Tag Archives: entertainment law

Guilds, Negotiations, Writers

When (Not) To Use A Bigger Hammer

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The constant drum beat of the pending writers’ strike is louder here in Los Angeles than the one to go to war with Iran. Such much for the insular and provincial world of Hollywood. The status and pace of the current negotiations with the Writers Guild of America can be found here.

At the movie studios, the networks and off-network cable outlets, the feeling amongst execs I’ve spoken with is that they’re ready to brave a strike. The studios had a lot of time to build up a surplus of projects. On the TV side, the networks and cable outlets have and will continue to have a ready supply of non-scripted and reality programming.

While far from an accurate metric, the pace of writing deals picked up markedly in recent weeks judging from the deal flow on my desk; and not just with WGA writers. Despite my personal feeling that the whole genre has jumped the shark, the number of my clients producing and “writing” non-scripted/reality projects is growing exponentially by the day. In the independent feature world, there’s talk of WGA writers ghosting projects under pseudonyms or under the radar on low budget fare. One independent producer I know is upbeat about the prospect of having access to more talented writers on the cheap.

For the writers’ sake – a number of them friends as well as clients of mine – I hope that the strike doesn’t last long. I understand the WGA Strike of ’88 devastated writers. As with the ’88 strike, a long strike now will hurt fledgling writers as well as established ones. With the high cost of living in LA, it is unlikely that even the most successful scribes can hold out long what with mortgages and private school tuition to pay for well into five figures. Acting talent and directors will likewise be harmed from the lack of work or by avoiding the picket lines of their union brethren.

Accordingly, I make this open plea to the WGA: Don’t strike. At least not yet.
The studios and networks would rather negotiate with you than fight, especially when everyone knows that negotiations are inevitable. The adverse effects of a strike will be negligible to the studios and networks compared to the financial hardship to many of your members. Maybe if you had more negotiating leverage, a strike would make sense but you don’t. Given the Guild’s limited options, it would be far better for you to use the collective fear of a writers strike than to actually go on strike. Some on the studio side worry about a long term strike despite their backup plans. They feel that neither side really prevailed in the last strike and don’t believe either side will prevail in this one. Fear of loss can be a powerful motivator for you; far more powerful than the actual outcome. Conduct yourselves accordingly.

Agents, Deal Points, Independent Film, Negotiations, Writers

Independent Bumps

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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.

Independent Film, Negotiations, Television

Credit Where Credit Is Due: Is There Enough Room On Awards Night For More Producers?

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After five producers received Best Picture Oscars for “Shakespeare in Love” in 1999, the Motion Picture Academy placed a three producer per Oscar limit on any film under contention. The Academy also required the honored three to be fully functioning producers on the pictures; studio execs, personal managers and lawyers (oh, well) need not apply.

Subsequent to enactment, certain producers who were credited on “Crash,” “Little Miss Sunshine” and “The Departed” but eliminated for award contention by this rule made some compelling objections against it. As a result, the Academy is relaxing its requirements, albeit slightly, to allow for the inclusion of one additional producer under certain rare and extraordinary circumstances. Each of the producers must be credited as “producer,” thereby excluding any individuals with executive producer or associate producer credits.

Meanwhile , the Television Academy is tightening its eligibility requirements in an effort to “crackdown on producer credit inflation” by capping the number of individual producers who can receive an Emmy for a comedy series at 11 and a drama series at 10. But even with these higher numbers, exceptions seem to be proliferating with “Gray’s Anatomy” and “House” each having grandfathered eligibility for 13 producer nominations.

Note that neither of these rules limit the number of producer credits accorded to any motion picture or television program. They just limit the number of producers eligible for award nominations. Nevertheless, the academies are right to be concerned with credit dilution. These awards are intended to acknowledge the creative efforts of those responsible for the works in contention. They are also a great way to increase box office gross. As I have said elsewhere in this blog, credits are “the coin of the realm” in the industry and diluting any credit reduces their value just like real currency. However, it is wrong-headed to set arbitrary caps on the number of producers eligible for an award as a means of addressing this capricious credit problem. Mandating that all award eligible producers render meaningful, creative services is a far more equitable way to go.

Until the academies modify their position, reps will need to be creative to increase their clients’ chances. Although the Motion Picture Academy asserts that it is “not bound by any contract or agreement relating to the sharing or giving of credit and reserves the right to make its own determination of credit for award consideration,” I have been involved in several negotiations where reps for producers (myself included) negotiated producer credit order “for all purposes, including award consideration.” Without a more logical approach, it is inevitable that the contractual intent of the parties to producer agreements versus the subjective consideration of the academies will be tested in the near future.

Financing, Independent Film, Notable, Product Placement

Advertisers Now Investing In Indy Films

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The Los Angeles Times and Tim Swanson’s blog reported earlier this month about Inferno Distribution’s recent financing of “The Women” starring Annette Benning, Meg Ryan, Eva Mendes, Jada Pinkett Smith and Candice Bergen. I’ve worked with Bill and Jim at Inferno before, and they can be very resourceful when it comes to financing their pictures.

Inferno financed about $3 million of a reported $15 million budget with an advertiser buy-in from Unilever/Dove. In exchange, Dove will share in profits at cash break-even on the negative cost of the picture (presumably, with some fees payable to Inferno and distributors off the top).

Similarly, Gatorade reportedly invested about $3 million in “Gracie,” a picture about girls soccer, making it possible for the producer to acquire an additional $7 million in financing from a hedge fund. In a deal that apparently proves that producing credits are the coin of the realm – even outside the entertainment business – Gatorade execs received three producing credits in exchange for Gatorade’s investment but neither they nor Gatorade are entitled to receive any back end.

Swanson’s blog reported that neither company demanded product placement for their investment though apparently both advertisers will receive it anyway. The girls in “Gracie” reportedly drink Gatorade on screen. Diane English, director of “The Women” is quoted in both pieces as looking for ways to incorporate the Dove brand “seamlessly.” (Funny, doesn’t the placement of product in the picture make these deals run of the mill product placement deals?) In both “Gracie” and “The Women,” advertisers are leveraging content that reflects well on their product or ties in a like-minded demographic audience to their product with the picture. Given advertising budgets in the hundreds of millions (billions?) of dollars, an investment in an smaller budgeted, independent picture is a drop in the bucket for many advertisers.

Product placement and sponsorship are nothing new to the entertainment business and have been around even longer than motion pictures. What is new, is advertiser focus on smaller, independent pictures. Still, this seems to be more flash than substance since there is no business bang from advertiser investment in pictures without significant domestic (read: theatrical) distribution. In other words, independent producers without distribution (aka consumer reach) need not apply.