Tag Archives: daily variety

Lost In Translation

I’ve been collecting expressions I’ve heard or used during negotiations since the start of dealfatigue; most recently updating the page, Lingua Franca last month. So I was pleased to discover Variety’s slanguage dictionary here.

Variety’s site is a comprehensive companion to Lingua Franca but lacks a number of words and expressions I’ve collected. So use them together as a resource and keep those emails coming so I can keep Lingua Franca timely and useful.

Black Box Dealmaking

"RFID closed" by AMagill

Over the past 18 months, I’ve watched countless film projects rise, flounder and fall with the promise of financing. The prevailing wisdom is that things have gotten so bad with oil, gas and real estate investment that film finance actually looks like a safe bet for equity investors. Oh, if it were only so. Film investment for equity players continues to be a very risky play.

Although debt financing continues to be a dim prospect, Comerica Bank, Union Bank and National Bank of California continue to back certain films from reliable players. From my perspective however, the end of debt financing of motion pictures came almost three months after the collapse of AIG and Lehman Brothers when the US rescued the bank in mid-finance of a movie I was working on. The bank ultimately financed the picture though I like to think that the collective efforts of the lawyers, the bank executives and the producers involved had a hand in getting the deal done.

Depending on the day, sheer will to make things happen is either over-rated or under-rated. And so it goes with film financing.

I’ve reviewed countless Stand By Letters of Credit (SBLC’s), real estate investments restructured for film finance, Sole Trader deals out of the UK, nine figure film funds from – depending on the day – Vancouver, Taipei, Shanghai and New Jersey and sources of black box financing where, for reasons not entirely clear to me, the identities of the investors and the financing methods used are veiled in secrecy. Not one of these sources of financing has come through. For its part, black box financing may be illegal or even dangerous. In a post-Bernie Madoff world, you just can’t leave the risk of financial games to chance. Get transparency or don’t do the deal.

Some of these prospective investors may prove to be the real deal but at best, they are all long shots. Do your due diligence so you know who you’re dealing with, the sources of financing and whether the investor is prepared to provide you with references (i.e., prior projects they’ve financed) and proof that their funds actually exist through escrow or bank confirmation. Some financiers may be more forthcoming than others and at some point, given the limited resources of time, money, knowledge and passion, you may have to go with your gut in deciding whether to proceed.

I have to believe that a number of would-be film investors are earnest and either don’t know that they don’t have money to invest or get cold feet at the prospect of closing; while others may be lookey-loos who simply want to do lunch at The Ivy and play the producer game but really don’t have any money to invest.

But still they come with promises that entice producers and other creatives. Just make sure you don’t get stuck picking up the check.

SAG’s Thaw

"Fire & Ice"  courtesy of Nathan Harper

Variety‘s Dave McNary reported that the Screen Actors Guild’s national board just approved a tentative two year deal on its film-TV contract, triggering a ratification vote by the guild’s members on June 1st.

As McNary writes in today’s Variety:

Should the deal be approved by members, it will extinguish what’s been a nagging uncertainty for the business for the past year. Production on film and TV was thrown off-kilter by the writers work stoppage, then by studios’ and nets’ fears that a SAG strike might emerge. During the period of uncertainty in the fall, control of SAG’s national board shifted to a moderate coalition, while the economic crisis helped create a big slowdown in local feature production. (First-quarter off-lot activity in Hollywood was at an all-time low.)

The terms of the new deal are generally the same as those the networks and studios agreed to with the WGA, DGA and AFTRA. That means that all of the guild’s protracted stang und drum sturm und drang was a waste of time and may have even hurt SAG’s chances to assert jurisdiction over all television programming.

SAG and AFTRA have joint jurisdiction over dramatic television and most television actors are members of both unions. The networks saw an opening and took it by entering into TV agreements with AFTRA instead of SAG. For the first time in 30 years, AFTRA split from SAG and negotiated its primetime contract without SAG. By doing so, the networks scored a twofer by fostering discord between and within each union and averting any threat to TV production during a strike.

Effective negotiating requires unity between and amongst the rep and the represented. This is all the more so when the represented are a large number of people (in this case, 120,000), each with different goals, motives and fears.

Group dynamics assumes that there’s always going to be dissent amongst a large number of people seeking a common goal. The WGA had similar difficulties during their negotiations with the AMPTP. However, a large group still requires a broad coalition of support before it embarks on any negotiation. In this case, SAG’s current board came to power in the middle of these negotiations and only holds a slim majority.

Given that, infighting between guild factions doomed these negotiations from the start; drawing off much needed focus and consensus away from the negotiations and towards addressing dissenters objections to the point of distraction. The AMPTP likely concluded that the best tactic for them was to stay largely mum lest they provide guild factions with any common ground on which to unify.

And now that SAG’s national board has approved the deal terms, it’s still far from over.

In the weeks to follow, SAG president Alan Rosenberg and his MembershipFirst faction have vowed to continue their opposition to the current proposal in an effort to get as many no votes from SAG members as they can. Although the consensus is that passage of the current proposal is all but assured, Rosenberg and company are reportedly setting the stage for next fall’s election of SAG’s leadership. This tactic has already proven to be self-destructive and will accomplish nothing other than to further weaken the union and any chance it may have at unification.

As it is, SAG should have postponed negotiations until it developed consensus within its membership and its leadership. Common ground is the cure here. This isn’t Monday morning quarterbacking; it’s common sense.

Expiration of SAG’s new agreement concurrent with the WGA, AFTRA and the DGA’s agreements was one of the most important concessions the guild was able to obtain from the studios. With all the creative unions’ deals expiring at the same time, they’ll be strength in numbers and an opportunity for a unified front based on a set of common goals. Although many SAG members believe they may have lost this battle, with that kind of formidable alliance, SAG may ultimately be in a position to win the war.

Money For Nuthin’ or Nick’s For Free


AFTRA accused Nickelodeon of improperly negotiating talent revenue participation for the cable outlet outside of Nick’s shows. A copy of AFTRA’s purported letter to Nick (I couldn’t verify its authenticity) is here.

More specifically, AFTRA’s letter asserts that Nick requires “that the performer grant to the employer a right to a ‘profit participation’ interest in the talent’s third-party income as a condition of employment” in violation of AFTRA’s collective bargaining agreement and possibly California law.

I don’t think that AFTRA has a leg to stand on or they would have cited the applicable provisions of their agreement and the law chapter and verse. I suspect that Nick’s lawyers came to the same conclusion.

What is clear is that the major studios, networks and cable outlets are looking for the next Martha Stewart or, in Nick’s case, their answer to the Disney Channel’s “Hannah Montana”; building brands on the backs of the talent they break with the goal of cashing in on their success essentially forever.

While it’s difficult to empathize with the big entertainment companies, production costs are rising and viewership is more fragmented. As a result, they’re on a desperate search for new revenue streams.

I posted about this emerging deal point several months ago when the Food Network started asking for similar language in their talent agreements. With Nick now taking up the cause, a trend has developed and it won’t be long before the rest follow suit.

What was once an unreasonable “ask,” will become – if it isn’t already – business affairs policy unless talent reps develop the leverage to collectively reject it. However, with the potential millions to be made by breaking the next Miley Cyrus and a surplus of talented kids (and their parents) hoping to make it big, I doubt that’s possible.