firm has never slowed down with development and pitching work, so I’ve got some great news about development right now for television and also feature projects. When you have a moment, take a look at the rest of my entertainment law articles available all in one place at https://filmtvlaw.com/entertainment-lawyer-qa.

DEVELOPMENT

So, unlike some of the big agencies like WME and CAA, our firm has not slowed down or stopped shopping projects to networks, production companies, or agencies. The results for the projects we are currently representing have been great. In fact, I have been getting stronger responses on many projects over the past three weeks than average for this time of year. There are a couple of different reasons for that which I am happy to share.

A-LIST CAST

I will start with a word about cast first. Right now, every major television series has halted production, and the feature film world is just the same. Of course, nobody wants to put cast or crew in harms way, and beyond that, there are some legal issues about whether or not general liability insurance and workers’ comp insurance will cover the producers if someone catches COVID-19 on set. Chances are that the insurance companies will not cover the costs under the pandemic or “Acts of God” provisions in standard insurance policies.

To add further production confusion, it is also possible that cast contracts with a “force majeure” clause in them can now be activated, which often allow either party to breach the contract should a particular event, like a pandemic, occur during production.

While that all seems very troubling, the upside is that there are now a lot of great cast that are sitting at home and open to reading the next great series pilot or feature film. Moreover, because a number of major agencies have given up packaging right now, there is also not very much competition, so there really has never been a better opportunity to get amazing cast to read and fall in love with a new project.

NETWORKS AND PLATFORMS

As I mentioned earlier, although the front desk of many Networks might have a general recording playing, all development executives are working from their cell phones and emails, and are busy stocking up on new scripts and new projects, in anticipation of the inevitable end to this situation.

In fact, management at some networks is encouraging both development executives and idled production executives to put all their efforts into development, even asking execs to focus on passion projects and new materials. Again, this is an awesome opportunity for new producers and producers looking to get into scripted or looking to move up to bigger networks.

PRODUCTION COMPANIES AND STUDIOS

It’s the same story here, with the exception that executives on the distribution or production side might begin to get paired down in the next few weeks. Disney already announced some aggressive staff reductions, although from my contacts it appears to be limited to distribution executives right now (those that deal with theatrical releases).

So, it’s a great time to bring new materials in development to production companies and studios. Just be ready to get a tentative greenlight, because nothing can go into physical production until the Stay At Home orders are lifted. As long as producers are realistic on this point, there are a lot of opportunities for feature projects.

Although no one can say how long the production holds might last, the fact is that a lot of producers are using this time to line up their next project. In an industry with such a huge amount of competition for top cast and network and studio attention, serious producers are using this as an opportunity to move to the front of the development queue.

Our firm can get your project to major networks, platforms, film studios and production companies. Feel free to contact our firm about film or television development representation. As with all complex entertainment matters, please seek experienced entertainment legal counsel before making legal and financial decisions. This article is for informational purposes only and does not represent legal, accounting or tax advice. Do not act on this article without hiring legal representation.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

I’m hoping you can help me to decide if I should produce my new project as a movie or a TV show. I think it could go either way, and a lot of my friends encouraged me to try to produce it as both. What do you think and can you help me get it produced?

Answer by Brandon Blake, Entertainment Lawyer:

This is certainly the big question these days and there are a lot of different ways to think about it. When I represent television series and feature films during development, I gain a lot of insights by talking with network and studio executives. I’m happy to share some of those insights with independent producers because I think it will make a big difference to the decision of how to develop a project. Please also check out the library of entertainment industry articles I have published over the years at https://filmtvlaw.com/entertainment-lawyer-qa.

FORMAT

First off, just to cover the basics, it is probably a good idea to clarify what it means to choose to develop a project as a feature film or as a television series. A feature film is developed as a single production, over 80 minutes in length. Conversely, a project developed as a television series should be conceived of as not a single program, but instead as a series of programs, typically in the 30 minute or 60 minute format. Episodes of 10 or 15 minutes are not typical for network or cable series, except sometimes for animation. Web series can be much shorter episodes but producing a project as a web series means you will not find broader network or platform distribution for the project. Likewise, a series should be considered in the context of at least 6 episodes, because anything less is not typical television development.

If a producer’s ambition is to first produce a feature film, then move into a television series based on the feature, then that is typical feature film distribution and it is not necessary to develop the series simultaneous with the feature.

One idea that pops up quite often is that a feature script of 80 or 90 pages can also be pitched as a television pilot. However, serious producers acknowledge that there is a big difference between an 80 page pilot and an 80 page feature film. It makes a lot of sense to solidly choose a direction early on.

MARKET DIRECTION

As I mentioned, a lot of articles about film and television development dwell on the market direction, so as to determine where there will be the most potential finance and audience available for your completed project. I do not agree that this is necessarily the major concern for most independent producers, but it is a good idea to go into your project development with your eyes open to the realities of the market.

The reality is that today, the market for television content is substantially greater than for feature film projects. That is being driven by a couple of factors. First, the platforms including Netflix, Amazon, Hulu, Peacock, HBO Max, and Disney+ all want to acquire a lot of content to fill out their services, and the easiest way to do that is through series rather than a lot of one-off feature films. Second, many of the platforms believe that series create more follow through with users, who will watch more content when it is produced in a series format, while they are more picky about choosing new features. Finally, financing is more difficult for features, because most feature films require private equity investors. More about that later in the article.

But despite all of that, many more feature films are produced than series, which really is not a benefit to the independent producer, because despite the smaller market and lower financing available, there is also more competition in the market with other features.

That all would tend to support pursuing television development for a project, but again, I don’t think most producers should strictly decide on how to develop a project based on market factors.

CREATIVE DEVELOPMENT

Just as important as market factors, independent producers should consider creative issues when deciding on whether to produce a project as a feature film or television series. This breaks down into a couple of different considerations.

Format: First, can a project really fill out at least 6 to 12 episodes, meaning at least 6 hours of content? Not every feature can be stretched out into multiple episodes successfully. I also think it is a big error to imagine that every television series is just a very long movie. That is not the case. There are fundamental differences between the structure of a series and the structure of a feature film.

Budget: Second, do you have access to financing to 20% to 50% of the feature budget, or can you raise it in short order through private investors or self-financing? If the answer is yes, then you might be in the position to have the cameras rolling in the next 3 to 6 months, and that is a very attractive proposition to many independent producers. A television series is going to take longer to develop, longer to green-light, and longer to shoot.

A-List Cast: Third, how interested are you in name cast? The fact is, to rise above the noise of the independent film market, producers need to attach A-list (or best available) cast to their feature projects. That means working with a law firm like ours to make offers to lead cast members. It also means catering to cast in terms of the types of roles that are written into the script. There are amazing, interesting characters that no actor wants to play. So “castability” has to be a consideration when going the direction of feature film development.

Story: Forth, how important is story to you? Careful on this one. Like most people, for years I felt that feature film tended to have better writing and sharper, more contained stories. However, what I have discovered over the past few years is that network creative and development executives really care about story and character. In fact, time and time again, when I am representing a series to networks, the first thing a development VP will ask me about is the story or the characters. If you think about it, that really is how it should be.

Conversely, there are quite a few conversations I have with film companies where at some point in the conversation the executive will tell me that “we don’t care about scripts.” A lot of film financiers will ask for a copy of the financial plan before the script! Instead, cast attachments, equity financing sources, and distribution guarantees often take precedent over the story and characters.

There are a lot of good reasons for that happening in the feature film world, mostly revolving around the absence of secure financing for feature film projects. However, I can’t help but feel like the entertainment industry is gradually moving to a world where producers and writers that care about quality are going to increasingly gravitate toward television development.

Our firm can get your project to major networks, platforms, and film studios and production companies. Feel free to contact our firm about film or television development representation. As with all complex entertainment matters, please seek experienced entertainment legal counsel before making legal and financial decisions. This article is for informational purposes only and does not represent legal, accounting or tax advice. Do not act on this article without hiring legal representation.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

I’m raising money for a movie and one of the executive producers said that if we are raising money under Regulation D that we don’t need to file anything anymore because it is under the Reg. D exemption. I didn’t think that sounded right but he sent me this link: sec.gov /fast-answers/answers-regdhtm.html. Is this too good to be true?

Answer by Brandon Blake, Entertainment Lawyer:

I am happy you asked this question because I have been getting hundreds of questions about it and I hope this article will answer a lot of film and television producers’ questions. If you have not yet, please take a look at my library of entertainment industry articles at https://filmtvlaw.com/entertainment-lawyer-qa where I answer questions twice a month for clients and friends of the firm.

REGISTRATION OF SECURITIES

This all started with how Google links to part of a question and answer on the SEC’s own website. When I saw it online, I confess I was confused at first as well, even though I have practiced securities law for 19 years.

Here is the excerpt as it appears on Google:

What is a Regulation D exemption?

Regulation D Offerings. ... Regulation D under the Securities Act provides a number of exemptions from the registration requirements, allowing some companies to offer and sell their securities without having to register the offering with the SEC. Dec 2, 2009

sec.gov › fast-answers › answers-regdhtm

At first glance it seems conclusive. “Some companies” can offer and sell securities without a registration, and it is all based on Regulation D. One thing to notice is the “…” in the middle of the Google excerpt. That indicates that Google has edited and excerpted this from another source, in this case, from the SEC website.

I’m not surprised that a lot of film and television producers have been confused by this statement. However, the key to understanding it involves knowing a little more about securities laws.

For a securities lawyer like me, the word “registration” does not mean what it usually means in casual conversation. In SEC-lingo “Registration” means the same thing as “IPO.” The SEC usually deals with really big companies that are raising billions of dollars. Companies that want to “go public” or conduct an “IPO” are required to “Register” their securities with the SEC.

When Facebook and Google sell securities, the SEC works with them directly, something like an IRS audit, making sure that the offering is being conducted according to all of the rules and regulations in place in the United States to govern an IPO.

This process generally costs several million dollars. Just to repeat that, “Registration” with the SEC will cost more than $1,000,000, because it is so much legal work to comply with all of the requirements, including filing the IPO in all 50 states.

For companies like Facebook and Google, a few million dollars in legal fees is like a rounding error and represents an insignificant percentage of the funds being raised. But for a film or television producer who wants to raise five million dollars, paying 20% of those funds for Registration doesn’t make any sense.

FILING FOR EXEMPTION

So, the SEC enacted Regulation D in 1982 to create a simplified way of filing an offering with the SEC of smaller amounts of money. It is true that an offering filed pursuant to Regulation D is “exempt” from Registration, meaning that you don’t have to pay millions of dollars on an IPO that will be filed in all 50 states.

However, that does not mean that there is nothing to do to file a company for exemption under Regulation D. In fact, the very link provided by Google leads to the following discussion on the SEC.gov website:

Companies that comply with the requirements of Regulation D do not have to register their offering of securities with the SEC, but they must file what’s known as a "Form D" electronically with the SEC after they first sell their securities.

And the SEC website continues:

Even if a company takes advantage of an exemption from registration, a company should take care to provide sufficient information to investors to avoid violating the antifraud provisions of the securities laws. This means that any information a company provides to investors must be free from false or misleading statements.

You should always check with your state securities regulator to see if they have more information about the company and the people behind it. Be sure to ask whether your state regulator has received notice of the offering.

In other words, there is still a lot of work to do when you are filing an “Exempt” offering. As the SEC states above, that work is broken down generally into 1) Filing the SEC Reg D. electronically, 2) Providing investors with required disclosures and disclaimers to avoid securities fraud charges, and 3) Complying with state law requirements to file your offering.

The work required to comply with SEC Regulation D makes up what is called an “Exempt Offering”. Preparing this material includes a PPM and other investor disclosures and disclaimers. While it is a lot less work that Registering your offering, it still is a complicated process.

KEEPING INVESTORS HAPPY

All this work is basically done to keep investors happy. Investors want to know what producers are going to do with the money, what is expected of them, what is expected of the producer, and what they can do if the film or television project ends up not making money.

If done correctly, complying with securities laws answers a lot of investor questions and provides a framework for how to compensate them if there are profits, and how to let them take tax deductions if there are losses.

Another benefit of filing for exemption is that it will allow your investors to take advantage of the Tax Cuts and Jobs Act tax deductions that are available to support film and television productions. This is a great benefit that you can provide to your investors by properly setting up a securities offering.

And the cost of not complying is first, securities fraud on both the federal and state level, and second, the investors will have the right of rescission, meaning that the investors will have the right to get back their money, even years after the movie was produced. When nothing at all is done to inform investors about the terms of the investment, ultimately the FBI can get involved, and their have been recent cases of the FBI arresting producers involved with what many filmmakers feel is “normal” business practice, meaning doing nothing more than filing an LLC when raising investor funds.

Please feel free to contact our firm about setting up a securities offering for your film or television project. As with all complex entertainment matters, please seek experienced entertainment legal counsel before making legal and financial decisions. This article is for informational purposes only and does not represent legal, accounting or tax advice. Do not act on this article without hiring legal representation.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

Thanks for all the super informative articles over the years! Hey, I’m always hearing terms like “pilot season” and “pitching season.” Is there a strict rule about this or is it more of a year-round thing now?

Answer by Brandon Blake, Entertainment Lawyer:

Thanks for your important question about television pilot season and pitching season. If you have not yet, please take a look at my library of entertainment industry articles at https://filmtvlaw.com/entertainment-lawyer-qa where I answer questions twice a month for clients and friends of the firm.

So, the short answer is yes, “pilot season” and “pitching season” are still important times of the year, and especially for scripted network television. While I would say that in general reality television is probably a year round pitching season, and Netflix and Amazon (and probably soon Peacock, HBO Max, and Disney+) are also open to beginning new programs year round, major networks and to a lesser extent cable networks still do have a schedule for scripted programs, and to give yourself the best possible odds of success, you should be aware of it.

And to answer the question up front, yes, our law firm does represent series concepts and pilots to major networks, cable networks, and the platforms including Netflix, Amazon and Hulu.

Pitching Season:

Unlike Pilot Season, pitching season does not have a firm start date, because even the major networks will begin hearing series pitches early in the year. However, late May to early June is when pitching season really gets underway. Why? Because Upfronts are help the third-week of May every year. More about that below.

Traditionally series concepts and scripts are pitched from June until the start of the Holidays in December. Over the Holidays network executives will decide which series concepts will get a pilot order.

But what if you have already shot a sizzle reel or pilot? The sizzle reel will be considered part of the series concept, so that does not change the order of things. However, if you have shot a pilot independently, then read more below.

Pilot Season:

Pilot Season starts in January, when major network executives begin ordering pilots for series. Pilot orders are when a network decides that a series pitch is good enough to merit the production of a pilot to determine whether or not the series concept will translate into a popular series.

This leads to a period of roughly February through April when pilots are cast and produced. This is a busy time for actors and production crews as a substantial number of the network pilots will be shot during this period.

But what if you already have a pilot? Like I said, a lot is changing the world of television development and production, and one of those changes is outside funded and produced television series pilots. There once was a time when very few would risk the costs associated with independently produced pilots, but if a production company does make that risk, and if the pilot is good, the producer is leap frogging over much of the pitching process and presenting Networks with the opportunity to view a pilot without going to the expense of developing and producing the pilot in house.

Upfronts:

In April and May major networks will then make selections regarding series orders. Only a handful of the pilots at each network will get series orders. What’s the rush in late April and early May? The annual Upfronts are held in New York in the third week of May. This is where sponsors get to see the new series orders and make bids on commercial airtime “up front.” It is these sponsor orders that pay for all of the series and make up for all the losses on the pilots that don’t get selected.

But what about Netflix, Amazon and Hulu (soon to be joined by Peacock, HBO Max, Disney+)? To the extent that major networks like NBC with Peacock.tv, Warner Bros. with HBO Max and ABC/ Disney with Disney+ begin to adopt the same subscription model as Netflix and Amazon, you will begin to see a move away from the rigid Pitching Season and Pilot Season at the major networks. Why? Because none of those (for now) will be funded by sponsors, so rushing to get things ready for Upfronts will be a thing of the past. That is at least until the subscription model falls apart and we start seeing ads on Netflix, which is coming.

Getting a Project into Pitching Season and Pilot Season

In order to get a series project to be considered for pitching season and pilot season it must be represented by either a major agency, an entertainment law firm with relationships to the networks, or be developed by a major production company with an in-house deal with a Network or Studio.

I have talked with development and creative executives at multiple networks and they have all repeated the same thing. Although attaching a major production company is no longer required for many areas of television development, representation continues to be a pre-requisite to their review of a project.

Please feel free to contact our firm about shopping television series concepts and pilots this year. As with all complex entertainment matters, please seek experienced entertainment legal counsel before making legal and financial decisions. This article is for informational purposes only and does not represent legal, accounting or tax advice. Do not act on this article without hiring legal representation.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

Assembly Bill AB 5 regarding contractor vs employee classification is geared towards the gig economy especially Uber and Lyft, but it will have effect on independent musicians. Would it have any impact on independent films and television series and how? It would be great to write on this in your next article.

Answer by Brandon Blake, Entertainment Lawyer:

Thanks for a great question about the independent contractor law California AB 5, which has now passed and become the new California Labor Code Section 2750.3, which eliminates much of the independent contractor status in California. If you have not yet, please take a look at my library of entertainment industry articles at https://filmtvlaw.com/entertainment-lawyer-qa.

Unless there are some entertainment industry amendments next year, as of January 1, 2020, California film and television producers will lose the option to hire most production crew as independent contractors. Having now reviewed the new California Labor Code Section 2750.3, I do not see many exemptions available for the film and television industry, and in fact, the film and television industry has been specifically targeted by the new law, removing exemptions otherwise available to the publishing and print advertising industries.

Background of AB 5

The legislation originally known as AB 5 was intended to deal with some abusive labor practices primarily in the California transportation industry, specifically in harbor trucking and for ride sharing apps like Uber and Lyft.

But with arguably some great intentions, one of the most sweeping labor laws in California history has been passed, one that is not limited to the app or gig economy, and one that by its very language specifically targets the film and television industry.

Ironically, both the harbor trucking companies and Uber and Lyft have vowed to continue hiring drivers as independent contractors under some apparent loopholes that will leave the original targets of the law to skate through this without doing much more than increasing costs for their independent contractors.

The New Test for Independent Contractor Status

Here is the new language of the Labor Code Section 2750.3:

2750.3. (a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:

(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

(B) The person performs work that is outside the usual course of the hiring entity’s business.

(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

I think it is safe to say that part 1(A) above is written so broadly that by the nature of the language it would be practically impossible for any producer to claim that a member of a production crew was “free from the control and direction of the hiring entity.”

However, part 1(B) is equally difficult for a film or television producer, given that the crew member would most certainly be performing services within the scope of the business of the production company.

That means that the California entertainment industry could only look to the exemptions for possible ways to continue to hire cast and crew as independent contractors.

Exceptions to AB 5 and Labor Code Section 2750.3

One of the primary exemptions from the new AB 5 comes in defining certain occupations as “professions” which are exempt from the protections of the new Labor Provisions. However, anyone looking for a film and television specific exemption to AB 5 is going to get an unpleasant surprise in Section (a)(2)(B)(ix), where film and television crew are specifically not included in an exemption for photographers:

(ix) Services provided by a still photographer or photojournalist who do not license content submissions to the putative employer more than 35 times per year. This clause is not applicable to an individual who works on motion pictures, which includes, but is not limited to, projects produced for theatrical, television, internet streaming for any device, commercial productions, broadcast news, music videos, and live shows, whether distributed live or recorded for later broadcast, regardless of the distribution platform.

What does that mean? It means that one of the only possible exemptions for film and television professionals was specifically removed by the legislative action, to make clear that film and television crew must now be considered employees and not independent contractors.

No Effect on The Entertainment Industry

As part of the legislative history, the legislature stated that they relied on film and television industry executives, as well as entertainment attorneys, who testified that there would be “no effect on the entertainment industry” by the passage of AB 5.

I am very surprised that was the opinion of the entertainment industry members that they asked about AB 5. However, I can only guess that the reason might be because many studio and network projects are produced in New Mexico, Georgia, Louisiana and Canada, and hence will not be affected by the new California Labor Code provision, and if only larger productions were considered, it is true that most of the crew is already on payroll. Unfortunately, it seems the independent film and television community has been overlooked.

Contract Solutions and Loan-Outs

There may be certain other provisions of the new Labor Code Section 2750.3 that will provide an independent contractor option for certain members of the crew, specifically writers and producers.

Moreover, some additional members of the crew might also be extended independent contractor status, but not without the imposition of new costs on these crew members.

For the above-the-line cast and crew, this would seem to strike at the heart of the loan-out company, taking away one of the last ways that business costs and expenses can be deducted, given that the Tax Cuts and Jobs Act took away business deductions for employees.

It’s imperative that anyone planning a production in 2020 hire an entertainment law firm like ours to provide pre-production and production legal for the project. Using any crew or employment contract drafted before January 2020 for a California production in 2020 and beyond will potentially subject producers to substantial tax penalties and law suits by both cities and the State of California, because AB 5 creates separate causes of action for California cities where the work is performed. That means if you hire an independent contractor in certain cities, the city itself can file a lawsuit against you personally. All it takes to get the ball rolling is for one contractor to sign up for unemployment benefits after the shoot.

Please feel free to contact our firm about film and television production legal for your next film or television project. As with all complex entertainment matters, please seek experienced entertainment legal counsel before making legal and financial decisions. This article is for informational purposes only and does not represent legal, accounting or tax advice. Do not act on this article without hiring legal representation.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

I’m getting ready to shop around my TV pilot script and a couple writers I know told me that I should get a good NDA drafted to protect my rights. Is that the best way to protect a television series?

Answer by Brandon Blake, Entertainment Lawyer:

Thanks for a good question about protecting television series rights. As an entertainment attorney for the last nineteen years I view my responsibility as split evenly between protecting the rights of my clients work and equally importantly, getting projects out to networks, production companies and agencies that can help bring the projects to life. If you have not yet, please take a look at my library of entertainment industry articles at https://filmtvlaw.com/entertainment-lawyer-qa.

So to answer this question, I will start with the things every writer could and should do themselves to protect television series rights. Then I will touch on some things I do not recommend, and finally, I will mention why submitting your series project though our entertainment law firm is the number one way to protect your IP rights from plagiarism or infringement.

Do-It-Yourself

Some things really do get easier over the years, and nothing has been so streamlined as filing copyrights with the US Copyright Office. The Copyright Office makes available all of the necessary filings online, and there is no reason not to file a copyright for your television series before you get out there and start shopping it. It’s never too late to do it either. If you have not gotten around to it, here is the link:

eco.copyright.gov/eService

So, you might ask, is it really that easy? Yes, it is relatively easy. There are a lot of prompts and information that you can read along the way if you get stuck.

There are a couple of cautions: One is that the Copyright Office in the past year or two has gotten a lot more particular about “Works Made for Hire.” That is no longer the default choice for most producers and the Copyright Office has hired some examiners that are rejecting some filings. Still nothing like the rigor applied to Trademark Applications, but there is a little bit of oversight now at the Copyright Office.

WGA Registration

For nineteen years I have pondered the question of why the default way of protecting a film or television script for most writers is WGA Registration. Now if you are a WGA Member, then it is required. But for most non-WGA writers there is very limited benefit from a WGA Registration.

I actually discourage WGA Registration because of the fact that it gives writers the false sense of security that the project has been protected by making this filing. WGA Registration does not provide any statutory protection of the script, and it also expires in just five short years. Most writers and producers who have filed a script with the WGA will not renew the registration, and hence their scripts are entirely unregistered and unprotected, and they probably do not even know it.

Non-Disclosure Agreements

Now we are getting to a delicate subject because there are writers and producers who feel that it is absolutely essential to get a non-disclosure agreement signed by anyone who reads the script.

On one hand I respect the fact that it is a powerful way to protect the IP of a project, because a signed contract will specify exactly what the expectations are for protecting not just the copyrightable expression, but also the idea and title, which are not protected under copyright law.

However, many networks, production companies and studios will not sign a non-disclosure agreement before reading an outside script. In fact, many of them will request the writer or producer do the exact opposite and sign a submission release, which specifies that the writer or producer will have limited rights to sue in case of infringement or plagiarism of the idea.

I would suggest that this is one of the reasons to submit through a known entertainment law firm like ours, rather than resort to doing-it-yourself on this issue. For each network or production company that will sign, five more will not, and in television pitching, you don’t want to damage your odds that way.

Trademarks

Trademarks are another way to protect some of the IP rights to a television series. If you feel that the title of your series is especially important, or if you have certain designs, logos, or characters that might be unique and protectable, then trademark might be an option.

Typically, animated projects are most likely to need trademark protection, since a big part of an animated series are the character designs and the artwork for the series. On the other hand, reality television series are another good candidate for trademark protection, because less of the pitch materials are copyright protectable.

Submission Through an Entertainment Law Firm

Finally, I would like to discuss the number one way to protect the IP rights to a television series, and that is to have the series submitted through our entertainment law firm. None of our clients’ series or feature projects have ever been infringed or plagiarized.

If you think about it, having a third-party submit the series and keep detailed notes about what was submitted, and to whom, is the ideal solution, and if that third-party is a law firm which can enforce a client’s rights in court, it is going to make any infringement very unlikely.

Moreover, unlike requiring readers to sign a non-disclosure first, major networks, production companies and studios actually like it when a project is submitted through a respected entertainment law firm. That’s because networks, production companies and studios are paranoid that writers will file false infringement claims, and they feel more confident when a third-party has documented the submission. So, submitting through an entertainment law firm really is a win-win for everyone involved.

Please feel free to contact our firm about television representation, copyright and trademark services. As with all complex entertainment matters, please seek experienced entertainment legal counsel before making legal and financial decisions. This article is for informational purposes only and does not represent legal, accounting or tax advice. Do not act on this article without hiring legal representation.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

I’m an experienced showrunner with two series under my belt. I’m shopping around a third but getting shut out of all but current connects and friends. I never went the agent route, but now considering agent vs. manager vs. law firm. Appreciate any insights.

Answer by Brandon Blake, Entertainment Lawyer:

Thanks for a good question about television representation and shopping television series. I have been representing television writers and producers for nineteen years and I have never seen a better time to be out there with a new television series project.

I would like to focus first on the differences right now between WGA showrunners versus non-union television producers and writers. Please feel free to visit my website at www.filmtvlaw.com where I publish my entertainment lawyer Q&A with years of inciteful articles and advice on the film and television business.

WGA Writers

First off, there has been an ongoing dispute between the WGA and the Association of Talent Agents for three months now. The Writers Guild has required members to fire agents that have not signed a new Code of Conduct that prohibits packaging work on behalf of production companies and networks, and also prohibits agencies from forming their own production companies.

So, for WGA members, none of the large packaging agencies have signed the Code of Conduct. The good news is that there are some great smaller agencies that have signed the Code of Conduct that you should consider. Otherwise, WGA members can choose between management firms and entertainment law firms for representation.

Talent Managers

Getting a talent manager to represent the new project is an option for both WGA and non-WGA showrunners. If you have a track record of financially successful projects you should look into management representation.

However, if you are located in either California or New York there is another hurdle for talent managers to overcome to be able to directly pitch projects to production companies and television networks. Both states have a version of the Talent Agencies Act. This was a very well-meaning law passed nearly 50 years ago. Originally it was set up to prevent agents from negotiating talent contracts on behalf of clients unless they paid a bond to the State, as well as to cap the percentage agents could charge.

Most talent managers are not also talent agents and so they are legally restricted from “soliciting employment” for their clients by the Talent Agencies Act. It is not completely clear what “soliciting employment” means, especially as it relates to showrunners, but it is the reason that most managers require clients to also have agency representation, as a way for them to avoid any liability under the Talent Agencies Act.

Given that the average management fee is 15%, if agency representation is also required, you are then at 25% in commissions off the top. However, there are no upfront fees.

Entertainment Law Firms

Law firms like BLAKE & WANG P.A. that exclusively represent film and television projects have always been exempt from the Talent Agencies Act, by virtue of the fact that entertainment lawyers are already required to be licensed by the State Bar.

In fact, the Talent Agencies Act was originally drafted to protect agency clients from agents who were negotiating contracts and taking commissions, without any State license or oversight. The State Bar Act in California went into effect in 1927, more than 50 years before the Talent Agency Act.

Therefore, entertainment lawyers are not prohibited from “soliciting employment” for clients and are the only other group besides agents licensed to represent talent clients directly to production companies and networks in California and New York. Other states have different laws, but most have subsequently passed some form of the Talent Agencies Act.

One difference from talent agencies and management companies is that entertainment law firms do not work on a commission. The State Bar prohibits entertainment lawyers from making the sort of client agreements that agents and managers do, so for that reason hiring an entertainment law firm will require some startup capital.

Talent Agencies

For non-WGA showrunners, talent agencies are another great option for representation of film and television projects. Ideally talent agencies will be able to leverage their other name cast and directors by “packaging” them with your series project.

That is one of the reasons why the big four talent agencies, WME, CAA, UTA and ICM have been the primary targets of the WGA dispute with agencies. These four very large agencies represent most of the biggest name performers and directors, and hence can add a lot of value to a project they represent.

Smaller agencies are less likely to have the name talent in-house, and so their business will involve shopping the project to other agencies and cast, before contacting production companies and networks.

A lot has been made of the big four agencies being paid by production companies and networks for their packaging services, hence avoiding the commission system altogether by actually getting paid by third-parties.

However, it really is a bit unrealistic of writers to expect agencies to finance the development of their series projects. Packaging has created a conflict of interest, but let’s face it, the only entity that can really pay for the development of a television project is the producer. So long as writers stay out of the business-side of entertainment and want to be courted by others, there will always be a cost problem with the current vision the WGA has of television and film development.

Please feel free to contact our firm about television representation, shopping and packaging services. As with all complex entertainment matters, please seek experienced entertainment legal counsel before making legal and financial decisions. This article is for information purposes only and does not represent legal, accounting or tax advice.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

A friend of mine is investing into a movie and asked me to get involved too. I’ve never invested into that industry, but from my layman’s view the movie seems to have merit. What should I be looking for to protect myself if I decide to dive into this one?

Answer by Brandon Blake, Entertainment Lawyer:

Thanks for a great question about investing in a feature film. Over the last 19 years I have represented many feature film investors. Feature film finance has changed quite a bit over the past few years thanks to all the new tax incentives available to help reduce the risk of film and television investing.

I want to focus on the whole process today, from the most basic things to look for in a film investment, to the more sophisticated incentives and tax credits that can make a film investment attractive.

The Package

First off, anyone new to feature film investing should be aware of the concept of packaging. Packaging is what the big agencies like WME and CAA do for client production companies, when they attach famous actors and directors to a project to increase the marketability of the film.

No matter how great the concept and the script might be, distributors and sales agents will be looking for well known cast to get the audience to turn out for the film.

While there are a number of ways to demonstrate the interest from cast, such as Letters of Intent, the fact is that a Letter of Intent will not ensure that that cast member will actually appear in the film.

Instead, investors should look for guarantees in the financing materials that particular actors will appear in the film, thereby securing the investment with bankable actors and directors.

Distribution

Again, many independent filmmakers rush into production, and then end up with a finished feature film with no distribution. That generally happens because the film producer is deriving all the benefits from the film from the production of the film itself. Most likely the producer and director fees are tied to production, and the filmmakers can use the film as a kind of resume to make their next feature.

But the investors end up paying for a resume that might not be destined to finding distribution. So, investors should look for feature film projects where the filmmakers are lining up distribution before the start of production.

That is not to say that it is realistic to see a signed distribution agreement before the financing of a film occurs. If a distributor made that type of a commitment it would likely also be providing financing and then there would not necessarily be a place for private equity investors at all.

But investors should look for guarantees from the film producer that distribution will be lined up before production commences on the project.

The Offering

It surprises me that there are still a large number of high-level production companies and film finance companies that do not conduct the legally required securities filings with the Securities and Exchange Commission (SEC) and with the State Securities Administrators.

From an investor standpoint there are a couple of reasons why you want to look for feature film and television investments that have been filed with the SEC.

1) Tax Incentives: There are many tax incentives that will not be available, or will not be easily claimable, without the right securities and finance paperwork. For example, the new Section 181 tax deduction, which relies on Section 168 bonus depreciation, requires a detailed process of qualification for the film, as well as the investment to be properly organized, to take the new tax incentive.

The best way to ensure that you can take the new Section 181 tax deduction is to make sure that all of the tax information and qualification materials are part of the securities offering. No law firm will take the risk of qualifying a film or television project after the project has already been produced.

Likewise, there are numerous other tax incentives that can virtually eliminate the risk of investing in film and television, but unless those incentives are part of the financing documents, an investor cannot guarantee that they will actually be available to the investor after the film is completed.

2) Liability: There are two factors to this issue.

First, a properly filed investment company and offering ensures that you as the investor will never be liable for anything more than your initial investment. Legally that cannot be guaranteed through a simple investor agreement or partnership document. Unless there is a properly filed investment company and offering, liability arising from the film or television project could actually be charged to the other partners or joint venturers in the project, including the investors.

Second, many investors I work with also tend to get involved with selling the investment to other friends and associates. That might be on a casual basis, or it might be for a commission. In either way, the only way that the investor can make sure that he or she does not take on liability for introducing other investors to the project is if the offering is properly filed with the SEC and the states where the investors reside.

It is really in the film producer’s interest to properly file the investment with the SEC because then he or she knows that investors will have the confidence to sell the project to others.

3) Clear Documentation: The SEC and the State Securities Administrators require clear and detailed instructions about how the investment is going to work and the rights that the investors will have in the project.

This is to the advantage and benefit of the investor, who otherwise might be in the dark as to the way that the investment works. In fact, one of the biggest problems I see with film and television investments is that no one knows how the profits of the film will be distributed to the investors. Typically, this is not intentional, the filmmakers simply are not concerned with financial aspects. Their goal is to produce a film, and very little thought is given to how investors will benefit from the project.

Tax Incentives

Finally, the number of tax incentives available today for film and television production is truly incredible and to not take full advantage of these incentives is a real lost opportunity for the investor.

For example, investors today can take a 100% tax deduction under the new section 181 tax deduction, with section 168(k) bonus depreciation, for a film or television investment.

That is just the start of the incentives and tax credits available for feature film and television production. If the film investment you are looking at is not telling you about these incentives and credits, it might well be that the filmmaker is taking these credits and incentives and not passing them through to the investors.

A good film investment should come with a thorough discussion of tax incentives and the ways that you as the investor can benefit. There should also be an attorney opinion letter from the production company attorney, which will allow you to more easily explain to your accountant or financial advisor how to take the deduction or credit. Remember, it is the attorney for the production company that can certify that an incentive or credit is available.

Feel free to contact my firm about reviewing any investment you intend on making in the film or television industry. We have reasonable rates and 19 years of experience protecting investors in the entertainment business.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

I am putting together an indie film that I will seek distribution and place in festivals. The film in question will be based around one leading actor. What kind of contract or agreement should I create with the leading actor if the film gets distribution and it sells in the six-figures?

Answer by Brandon Blake, Entertainment Lawyer:

Some good questions today about independent film production, specifically involving actor agreements and distribution. Let’s talk about the actor contract first, and then we can address your questions about distribution of independent films and what types of deals to expect.

ACTOR CONTRACTS

So, first off everyone should know that the Screen Actors Guild (SAG) makes available free contracts to independent filmmakers, which they hope that independent filmmakers will use to hire actors. I know that as soon as I write this, half the readers will quit reading and go look up the free SAG contracts.

But for the fifty-percent of those still reading this article, I want to point out how truly wrong it is to use contracts that are written by the union that is representing actors. Don’t get me wrong, the Screen Actors Guild is an incredible organization and has done a lot to protect performers’ rights and to generally elevate the workplace standards and safety of film and television productions.

However, using the contracts that they draft to protect and advocate for their members is very similar to using someone else’s attorney to look out for your own interests. It is a basic conflict of interest, and no matter how easy and quick it might seem, the filmmaker and the producer are going to get burned.

When it comes to the question at hand, the SAG actor agreements do not have any provisions for equity sharing, or for the kind of profit participation you are discussing. Moreover, you need to be careful about how you formulate your profit participation, because there is the potential for increasing your residual and Pension Health and Welfare obligations depending on how you draft these provisions, including offering deferred salary or compensation.

Stepping beyond the boilerplate SAG actor agreements, the most customary way of defining the profit participation of an actor is going to be adjusted gross receipts. This term alone creates a lot of questions in the minds of filmmakers, because it does have the word “gross” in it, and so then that invariably draws the reaction from many independent filmmakers that they will not share “gross” with actors if they can help it.

But not all gross profits are the same, and “adjusted gross receipts” or AGR are defined by the production company to take into account the costs of production, as well as being defined on the production side, meaning that distribution and sales fees are taken out.

With regard to the correct “percentage”, a percentage of AGR could range from the low side at 2.5% to the high side of 15% for a well-known celebrity that is working for scale or substantially below his quote. Of course, the question is always, percentage of what, and you want to make sure that your production company has properly defined its revenue sharing definitions. A note here, revenue sharing definitions do not come with a LegalZoom template LLC. I know it is tempting to simply not read the boilerplate pro-forma that comes with filing service company materials, but there is literally nothing of value in those pages of useless filling except for citations to 20 or 30 year old (often outdated) code provisions.

So that is a long way of saying that don’t assume because you have an LLC that you therefore have a definition of AGR somewhere.

DISTRIBUTION

I also wanted to address the inherent question that was posted about distribution and what types of deals to expect for an independent feature film project.

It is my opinion that one of the most surprising things that many independent film producers do is to wait until the movie is completed to begin thinking about distribution. Given that distribution is the ultimate goal of every independent filmmaker, why is it that distribution does not become part of the pre-production planning?

Our firm has been very successful in helping filmmakers to line-up distribution interest in projects before production starts. Whether that means a distribution deal, or an offer to consider the film on completion, you will be exponentially increasing your odds of successful distribution by beginning to engage distributors before you start production.

However, lets assume that you have progressed to post-production and are now shopping for a distribution deal. Again, the right time to get entertainment legal counsel like myself involved is as soon as you begin submitting to festivals. Our firm can help to tailor the approach to distributors, preventing missteps in presenting the film, and keeping the film from going stale before you even start getting market offers.

When it comes to the types of deals, basically you need to divide distribution into domestic and international. Domestic deals can involve a minimum guarantee or even an acquisition for very hot films with a lot festival interest or commercial elements.

However, don’t overlook a percentage deal with a larger distributor, because a 20% deal with Sony Pictures or Lionsgate might come to a lot more money than an offer with a minimum guarantee from a company with less distribution channels and where perhaps the minimum guarantee is a lot trickier to collect on than the initial deal letter makes it seem.

Foreign sales are a whole other question, and generally involves negotiating a good sales agreement with a reliable foreign sales agent. I would say that for an entertainment lawyer, one of the biggest challenges is to negotiate a sales deal with a foreign sales agent, because of the complexity of the terms and the revenue structure. There is no question, if a filmmaker tries to negotiate a sales deal without counsel, nothing will end up getting paid at all by the sales agent. That’s not an overstatement, it is just reality.

I have been representing film, television and music clients for 19 years with the law firm of BLAKE & WANG P.A. Please feel free to contact us for a quote to assist with production legal, distribution contracts, and representation to distributors and sales agents. Please do not decide about complex entertainment legal matters without consulting an experienced entertainment lawyer first.

- By Brandon Blake, Entertainment Attorney

Question for FilmTVLaw.com:

Is the WGA on strike? The series I am working on is going ahead as though nothing was going on, but then I read in the trades that the WGA was on strike against agents. Is this going to affect the series I’m working on right now?

Answer by Brandon Blake, Entertainment Lawyer:

Thanks for a great question about the WGA-ATA conflict. The WGA has gone through with its plan to instruct WGA members to terminate their agent contracts, which is going on right now. This will have a big impact on the entertainment business, but probably not an immediate impact on anyone’s current productions. Please feel free to check out my Q&A Blog for a wealth of other entertainment related advice and articles at www.filmtvlaw.com/entertainment-lawyer-qa/.

The backstory is that the Writers Guild of America West (WGA), the Guild that most professional film and television writers are a member of, has had a long-standing dispute with talent agencies regarding packaging fees. In fact, this goes all the way back to 1976, which was the last time that the WGA negotiated an agreement with the Association of Talent Agents (ATA). Just to back track and clarify, this has nothing to do with the Alliance of Motion Picture and Television Producers (AMPTP) or with the Minimum Basic Agreement for writers’ minimum fees.

Back in 1976, when the WGA negotiated with the ATA, it was already unhappy with the packaging fees that were allowed for in the agreement, but it was a seemingly small issue at the time. Little did the Writers Guild know that over the next 43 years, “packaging” would become the principle activity of agents, which would eventually swallow up the whole industry and become the largest source of income for some agencies.

WHAT ARE PACKAGING FEES?

At the heart of the WGA-ATA strike are packaging fees, which for many are still a little bit mysterious. Packaging fees do not seem to fit within the three-part negotiation that involves film and television producers, agents, and the talent they represent. Note this effects performers and directors just as much as it effects writers.

In the traditional scenario, a producer will go out and hopefully raise some development money, then the producer will contact an agency and inquire about the rates to hire a writer for a film or television pilot. The agent will pass along the information to the writer, and if the writer is interested, will then negotiate a fee for that writer to perform the writing work needed. For his troubles, the agent will collect 10% of the fee payable to the writer. Not bad given all the agent did was sit in his office, take a phone call, and forward information to his client.

But, in reality that is not how things work at all. First off, many producers do not have financing. Second, writers are not content to let their agents sit in an office and take random phone calls once a month. This traditional scenario of how films and television series are developed never worked.

In reality, there are tens-of-thousands of producers, some financed and some not, all desperate to get their scripts, television concepts, and reality shows made. There are so many, in fact, that it becomes very difficult weed out legitimate projects. On the other side, there are hundreds-of-thousands of writers, actors, and directors hoping to work on a film or television project who are looking for quick results from their agents.

AGENTS AND THEIR CLIENTS

At the core of the conflict is something that most writers (and performers) are not aware of, which is that not every project is passed along to the writer. We already knew that the project had to come through an entertainment lawyer, or directly from a major studio or network. So, a lot of projects get cut out right there.

But, of the bona fide projects that come through representation, a few agencies still refuse to pass along information about those projects until a packaging fee has been arranged.

That’s why at the center of the new WGA Code of Conduct, the code says an agent must pass along all projects to the writer client. That doesn’t seem that radical, unless you know that some agencies have based their entire business model around not doing the above at all.

PACKAGING IS REAL WORK

There are some realities about putting together a film or television series that probably even a lot of WGA writers are not aware. One is that packaging a project, which involves bringing together cast, writers, and directors with viable production companies and real distribution is hard, time consuming work.

If agents are the one being tasked with basically “producing” the entire project, it makes sense that they should be compensated for that work. Being paid out of the eventual production budget is a great idea, but how does an agent get to the point where there is a budget?

The problem is that the packaging fee is coming from the studio or the production company, which is technically the opposite party. The conflict of interest that arises is a natural result of the financial arrangement. If the studio is paying the agent for the cost of putting together the project, which is what packaging is, then who is going to get the better deal, the writer or the studio?

OPPORTUNITIES FOR INDEPENDENT PRODUCERS

If the WGA is successful it is going to make a lot of opportunities for independent film and television producers.

When the agencies are not too tied up with production and sales, and are available to hear about all legitimate projects that come through representation, it means they will be available to review more projects, expanding the number projects that writers are receiving, and allowing producers to find exactly the right person for the job.

In addition to opening the doors to more independent production, more writers might also now choose to have their deals negotiated by an entertainment lawyer, to ensure that the deal is in their own best interest.

Feel free to contact our office about rates for our packaging and representation services, and please do not decide about complex entertainment legal matters without consulting an experienced entertainment lawyer first. At BLAKE & WANG P.A. I have been representing feature film projects, television series, and recording artists for more than 19 years. Please feel free to contact my office at www.filmtvlaw.com about a quote.

- By Brandon Blake, Entertainment Lawyer

Question For FilmTVLaw.com:

We’re shooting a feature in the summer. I got introduced to a possible investor who asked about “tax equity.” I have not heard that term. He said he could get back part of his investment from taxes if we set up the investment right. Please help!

Answer by Brandon Blake, Entertainment Lawyer:

Great question about tax equity and what it means with respect to investing in film and television projects. Film and television producers are potentially looking at the best prospects in years thanks to the often overlooked Tax Cuts and Jobs Act incentives for film and television. Please feel free to check out all of my entertainment industry articles at https://filmtvlaw.com/entertainment-lawyer-qa/.

I’m personally very excited about the incentives that Congress added into the Tax Cuts and Jobs Act of 2018, which provided a number of tax incentives for film and television producers. But first, let’s talk about “tax equity investing” and what it all means.

Tax Equity Investing in film and television is nothing new historically, and if anyone is familiar with the boom in filmmaking that took place in England and Germany in the 1990s, they know it was all based on a type of tax equity investing that the new Tax Cuts and Jobs Act has brought to the United States today.

At its most basic, tax equity investing means providing tax-based incentives for investors to invest money into certain industries that the legislature wants to support. So, for example, the oil industry in the United States has enjoyed various tax equity incentives for decades both Federally and in various states.

Until recently, the biggest tax equity investment in the United States was solar energy. Solar investing involves investing in the solar energy business, and because there are a lot of environmental benefits to solar energy, the United States has been backing solar energy investing with a combination of tax deductions and tax credits.

Now we might be seeing a transition, where some of the value of those solar energy tax credits and deductions have been cut back by the new Tax Cuts and Jobs Act.

In its place, Bonus Depreciation has now been specifically provided to film and television projects. Much like the old Section 181 Film Tax Incentive, Bonus Depreciation provides for a 100% tax deduction for qualifying film and television projects.

However, as good as Bonus Depreciation is for tax equity investors in film and television, it actually gets a lot better when the securities offering can also take into account the various tax incentives and tax credits available through particular states around the country, including especially the state tax incentives in Georgia, Louisiana and New Mexico, although there are lots of other contenders as well.

By structuring a securities offering around federal and state tax incentives, it is possible for film and television producers to create a tax equity structure that is very competitive with what the solar industry is offering today, and with the benefit of being able to participate in the perks of the entertainment industry.

Our firm has been setting up sophisticated securities offerings for film and television producers for 19 years. Please be aware that our firm does not advise on or re-organize third-party securities documentation, but we can prepare a new securities offering and SEC filings for your production to take advantage of Bonus Depreciation rules and state tax incentives.

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 19 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

QUESTION FOR FILMTVLAW.COM

Recently I heard Jennifer Lawrence and Leonardo DiCaprio are deciding not to work with agencies and choosing representation through managers or entertainment attorneys instead. Is that legal? I thought actors could only be repped by talent agencies?

ANSWER BY BRANDON BLAKE, ENTERTAINMENT ATTORNEY:

It’s no secret that something is going on in the entertainment business in the past couple of years that is unprecedented. A-list actors and actresses like Jennifer Lawrence and Leonardo DiCaprio are choosing to forgo the agency system altogether. There are a couple of good reasons why, and some of those reasons might not apply unless you are a well-known superstar. Please feel free to check out all of my entertainment industry articles at https://filmtvlaw.com/entertainment-lawyer-qa/.  

First off, any young performer, writer or director should not write-off an offer from a major agency, as it can certainly be a career defining opportunity. Many of my clients are represented by major agencies and would not have it any other way.

But that said, some of the changes in the industry make it possible to launch a career in the entertainment business without agency representation. Of course for some, that’s not a choice. Often, major agencies are looking for a track record of solid performance (and paychecks) before committing to new talent. But then again, Jennifer Lawrence and Leonardo DiCaprio are not exactly new to the business.

One of the principle reasons for producers and directors to work with an agency is because the agency can submit projects to Netflix, Amazon and the studios. That is an incredible window of opportunity that is difficult to get otherwise. However, recognized entertainment law firm’s like ours can also submit packaged projects to platforms like Netflix, Amazon and Hulu, in addition to the studios and major networks. So an agency, while attractive, is not strictly necessary any more.

Another consideration are fees. While most performers, writers, directors and producers would agree that 10% is a small price to pay for major agency representation, that in some ways underestimates the costs.

First off, typically performers will be represented by both an agent (10%) plus a manager (15%), which comes in at an off-the-top 25% of all earnings. Second, you are still going to have to hire an entertainment attorney to negotiate your deals, because although the deal points will be hammered out by your agent or manager, the bulk of the contract will still be negotiated lawyer to lawyer.

Finally, packaging has become so competitive that each agency locks clients into a large system of sales and production business. I don’t think very many clients are going to complain about being locked into the William Morris Endeavor system, since they do represent so many major productions, but for someone like Jennifer Lawrence and Leonardo DiCaprio who can literally pick and choose their projects, the big agencies could actually become a limiting factor in the number of roles they can consider.

Of course there are always going to be areas where an agency of any size is going to be indispensable. 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 or through an entertainment attorney. 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.

Likewise, agents will have access to the breakdowns of many film and television productions, which gives agents access directly to a network of casting directors who are looking to immediately fill acting roles on upcoming productions. These are duties that managers and entertainment attorneys are not going to replace.

So the good news is that there is more opportunity to break into the entertainment business than ever before, and it is no longer a system where agency representation makes or breaks a career. With some dedication and hard work, everyone can make it, whether that means an offer from a major agency, or a hardworking manager or entertainment attorney like our firm that can represent your project and get you to the next level.

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 18 years. Please feel free to contact my office about a quote.

- By Brandon Blake, Entertainment Lawyer

Question For FilmTVLaw.com:

I did a page-one rewrite on a script for a producer who never paid me for my work. Later he sent me a text message giving me rights to the project. Now like 2 years later I’m actually casting the movie and the producer says he never gave me the project and that a text is not a written contract. Can I use a series of texts as proof he gave me the rights?

Answer by Brandon Blake, Entertainment Lawyer:

Great question. There are a lot of rights questions here but I want to focus on two issues, one is the idea of the “derivative work”, and the other is about the US Copyright Act requirement for a “signed writing.” In addition to this article I have nearly a hundred other articles covering all facets of film and television development and production at ww.filmtvlaw.com/entertainment-lawyer-qa/

First of all, we need to look at how many different versions of the creative work exist. In film and television we usually talk about 1) the “underlying work,” such as a book, short story, comic book, etc., 2) the script, and 3) the film or television production itself. Each of these three works has a copyright, and none of these works need to be owned by the same party.

The underlying work is considered to be the original work. It was not based on a previous property and is copyrighted solely in the name of the author or of the company that commissioned the work. A script or teleplay could also be an original work if it was written without reference to an underlying story or other creative work.

Each of the subsequent works based on the original work are “derivative works”, meaning that they are based on other copyrightable works and that they therefore must be licensed from the original author.

In this case, there are multiple derivative works. If there was a story or property the first script was based on, then that would be the original work, the first script is a derivative work, and your rewrite is a derivative work, based on both of the two previous works. In order to precede you would need to license the rights from both the original story and also the other screenplay. If the first script was an original screenplay, then you would only have to deal with the ownership of that work.

Now the next question deals with how a creative work can be licensed. The Copyright Act specifies that a “signed writing” is required to transfer those rights. But it does not provide any more detail or a template for what is required. There have been cases where even a check was used as evidence of a transfer, although the writing must be signed by the party transferring the rights.

But electronic communications create a whole new issue regarding what “signing” means. The federal ESIGN Act clarified a few things, making it federal law that digital signatures are considered to be as binding as ink on paper signatures. The ESIGN Act provides a number of steps that help to confirm that a signature is binding, but it specifically does not require any one technical step to complete an electronic signature.

So then that creates a gray area with regard to emails and text messages. Emails are often “signed” by the party sending the email, although email communication can certainly be easily altered.

Text messages, Facebook and Twitter posts are even more difficult, because they could be considered signed writings in some ways, although certainly are not expected to be formal contracts by the parties sending them.

So the best advice is to be cautious with sending electronic communications. Do not assume that what is said by email or text is “not binding”, because under federal law it can be held to be a signed writing. On the other hand, a writer or producer should not rely on an email or text to be a final disposition of the underlying rights either, given that there are not all the formal steps needed to confirm a signature under the ESIGN Act.

When it comes to the underlying rights to your film or television project, writers and producers should not take chances. Every project has the potential to become valuable property in the future. Have a formal contract drafted, or if a contract is presented, have it reviewed. Many producers only focus on the transfer of rights and the overall division of royalties and profits, but there are a lot of other legal issues that should be resolved as part of a rights agreement as well.

As with any legal matter, please do not make a decision about complex matters without consulting an experienced entertainment attorney first. I have been representing feature film projects and television series for more than 18 years. Please feel free to contact my office about a quote. Feel free to contact my office at www.filmtvlaw.com about a quote.

- By Brandon Blake, Entertainment Lawyer

Question For FilmTVLaw.com:

How do I protect and register the title of my film? I’ve heard the term chain of title, but not clear on what it really means. I’ve got a really unique title for my feature project and already filed with WGA. What am I missing?

Answer by Brandon Blake, Entertainment Lawyer:

Thank you for your question. I represent a lot of producers and writers and there is generally a lot of confusion out there regarding the chain of title for a film project. The terminology is similar between several different areas of the law, so I will go through and respond to these issues from a number of different points of view. In addition to this article I have nearly a hundred other articles covering all facets of film and television development and production at www.filmtvlaw.com/entertainment-lawyer-qa/

First, it is important to know that copyright is an important part of the chain of title, but somewhat confusingly, copyright does not protect the titles themselves of television series or feature films. Copyright only protects creative content and the titles are not considered to be part of the work of authorship.

This then often leads to the question of why is it that one of the standard deliverables for feature films is called a “title search”? In this case “title” is actually referring to the chain of ownership to the work, much like a car or house has a “title”, meaning a record of ownership. To further confuse things, a title search often does involve searching the titles of copyrightable works but that is done to find other works that might have been infringed.

You will find many copyrighted works, including film and television shows, that all share the same titles although the use of similar or confusing titles, or the reference to titles of other works, is not completely unrestricted.

Producers can go about protecting the actual titles of entertainment works in two principal ways, first is trademark and second for feature film is MPAA registration.

Trademark can be used by both film and television producers to protect the title of a production, although trademark does not specifically protect the title of a creative work either. A trademark is supposed to be what is called a “source identifier.” Trademarks and servicemarks are for the purpose of identifying the maker of some product or service, and thereby keeping consumers from being confused about who created the goods. Coke, Pepsi and Apple are all easy examples of the typical functioning of trademarks. Each of these “marks” identifies a particular maker of drinks or computers.

So when it comes to using trademark to protect the film or television production’s title, some creativity is often required in coming up with a mark that is valid and can protect the title of the work.

Common law or state trademark law is also available in many jurisdictions and it is possible that even if the mark was not filed with the federal trademark office, that there could still be protection for a film or television title at the state law level.

Many producers do not know that for feature films another method of protecting titles exists, which is MPAA registration. MPAA registration can protect a title and is the purpose of reserving titles for theatrical feature films. There are some costs involved but many feature film clients retain us to obtain MPAA protection for planned feature film projects. It is good to start early with this process since names are simply assigned on a first-come first-serve basis.

As with any entertainment matter, please do not make a decision about complex issues without consulting an experienced entertainment lawyer first. Feel free to contact my office at www.filmtvlaw.com about a quote.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

I’ve got a project perfect for Dreamworks. How can I get in the door at Dreamworks? I’m not a first-time filmmaker, got three films distributed already. I’m ready to work at the next level. Thanks for your posts! Keep up the good work.

Answer by Brandon Blake, Entertainment Lawyer:

Thanks to everyone for all of the great questions these past two weeks. I can’t get to all of them but will focus on those that probably resonate with the most readers. Please feel free to check out my Q&A Blog for a wealth of other entertainment related advice and articles at www.filmtvlaw.com/entertainment-lawyer-qa/. 

I have had the good fortune of working with Dreamworks Animation on a number of recent projects, and actually represent 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 in the “studio” system. After that we can talk about opportunities to break in for independent producers and writers.

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 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 best 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 studio, 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 with us to studios. Whether I work with major agencies or studios, the idea is to do the legwork for the development executives, bringing them something with not only a great story but talent already attached. 

Regarding advice for how to get projects seen by studios and networks, 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 18 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) 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. But due to schedules and the personal taste of the talent involved, only one in fifty of those will work out. An entertainment law firm like ours can help. I have been successfully bringing together cast, directors and celebrities with films in development for nearly two decades. Relationships, the right approach, and industry knowledge are crucial when pitching a project to high level talent.

3) Publicity. 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 grab a news headline, then chances are the story will not impress the agents or studios either. Work on ways to make the project newsworthy. 

Feel free to contact our office about rates for our packaging and representation services, and please do not decide about complex entertainment legal matters without consulting an experienced entertainment lawyer first. At BLAKE & WANG P.A. I have been representing feature film projects, television series, and recording artists for more than 18 years. Please feel free to contact my office at www.filmtvlaw.com about a quote.

- By Brandon Blake, Entertainment Lawyer

Question for FilmTVLaw.com:

I’m a freelance television producer and my wife is a casting director. Do we qualify for the 20% deduction for pass-through business income in the new Trump tax cuts? Been thinking about forming a company but not clear on how to do it right. Thanks in advance. 

Answer by Brandon Blake, Entertainment Lawyer:

It has never been a better time to form a loan-out company and getting the 20% deduction for pass-through business income under the new 199A deduction of the Trump tax cuts is just the start of it. Aside from the Tax Cuts and Jobs Act (TCJA) benefits, 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.

A word of warning, all of the TCJA deductions are complex and the new 199A deduction is no exception. Before you file a loan-out, you will need to have an entertainment law firm like ours organize the company. You can also see other entertainment legal advice that I publish twice a month in my Entertainment Lawyer Q&A Forum at www.filmtvlaw.com.

Although 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 when being hired for entertainment freelance jobs, and that was before the new 20% deduction for pass-through business income under the 199A deduction.

TJCA 20% Deduction for Pass-Through Business Income

At the beginning of the year the big story was that there had been an attempt by Congress to prevent entertainment industry businesses from gaining full advantage of the 20% deduction for pass-through business income under 199A. However, in many ways that has been overstated and it comes down to the income level of the business owner and also the marriage status, since there is a marriage penalty built into this deduction. Tax planning is key, and I could not recommend someone file a loan-out without tax planning service from an entertainment law firm like ours being part of the formation, because there are many different ways to organize businesses, and many different choices of State jurisdiction as well. With proper tax planning done at the time of the formation of the loan-out company, all entertainment industry businesses should see substantial benefits from the TJCA section 199A deduction.

Elimination of Itemized Deductions

It is true that what the Tax Cuts and Jobs Act has given with one hand, it has taken away with the other. Employees with business costs are hard hit, and that effects many in the entertainment industry. 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 the employee W-2 is your income and the only way to reduce your tax bill is through itemized deductions. Now under the Trump tax “cuts,” many of these itemized deductions are actually eliminated, such as unreimbursed employee business expenses, and a lot of others. Moreover, higher income employees will reach the alternative minimum tax, in which case most of the business deductions are then eliminated anyway, 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.

Loan-Outs and Business Expenses

Aside from the new Tax Cuts and Jobs Act 20% deduction for pass-through business income, the original reason to file a loan-out company is still valid and comes down to business expenses. 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? 

So, for the entertainment industry, the 20% deduction for pass-through business income in the new 199A deduction is a great incentive to start a loan out company, but the meat of the tax savings will come from switching from an employmee tax status to a business owner. That always provided tax advantages, and the new Tax Cuts and Jobs Act goes one step farther by eliminating employee itemized deductions, while at the same time tagging on a 20% pass-through business income deduction for entertainment business owners.

Remember that tax planning is key, and tax planning and business formation for an entertainment company is too sophisticated to trust to anyone other than a licensed entertainment law firm like ours.

Feel free to contact our office about rates for our tax planning and loan-out company formation services, and please do not decide about complex matters without consulting an experienced entertainment lawyer first. At BLAKE & WANG P.A. I have been representing feature film projects, television series, and recording artists for more than 18 years. Please feel free to contact my office at www.filmtvlaw.com about a quote.

- By Brandon Blake, Entertainment Lawyer