Category Archives: Deal Points

Chorus Line Dancers Make A New Deal

s02ccon2l.gif

Although “A Chorus Line” opened on Broadway over thirty years ago, the dancers who signed away their life story rights as the basis for the musical back in 1974 recently renegotiated the terms of their deal. The dancers originally signed away these rights for $1 each during “workshop” sessions for the musical.

In 1975, Michael Bennnett, the producer, choreographer and co-writer of the book for the show, renegotiated these terms after “A Chorus Line” moved to Broadway; dividing about one-tenth of his own royalties and about one-third of his rights income derived from the show and its subsidiary rights with the dancers. “This kind of arrangement has now become standard, though with less generous terms, for people involved in workshops that lead to Broadway productions,” wrote Campbell Robertson for The New York Times.

Apparently, many of the dancers remained unsatisfied with these terms. For a more complete chronology, read here.

The Bennett Estate’s recent revival of the show on Broadway triggered the renegotiations. The previous agreement only applied to the original Broadway production not to first class productions like Broadway revivals and related road shows. The revival presented the dancers with a unique opportunity to renegotiate. After 16 months, the dancers successfully negotiated an additional (undisclosed) share of revenues in the current production as well as in all past and future first-class productions of the show.

The “Chorus Line” renegotiation provides broader implications to deal making for two reasons:

1. Leverage only comes from immediately recognizing the other party’s needs and fears in a particular deal and then effectively using that leverage in negotiations. Accurately assessing your leverage can be tricky since your own needs and fears are always in play (this is so even if you have representation – e.g., the writers strike negotiations).

Here, the Estate wanted to mount a new production of “A Chorus Line” which required additional permission from the dancers. The original show and subsidiary rights grossed over $280 million. Clearly, the Estate was a motivated negotiator with that much money at stake. Each of the 37 dancers however, was unorganized and had differing agendas. I suspect the 16-month lag in closing this deal was due in part to those detracting elements on the dancers’ side of the equation.

2. We now live in an era of franchised content – “everything old is new again” as the show tune goes. Even early-stage deals (aka deal memos) should be negotiated accordingly with an eye towards future revenues from media not even conceived at the time the deal is struck. If the deal is worth papering, it is worth papering thoroughly. Opportunities to renegotiate may later prove to be few and far between. In this case, it took the dancers over 30 years to get a taste of these revenues. Most people aren’t prepared to wait that long.

Non-Scripted Outlets Want A Bigger Piece Of The Hostess Pie

hostess_fruit_pies2.jpg

The Food Network made Emeril Lagasse and Rachael Ray into television stars and household names. They’ve also become multi-millionaires from the sales of countless books and other merchandise; revenues the network admits are typically excluded from their talent deals.

The NY Times reports that about a year ago, the “Food Network began aggressively trying to change that with new deals that were ‘way more onerous’ from the stars’ point of view, said a person who has been affected by the changing strategy, by insisting on a stake in book deals and licensing ventures, and control over outside activities.”

This is an important sea change in talent negotiations on non-scripted programming. While my experience has been that network participation in merchandising has been part of the ask from cable outlets, it has not, for the most part, been a deal breaker and then only when it arose from an outlet’s desire to embark on its own merchandising efforts (i.e., revenues from branding the network as opposed to the talent).

The Food Network’s approach will likely influence future negotiations at other outlets breaking new talent in their programming though probably less so on deals featuring talent with more hosting experience (i.e., brand recognition in their own right) or have pre-existing merchandising deals. Such talent will have more negotiating leverage but if pressed, may be able to negotiate limited outlet participation “above a baseline” from any bump in merchandising revenues after hosting the outlet’s programming.

Independent Bumps

sisyphus_sign.jpg
Recent observation: on two separate deals, different reps at different agencies asked for a $25K set up bonus if their writer-client’s projects were independently produced. A set up bonus or “studio bump” is often negotiated in a writer’s option/purchase agreement if the producer successfully sets the project up at a major studio. The bonus is often negotiated as an advance against the purchase price. Notwithstanding the ebb and flow of capital investment in independent pictures, financing projects at any budget level north of even $250K is always a test of a producer’s tenacity and access to resources. If this deal point develops into a trend, it will only be a testament to the rep’s negotiating ability; their client’s industry precedent; and the ignorance of the producer’s rep to the financing problems facing most independent producers. I rejected the reps’ requests in my negotiations for this very reason. The next time I represent a writer, things may be different.

Check out Jeff Garlin’s unusually frank interview with Elvis Mitchell on KCRW’s “The Treatment.” In addition to pushing his first picture as director, writer and star, “I Want Someone To Eat Cheese With,” Garlin speaks candidly about why it is OK to take lucrative roles on bad movies and the challenge of independent finance. On the latter, he laments the experience of meeting with a prospective investor at the Mondrian Hotel on the Sunset Strip. The investor brought along two hookers – they asked better questions than he did.

Lastly, the NY Times ran a piece by David Oshinsky about book publisher Alfred Knopf’s archive of reader’s reports (aka “coverage”) and rejection letters on such works as “The Diary of a Young Girl” by Anne Frank (“a dreary record of typical family bickering, petty annoyances and adolescent emotions”) and George Orwell’s “Animal Farm” (it’s “impossible to sell animal stories in the U.S.A.”). “Knopf wasn’t alone. ‘The Diary of a Young Girl,’ . . . would be rejected by 15 others before Doubleday published it in 1952. More than 30 million copies are currently in print, making it one of the best-selling books in history.” This should confirm what everyone already suspects: there’s no accounting for taste even among the taste makers. In other words, no one knows nuttin. Tenacity (see above) – not necessarily talent – over the long term is key.